By Eric Schweibenz
On September 16, 2011, the International Trade Commission issued the public version of former chief ALJ Paul J. Luckern’s Final Initial and Recommended Determinations ("ID") (dated July 27, 2011) in Certain Electronic Imaging Devices (Inv. No. 337-TA-726). 

By way of background, the Complainant in this investigation is FlashPoint Technology, Inc. (“Flashpoint”) and the remaining Respondents are HTC Corp. and HTC America, Inc. (collectively, “HTC”).  The patents-in-suit are U.S. Patent Nos. 6,262,769 (the ‘769 patent) and 6,163,816 (the ‘816 patent).  According to the ID, ALJ Luckern determined that no violation of Section 337 occurred by HTC.  Specifically, ALJ Luckern determined, inter alia, that (i) Flashpoint failed to show that the asserted claims of the ‘796 and ‘816 patents are infringed, (ii) it has been established that the asserted claims of the ‘816 patent are invalid under 35 U.S.C. § 102(b) (on sale bar), (iii) it was not established that the asserted claims of the ‘769 and ‘816 patents are invalid in view of prior art, (iv) Flashpoint’s rights under the ‘816 and ‘769 patents were not exhausted with respect to HTC’s accused Windows Phone 7 products, and (v) Flashpoint did not establish a domestic industry with respect to either of the ‘769 or ‘816 patents.    

Flashpoint’s complaint originally named Respondents Nokia Corp. and Nokia, Inc.; Research in Motion Ltd. and Research in Motion Corp.; HTC Corporation and HTC America, Inc.; LG Electronics, Inc., LG Twin Towers, LG Electronics USA, Inc. and LG Electronics MobileComm USA, Inc.  The Nokia, Research in Motion and LG Respondents were terminated from the investigation, leaving only the HTC Respondents.

Flashpoint alleged direct and indirect infringement of claims 1-7, 11-13, 16-23, 26 and 30-32 of the ‘769 patent (a method and system for image capture, rotation and display in a digital camera) and claims 1-5, 8-13 and 16 of the ‘816 patent (system and method for retrieving capability parameters in an electronic hand-held device.)  According to Flashpoint, HTC’s phones running Android 2.1 or higher infringed both patents and its phones running Windows 7 infringed the ‘769 patent.  Flashpoint selected the Droid X as a representative product for the Android phones and the HD7 as exemplary for Windows 7 phones.   The Commission investigative attorney (“OUII”) agreed with Flashpoint that the Android and Windows 7 phones infringed the ‘769, but argued that Flashpoint failed to prove infringement of the ‘816 patent.

In response, HTC alleged non-infringement and that the patents were anticipated, obvious and invalid due to the on-sale bar.

ALJ Luckern applied his claim construction and determined that neither the Droid X nor the HD7 infringed any of the asserted patent claims.  ALJ Luckern further determined that Flashpoint’s infringement arguments for the ‘816 patent were contrary to his claim construction and conflicted with its own expert’s testimony.  Since those phones were representative of all the phones, he held that none of the accused phones infringed.

Next up were HTC’s various invalidity allegations.  HTC argued that the ‘769 patent was obvious under various combinations of references and the ‘816 patent was anticipated.  OUII agreed with the former allegation and disagreed with the latter.  As part of its obviousness/anticipation defense, Flashpoint had argued they were entitled to the date of conception rather than the date of filing.  ALJ Luckern held that Flashpoint failed to prove diligence in reducing the invention to practice and that the inventor’s testimony was uncorroborated.  

ALJ Luckern also held that the references HTC cited in attacking the ‘769 patent disclosed the elements of the claim, but that HTC failed to prove the motivation or the manner by which these references would have been combined.  He also rejected the anticipation argument.  In this regard, ALJ Luckern held that the reference disclosed most of the elements of the ‘816 patent, but all the elements in the reference existed outside the device while the ‘816 patent claims required that they be “contained on a handheld device.”  ALJ Luckern further determined that the ‘816 patent was invalid due to the on-sale bar.

In addition, ALJ Luckern found that Flashpoint failed to prove the technical prong of the domestic industry requirement.  Flashpoint argued certain Motorola devices practiced the ‘769 patent and Apple also licensed and practiced the patent.  Based on his claim construction, ALJ Luckern rejected these arguments.  Likewise, he held that the Motorola devices did not practice the ‘816 patent either.

Regarding remedy and bonding, if the Commission ultimately found a violation in this investigation, ALJ Luckern recommended a limited exclusion order and no bond.