U.S. International Trade Commission

In the Matter of

Publication 4120 December 2009

Washington, DC 20436

Investigation No. 337-TA-586

Certain Stringed Musical Instruments and 

Components Thereof
U.S. International Trade Commission

Address all communications to 

Secretary to the Commission 

United States International Trade Commission 

Washington, DC 20436

COMMISSIONERS 

Shara L. Aranoff, Chairman 

Daniel R. Pearson, Vice Chairman 

Deanna Tanner Okun 

Charlotte R. Lane 

Irving A. Williamson 

Dean A. Pinkert 
U.S. International Trade Commission

Washington, DC 20436 

www.usitc.gov

In the Matter of

Publication 4120 December 2009

Investigation No. 337-TA-586

Certain Stringed Musical Instruments and 

Components Thereof


Vigier, Inc. (Grigny, France) (“Vigier”), and Schaller Electronic (Postbauer-Heng, Germany). 

Hoshino and Vigier have been terminated from the investigation on the basis of settlement 

agreements. Only claims 8,9, and 11 of the ‘066 patent and claims 1 and 14-22 of the ‘094 

patent remained in the case as of the date of the final ID. 

On December 3,2007, the administrative law judge (“ALJ”) issued a final initial 

determination (“ID”) finding no violation of section 337, on the ground that the economic prong 

of the domestic industry requirement was not met as required by section 337(a)(2), (3)(C). 

McCabe and the Commission investigative attorney filed petitions for review. On December 21, 

2007, the Commission issued a notice extending the deadline for determining whether to review 

the subject ID by fifteen (15) days until February 1,2008. On February 1,2008, the Commission 

issued a notice extending the deadline for determining whether to review the ID to February 8, 

2008, and extending the target date for completion of the investigation to April 10,2008. On 

February 7,2008, the Commission issued a notice of a determination to review the subject ID in 

its entirety, requesting briefing on the issues on review, including certain specific questions. On 

April 10,2008, the Commission issued a notice extending the target date to April 24,2008. 

Having considered the submissions on review and the relevant portions of the record, the 

Commission has determined to terminate the investigation with a finding of no violation for 

failure to meet the domestic industry requirement. 

This action is taken under the authority of section 337 of the Tariff Act of 1930, as 

amended (19 U.S.C. 5 1337), and in sections 210.41 and 210.45(c) of the Commission’s Rules of 

Practice and Procedure (1 9 CFR 5 5 2 10.4 1,2 10.45(c)). 

By order of the Commission. \ 

Marilyn R. Ab&& 

Secretary to the Commission 

Issued: April 24,2008 

2 
UNITED STATES INTERNATIONAL TRADE COMMISSION 

Washington, D.C. 20436 

In the Matter of 

CERTAIN STRINGED MUSICAL 

INSTRUMENTS AND COMPONENTS 

THEREOF 

Investigation No. 337-TA-586 

ORDER 

This investigation was instituted on November 3,2006, based upon a complaint filed 

October 3,2006, and supplemented October 24,2006, by Geoffiey McCabe (Los Angeles, 

California) (“McCabe”). 71 Fed. Reg. 64738 (Nov. 3,2006). The complaint alleged violations 

of section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. 3 1337, in the importation into 

the United States, the sale for importation, and the sale within the United States after importation 

of certain stringed musical instruments and components thereof by reason of infiingement of one 

or more of claims 1-6, 8,9, and 11 of U.S. Patent No. 6,175,066 (“the ‘066 patent”); claims 1-6 

of U.S. Patent No. 5,965,831; claims 1 and 14-22 of U.S. Patent No. 6,891,094 (“the ‘094 

patent”); and claims 1-3,6-10, 14, 15,23,27,28, and 32 0fU.S. Patent No. 5,986,191. The 

complaint named as respondents Floyd Rose Guitars (Redmond, Washington), Ibanez, Inc. 

(Hoshino) US (Bensalem, Pennsylvania) (“Hoshino”), Vigier, Inc. (Grimy, France) (“Vigier”), 

and Schaller Electronic (Postbauer-Heng, Germany). Hoshino and Vigier have been terminated 

fiom the investigation on the basis of settlement agreements. Only claims 8,9,, and 1 1 of the 

‘066 patent and claims 1 and 14-22 of the ‘094 patent remained in the case as of the date of the 

final ID. 
On December 3,2007, the administrative law judge (“WJ”) issued a final initial 

determination (“ID”) finding no violation of section 337, on the ground that the economic prong 

of the domestic industry requirement was not met as required by section 337(a)(2), (3)(C). 

McCabe and the Commission investigative attorney filed petitions for review. On December 21, 

2007, the Commission issued a notice extending the deadline for determining whether to review 

the subject ID by fifteen (1 5) days until February 1,2008. On February 1,2008, the Commission 

issued a notice extending the deadline for determining whether to review the ID to February 8, 

2008, and extending the target date for completion of the investigation to April 10,2008. On 

February 7,2008, the Commission issued a notice of a determination to review the subject ID in 

its entirety, requesting briefing on the issues on review, including certain specific questions. On 

April 10,2008, the Commission issued a notice extending the target date to April 24,2008. 

Having considered the submissions on review and the relevant portions of the record, 

It is hereby Ordered that: 

(1) This investigation is terminated with a finding of no violation for failure to 

meet the domestic industry requirement. 

(2) The Secretary to the Commission shall serve a copy of this Order on all parties to the 

investigation. 

By order of the Commission. 

M~’y”R-v Secretary to e Commission 

Issued: April 24,2008 

2 
CERTAIN STRINGED MUSCIAL INSTRUMENTS AND 337-TA-586 

COMPONENTS THEREOF 

PUBLIC CERTIFICATE OF SERVICE 

I, Marilyn R. Abbott, hereby certify that the attached NOTICE OF COMMISSION 

DETERMINATION OF NO VIOLATION OF SECTION 337; TERMINATION 

OF INVESTIGATION has been served by hand upon the Commission Investigative 

Attorney, Rett Snotherly, Esq., and the following parties as indicated, on 

ril 75. 7008 

U.S. kternati&d"hade Commission 

500 E Street, SW 

Washington, DC 20436 

ON BEHALF OF COMPLAINANT GEOFFREY 

MCCABE: 

Robert M. Hansen, Esq. 

Stephen D. Huang, Esq. 

Reza Ghafoorian, Esq. 

HANSEN HUANG TECHNOLOGY LAW GROUP, 

LLP 

1725 Eye Street, NW, Suite 300 

Washington, DC 20006 

( ) Via Hand Delivery 

( ) Via Overnight Mail 

(9 Via First Class Mail 

( )Other: 

P-202-465-3294 

F-202-349-39 15 

ON BEHALF OF RESPONDENT SCHALLER 

ELECTRONIC: 

Marina F. Cunningham, Esq. 

Wm. Tucker Griffith, Esq. 

Jeanne M. Tanner, Esq. 

MCCORMICK, PAULDING & HUBER LLP 

City Place I1 

185 Asylum Street 

Hartfort, CT 06103-3410 

P-860-549-5290 

( ) Via Hand Delivery 

( ) Via Overnight Mail 

('Q Via First Class Mail 

( )Other: 
Page 2 - Certificate of Service 

ON BEHALF OF RESPONDENT FLOYD ROSE 

MARKETING: 

Joseph S. Littenberg, Esq. 

Willilam L. Mentlik, Esq. 

Roy H. Wepner, Esq. 

LERNER, DAVID, LITTENBERG, 

KRUMHOLZ & MENTLIK, LLP 

600 South Avenue West 

Westfield, NJ 07090 

P-908-654-5000 

F-908-654-7866 

( ) Via Hand Delivery 

( ) Via Overnight Mail 

Via First Class Mail 

( )Other: 

PUBLIC VERSION 

1930 on the ground that the complainant’s activities did not satisfy the economic prong of the 

domestic industry requirement. He also issued a recommended determination (“RD”) on remedy 

and bonding. 

Complainant Geoffrey McCabe (“McCabe”) and the Commission investigative attorney 

(“IA”) filed petitions for review of the ALJ’s final ID. Upon consideration of the petitions and 

responses thereto, the Commission determined to review the subject ID in its entirety. 

On review, the Commission has determined to terminate the investigation with a finding 

of no violation for failure to meet the domestic industry requirement of section 337(a)(2), (3). 

The following opinion sets forth the reasons for the Commission’s determination. 

I. BACKGROUND 

The Commission hereby adopts the administrative law judge’s findings of fact set out in 

the final initial determination. 

A. Procedural History 

1. The Complaint and the Proceedings Before the ALJ 

On November 3,2006, the Commission instituted this investigation based upon a 

complaint filed October 3,2006, and supplemented October 24,2006, by Geoffrey McCabe (Los 

Angeles, California) (“McCabe”). 71 Fed. Reg. 64738 (Nov. 3,2006). The complaint alleged 

violations of section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. 0 1337 (“section 

337’7, in the importation into the United States, the sale for importation, and the sale within the 

United States after importation of certain stringed musical instruments and components thereof 

by reason of infringement of one or more of claims 1-6, 8,9, and 11 of U.S. Patent No. 6,175,066 

(“the ‘066 patent”); claims 1-6 of U.S. Patent No. 5,965,831; claims 1 and 14-22 of U.S. Patent 

2 
PUBLIC VERSION 

No. 6,891,094 (“the ‘094 patent”); and claims 1-3,6-10, 14, 15,23,27,28, and 32 of U.S. Patent 

No. 5,986,191. The complaint named as respondents Floyd Rose Guitars (Redmond, 

Washington) (“Rose”), Ibanez, Inc. (Hoshino) US (Bensalem, Pennsylvania) (“Hoshino”), Vigier, 

Inc. (Grigny, France) (“Vigier”), and Schaller Electronic (Postbauer-Heng, Germany) 

(“Schaller”). 

McCabe is both the inventor on the asserted patents and the complainant. Hoshino and 

Vigier have both settled with McCabe, and the investigation has been terminated with respect to 

these respondents. See Notice, June 6,2007 and July 30,2007. Both settlements involved 

license agreements. The only respondents remaining are Rose and Schaller. Rose and Schaller 

did not participate in the hearing and did not file post-hearing briefs. At the hearing, counsel for 

complainant represented that McCabe would only be asserting claims 8,9, and 11 of the ‘066 

patent and claims 1, and 14-22 of the ‘094 patent, but not the other patents asserted in the 

complaint. Tr. at 44-45. 

