19
Jan
By Eric Schweibenz
On January 14, 2011, ALJ E. James Gildea. issued the public versions of Order No. 29 and Order No. 30 (both dated January 4, 2011) in Certain Digital Set-Top Boxes and Components Thereof (Inv. No. 337-TA-712).  In Order No. 29, ALJ Gildea denied Respondent Cablevision Systems Corporation’s (“Cablevision”) motion for summary determination of invalidity of claim 13 of U.S. Patent No. 6,381,748 (the ‘748 patent).  In Order No. 30, ALJ Gildea denied Cablevision’s motion for summary determination of no violation of Section 337 based on Complainants Verizon Communications, Inc. and Verizon Services Corp.’s (collectively, “Verizon”) alleged failure to satisfy the importation requirement and failure to show a nexus between the importation of the accused products and Cablevision’s allegedly infringing acts.

According to Order No. 29, Cablevision argued in its motion that claim 13 of the ‘748 patent is invalid as anticipated by U.S. Patent No. 6,034,689 (the ‘689 patent).  Cablevision argued that a “transforming” step recited in claim 13 of the ‘748 patent could be performed by either a gateway server or the set-top box.  According to Cablevision, the ‘689 patent discloses every element of claim 13, including a set-top box that performs the “transforming” step.

Verizon opposed the motion, arguing that Cablevision was attempting to broaden the scope of claim 13 to cover “transforming” at the set-top box, rather than requiring that the “transforming” step be performed at a gateway server.  Under Verizon’s proposed construction, there could be no anticipation by the ‘689 patent.

The Commission Investigative Staff (“OUII”) also opposed Cablevision’s motion based on the existence of a genuine dispute of material fact in connection with the proper scope of claim 13.

After considering the parties’ arguments, ALJ Gildea determined to deny the motion because Cablevision’s argument was based on disputed issues of claim construction that the ALJ had yet to resolve.  According to Order No. 29, “[t]he Administrative Law Judge has previously ordered that the patent claims in the Investigation will not be interpreted in advance of the main hearing.”  Thus, ALJ Gildea determined that summary determination of invalidity would be inappropriate, and denied Cablevision’s motion.

In Order No. 30, ALJ Gildea denied Cablevision’s motion for summary determination that (i) Verizon has failed to satisfy the importation requirement of Section 337 and (ii) there is “no requisite nexus between the importation of the accused products and Cablevision’s allegedly infringing acts” for the ‘748 patent and U.S. Patent No. 7,561,214.  According to the Order, Cablevision argued that it contracts with nonparty Cisco Systems Inc. (“Cisco”) for the manufacture and importation of the accused set-top boxes, and that Cablevision itself is not involved in importation.  With respect to nexus, Cablevision argued that there is no nexus between the importation of accused set-top boxes and Verizon’s allegations of infringement because these allegations depend upon a third party’s use of optional functionality that is not included in the imported articles.

Verizon opposed the motion, arguing that Cablevision caused Cisco’s importation to occur by purchasing large quantities of customized set-top boxes and that Cablevision is elevating form over substance.  Verizon also disputed Cablevision’s arguments with respect to nexus, noting that Cablevision misunderstands the law and that even if Cablevision’s interpretation of legal authority were accurate, “Cablevision’s arguments rely on hotly disputed issues of fact.”

OUII also opposed the motion, arguing that genuine issues of material fact remain with respect to the issues raised.

ALJ Gildea denied the motion, noting that “it is apparent that Cablevision misunderstands the importation and related nexus requirements.”  Additionally, the ALJ found that Cablevision’s level of involvement in the importation of the accused products is a genuine issue of disputed material fact, and that genuine issues of material fact also remain with respect to nexus.  Accordingly, ALJ Gildea denied Cablevision’s motion.
Share