By Eric Schweibenz
On April 2, 2013, ALJ David P. Shaw issued the public version of the Remand Initial Determination (“RID,” dated March 22, 2013) in Certain Gaming and Entertainment Consoles, Related Software, and Components Thereof (Inv. No. 337-TA-752).

By way of background, the investigation is based on a complaint filed by Motorola Mobility, Inc. and General Instrument Corporation (collectively, “Motorola”) alleging violation of Section 337 by Respondent Microsoft Corp. (“Microsoft”) for its importation into the U.S. and sale of certain models of Microsoft’s popular Xbox product.  See our November 24, 2010 post for more details. 

On April 23, 2012, ALJ Shaw issued an initial determination (“ID”) which found that a violation of Section 337 occurred by reason of infringement of certain valid claims of U.S. Patent Nos. 5,357,571 (the ‘571 patent); 6,069,896 (the ‘896 patent); 6,980,596 (the ‘596 patent); and 7,162,094 (the ‘094 patent).  See our May 24, 2012 post for more details on the public version of the ID.  On June 29, 2012, the ITC issued a notice determining to review the ID in its entirety.  The Commission also remanded the investigation to the ALJ to “(1) apply the Commission’s opinion in Certain Electronic Devices with Image Processing Systems, Components Thereof, and Associated Software, Inv. No. 337-TA-724, Comm’n Op. (Dec. 21, 2011); (2) rule on Microsoft’s motion for partial termination of the investigation …; and (3) set a new target date for completion of the investigation,” which allows four months for Commission review.  See our July 3, 2012 post for more details.

We now provide additional information based on the public version of the RID.
According to the RID, although ALJ Shaw had previously found Microsoft’s accused products to directly infringe the ‘896 patent, “in view of the Commission’s opinion in Electronic Devices, it is now apparent that Microsoft does not directly infringe.”  The claims at issue are directed to methods of establishing a wireless peer-to-peer communication network.  As summarized by the ALJ, Electronic Devices “holds that the practice of an asserted method claim within the United States after importation cannot serve as the basis for an exclusion order.”  In other words, “[a]n article, standing alone, cannot directly infringe a method claim” as the act of importation does not carry out all the steps of the method claim.  Therefore, ALJ Shaw determined that Microsoft does not directly infringe the asserted claims of the ‘896 patent.

Although ALJ Shaw determined that there was no need for further analysis regarding indirect infringement as Motorola had waived such arguments and was “only able to present indirect infringement evidence that could have been presented earlier,” he conducted a thorough analysis in case the Commission disagreed.

In relation to Motorola’s argument that Microsoft induced infringement, Microsoft asserted that Motorola failed to prove the specific intent requirement and failed to show that Microsoft had knowledge that the method was patented and infringing.  ALJ Shaw agreed.  Although Microsoft had known of the patent for several years, “it is insufficient simply to show that the accused party knows that its customers perform acts and that those acts happen to infringe a patent.”  Furthermore, the ALJ concluded that Microsoft’s packaging and user guides, showing use of components that together practice the patented invention, does not show specific intent to induce infringement as there are other, noninfringing ways of controlling the devices. 

ALJ Shaw concluded that Motorola’s contributory infringement arguments failed as well, as the accused products “are not material parts of the claimed inventions and are not especially made or adapted for infringement, and because they have substantial noninfringing uses.”  Specifically, the ALJ noted that Motorola had failed to match the accused products to each element of the claims in order to determine that they were “material.”  Furthermore, ALJ Shaw pointed to the substantial noninfringing uses argued by Microsoft, including those where the components were connected via wires, as opposed to the wireless aspect of the claims, and emphasizing the additional (noninfringing) functions achievable when the components were connected wirelessly.

Therefore, ALJ Shaw determined that no violation of Section 337 had occurred, as there was no direct or indirect infringement of the ‘896 patent.