2. The AL J’s Final Initial Determination 

On December 3,2007, the administrative law judge (“ALJ”) issued a final initial 

determination (“ID”) finding no violation of section 337 for failure to meet the domestic industry 

requirement. The ALJ found that subject matter jurisdiction was established by the admission of 

Rose and Schaller that they imported the accused Speedloader products into the United States. 

ID at 7-8. The ALJ found personal jurisdiction was established by the respondents’ response to 

the complaint and participation in discovery and pre-hearing briefing. The ALJ denied 

McCabe’s motion to draw any adverse inferences against Rose under Commission Rule 

210.17(d) for failure to appear at the hearing, stating that Rose had filed a pre-hearing brief, and 

3 
PUBLIC VERSION 

that when Rose gave notice to the other parties that it would not participate in the hearing, 

McCabe had not objected at that time or made any representation that he would be prejudiced. 

ID at 4.’ 

On the merits, the ALJ found that the complainant had failed to show that his alleged 

research and development and licensing activities meet the economic prong of the domestic 

industry requirement as required by section 337(a)(2), (3)(C). The ALJ did not address the other 

issues raised in this case. With regard to research and development, the ALJ held that McCabe’s 

$8,500 expenditures on prototypes were significantly less than those of previous complainants 

for which the Commission found a domestic industry existed, and did not constitute a substantial 

investment. ID at 23-24. With regard to licensing, the ALJ held that the complainant must 

receive revenue from his licensing activities, ID at 1 1 , and that even counting the licenses arising 

from settlement with two Commission respondents after the filing of the complaint (Hoshino and 

Vigier), McCabe’s revenue was significantly less than the complainant in Certain Digital 

Processors who received “‘millions of dollars in royalties due to the successhl licensing of its 

patent portfolio. ”’ ID at 24 (quoting Certain Digital Processors and Digital Processing Systems, 

Components ThereoJ; and Products Containing Same ( “Certain Digital Processors”), Inv. No. 

337-TA-559, Initial Determination at 94 (May 11 , 2007). The ALJ issued a recommended 

determination (RD) on remedy and bonding in the event that the Commission should find a 

violation, recommending a limited exclusion order, a cease and desist order against Rose, and a 

bond in the amount of $3 per infringing article to permit temporary importation during the 

McCabe did not petition for review of the denial of his motion. 

4 
PUBLIC VERSION 

Presidential review period. 

3. Petitions for Review 

McCabe and the Commission investigative attorney (“the IA”) filed petitions for review 

of the ALJ’s final ID. McCabe argued that the ALJ erred as a matter of law in comparing the 

investments made by McCabe to those of high technology companies, without considering the 

nature of the musical instrument marketplace. McCabe Petition for Review at 14- 15. McCabe 

stated that the Commission has recently held that “there is no mathematical threshold test” for 

the economic prong of the domestic industry requirement, which is based instead on “an 

examination of the facts in each investigation, the articles of commerce, and the realities of the 

marketplace.” McCabe Petition for Review at 1 1 - 12 (citing Certain Male Prophylactic Devices, 

Inv. No. 337-TA-546, Commission Op. at 39 (June 22,2007) (citing Certain Double-Sided 

Floppy Disk Drives and Components Thereof (TEO), Inv. No. 337-TA-215 (May 1986))). 

McCabe pointed to the Commission’s statement that “small businesses in this country can 

become larger ones, and there is a public interest in protecting them against unfair theft of their 

property rights.” McCabe Petition for Review at 12 (citing Certain Static Random Access 

Memories and Integrated Circuit Devices Containing Same, Processes for Making Same, 

Components Thereox and Products Containing Same, Inv. No. 337-TA-325, Order No. 9 at 4 

(May 14, 1991). He also referred to Certain Audible Alarm Devices, Inv. No. 337-TA-365, 

Initial Determination at 50 (Feb. 2, 1995), non-reviewed by Notice of Mar. 21, 1995 (“there is no 

requirement under Section 337 that an industry be a certain size”). In the context of licensing, 

McCabe explained that the unit price and sale volume of musical instruments is lower than that 

of the products at issue in Digital Processors, cited by the ALJ in the subject ID, making 

5 
PUBLIC VERSION 

comparison to Digital Processors arbitrary and unfair. McCabe Petition for Review at 17 

(discussing ID at 24). McCabe stated that the Commission has moved towards a simpler test to 

determine the existence of a domestic industry under section 337(a)(3)(C). McCabe Petition for 

Review at 13, 15 (citing Certain Microlithographic Machines and Components ThereoJ Inv. No. 

337-TA-468, ID at 346 (Jan. 29,2003)(noting that the Commission no longer compares what 

percent of an article is manufactured in the United States versus what percent of that article was 

manufactured abroad), as modified by Commission Notice (Mar. 17,2003) (deciding not to 

review analysis in ID of section 337(a)(3)(C), but taking no position on analysis of section 

337(4(3)(A) and 

McCabe argued that the licensing revenue he received from Hoshino and Vigier after the 

filing of the complaint should count toward satisfaction of the domestic industry requirement. 

McCabe Petition for Review at 13, 18 (citing Certain Concealed Cabinet Hinges and Mounting 

Plates, Inv. No. 337-TA-289, Commission Op. at 21 (Jan. 8, 1990) (declining to adopt the ALJ’s 

finding that the date of the last supplement to the complaint was the critical date); Certain 

Variable Speed Wind Turbines and Components ThereoJ; Inv. No. 337-TA-376, Commission Op. 

at 15- 18 (Nov. 1996) (Commission takes into account that complainant filed for bankruptcy after 

the filing of the complaint). 

The IA stated that there is no absolute threshold for “substantial investment” and agreed 

with McCabe that Digital Processors is the wrong benchmark because the musical instruments 

industry is a smaller industry than the parallel processing semiconductor industry. IA Petition for 

Review at 11. In addition, the IA pointed to McCabe’s out of pocket costs, presentation of 

designs at trade shows, and incorporation of a now dehnct company. Id. at 1 1 - 12. 

6 
PUBLIC VERSION 

The IA agreed that McCabe’s research and development activities and licensing activities 

should satisfy the economic prong of the domestic industry requirement under section 

337(a)(3)(C). Moreover, the IA stated that the ALJ ignored McCabe’s “sweat equity,” pointing 

out that McCabe put in a substantial effort over many years to license his patents, noting his 

licensing to Hoshino and Vigier (which occurred after the filing of the complaint), and arguing 

that this activity meets the economic prong of the domestic industry requirement under section 

337(a)(3)(C). IA Petition for Review at 11-14. 

Rose responded that McCabe does not meet the criteria for the economic prong of 

domestic industry under research and development or licensing. Rose pointed to legislative 

history that the domestic industry requirement is supposed to serve a gatekeeping function. Rose 

Response at 4 (citing 132 Cong. Rec. H9965 (Oct. 14, 1996). Rose stated that McCabe has never 

had facilities outside his personal residence, does not engage in the relied-on business full-time, 

and has no formal record keeping. Id. at 6. Rose stated that the ALJ was correct in finding that 

McCabe’s research and development total $8,500 rather than $12,500, and that over 17 years this 

would amount to $500 a year, which Rose argued is a de minimis investment and not the 

substantial exploitation of intellectual property required by section 337(a)(3)(C). Id. at 6-7. 

With respect to licensing, Rose argued that McCabe’s activities are not substantial, that the 

license agreements agreed to as part of the settlement with various respondents did not include 

US. Patent No. 6,891,094, and that, in any case, it would be against public policy to allow 

complainants to meet the domestic industry requirement after the fact as a result of settlements 

by respondents who would otherwise be immune from suit from a complainant who did not meet 

the domestic industry requirement before settlement. 

7 
PUBLIC VERSION 

4. Commission Review 

On December 2 1 , 2007, the Commission issued a notice extending the deadline for 

determining whether to review the subject ID by fifteen (1 5) days until February 1 , 2008. On 

February 1,2008, the Commission issued a notice extending the deadline for determining 

whether to review the ID to February 8,2008, and extending the target date for completion of the 

investigation to April 10,2008. 

On February 7,2008, the Commission determined to review the subject ID in its entirety, 

and issued a notice requesting briefing on the issues on review, including the following three 

groups of questions: 

(1) What type and level of research and development is necessary to satisfy the economic 

prong of the domestic industry requirement under section 337(a)(3)(C)? Should it differ 

depending upon the size of the relevant marketplace or whether the patent holder is an 

individual versus some other entity? What is the appropriate industry market in which we 

should examine the economic prong of the domestic industry requirement: the market for 

certain guitars, all guitars, certain musical instruments, or all musical instruments or some 

other industry market? How do these criteria apply in this case? How is your argument 

supported by the record in this case? Does research and development prior to the 

issuance of a patent count towards the domestic industry requirement? 

(2) What type and level of licensing activity is necessary to satisfy the economic 

prong of the domestic industry requirement under section 337(a)(3)(C)? Is the 

relevant time period for licensing activity before or after the filing of the 

complaint, or both? How do these criteria apply in this case? How is your 

argument supported by the record in this case? For the purposes of this question, 

consider whether licensing negotiations would qualify if they did not result in an 

actual license during a relevant period of time. 

(3) Is the relevant industry in this case “in the process of being established” 

pursuant to section 337(a)(2)? Was this issue properly raised before the ALJ and 

in the petitions for review? How is your argument supported by the record in this 

case? How do the criteria for an industry in the process of being established differ 

from the criteria for an industry that already exists? 

McCabe, Rose, and the IA submitted responses to the questions on review, and replies thereto. 

8 
PUBLIC VERSION 

On April 10,2008, the Commission issued a notice extending the target date to April 24,2008. 

B. The Complainant’s Domestic Activities 

1. Alleged Research and Development Activities 

In 1988, McCabe had a prototype of his fulcrum tremolo tuning device manufactured at a 

cost of $3,500. ID at 13. Then in 1990, McCabe had a second prototype developed at a cost of 

$4,000. In 1998, McCabe developed a third prototype that could be used on a Fender 

Stratocaster style guitar. ID at 13. In 2000, McCabe developed a fourth prototype, and between 

2002 and 2003 developed a fifth prototype as part of a collaboration with Sonic Sales. ID at 14. 

2. Alleged Licensing Activities 

McCabe attended the National Association of Music Merchants (“NAMM”) shows and 

entered into talks with potential manufacturers. Drawings of McCabe’s design were included in 

Kahler International Inc.’s catalog at the 2006 NAMM show which were compatible with the 

Fender standard. ID at 14-15. 

