By Eric Schweibenz
On March 3, 2011, ALJ Robert K. Rogers, Jr. issued the public version of Order No. 27 (dated January 4, 2011), Order No. 30 (dated January 11, 2011), Order No. 33 (dated January 20, 2011), Order No. 37 (dated January 28, 2011), Order No. 41 (dated February 7, 2011) and Order No. 43 (dated February 11, 2011) in Certain Inkjet Ink Cartridges with Printheads and Components Thereof (Inv. No. 337-TA-723).

In Order 27, ALJ Rogers denied Respondent Asia Pacific Microsystems, Inc.’s (“APM”) motion to restrict the theories and evidence of importation that Complainants Hewlett-Packard Company and Hewlett-Packard Development Company, L.P. (collectively, “HP”) may rely upon.  APM argued that HP should be restricted to the theories and evidence provided in response to APM’s interrogatories regarding the importation of APM’s products, in which HP merely pointed to the evidence and allegations contained in the complaint.  HP, however, maintained that it provided sufficient notice of its theories and evidence on importation based on the contentions in a supplemental expert report, which contained opinions on wafer samples that APM had to be compelled to produce, and which was incorporated by reference into HP’s supplemental interrogatory responses.  In denying the motion, ALJ Rogers noted that it was not necessary for HP to serve supplemental interrogatory responses to incorporate by reference the supplemental report that it had already served on APM, and that even if such supplemental responses were necessary, nothing prohibited HP from incorporating a supplemental report by reference into its interrogatory responses.

In Order 30, ALJ Rogers granted HP’s unopposed motion for summary determination that it satisfied the economic prong of the domestic industry requirement.  According to the Order, nine inkjet cartridge products in the “HP 56/57 Family” practice the asserted patents, and HP invested hundreds of millions of dollars since 2007 on manufacturing overhead, packaging, warranty and repair activities, and distribution related to these products in facilities located in Oregon, California, Idaho, Virginia and Puerto Rico.

In Order 33, ALJ Rogers granted-in-part and denied-in-part APM’s motion to strike portions of HP’s aforementioned supplemental expert report.  APM sought to strike various parts of the report on the grounds that:  (1) it contained opinions on importation that were improper because the expert’s initial report only addressed infringement and domestic industry, not importation; (2) it contained improper legal arguments; and (3) the expert was not qualified to offer the opinions therein because he lacked experience in wafer manufacturing.  HP and the Commission Investigative Staff (“OUII”) opposed the motion.  ALJ Rogers determined that the supplemental report was proper, observing that HP’s expert was previously unable to compare wafers from the imported inkjet cartridges to the samples provided by APM due to APM’s refusal to provide wafer samples until it was compelled to do so, and further noting that there is no requirement that a supplemental expert report cover the same subject matter as an initial report.  The ALJ also found that APM failed to show that HP’s expert was unqualified, pointing out that the expert had extensive experience in the field of inkjet printing, and that the lack of experience in wafer manufacturing on his resume was not a sufficient basis to exclude his testimony.  ALJ Rogers agreed in part with APM, however, that the supplemental report contained improper legal arguments or legal conclusions, and struck all or part of 16 paragraphs that contained ultimate conclusions regarding the legal issues surrounding infringement and importation, arguments concerning APM’s knowledge regarding former respondent MicroJet Technology Co., Ltd’s (“MicroJet”) use of APM’s wafers, or arguments otherwise confined to a legal brief.

