By Eric Schweibenz
On August 6, 2012, ALJ Theodore R. Essex issued Order No. 17 in Certain Integrated Circuits, Chipsets, and Products Containing Same Including Televisions (Inv. No. 337-TA-822).  In the Order, ALJ Essex determined to stay the investigation pending the Commission’s Final Determination in Inv. No. 337-TA-786.

According to the Order, Respondents Zoran Corporation (“Zoran”), MediaTek, Inc. (“MediaTek”), VIZIO, Inc., Sanyo Electric Co., Ltd., Sanyo North America Corp., Sanyo Manufacturing Corp., TPV Technology Ltd., TPV International (USA) Inc., Top Victory Electronics (Taiwan) Co., Ltd., Top Victory Electronics (Fujian) Co., Ltd., Envision Peripherals, Inc., AmTran Technology Co., Ltd., and AmTran Logistics, Inc. (collectively, the “Respondents”) filed a motion to stay the procedural schedule in the 822 investigation until the Commission issues its Final Determination in the 786 investigation.  Complainant Freescale Semiconductor, Inc. (“Freescale”) opposed the motion.  The Commission Investigative Staff did not take a position on the motion.

In the Order, ALJ Essex noted that the 822 and 786 investigations “are identical in almost all respects.”  In particular, the ALJ noted that the Complainant, the asserted patent, and the asserted claims are the same in both investigations.  Further, the chip suppliers/manufacturers of the accused chip packages—Zoran and MediaTek—are the same in both investigations, although the downstream Respondents are different.  The ALJ also noted that on July 12, 2012, ALJ Robert K. Rogers, Jr. issued an Initial Determination (“ID”) in the 786 investigation finding  no violation of Section 337 because, inter alia, the asserted claims of U.S. Patent No. 5,467,455 (the ‘455 patent) are invalid.  See our July 16, 2012 post for more details.  The Order states that the ID in the 786 investigation is currently pending before the Commission.

In their motion, the Respondents argued that a stay was warranted because (1) it would conserve Commission resources on the upcoming hearing in the 822 investigation; (2) it would dramatically simplify this issues and the hearing, especially if the invalidity of the ‘455 patent is upheld; (3) Freescale would only suffer minimal, if any, prejudice; (4) the 786 investigation is near its Target Date; and (5) the stay would result in the efficient use of Commission resources.

Freescale argued that the balance of factors weighed against granting the stay.  In particular, Freescale argued that (1) the state of discovery and the hearing date weighed against a stay since fact discovery is over and expert discovery is well under way; (2) a stay would not simplify the issues since, even if the Commission did uphold the invalidity ruling, the question of whether the claims are invalid is not final because Freescale can appeal the holding to the Federal Circuit; (3) Freescale would be unfairly prejudiced; (4) the stage of the 786 investigation relative to the stage of the 822 investigation and the expiration of the ‘455 patent weighed against granting the stay; and (5) a stay would not result in a more efficient use of the Commission’s resources.

After considering the arguments, ALJ Essex determined to stay the investigation.  The ALJ noted that the Commission’s Final Determination in the 786 investigation could ultimately be dispositive of the 822 investigation.  In particular, the ALJ found that a Commission decision affirming the invalidity of the ‘455 patent “would end the question as to whether this investigation should proceed.”  ALJ Essex also found that, in any event, staying the pre-hearing preparations and the hearing dates in the 822 investigation would allow the parties and the ALJ to prepare for the hearing with the Commission’s guidance and would simplify the issues in the investigation.  Additionally, any prejudice to Freescale weighed only slightly against granting the stay.  Moreover, the stage of the parallel proceedings in the 786 investigation weighed in favor of a stay because the 786 investigation is clearly in its final stages.  Lastly, a stay would allow for the efficient use of Commission resources, especially in light of the fact that “the Commission and this ALJ are carrying extremely heavy Section 337 dockets.”