McCabe did not consummate any licenses before the filing of the complaint. However, 

he negotiated with several companies, as discussed below. After the filing of the complaint, he 

did settle with and enter into licenses with Hoshino and Vigier. ID at 18-19. 

McCabe asserts that in 200 1 he received a licensing offer from Seymour Duncan 

Company. ID at 15. He states that the deal fell through because of a deteriorating business 

relationship. ID at 16. The ALJ found that McCabe did not receive an offer to license his 

product but rather that Seymour Duncan was assisting McCabe in licensing Rose’s patent. ID at 

23. 

McCabe also asserts that he received a licensing offer from Kahler. This deal fell through 

9 
PUBLIC VERSION 

due to concerns on Kahler’s part. ID at 16. The ALJ found no evidence that there was an 

agreement between these parties at any time. ID at 23. 

In 2002-2003, Sonic Sales and Jack Westheimer expressed interest in licensing and 

manufacturing McCabe’s design. The companies decided not to manufacture McCabe’s guitars 

for fear of infringing Rose’s “Speedloader” patent. ID at 16-17. McCabe entered into talks with 

Rose at this time, including licensing discussions. McCabe also discussed licensing with 

respondent Hoshino, and after this investigation commenced, licensed respondents Hoshino and 

Vigier. 

Later, Kahler again considered licensing from McCabe but told McCabe that he must 

eliminate the possibility that Rose might sue a manufacturer on the basis of its Speedloader 

patent. ID at 18. 

C. The Patented Instruments 

The invention relates to improved stringed instruments (guitars) which contain 

components which allow a musician to optimally tune the strings. Generally, when a musician 

tunes a stringed instrument, he or she turns a peg which tightens the strings. This not only 

increases the tension of the strings, but also changes the length of the strings. This is a problem 

because the pitch of the string depends on the tension but the harmonic properties depend on the 

length. ‘094 patent, col. 1 , lines 50-60. Thus, the usual method of pitch tuning may affect the 

harmonic tuning of the instrument. The present invention allows the musician to do both pitch 

tuning and harmonic tuning without one disturbing the other. 

U.S. Patent No. 6,175,066 (the ‘066 patent) issued on January 16,2001. JX-1. The 

patent issued from an application no. 08/027,729, filed January 14, 1993, which was a divisional 

10 
PUBLIC VERSION 

of application no. 07/607,458, filed October 3 1, 1990 (issued as non-asserted U.S. Patent No. 

5,198,601). The ‘066 patent features a “fulcrum tremolo” which sits between the strings’ critical 

attachment points on the neck and the tailpiecehridge and allows the musician to adjust the 

length and tension of the strings. Claims 8,9, and 11 are asserted. Independent claim 8 recites: 

8. A stringed musical instrument comprising an elongated neck and a body 

attached to one end of said neck, a bridge-tailpiece assembly mounted on said 

body, a plurality of elongated strings, means on said neck for supporting and 

forming a first critical point for each of said strings, said bridge-tailpiece having a 

plurality of bridge elements, said plurality of bridge elements each having a 

surface forming a second critical point for each of said strings, said 

bridge-tailpiece assembly comprising a fulcrum tremolo having a fulcrum axis, 

said bridge elements being pivotably displaceable by an essentially constant radius 

about said fulcrum axis, wherein at least one of said bridge elements has an 

enlarged curved surface and said enlarged curved surface extending generally in 

the direction of said strings, said second critical point travels a critical distance 

along the surface of said enlarged curved surface and displaces the second critical 

point from said essentially constant radius during the pivoting of said fulcrum 

tremolo about said fulcrum axis. 

U.S. Patent No. 6,891,094 (the ‘094 patent) issued on May 10,2005. JX-3. The patent is 

a continuation of application no. 08/027,729, filed January 14, 1993 (issued as the ‘066 patent), 

which itself is a divisional of the application that issued as non-asserted U.S. Patent No. 

5,198,601. Id. The ‘094 patent teaches a fulcrum tremolo with a tuning adjustment device for 

fine tuning. Claims 1, and 14-22 are asserted. Independent claim 1 recites: 

1. A stringed musical instrument comprising: a body, a neck extending outwardly 

from said body, a head located opposite said body on said neck, at least one string 

extending from said body to said head, said at least one string having a first end 

and a second end, a first mechanism on said head for supporting and forming a 

first critical point for said at least one string, a second mechanism on said body for 

supporting and forming a second critical point for said at least one string, said first 

end secured to said head and said second end secured to said body, and a tuning 

adjustment device comprising: a first portion to tension said at least one string to 

playing pitch fiom an untensioned condition to at least one pitch tuning quickly, 

and a second portion to further tension said at least one string at playing pitch, 

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PUBLIC VERSION 

wherein said second portion is in close proximity to said first portion, wherein 

said tuning adjustment device is located on said body, and said tuning adjustment 

device further comprising: at least one anchor connected with said second end, 

and at least one third portion for pivoting said at least one anchor about an axis 

that is transverse to the axis of said at least one string in a first direction to tension 

said at least one string to said at least one pitch tuning. 

11. ANALYSIS 

A. Standard of Review 

Under the Administrative Procedure Act, upon review of the initial determination of the 

ALJ, “the agency has all of the powers which it would have in making the initial decision except 

as it may limit the issues on notice or by rule.” 5 U.S.C. 0 557(b) (quoted in Certain AcidWashed Garments and Accessories, Inv. No. 337-TA-324 (U.S.I.T.C. Aug. 6, 1992)); 19 C.F.R. 

0 210.45(c). In other words, once the Commission decides to review the decision of the ALJ, 

the Commission may conduct a review of the findings of fact and conclusions of law presented 

by the record under a de novo standard. 

B. The Domestic Industry Requirement 

1. Section 337(a)(2) and (a)(3) 

The domestic industry requirement of section 337 is set out at section 337(a)(2) and 

Section 337(a)(2) provides: 

(2) Subparagraphs (B), (C), (D), and (E) of paragraph (1) apply only if an 

industry in the United States, with respect to the articles protected by the patent, 

copyright, trademark, mask work, or design concerned, exists or is in the 

process of being established. 

Section 337(a)(3) provides: 

(3) [A]n industry in the United States shall be considered to exist if there is in 

12 
PUBLIC VERSION 

the United States, with respect to articles protected by the patent . . . concerned - 

(A) significant investment in plant and equipment; 

(B) significant employment of labor or capital; or 

(C) substantial investment in its exploitation, including 

engineering, research and development, or licensing. 

The Commission has divided the domestic industry requirement into an economic prong (which 

requires certain activities) and a technical prong (which requires that these activities relate to the 

intellectual property being protected), such that an industry must exist or be in the process of 

being established. Section 337(a)(2), (a)(3); see, e.g., Certain Variable Speed Wind Turbines and 

Components Thereof, Inv. No. 337-TA-376 (“Wind Turbines”), USITC Pub. 3003 (Nov. 1996), 

Comm’n Op. at 14-17. Under the definitions of section 337(a), an industry exists if there is 

“significant investment in plant and equipment,” “significant employment of labor or capital,” or 

“substantial investment in [the patent’s] exploitation, including engineering, research and 

development, or licensing.” Section 337(a)(3)(A),(B),(C). An industry is “in the process of 

being established” if the patent owner “can demonstrate that he is taking the necessary tangible 

steps to establish such an industry in the United States,” S. Rep. 100-71 at 130, and there is a 

“significant likelihood that the industry requirement will be satisfied in the future.” H. Rep. 100- 

40 at 157. 

With respect to section 337(a)(3)(A) and (B), the technical prong is the requirement that 

the investments in plant or equipment and employment in labor or capital are actually related to 

“articles protected by” the intellectual property right which forms the basis of the complaint. 

13 
PUBLIC VERSION 

Section 337(a)(3); see Wind Turbines at 14-17. With respect to section 337(a)(3)(C), the 

technical prong is the requirement that the activities of engineering, research and development, 

and licensing are actually related to the asserted intellectual property right. 

Section 337(a)(2) and (a)(3) were added to section 337 in the Omnibus Trade and 

Competitiveness Act of 1988, 102 Stat. 1107, Pub. L. 100-418 (August 23, 1988) (“OTCA’7).3 

Here, complainant McCabe relies on section 337(a)(3)(C), specifically its provisions relating to 

research and development and licensing. He also relies on that part of section 337(a)(2) which 

refers to an industry “in the process of being established.” 

Whether an investment in domestic industry is “substantial” is a fact-dependent inquiry 

for which the complainant bears the burden of proof. 

2. The Legislative History 

The legislative history of section 337(a)(3)(C) states that: 

an industry exists in the United States with respect to a particular article involving 

an intellectual property right if there is, in the United States,-- 

1. significant investment in plant and equipment; 

2. significant employment of labor or capital; or 

3. substantial investment in the exploitation of the intellectual property 

right including engineering, research and development or licensing. 

The first two factors in this definition have been relied on in some 

Commission decisions finding that an industry does exist in the United States. 

The third factor, however, goes beyond ITC’s recent decisions in this area. The 

definition does not require actual production of the article in the United States if it 

can be demonstrated that significant investment and activities of the type 

enumerated are taking place in the United States. Marketing and sales in the 

The OTCA also eliminated the requirement that a domestic industry be “economically and 

efficiently operated” as well as the requirement of proving injury to a domestic industry where unfair 

competition based on violation of federal statutory rights is alleged, e.g., patent, trademark, and copyright 

infringement, as opposed to unfair competition based on violation of common law rights, e.g., trade dress 

infringement. 

14 
PUBLIC VERSION 

United States alone would not, however, be sufficient to meet this test. The 

definition could, however, encompass universities and other intellectual property 

owners who engage in extensive licensing of their rights to manufacturers. 

H. Rep. 100-40 at 157 (1987). Legislative debates in the previous Congress also contain the 

following remarks by Representative Kastenmeier4: 

For those who make substantial investments in research, there should be a 

remedy. For those who make substantial investments in the creation of 

intellectual property and then license creations, there should be a remedy. Let me 

give one example, there’s a start-up biotech firm in my state. Its product is its 

patents. It hasn’t reached the stage of manufacture. It doesn’t have the money. 

But it will reach that point, by licensing its patents to others. Should we deny that 

firm the right to exclude the work of pirates? Our legislation would say no. A 

party could get relief if it has made significant investment in R & D, engineering, 

or licensing. 

