By Eric Schweibenz and Lisa Mandrusiak
On August 7, 2014, ALJ David P. Shaw issued the public version of the recommended determination ("RD") (dated July 16, 2014) in Certain Digital Media Devices, Including Televisions, Blu-Ray Disc Players, Home Theater Systems, Tablets and Mobile Phones, Components Thereof and Associated Software (Inv. No. 337-TA-882).

By way of background, this investigation was instituted on June 12, 2013 and is based on a May 13, 2013 complaint filed by Black Hills Media, LLC ("BHM") alleging violation of Section 337 in the importation into the U.S. and sale of certain digital media devices that infringe one or more claims of U.S. Patent Nos. 8,028,323; 8,214,873 (the '873 patent); 8,230,099; 8,045,952 (the '952 patent); 8,050,652 (the '652 patent) and 6,618,593 (the '593 patent). See our May 16, 2013 and June 20, 2013 posts for more details on the complaint and the notice of investigation, respectively.

According to the initial determination ("ID"), ALJ Shaw determined that no violation of Section 337 has occurred because the accused Samsung, LG, and Toshiba products do not infringe the asserted patents and the domestic industry requirement has not been satisfied with respect to any asserted patent. For additional details, see our July 10, 2014 post.

Although ALJ Shaw found no violation, the ALJ is required to issue an RD concerning the appropriate remedy in the event that the Commission ultimately does find a violation of Section 337.

According to the RD, BHM argued that a limited exclusion order would be appropriate in the event a violation of Section 337 is found, and Respondents "d[id] not deny that a limited exclusion order would be an appropriate remedy," but rather argued what the boundaries of the order should be. The Commission Investigative Staff ("OUII") agreed with Respondents because the accused products do not infringe (nor were accused to infringe) on their own, but only in combination with specific software applications. In light of these arguments, the ALJ recommended that a limited exclusion order should cover only specific combinations of accused products and software found to infringe.

BHM also argued that a cease and desist order would be appropriate, alleging that Respondents "currently maintain commercially significant inventories of infringing products" in the U.S. Respondents and OUII asserted that BHM failed to meet its affirmative burden in this regard, and that there is no evidence of a commercially significant inventory. ALJ Shaw considered the evidence related to each Respondent separately, and concluded that, even assuming that the evidence showed commercially significant inventory for each (which it did not), BHM did not demonstrate that the accused products in the inventory were imported in combination with the required software. As such, the ALJ recommended that no cease and desist order be issued.

ALJ Shaw also determined the amount of bond that would be appropriate during the Presidential review period. Although BHM argued that a 100% bond was appropriate, Respondents and OUII argued that, in light of BHM's status as a non-practicing entity, no bond is required as there could be no lost sales, and that BHM's proposal of 100% was "disingenuous" since BHM failed to ascertain a price differential. ALJ Shaw agreed with Respondents and the OUII, recommending that any bond should be zero.