By Eric Schweibenz
On April 20, 2011, Chief ALJ Paul J. Luckern issued the public version of Order No. 33 (dated January 5, 2011) in Certain Integrated Circuits, Chipsets, and Products Containing Same Including Televisions, Media Players, and Cameras (Inv. No. 337-TA-709).  In the order, ALJ Luckern granted Complainant Freescale Semiconductor Inc.’s (“Freescale”) motion for summary determination that it satisfied the domestic industry requirement of Section 337 because of licensing activities in the United States for each of the patents-in-suit.

The Commission Investigative Staff supported the motion.  Respondents Panasonic Corporation, Funai Electric Co., Ltd., Funai Corporation, Inc., Victor Company of Japan Limited, JVC Americas Corp., Best Buy Purchasing, LLC, BestBuy.Com, LLC, and Best Buy Stores, L.P., B&H Foto & Electronics Corp., Huppin’s Hi-Fi Photo & Video, Inc., Buy.com Inc., QVC, Inc., Crutchfield Corporation, Computer Nerds International, Inc., and Wal-Mart Stores, Inc. (collectively, the “Respondents”) opposed the motion, arguing that Freescale failed to provide adequate evidentiary support that the activities forming the basis for its purported investments actually relate to licensing.  Specifically, the Respondents argued (1) that Freescale’s investments included payroll expenses for “persons attenuated from the actual licensing of the patents-in-suit” and non-payroll expenses for office supplies and “other mundane things,” (2) that Freescale provided no job descriptions or other indication that the individuals in question were actually engaged in licensing activities, and (3) that Freescale did not identify the expenses for the licenses relied on to establish domestic industry.

In rejecting the Respondents’ arguments, ALJ Luckern determined that Freescale had relied on substantial licensing related expenses which the Respondents did not categorize as “attenuated” or “mundane,” and that payroll expenditures on administrative personnel and non-payroll expenditures on office supplies may be related to licensing activities that “take advantage of” the patents-in-suit through “drafting and sending cease and desist letters, filing and conducting a patent infringement litigation, conducting settlement negotiations, or negotiating, drafting, and executing a license,” citing Certain Coaxial Cable Connectors and Components Thereof and Products Containing Same, Inv. No. 337-TA-650, Comm’n Op. at 49-50 (March 31, 2010).  Further, ALJ Luckern determined that Freescale had in fact provided evidence regarding the activities of the personnel in question (e.g., 30(b)(6) deposition testimony), and that Freescale’s evidence demonstrated a sufficient nexus between the licensing activities and the patents-in-suit.