132 Cong. R. H1782 (Apr. 10,1986). 

The legislative process seems to have begun in response to the Commission’s 

investigation in the Gremlins case, in which Warner Brothers alleged injury to its business in 

merchandise bearing registered Gremlins copyrights. Certain Products with Gremlin Character 

Descriptions, Inv. No. 337-TA-201. In the Gremlins case, the Commission, inter alia, reversed 

that part of the ALJ’s final ID that Warner Brothers, Inc.’s licensing division constituted a 

domestic industry, because at that time licensing could not constitute a domestic industry. See 

Commission Opinion at 9-1 1 .’ Warner Brother’s licensing division, the Licensing Company of 

America, included market research, sales, sales promotion, graphics services, financial control, 

Then-Chairman of the Subcommittee on Courts, Civil Liberties, and the Administration of 

In the Gremlins case, there was a domestic industry based on domestic manufacture by Warner 

Justice, House Committee on the Judiciary. 

Brothers’ licensees, but Warner Brothers could not meet the then-existing injury requirement. 

Commission Opinion at 1 1-2 1. 

15 
PUBLIC VERSION 

and business affairs departments. Shortly after the Gremlins investigation, Representative 

Kastenmeier called for amendment to section 337 to “avoid unfortunate results which have 

occurred in some recent cases, such as Gremlins.” 132 Cong. R. H1782 (Apr. 10, 1986) 

(discussed in Certain Digital Processors and Digital Processing Systems, Components Thereof; 

and Products Containing Same, Inv. No. 337-TA-559, Initial Determination at 89 (May 11, 

2007), nonreviewed in relevant part by Commission Notice (August 6,2007)); Trade Reform 

Legislation, Hearings Before the Subcommittee on Trade of the Committee on Ways and Means, 

Part II., 99‘h Cong. 8 (1986) (testimony of Rep. Robert W. Kastenmeier, Chairman, 

Subcommittee on Courts, Civil Liberties and the Administration of Justice). The 1988 

amendments to section 337 avoided such an outcome with respect to licensing by adding section 

337(a)(3)(C), allowing licensing and other non-manufacturing activities, such as research and 

development, to qualifl as a domestic industry. The legislative history of the OTCA also 

indicates that “[mlarketing and sales in the United States alone would not, however, be sufficient 

to meet this test.” S. Rep. 100-71 at 129 (1987). 

As for the legislative history of section 337(a)(2), an industry would be considered “in the 

process of being established” if the patent owner “can demonstrate that he is taking the necessary 

tangible steps to establish such an industry in the United States.” S. Rep. 100-71 at 130. “The 

owner of the intellectual property right must be actively engaged in steps leading to the 

exploitation of the intellectual property, including application engineering, design work, or other 

such activities. The Commission should determine whether the steps being taken indicate a 

significant likelihood that the industry requirement will be satisfied in the fi~ture.” H. Rep. 100- 

40 at 157. Moreover, “the mere ownership of a patent or other form of intellectual property 

16 
PUBLIC VERSION 

rights would not be sufficient to satisfy this test.” S. Rep. 100-71 at 129. 

C. WHETHER A DOMESTIC INDUSTRY EXISTS ON THE BASIS OF 

SUBSTANTIAL INVESTMENT IN THE EXPLOITATION OF THE 

PATENT THROUGH RESEARCH AND DEVELOPMENT OR 

LICENSING 

1. Submissions of the Parties Regarding Section 33 7(a)(3)(C) 

In responding to the Commission’s notice of review, McCabe states that section 

337(a)(3)(C) covers “activities genuinely designed to exploit their intellectual property” as 

opposed to those merely standing on ownership of a U.S. patent. McCabe Submission at 18 

(citing S. Rep. 100-7 1 at 130 (1 987)). McCabe elaborates that qualifying non-manufacturing 

activities include initial research and development, engineering, initial designs, creating a 

prototype, testing, final design, marketing, distribution, sales, and licensing. McCabe 

Submission at 18-1 9 (citing Certain Dynamic Random Access Memories, Components Thereox 

and Products Containing Same (“DRAMs’Y, Inv. No. 337-TA-242, U.S.I.T.C. Pub. No. 2034 at 

62 (“distribution, research, development, and sales”). McCabe points to a determination that 

non-manufacturing activities may take the form of the development and marketing of articles 

practicing the patents. McCabe Submission at 19 (citing Certain Microcomputer Memory 

Controllers, Inv. No. 337-TA-331, Initial Determination (Order No. 6) at 6-7, 1992 WL 81 1299 

(January 8, 1992), unreviewed by Commission Notice, 57 Fed. Reg. 5170 (February 12, 1992) 

(research leading to the issuance of a patent, developing, and marketing created genuine issue of 

material fact regarding existence of domestic industry). In Diltiazem, the Commission 

acknowledged research and development consisting of developing dosage units and seeking FDA 

approval, whereas in Integrated Circuits, the ALJ noted the collaboration between complainant’s 

17 
PUBLIC VERSION 

engineers and prospective customers. McCabe Submission at 19 (citing Certain Diltiazem 

Hydrochloride and Diltiazem Preparations, Inv. No. 337-TA-349, USITC Pub. No. 2902, Initial 

Determination at 141-45 (June 1995), unreviewed by Commission Notice (March 30, 1995) and 

Certain Integrated Circuits, Processes for Making Same, and Products Containing Same, Inv. 

No. 337-TA-450, USITC Pub. No. 3624, Initial Determination at 153 (August 2003), unreviewed 

by Commission Notice (June 21,2002)). McCabe states that “the level of research and 

development should differ depending on the “realities of the marketplace” which may differ 

among different industries. McCabe Submission at 19-20 (citing Certain Male Prophylactic 

Devices, Inv. No. 337-TA-546 (August 1,2007) at 39). McCabe states that the relevant industry 

is the guitar hardware manufacturing industry, which uses simple metal parts and has a low cost 

for developing prototypes. McCabe Submission at 2 1. Moreover, McCabe argues that the 

Commission should give weight to the time and “sweat equity” of small business and 

individuals, because small businesses and individuals are more likely to invest their own time, 

use free resources, and work under strict budgetary restraints even within a given industry. 

McCabe Submission at 20-2 1. McCabe argues that research and development before the 

issuance of a patent should count towards the domestic industry requirement because a patent 

only issues after the patentee has already refined the invention to the point where the invention 

may be practiced without “undue experimentation.” McCabe Submission at 24 (referring to the 

standard for enablement understood by the courts to be required by 35 U.S.C. 4 112). 

McCabe argues that, as with research and development, one cannot compare licensing 

royalties across industries. McCabe Submission at 25-26. Moreover, McCabe states that 

licensing patents takes time to accomplish and that the amount of royalties earned will increase 

18 
PUBLIC VERSION 

over time, and argues on this basis that it is not appropriate to create an “arbitrary” standard for 

the domestic industry requirement. McCabe Submission at 26. McCabe states that in cases 

where the Commission has relied solely on licensing activity to satisfy the domestic industry 

requirement, it has simply required that the licensing agreements have produced revenue. 

McCabe Submission at 26 (citing discussion of requirements in Certain Digital Processors and 

Digital Processing Systems, Components ThereoJ; and Products Containing Same, Inv. No. 337- 

TA-559, Initial Determination at 96 (May 11,2007), nonreviewed in relevantpart by 

Commission Notice (August 6,2007)). However, McCabe argues based on the language of 

section 337(a)(3)(C) and its legislative history that licensing negotiations need not result in an 

actual license where part of the patentee’s activity is “designed to exploit their intellectual 

property.” McCabe Submission at 28 (quoting S. Rep. 100-71 at 130). McCabe states that while 

the Commission has often used the filing of the complaint as the cut-off point for satisfaction of 

the domestic industry requirement that it has used the end of the discovery period as the cut-off 

point. McCabe Submission at 26 (citing Certain Concealed Cabinet Hinges, 337-TA-289, 

Commission Opinion at 2 1). McCabe also argues that the relevant time for licensing activity is 

both before and after filing of the complaint, relying on Certain Variable Speed Wind Turbines 

and Components ThereoJ Inv. No. 337-TA-376, at Commission Opinion at 22-26, for the 

proposition that the Commission may even take into account events occurring after the target 

date for whether domestic industry exists. McCabe Submission at 26. In that investigation, 

McCabe stated the Commission noted that the complainant continued to exploit the patents at 

issue. 

Rose submits that the domestic industry requirement could differ depending on the 

19 
PUBLIC VERSION 

relevant marketplace, but is not affected by whether the patent holder is an individual or a 

business entity. Rose Submission at 5. Rose agrees that investments in research and 

development may be made prior to the issuance of a patent. Rose Response at 5. 

Rose cites legislative history for the proposition that licensing must be “extensive” and 

that “marketing and sales alone” are not sufficient. Rose Submission at 9 (citing 132 Cong. R. 

H9965). Rose states that the Federal Circuit has determined that the cut-off for determining the 

existence of an “industry” entitled to protection under section 337 is “the date on which the 

complaint was filed rather than the date on which the Commission rendered its determination.” 

Rose Submission at 10 (citing Bally/Midway Mfg. Co. v. USITC, 714 F.2d 11 17, 1121 (Fed. Cir. 

1983)). Rose suggests that such a bright-line rule would prevent complainants who do not 

already have a legitimate domestic industry from using the Commission to create a domestic 

industry which would not otherwise exist, by extracting settlements from respondents after the 

filing of an (unworthy) complaint. Rose Submission at 10. With regard to these settlements 

from litigation, Rose notes that respondents may choose to take licenses because of a business 

decision that it is cheaper to settle than to defend infringement suits. Rose Submission at 13 

(citing EWP Corp. v. Reliance Universal, Inc., 755 F.2d 898,907-08 (Fed. Cir. 1985)). Rose 

argues that the lowest level of licensing activity which the Commission has found substantial was 

in Digital Satellite in which there were four licenses (all executed before the filing of the 

complaint) and the complainant also had five employees employed in connection with a licensing 

system and incurred legal fees in litigation unconnected to the ITC complaint. Rose Submission 

at 1 1 (discussing Certain Digital Satellite System Receivers and Components ThereoJ; 337-TA392, Initial Determination at 10-12, for which the Commission took no position on this issue by 

20 
PUBLIC VERSION 

Commission Notice (December 4, 1997)). 