In Order 41, ALJ Rogers denied HP’s motion for summary determination on infringement, importation and domestic industry.  HP’s argument on infringement, which the OUII supported, was that its expert’s opinion was unrebutted.  However, ALJ Rogers pointed out that APM’s expert offered a report containing a non-infringement opinion for each of the asserted patents.  Regarding the technical prong of the domestic industry requirement, HP (and the OUII) similarly asserted that HP’s expert’s technical prong analysis was unrebutted.  The ALJ, however, found that APM raised a genuine issue of material fact when it argued that if the accused products are clones of HP’s domestic industry product, as HP contends, then APM’s non-infringement analysis applies equally to the technical prong.  As to importation, ALJ Rogers determined that HP’s motion focused on the alleged importation of accused products by former respondents (“the Mipo entities”) and did not address the importation issues unique to APM, which allegedly sells components to defaulting respondent MicroJet, which in turn manufactures and sells the accused inkjet cartridges to other companies (e.g., the Mipo entities) that eventually import them into the United States.  Specifically, the ALJ found genuine factual disputes regarding APM’s alleged sales to MicroJet for importation, including:  (1) whether MicroJet intentionally withdrew from the U.S. market; (2) whether APM components are included in the accused products that have been allegedly imported; and (3) whether APM knew or should have known about the alleged importation of the inkjet cartridges containing APM components.  Finally, ALJ Rogers declined to grant summary determination that defaulting respondent MicroJet violated Section 337, noting that such a determination is unnecessary because a complainant may seek immediate relief against a respondent found in default under Rule 210.16 without the need for an independent determination of violation (and further noting the aforementioned factual dispute regarding whether MicroJet intentionally withdrew from the U.S. market).

In Order 43, ALJ Rogers denied APM’s motion for summary determination on infringement.  APM argued that:  (1) HP’s expert did not offer an opinion on direct infringement; (2) certain asserted claims should be construed to require a “printhead,” which APM’s products undisputedly do not have; (3) APM never imported, sold, or offered to sell in the U.S. components of products that infringe the asserted patents; (4) there is no evidence that APM knew that its accused products were especially made to infringe the asserted patents; and (5) HP’s expert report “does not meet the test for showing inducement,” and that APM is merely a foundry that makes wafers from masks provided by MicroJet.  While conceding that its expert did not offer an opinion on direct infringement, HP argued that APM may jointly infringe through collaboration with MicroJet.  HP also asserted that under the Federal Circuit’s decision in Spansion, Inc. v. Int’l Trade Comm’n, 2010 WL 5156992, *16 (Fed. Cir. Dec. 21, 2010), a party can be liable for contributory infringement without having imported or sold a product in the United States.  HP further argued that APM’s knowledge of the asserted patents, together with an alleged knowledge that there is no substantial non-infringing use for the accused products, allows the ALJ to presume that APM had the requisite knowledge for contributory infringement.  With respect to inducement, HP cited emails exchanged between APM employees discussing some of the asserted patents, as well as deposition testimony that APM’s sales director had known that MicroJet sells HP-compatible inkjet cartridges and that APM continued to sell thousands of wafer products to MicroJet after the investigation began.  The OUII supported APM’s motion as to direct infringement, but not with respect to contributory infringement.  ALJ Rogers denied the motion on the grounds that:  (1) the alleged lack of expert testimony on direct infringement is not necessarily dispositive of the issue; (2) HP proffered evidence demonstrating a dispute of material fact as to whether APM may be held jointly liable for infringement with MicroJet, and under Federal Circuit precedent, a first party may be vicariously liable for infringement of a second party when the former controls or directs the actions of the latter (citing Centillion Data Sys., LLC v. Qwest Comm’ns Int’l, Inc., 2011 WL 167036, *6 (Fed. Cir. Jan. 20, 2011)); (3) it is in appropriate to decide whether the term “printhead” recited in the preamble of certain asserted claims should be construed as a limitation on an abbreviated summary determination record, and there is a factual dispute as to whether APM’s products would meet this limitation in any event; (4) the correct standard for evaluating contributory infringement is indeed set forth in Spansion, and APM’s argument that it never imported or sold a product in the U.S. does not preclude liability for contributory infringement; (5) according to the evidence cited by HP, there is a factual dispute as to whether APM knew about HP’s patents and whether APM’s products had no substantial non-infringing uses; and (6) there are likewise disputed issues of material fact concerning inducement.