By Eric Schweibenz and Lisa Mandrusiak
On August 28, 2015, ALJ Thomas B. Pender issued Order No. 17 (dated Aug. 27, 2015) in Certain Audio Processing Hardware and Software and Products Containing Same (Inv. No. 337-TA-949), denying Respondents' motion for stay pending appeal and ordering Respondents to show cause why they should not be sanctioned for filing the motion for stay.

By way of background, this investigation is based on a February 6, 2015 complaint filed by Andrea Electronics Corp. ("Andrea") alleging violation of Section 337 in the importation into the U.S. and sale of certain audio processing hardware and software and products that infringe one or more claims of United States Patent Nos. 5,825,898; 6,483,923; 6,049,607; 6,363,345; and 6,377,637.  See our February 4, 2015 and March 23, 2015 posts for more details on the complaint and Notice of Investigation, respectively.

According to the Order, Respondents Hewlett-Packard Co., Dell Inc., Toshiba Corp., Toshiba America Information Systems, Inc., Lenovo Holding Co., Inc., Lenovo (United States) Inc., Acer, Inc., Acer America Corp., ASUSTeK Computer, Inc., and ASUS Computer International (the "Respondents") filed a motion to stay this investigation pending Federal Circuit appeal of the Commission's determination not to review ALJ Pender's Initial Determination ("ID") finding that Complainant Andrea had standing.

ALJ Pender noted in the Order that the Commission placed this Investigation in the Pilot Program and asked the ALJ to hold an early evidentiary hearing on standing.  Moreover, the notice of investigation specifically stated "[t]he issuance on an early ID finding complainant does not have standing to assert the asserted patents shall stay the investigation unless the Commission orders otherwise; any other decision shall not stay the investigation or delay the issuance of a final ID covering the other issues of the investigation."  In view of this language, ALJ Pender held that Respondents "ignored the Commission's clear instructions" when they filed a motion to stay pending Federal Circuit appeal of the ID holding that Andrea had standing.  The motion was therefore denied.  The ALJ also explained that the case law relied on by Respondents was inapposite, further warranting denial of the motion since the ID was not a final determination on the merits under Section 337.

ALJ Pender also noted that Respondents filed a separate motion asking the Federal Circuit to stay the Investigation one day after the deadline for responses to their motion at the Commission, and in view of these actions, ALJ Pender stated that it "would appear that the only reason for filing the motion to stay at the Commission was to delay these proceedings and/or cause Andrea and the Staff the unnecessary added expense of responding."

As such, and in view of the explicit language in the notice of Investigation, ALJ Pender ordered Respondents "to show cause why they (and their attorneys) should not be sanctioned" in view of the "frivolous nature" of Respondents' motion.

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