The LA submits that it would be contrary to Commission precedent to attempt to quantify 

a baseline level of research and development that every complainant must meet regardless of the 

circumstances. IA Submission at 2-3 (citing DRAMS at 61-62; Certain Double-Sided Floppy 

Disk Drives and Components Thereof(temp0rary relief), Inv. No. 337-TA-215,227 USPQ 982, 

989 (USITC 1986) (Commission Opinion)). The IA states that research and development does 

not have to result in a completed product that is offered for sale in order to count towards the 

domestic industry requirement. IA Submission at 3 (citing Certain Dynamic Sequential Gradient 

Compression Devices and Components Thereof, Inv. No. 337-TA-335, Initial Determination at 

64 (May 18, 1992) (temporary relief), nonreviewed in relevant part by Commission Notice (June 

15, 1992)). Moreover, the IA agrees that past research and development may count towards the 

domestic industry requirement, even if performed before the issuance of the patent. IA 

Submission at 3-4 (citing Certain Video Graphic Display Controllers and Products Containing 

Same, Inv. No. 337-TA-412, Initial Determination at 12-13 (April 30, 1999), nonreviewed in 

relevantpart by Commission Notice (July 19, 1999)); IA Submission at 5 (citing Certain 

Battery-Powered Ride-On Toy Vehicles and Components ThereoJ; Inv. No. 337-TA-3 14, Order 

No. 6 at 20, unreviewed in relevant part by Commission Notice (January 4, 199 1); Certain 

Plastic Encapsulated Integrated Circuits, Inv. No. 337-TA-3 15, Initial Determination at 85 

(December 3, 199 1) (research from 1976- 1990 was considered in regarding a patent filed in 1973 

and issued in 1977). 

The IA submits that activities may count towards the domestic industry requirement even 

if a complainant cannot reduce all of its domestic activities to dollar amounts. IA Submission at 

21 
PUBLIC VERSION 

4 (citing Male Prophylactic Devices at 46 (“PTI is a small player in this market but its size 

relative to the dominant firms does not operate to preclude requested relief ’); IA Reply 

Submission at 4 (citing Certain Strip Lights, Inv. No. 337-TA-287, Initial Determination at 30 

(June 27, 1989, nonreviewed in relevantpart by Commission Notice (August 17, 1989). The IA 

states that Rose may not make any comparison to Certain Motor and Transmission Systems 

because the Commission chose not to take a position on the issue of the economic prong of 

domestic industry in that case. IA Reply Submission at 3. The IA states that the examination of 

the “realities of the marketplace” as part of the domestic industry analysis should focus on “broad 

brush” factors. IA Submission at 6. The IA states that “there is no need to undergo the complex 

analysis of defining the relevant market for the domestic goods in question as may be required in 

analyzing an antitrust cause of action ... or to assess the interchangeability or level of competition 

between or among certain types of guitars or other musical instruments.” IA Submission at 6. 

The IA notes that the Commission has considered licenses concluded after the filing of 

the complaint in Certain Strip Lights, Inv. No. 337-TA-287, Initial Determination at 49 (June 27, 

1989), nonreviewed in relevantpart by Commission Notice (August 17, 1989) (one of the 

licenses was entered into after the filing of the complaint). The IA suggests that there are policy 

considerations that may favor so doing, e.g., respondents may not take a license from a small 

business or individual unless and until the respondents believe that the small business or 

individual has the resources to bring suit; on this basis, the IA argues that the existence of a 

domestic industry should not depend on whether a respondent refuses to take a license before 

being sued. IA Submission at 7-8 (relying on Certain Digital Processors and Digital Processing 

Systems, Components Thereox and Products Containing Same, Inv. No. 337-TA-559 at 96 (May 

22 
PUBLIC VERSION 

1 1,2007), nonreviewed in relevant part by Commission Notice (August 6,2007) (licenses taken 

as part of settlement). The IA makes the statutory argument that “substantial investment in [the 

patent’s] exploitation, including ... licensing” does not require that a license exist, and that 

investment expenditures themselves count towards satisfaction of the requirement. IA 

Submission at 8 (interpreting section 337(a)(3)(C)). However, the IA concedes that there has not 

yet been a case in which the Commission relied on licensing for satisfaction of the domestic 

industry requirement in which no license has been executed. IA Submission at 9. 

2. Did McCabe Demonstrate Substantial Investment in the Exploitation of 

McCabe ’s Patents Through Research and Development or Licensing? 

McCabe argues that he has genuinely exploited his patents and completed all activities to 

ready the product for market. McCabe Submission at 23. He states he has completed all the 

necessary non-manufacturing steps for at least one product related to his patents. McCabe 

Submission at 25. McCabe contends that in addition to the five prototypes (which McCabe states 

he made for $12,500),6 he also possesses drawings, schematics, data sheets, building diagrams, 

business plans, spread sheets, cost analysis, and a database of models, part numbers, and costs, 

raw type I and type II base plates with formal details, computer-generated three-dimensional 

diagrams, formalized drawings, and folder groupings. McCabe Submission at 22; McCabe Reply 

Submission at 5 (citing CX-23, -13, -7, -58, and -6). 

McCabe argues that he has not only received revenue from his licensing agreements with 

Hoshino and Vigier (resulting from settlements of this investigation) but that he has also “shown 

6As discussed above, the ALJ found the investment to have been $8,500. 

23 
PUBLIC VERSION 

activities designed to exploit his intellectual properties which led to these licensing agreements.” 

McCabe Submission at 28 (relying on CX-3, -32,- 44,- 50,- 52,- 53, -54, -66, -97.) McCabe 

asserts that the settlement agreements with Hoshino and Vigier cover both the ‘066 and the ‘094 

patent. McCabe Reply Submission at 7-8 (citing Orders No. 9 and 11). 

Rose states that McCabe’s activities are de minimis, as he has never had employees, has 

no formal business plan, was unable to provide necessary assurances to prospective licensees, 

and has incurred no legal fees in connection with licensing prior to initiation of the complaint. 

Rose Submission at 11. Moreover, Rose argues that McCabe’s pre-complaint attempts to license 

are unrelated to the settlement agreements with Hoshino and Vigier, that McCabe admits that 

Hoshino and Vigier were previously uninterested in licensing, and that e-mails and meetings at 

trade shows should not qualify as investment in licensing. Rose Submission at 12. Rose argues 

that, because the [ [ 

I], the licenses do not constitute exploitation of the asserted patent, and that, in any 

event, U.S. Patent No. 6,891,094 is not the subject of a license. Rose concludes that the fact of a 

license agreement itself cannot be considered in isolation from the activity which produced it. 

Rose argues that the $8,500 which McCabe invested in developing prototypes does not 

satisfy the domestic industry requirement, citing Certain Motor and Transmission Systems and 

Devices Used Therein, and Products Containing Same, Inv. No. 337-TA-561, where the 

Commission took no position on this issue. Rose Submission at 5-6. Rose states that McCabe 

had no formal record keeping,’ that none of McCabe’s schematics had been formalized, and that 

’ McCabe and the IA note that Rose’s basis for this assertion was a confidential memorandum in 

support of summary determination by respondent Schaller which is not in evidence. McCabe Reply 

24 
PUBLIC VERSION 

the $8,500 investment in prototypes over 17 years amounts to $500 per year. Rose Submission at 

7. Rose argues that McCabe has failed to meet his burden of proof, as there is no record proof of 

the “sweat equity” which the IA alleges to exist and there is no proof that any “steadfast 

activities’’ would be a substantial investment in the relevant marketplace. Rose Submission at 8. 

Rose submits that these activities are consistent with the desires of patent holders to develop 

successful businesses but that McCabe’s activity is de minimis. Rose Submission at 9. 

The IA argues that McCabe’s prototypes constitute a domestic industry7 especially given 

his size in the market and the unquantified effort which McCabe has contributed to his work but 

which is not included in the $8,500 value of the prototypes. IA Submission at 4. The IA cites, 

inter alia, 1989 rnanufacturingllicensing discussions with Gary Kahler and Gibson Guitar 

Company, 1998 and 2000 discussions with the Seymour Duncan Company, and 2000 and 2004 

discussions with Rose, RKS Guitars, and Hoshino, and the ultimate settlement licensing 

agreements with Hoshino and Vigier, and intervening discussions along the way. IA Submission 

at 10-17. The IA states that there is no evidence that the settlement agreements were some sort 

of sham or that the asserted products of the licensed parties are not covered by the asserted 

patents. IA Reply Submission at 6. 

Discussion 

McCabe relies on section 337(a)(3)(C). We emphasize that there is no minimum 

monetary expenditure that a complainant must demonstrate to qualify as a domestic industry 

under the “substantial investment” requirement of this section. We agree with the parties that the 

Submission at 4; IA Reply Submission at 2. 

25 
PUBLIC VERSION 

requirement for showing the existence of a domestic industry will depend on the industry in 

question, and the complainant’s relative size. Moreover, we agree with the parties that there is 

no need to define or quantify the industry itself in absolute mathematical terms. 

McCabe had five prototypes manufactured: (1) McCabe had a first prototype 

manufactured in 1988 for $3,500, (2) a second prototype manufactured in 1990 for $4,000, (3) a 

third prototype after the 1988 NAMM show, (4) a fourth prototype in 2002-2003 presented at the 

2003 NAMM show, and (5) a fifth prototype presented at the 2005 NAMM show. ID at 13-14. 

McCabe argues that his total expenditures were $12,500 and the ALJ found that the total 

expenditures were $8,500. 

McCabe refers to various other activities, e.g., alleged “sweat equity.” We acknowledge 

that McCabe has expended such non-monetary resources in addition to the above expenditures 

found by the ALJ. While we do not discount the concept of sweat equity, documentation thereof 

in this case lacked sufficient detail. A precise accounting is not necessary, as most people do not 

document their daily affairs in contemplation of possible litigation. Nevertheless, evidence or 

testimony would have to demonstrate a sufficiently focused and concentrated effort to lend 

support to a finding of a “substantial investment.” 

With respect to licensing, we do not find that McCabe’s pre-complaint efforts to obtain 

licenses constitute a substantial investment. McCabe attended trade shows and engaged in 

discussions with various manufacturers. However, his only consummated licenses were acquired 

as the product of settlements with respondents to this investigation, after the filing of the 

complaint. While a consummated license achieved prior to filing a complaint is not a prerequisite 

for us to give weight to pre-complaint efforts to license a patent, the absence of any actual 

26 
PUBLIC VERSION 

licenses prior to a complaint is a factor we consider. Moreover, we find that McCabe’s 

unsuccessful pre-complaint licensing activities in this instance were not substantial under the 

evidence before us. 

