By Eric Schweibenz
On March 8, 2011, Chief ALJ Paul J. Luckern issued the public version of Order No. 18 (dated February 7, 2011) in Certain Electronic Imaging Devices (Inv. No. 337-TA-726) granting Complainant FlashPoint Technology, Inc.’s (“FlashPoint”) motion for summary determination that it satisfies the economic prong of the domestic industry requirement.

According to the Order, FlashPoint relied primarily on the domestic activities of its licensees – which include investments in plant and equipment, labor and capital, engineering, and research and development – to satisfy the economic prong.  Respondents Nokia Corp., Nokia, Inc., Research in Motion Ltd., Research in Motion Corp., HTC Corp., HTC America, Inc., LG Electronics, Inc., LG Electronics U.S.A., Inc., and LG Electronics MobileComm U.S.A., Inc. (collectively, the “Respondents”) argued in opposition that: (1) with respect to one licensee, the investments relied on by FlashPoint cannot be allocated to its domestic industry because they either predate the license or postdate the filing of the original complaint; (2) FlashPoint did not sufficiently segregate the activities of another licensee by specific product or geography; and (3) another licensee “strategically avoided submitting to depositions within the bounds of Order No. 11” and therefore findings about its domestic activities should be deferred until the evidentiary hearing.  The Commission Investigative Staff supported FlashPoint’s motion in part, contending that summary determination should be granted based only on certain licensee activities, and that even though the investment occurred after the filing of the original complaint, prior Federal Circuit and Commission decisions do not preclude such activities when evaluating domestic industry.

ALJ Luckern observed that under the precedent set by Certain Variable Speed Wind Turbines and Components Thereof (Inv. No. 337-TA-376), a domestic industry analysis can examine the changed circumstances that occur when a party acquires patent rights after the original complaint was filed, and that under the precedent in Certain Concealed Cabinet Hinges (Inv. No. 337-TA-289), a domestic industry that exists after the filing of a complaint but before the close of discovery may be relevant.  After reviewing the relevant chronology, the ALJ found that FlashPoint satisfied the domestic industry economic prong through the activities of a licensee at the time the amended complaint was filed.  ALJ Luckern further determined that the evidence proffered by FlashPoint of significant employment of labor and capital as well as substantial investment in engineering, research and development by another licensee – including a spreadsheet listing headcount and expenditures by quarter, model, and development activity (i.e., hardware vs. software) – sufficiently segregated the licensee’s investments in the development of specific models.  Finally, the ALJ rejected the Respondents’ argument that issues of fact remain because a licensee “strategically avoided” providing discovery, stating that the Respondents’ inability to obtain contradictory evidence from a third party does not mean that such evidence exists, and that if the Respondents believed a third party was non-cooperative, then they had the opportunity to seek additional discovery before the domestic industry discovery deadline.