The legislative history of the current domestic industry requirement sets forth the 

examples of bio-tech startups, universities, and the Gremlins investigation which provide 

guidance as to when a domestic industry in research and development, licensing, or both might 

exist. Even taking into account that McCabe is an individual and that the market for guitar parts, 

however defined, is relatively small, we determine that McCabe has failed to provide the 

Commission with sufficient evidence that his efforts fall within the ambit prescribed in the 

legislative history. In sum, before he filed his complaint, McCabe’s efforts were directed mainly 

at developing prototypes and, unsuccessfully, at finding a firm that would license or begin to 

make his product. We are mindful that access to section 337 should not be foreclosed to 

individual inventors simply because their operations or activities are not on the scale of many 

corporations or universities. Nevertheless, we find that McCabe has not provided sufficient 

evidence of substantial investment of the type described in section 337(a)(3)(C) to show that an 

industry in the United States exists. 

D. IS THERE A DOMESTIC INDUSTRY “IN THE PROCESS OF BEING 

ESTABLISHED”? 

McCabe asserts that there is an existing domestic industry for the asserted patents, but 

that in the alternative there is at least a domestic industry in the process of being established. 

McCabe Submission at 29. Both Rose and the IA argue that the issue of whether a domestic 

industry is in the process of being established was waived. 

27 
PUBLIC VERSION 

McCabe states that this issue was preserved because the relevant evidence was presented 

to the ALJ, and the issue was included in the discussion of applicable law in section 1II.D. of 

McCabe’s post-hearing brief and the discussion of the relevant law of domestic industry in 

section IV of McCabe’s petition for review of the subject ID. McCabe Submission at 30. 

Rose states that the issue of whether domestic industry is in the process of being 

established was waived, as it did not surface at the hearing or in the petitions for review.8 Rose 

Submission at 15-16. In this connection, Rose contends that it did not have adequate notice of 

this issue or a full and fair opportunity to litigate this issue. Rose Submission at 16 (citing 19 

C.F.R. 9 210.36(d); Trident Seafoods, Inc. v. NLRB, 101 F.3d 11 1, 116 (D.C. Cir. 1996). 

Under the IA’s understanding of the course of the investigation, the issue of whether 

domestic industry is in the process of being established has been waived, as it was not raised in 

the post-hearing briefs or the petitions for review. IA Submission at 17. 

We agree with Rose and the IA that McCabe waived any argument that he has an industry 

in the process of being established. In his post-hearing brief and petition for review, McCabe 

merely mentions this provision in his discussion of the law, rather than making an argument that 

he satisfies this provision, and the issue was not discussed in the ID. See ALJ Order No. 10 at 

29 (“The post-trial brief shall discuss the issues and evidence tried within the framework of the 

general issues determined by the Commission’s Notice of Investigation, the general outline of the 

briefs as set forth in Appendix B, and those issues that are included in the pretrial brief and any 

permitted amendments thereto. All other issues shall be deemed waived.”); 19 C.F.R. 0 

‘We note that Rose did not attend the hearing or participate in post-hearing briefing. 

28 
PUBLIC VERSION 

210.43(b)(2) (“Any issue not raised in a petition for review will be deemed to have been 

abandoned by the petitioning party and may be disregarded by the Commission in reviewing the 

initial determination (unless the Commission chooses to review the issue on its own initiative 

under 9 210.44)”). 

111. CONCLUSION 

For the above reasons, the Commission determines that McCabe has failed to show that 

he meets the domestic industry requirement under the economic prong. The investigation is 

terminated with a finding of no violation of section 337. 

By order of the Commission. 

Marilyn R@bJhtt ’ 

Secretary to the Commission 

Issued: MAY 1 6 2008 

29 
CERTAIN STRINGED MUSCIAL INSTRUMENTS AND 337-TA-586 

COMPONENTS THEREOF 

PUBLIC CERTIFICATE OF SERVICE 

I, Marilyn R. Abbott, hereby certify that the attached COMMISSION OPINION has 

been served by hand upon the Commission Investigative Attorney, Rett Snotherly, Esq., 

and the following parties as indicated, on May 16. 2008 

U.S. International Trade Commission 

500 E Street, SW 

Washington, DC 20436 

ONVBEHALF OF COMPLAINANT GEOFFREY 

MCCABE: 

Robert M. Hansen, Esq. 

Stephen D. Huang, Esq. 

Reza Ghafoorian, Esq. 

HANSEN HUANG TECHNOLOGY LAW GROUP, 

LLP 

1725 Eye Street, NW, Suite 300 

Washington, DC 20006 

( ) Via Hand Delivery 

( Via Overnight Mail nd Via First Class Mail 

( ) Other: 

P-202-465-3294 

F-202-349-3915 

ON BEHALF OF RESPONDENT SCHALLER 

ELECTRONIC: 

Marina F. Cunningham, Esq. 

Wm. Tucker Griffith, Esq. 

Jeanne M. Tanner, Esq. 

MCCORMICK, PAULDING & HUBER LLP 

City Place I1 

185 Asylum Street 

Hartfort, CT 06103-3410 

P-860-549-5290 

( ) Via Hand Delivery 

Via Overnight Mail 

Via First Class Mail 

) Other: 
Page 2 - Certificate of Service 

ON BEHALF OF RESPONDENT FLOYD ROSE 

MARKETING: 

Joseph S. Littenberg, Esq. 

Willilam L. Mentlik, Esq. 

Roy H. Wepner, Esq. 

LERNER, DAVID, LITTENBERG, 

KRUMHOLZ & MENTLIK, LLP 

600 South Avenue West 

Westfield, NJ 07090 

P-908-654-5000 

F-908-654-7866 

Sherry Robinson 

8891 Gander Creek Drive 

Miamiburg, OH 45342 

LEXIS-NEXIS 

Ronnita Green 

West Group 

901 Fifteenth Street, NW 

Suite 230 

Washington, DC 20005 

( ) Via Hand Delivery 

( ) Via Overnight Mail 

Via First Class Mail 

( )Other: 

( ) Via Hand Delivery 

( ) Via Overnight Mail 

o(3 Via First Class Mail 

( )Other: 

( ) Via Hand Delivery 

( ) Via Overnight Mail 

(q Via First Class Mail 

( )Other: 


5,986,191. The complaint named as respondents Floyd Rose Guitars (Redmond, Washington) 

(“Rose”); Ibanez, Inc. (Hoshino) US (Bensalem, Pennsylvania); Vigier, Inc. (Grigny, France); 

and Schaller Electronic (Postbauer-Heng, Germany) (“Schaller”). Rose and Schaller are the only 

remaining respondents . 

On December 3,2007, the ALJ issued a final ID finding no violation of section 337. 

Only claims 8,9, and 11 of the ‘066 patent and claims 1 and 14-22 of the ‘094 patent remained in 

the case as of the date of the final ID. Petitions for review were filed by McCabe and the 

Commission investigative attorney. A response to the petitions for review was filed by Rose. 

On December 2 1,2007, the Commission issued a notice extending the deadline for 

determining whether to review the subject ID by fifteen (15) days, to February 1,2008. 

On February 1,2008, the Commission issued a notice extending the deadline for 

determining whether to review the subject ID to February 8,2008, and extending the target date 

for completion of the investigation to April 10,2008. 

Having examined the relevant portions of the record in this investigation, including the 

final ID, the petitions for review, and the response thereto, the Commission has determined to 

review the final ID in its entirety. 

The Commission requests briefing based on the evidentiary record on the issues on 

review. The Commission is particularly interested in responses to the following questions: 

(1) What type and level of research and development is necessary to satisfy the 

economic prong of the domestic industry requirement under section 337(a)(3)(C)? 

Should it differ depending upon the size of the relevant marketplace or whether 

the patent holder is an individual versus some other entity? What is the 

appropriate industry market in which we should examine the economic prong of 

the domestic industry requirement: the market for certain guitars, all guitars, 

certain musical instruments, or all musical instruments or some other industry 

market? How do these criteria apply in this case? How is your argument 

supported by the record in this case? Does research and development prior to the 

issuance of a patent count towards the domestic industry requirement? 

(2) What type and level of licensing activity is necessary to satisfy the economic 

prong of the domestic industry requirement under section 337(a)(3)(C)? Is the 

relevant time period for licensing activity before or after the filing of the 

complaint, or both? How do these criteria apply in this case? How is your 

argument supported by the record in this case? For the purposes of this question, 

consider whether licensing negotiations would qualify if they did not result in an 

actual license during a relevant period of time. 

(3) Is the relevant industry in this case “in the process of being established” 

2 
pursuant to section 337(a)(2)? Was this issue properly raised before the ALJ and 

in the petitions for review? How is your argument supported by the record in this 

case? How do the criteria for an industry in the process of being established differ 

fiom the criteria for an industry that already exists? 

WRITTEN SUBMISSIONS: The parties to the investigation are requested to file written 

submissions on the issues under review. The submissions should be concise and thoroughly 

referenced to the record in this investigation, including references to exhibits and testimony. The 

written submissions must be filed no later than the close of business on February 22,2008. 

Reply submissions must be filed no later than the close of business on February 29,2008. No 

further submissions will be permitted unless otherwise ordered by the Commission. 

Persons filing written submissions must file with the Office of the Secretary the original 

and 12 true copies thereof on or before the deadlines stated above. Any person desiring to submit 

a document (or portion thereof) to the Commission in confidence must request confidential 

treatment unless the information has already been granted such treatment during the proceedings. 

All such requests should be directed to the Secretary of the Commission and must include a full 

statement of the reasons why the Commission should grant such treatment. See 19 C.F.R 

5 201.6. Documents for which confidential treatment is granted by the Commission will be 

treated accordingly. All nonconfidential written submissions will be available for public 

inspection at the Office of the Secretary. 

This action is taken under the authority of section 337 of the Tariff Act of 1930, as 

amended (19 U.S.C. § 1337), and in sections 210.42 - .46 of the Commission’s Rules of Practice 

and Procedure (19 C.F.R. §§ 210.42 - .46). 

By order of the Commission. 

Secretary to the Commission 

Issued: February 7,2008 

3 
CERTAIN STRINGED MUSCIAL INSTRUMENTS AND 337-TA-586 

COMPONENTS THEREOF 

CERTIFICATE OF SERVICE 

I, Marilyn R. Abbott, hereby certify that the attached NOTICE OF COMMISSION 

DETERMINATION TO REVIEW A FINAL INITIAL DETERMINATION OF 

THE ADMINISTRATIVE LAW JUDGE has been served by hand upon the 

Commission Investigative Attorney, Rett Snotherly, Esq., and the following parties as 

indicated, on February 8, 2008 

le* M& 

Phahlyn R. A6bott, Secretary ,7/11@ 

U.S. International Trade Commission 

500 E Street, SW 

Washington, DC 20436 

ON BEHALF OF COMPLAINANT GEOFFREY 

MCCABE: 

Robert M. Hansen, Esq. 

Stephen D. Huang, Esq. 

Reza Ghafoorian, Esq. 

HANSEN HUANG TECHNOLOGY LAW GROUP, 

LLP 

1725 Eye Street, NW, Suite 300 

Washington, DC 20006 

( ) Via Hand Delivery 

(d Via Overnight Mail 

( ) Via First Class Mail 

( ) Other: 

P-202-465-3294 

F-202-349-3915 

ON BEHALF OF RESPONDENT SCHALLER 

ELECTRONIC: 

Marina F. Cunningham, Esq. 

Wm. Tucker Griffith, Esq. 

Jeanne M. Tanner, Esq. 

MCCORMICK, PAULDING & HUBER LLP 

CityPlace I1 

185 Asylum Street 

Hartfort, CT 06 103-34 10 

P-860-549-5290 

( ) Via Hand Delivery 

o() Via Overnight Mail 

( ) Via First Class Mail 

( )Other: 
Page 2 - Certificate of Service 

ON BEHALF OF RESPONDENT F'LOYD ROSE 

MARKETING: 

Joseph S. Littenberg, Esq. 

Willilam L. Mentlik, Esq. 

Roy H. Wepner, Esq. 

LERNER, DAVID, LITTENBERG, 

KRUMHOLZ & MENTLIK, LLP 

600 South Avenue West 

Westfield, NJ 07090 

P-908-654-5000 

F-908-654-7866 

( ) Via Hand Delivery 

(2 Via Overnight Mail 

( ) Via First Class Mail 

( ) Other: 


TABLE OF CONTENTS 

LIST OF ABBREVIATIONS ................................................... iv 

DISCUSSION ................................................................ 2 

I . Introduction ............................................................ 2 

A ................................................. . Procedural History 2 

B . TheParties ....................................................... 5 

1 . Complain~t ................................................ 5 

2 . Respondents ................................................ 5 

Floyd Rose Marketing, Inc ............................... 5 

Schaller Electronic ..................................... 5 

C . Overview of the Technology 5 

D . 

a . 

b . 

......................................... 

The Patents at Issue ................................................ 6 

1 . The'066Patent ............................................. 6 

2 . The'094Patent ............................................. 6 

E . The Products at Issue ............................................... 6 

1 . McCabe's Products .......................................... 6 

2 . Rose'sProducts ............................................. 7 

3 . Schaller's Products ........................................... 7 

I1 . Jurisdiction and Importation 7 ............................................... 

A . Subject Matter Jurisdiction .......................................... 7 

B . Personal Jurisdiction ................................................ 8 

I11 . Relevant Law - Domestic Industry ........................................... 8 

.. 

11 
A . TechnicalProng ................................................... 8 

B . EconomicProng ................................................... 9 

IV . The ‘066 Patent and ‘094 Patent ........................................... 12 

Staff and McCabe’s Arguments ...................................... 12 

Research and Development ................................... 13 

2 . Licensing ................................................. 15 

A . 

1 . 

B . Discussion ...................................................... 19 

CONCLUSIONS OF LAW ..................................................... 27 

INITIAL DETERMINATION ................................................... 28 

RECOMMENDED DETERMINATION ON REMEDY AND BOND ................... 29 

V . RemedyandBonding .................................................... 29 

Limited Exclusion Order ........................................... 29 

B . Cease and Desist Order ............................................ 30 

C . Bond During Presidential Review Period .............................. 30 

APPENDIX OF EXHIBIT LISTS ............................................... A1 

A . 

... 

111 
CDX 

CFF 

CIB 

COSFF 

CPX 

CRB 

cx 

Jx 

SFF 

SIB 

SOCFF 

SRB 

Tr. 

LIST OF ABBREVIATIONS 

~ Complainant’s demonstrative exhibit 

complainant’s proposed findings of fact 

Complainant’s initial post-hearing brief 

Complainant’s objections to Staffs proposed findings of fact 

Complainant’s physical exhibit 

Complainant’s reply post-hearing brief 

Complainant’s exhibit 

Joint Exhibit 

Staffs proposed findings of fact 

Staffs initial post-hearing brief 

Staffs objections to Complainant’s proposed findings of fact 

Staffs reply post-hearing brief 

Transcript 

iv 
PUBLIC VERSION 

UNITED STATES INTERNATIONAL TRADE COMMISSION 

In the Matter of 

CERTAIN STRINGED MUSICAL 

INSTRUMENTS AND COMPONENTS 

THEREOF 

Washington, D.C. 

Inv. No. 337-TA-586 

INITIAL DETERMINATION ON VIOLATION OF SECTION 337 AND 

RECOMMENDED DETERMINATION ON REMEDY AND BOND 

Administrative Law Judge Charles E. Bullock 

(December 3,2007) 

Pursuant to the Notice of Investigation' and Rule 210.42(a) of the Rules of Practice and 

Procedure of the United States International Trade Commission, this is the Administrative Law 

Judge's Initial Determination in the matter of Certain Stringed Musical Instruments and Components 

Thereof, Investigation No. 337-TA-586. 

The Administrative Law Judge hereby determines that a violation of Section 337 of the Tariff 

Act of 1930, as amended, has not been found in the importation into the United States, the sale for 

importation, or the sale within the United States after importation of certain stringed musical 

instruments and components thereof, in connection with claims 8-9 and 11 of U.S. Patent No. 

6,175,066 and claims 1 and 14-22 of US. Patent No. 6,892,094. Furthermore, the Administrative 

Law Judge hereby determines that a domestic industry in the United States does not exist that 

practices U.S. Patent Nos. 6,175,066 and 6,891,094. 

' 71 Fed. Reg. 64,738 (November 3,2006). 

1 
DISCUSSION 

I. Introduction 

A. Procedural History 

On October 3,2006, Complainant Geoffrey McCabe (“McCabe”) filed a complaint with the 

Commission pursuant to Section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. 9 1337. The 

complaint was amended on October 24,2006. The amended complaint alleges a violation of Section 

337 in the importation and sale of certain stringed musical instruments (electric guitars) and 

components thereof (e.g., fulcrum tremolos) that infringe certain claims of U.S. Patent Nos. 

5,965,831; 6,175,066; 6,981,094; and 5,986,191. Based on the Complaint, the Commission voted 

to institute the investigation on October 30,2006. The Notice of Investigation was published in the 

Federal Register on November 3,2006. On November 7,2006, Judge Barton issued Order No. 2 

whereby he set a 15-month target date, or February 3,2008. 

On December 1,2006, Respondent Vigier SARL (“Vigier”) filed a letter responding to the 

Complaint and Notice of Investigation. On December 4, 2006, Respondent Hoshino (USA) Inc. 

(“Hoshino”) responded to the Complaint and Notice of Investigation. On December 12, 2006, 

Respondent Schaller Electronic (“Schaller”) responded to the Complaint and Notice of Investigation. 

On January 1 1,2007, Respondent Floyd Rose Marketing (“Rose”) responded to the Complaint and 

Notice of Investigation. On January 12,2007,Vigier filed a formal response to the Complaint and 

Notice of Investigation. 

On April 18, 2007, McCabe and Hoshino field a joint motion to terminate based on a 

settlement agreement. On May 7, 2007, the joint motion to terminate was granted by initial 

2 
determination in Order No. 9.* On June 6,2007, the Commission issued a notice determining not 

to review an initial determination terminating the investigation as to Respondent Hoshino (USA) Inc. 

based on a settlement agreement.3 

On June 2 1,2007, Vigier and McCabe filed a joint motion to terminate based on a settlement 

agreement. On July 10,2007, the joint motion to terminate was granted by initial determination in 

Order No. 11.4 On July 30, 2007, the Commission issued a notice determining not to review an 

initial determination terminating the investigation as to Respondent Vigier SARL based on a 

settlement agreement.5 

On July 5,2007, the Commission reassigned this investigation to the undersigned. 

On July 12,2007, Order No. 12 issued, granting in part and denying in part McCabe’s motion 

to amend the Complaint.6 On July 24,2007, Order No. 15 denied Schaller’s motion for summary 

determination as to the domestic industry req~irement.~ 

An evidentiary hearing was conducted before the undersigned on August 13, 2007. In 

support of its case-in-chief, McCabe called himself as a witness.* Rose and Schaller did not appear 

at the hearing, although Rose filed a prehearing brief and a prehearing statement and Schaller filed 

See Order No. 9 (May 7,2007). 

See Notice of Commission Determination Not to Review Initial Determination Granting 

Joint Motion to Terminate the Investigation with Respect to Respondent Hoshino (USA) Inc. (June 

6,2007). 

See Order No. 11 (July 10,2007). 

See Notice of Commission Determination Not to Review Initial Determination Granting 

Joint Motion to Terminate the Investigation with Respect to Respondent Vigier (July 30,2007). 

See Order No. 12 (July 12,2007) (denying McCabe’s motion to amend the complaint to 

add three additional respondents and extend the procedural schedule and granting McCabe’s motion 

to withdraw claim 6 of the ‘ 19 1 patent). 

See Order No. 15 (July 24,2007). 

See CX-97 (Witness Statement of Complainant Geoffrey McCabe). 

3 
a pre-hearing statement. At the hearing, Complainant withdrew his infringement allegations with 

respect to the ‘831 and ‘191 patents.’ 

After the hearing, post-hearing briefs, together with proposed findings of fact and conclusions 

of law, were filed on August 3 1,2007, and reply briefs, together with rebuttals to proposed findings 

of fact and conclusions of law, were filed on September 13 and 14,2007. Rose and Schaller did not 

file post-hearing briefs, reply briefs, proposed findings of fact, or conclusions of law and rebuttals 

to the same. 

On August 13,2007, McCabe filed a motion (586-013) seeking that adverse inferences be 

drawn against Rose pursuant to 19 C.F.R. 5 210.17(d) for failure to appear at the hearing. On 

August 23,2007, the Staff opposed the motion based on the fact that Rose filed a timely response 

to the complaint, filed a pre-hearing brief, participated in discovery and that McCabe has not alleged 

that it has been prejudiced by Rose’s failure to appear at the hearing. The undersigned finds that the 

circumstances in this investigation do not warrant finding adverse inferences against Rose. Until the 

hearing, Rose participated in discovery, timely responded to the complaint, filed a pre-hearing brief 

and a pre-hearing statement that specifically stated that it would not be participating in the hearing. 

McCabe was put on notice of Rose’s intention not to participate in the hearing, and, if McCabe 

believed that it would be prejudiced or harmed by Rose’s failure to appear at the hearing, then it 

should have addressed or raised its concerns prior or during the hearing. McCabe failed to do so. 

Therefore, the undersigned denies Motion No. 586-01 3. 

’ See Ghafoorian, Tr. 44. 

4 
B. TheParties 

1. Complainant 

Complainant Geoffrey McCabe (“McCabe”) is an individual residing in West Hollywood, 

California and is the inventor and owner of the asserted patents. 

2. Respondents 

a. Floyd Rose Marketing, Inc. 

Respondent Floyd Rose Marketing, Inc. (“Rose”) is a Washington corporation with its 

principal place of business in Neptune, New Jersey. 

b. Schaller Electronic 

Respondent Schaller Electronic (“Schaller”) is a German company with its principal place 

of business in Postbauer-Heng, Germany. 

C. Overview of the Technology 

At issue in this investigation are certain stringed musical instruments and components 

thereof. Specifically, the technology at issue concerns the tuning of stringed musical instruments, 

primarily electric guitars, from an untensioned to a tensioned playing pitch without the use of 

conventional tuning pegs. The tuning of stringed instruments requires that two different operations 

be performed, namely harmonic tuning and pitch tuning. In harmonic tuning, the length of the string 

between two critical points is adjusted. With pitch tuning, the tension on the string is increased or 

decreased. 

The technology at issue also addresses methods for improving the “tremolo effect” that 

occurs when a fulcrum tremolo is pivoted through the use of enlarged bridge elements. 

5 
D. The Patents at Issue 

1. The ‘066 Patent 

U.S. Patent No. 6,175,066 (“the ‘066 patent”) is entitled “Tuning Means for Stringed 

Musical Instrument” which was issued on January 16, 2001, based on Application Serial No. 

08/027,729, filed on January 14,1993, which was a divisional of Application Serial No. 07/607,458, 

filed on October 3 1,1990. The named inventor is Geoffrey McCabe, who is the owner of the ‘066 

patent. The ‘066 patent has a total of twelve (12) claims. One (1) independent claim, claim 8, is at 

issue here. Dependent claims 9 and 11 are also at issue here.” 

2. The ‘094 Patent 

U.S. Patent No. 6,981,094 (“the ‘094 patent”) is entitled “Tuning Means for Stringed Musical 

Instrument” which was issued on May 10,2005, based on Application Serial No. 09/760,908, filed 

on January 16, 2001, which was a continuation of Application Serial No. 08/027,729, filed on 

January 14,1993, which itself was a division of Application Serial No. 07/607,458 filed on October 

3 1,1990. The named inventor is Geoffrey McCabe, who is the owner of the ‘094 patent. The ‘094 

patent has a total of 25 claims. One (1) independent claim, claim 1, is at issue here. Dependent 

claims 14-22 are also at issue here.” 

E. The Products at Issue 

1. McCabe’s Products 

McCabe currently does not produce any products that practice the patents at issue. 

lo See JX-1 (“the ‘066 patent”); JX-5 (“the ‘066 prosecution history”). 

See JX-3 (“the ‘094 patent”); JX-7(“the ‘094 prosecution history”). The assignee listed 

on the ‘094 patent is Coherent Sound in Light, Inc. of Hollywood, California, the defimct corporation 

formed by Complainant Geoffrey McCabe. The current owner is Complainant Geoffrey McCabe. 

6 
2. Rose’s Products 

The accused products are Floyd Rose Speedloader bridge systems and guitars containing the 

same (“the accused Speedloader products”). 

’ 3. Schaller’s Products 

The accused products are Floyd Rose Speedloader bridge systems and guitars containing the 

same. Schaller is the original equipment manufacturer for making certain of the accused Floyd Rose 

Speedloader bridge systems.’* 

11. Jurisdiction and Importation 

Section 337 confers subject matter jurisdiction on the International Trade Commission to 

investigate, and if appropriate, to provide a remedy for, unfair acts and unfair methods of 

competition in the importation of articles into the United States. In order to have the power to decide 

a case, a court or agency must have both subject matter jurisdiction, and jurisdiction over either the 

parties or the property inv01ved.I~ 

A. Subject Matter Jurisdiction 

The complaint alleges that Rose and Schaller have violated Subsection 337(a)( 1)(A) and (B) 

in the importation and sale of products that infringe the asserted patents. Rose has admitted that it 

has imported the accused Speedloader products into the United States.I4 Schaller has admitted that 

l2 SIB 3. 

l3 19 U.S.C. 9 1337; also see Certain Steel Rod Treating Apparatus and Components 

Thereof, Inv. No. 337-TA-97, Commission Memorandum Opinion, 215 U.S.P.Q. 229,23 1 (1981) 

(“Certain Steel Rod”). 

l4 Rose Response to the Amended Complaint and Notice of Investigation 17 1 1 & 30; CX-41 

(Rose’s Response to Complainant’s First Set of Interrogatories No. 1 .l(d)). 

7 
it sells for importation into the United States the accused Speedloader product^.'^ Accordingly, the 

Commission has subject matter jurisdiction over Rose and Schaller in this investigation.16 

B. Personal Jurisdiction 

Rose and Schaller have responded to the complaint and notice of investigation, participated 

in the investigation, including participating in discovery, and submitted pre-hearing briefs, thereby 

submitting to the personal jurisdiction of the Commi~sion.’~ 

111. Relevant Law - Domestic Industry 

In a patent-based complaint, a violation of Section 337 can be found “only if an industry in 

the United States, relating to the articles protected by the patent . . . concerned, exists or is in the 

process of being established.”’* This “domestic industry requirement” has an “economic” prong and 

a “technical” prong. 

A. Technical Prong 

A complainant in a patent-based Section 337 investigation must demonstrate that it is 

practicing or exploiting the patents at issue.’’ In order to find the existence of a domestic industry 

exploiting a patent at issue, it is sufficient to show that the domestic industry practices any claim of 

l5 Schaller’s Response to Amended Complaint and Notice of Investigation 7 30; SX-1 

(Schaller’s Response to Staffs First Set of Interrogatories No. 3). 

l6 See Amgen, Inc. v. US. Int’l Trade Comm’n, 902 F.2d 1532, 1536 (Fed. Cir. 1990) 

(“Amgen”). 

l7 See Certain Miniature Hacksaws, Inv. No. 337-TA-237, U.S.I.T.C. Pub. No. 1948, Initial 

Determination (unreviewed by Commission in relevant part) at 4, 1986 WL 379287 (U.S.I.T.C., 

October 15, 1986) (“Certain Miniature Hacksaws”). 

19 U.S.C. 0 1337(a)(2). 

l9 See 19 U.S.C. 0 1337(a)(2) and (3); also see Certain Microsphere Adhesives, Process for 

Making Same, and Products Containing Same, Including Self-stick Repositionable Notes, Inv. No. 

337-TA-366, Commission Opinion at 8,1996 WL 1056095 (U.S.I.T.C., January 16,1996) (“Certain 

Microsphere Adhesives”), aff d sub nom. Minnesota Mining & Mfg, Co. v. US. Int’l Trade Comm ’n, 

91 F.3d 171 (Fed. Cir. 1996) (Table); Certain Encapsulated Circuits, Commission Opinion at 16. 

8 
that patent, not necessarily an asserted claim of that patent.20 Fulfillment of this so-called “technical 

prong” of the domestic industry requirement is not determined by a rigid formula, but rather by the 

articles of commerce and the realities of the marketplace.21 

The test for claim coverage for the purposes of the technical prong of the domestic industry 

requirement is the same as that for “First, the claims of the patent are construed. 

Second, the complainant’s article or process is examined to determine whether it falls within the 

scope of the claims.”23 As with infringement, the first step of claim construction is a question of 

law, whereas the second step of comparing the article to the claims is a factual determinati~n.~~ To 

prevail, the patentee must establish by a preponderance of the evidence that the domestic product 

practices one or more claims of the patent either literally or under the doctrine of equivalent^.^^ 

B. Economic Prong 

The term “domestic industry” in Section 337 is not defined by the statute, but the 

Commission has interpreted the intent of Section 337 to be “the protection of domestic manufacture 

of goods.”26 The Commission has Wher stated that “[tlhe scope of the domestic industry in patent2o Certain Microsphere Adhesives, Commission Opinion at 7- 16. 

21 Certain Diltiazem Hydrochloride and Diltiazem Preparations, Inv. No. 337-TA-349, 

U.S.I.T.C. Pub. No. 2902, Initial Determination at 138, 1995 WL 945 191 (U.S.I.T.C., February 1, 

1995) (unreviewed in relevant part) (“Certain Diltiazem”); Certain Double-Sided Floppy Disk 

Drives and Components Thereox Inv. No. 337-TA-215, 227 U.S.P.Q. 982, 989 (Commission 

Opinion 1985) (“Certain Floppy Disk Drives”). 

22 Certain Doxorubicin and Preparations Containing Same, Inv. No. 337-TA-300, Initial 

Determination at 109,1990 WL 710463 (U.S.I.T.C., May 21,1990) (“Certain Doxorubicin”), afd, 

Views of the Commission at 22 (October 3 1, 1990). 

23 Id. 

24 Markman, 52 F.3d at 976. 

25 See Buyer, 212 F.3d at 1247. 

26 Certain Dynamic Random Access Memories, Components Thereof and Products 

Containing Same, Inv. No. 337-TA-242, U.S.I.T.C. Pub. No. 2034 (November 1987), Commission 

(continued. ..) 

9 
based investigations has been determined on a case by case basis in light of the realities of the 

marketplace and encompasses not only the manufacturing operations but may include, in addition, 

distribution, research and development and sales.”27 

In making this determination, Section 337(a)(2) provides that for investigations based on 

patent infringement, a violation can be found “only if an industry in the United States, relating to the 

articles protected by the patent . . . concerned, exists or is in the process of being established.” 19 

U.S.C. 0 1337(a)(2). Section 337(a)(3) sets forth the following economic criteria for determining 

the existence of a domestic industry in such investigations: 

an industry in the United States shall be considered to exist if there is in the United 

States, with respect to the articles protected by the . . . patent . . . Concerned - 

(A) significant investment in plant and equipment; 

(B) significant employment of labor or capital; or 

(C) substantial investment in its exploitation, including engineering, research 

and development, or licensing.28 

As the statute uses the disjunctive term “or,” a complainant can demonstrate this so-called 

“economic prong” of the domestic industry requirement by satisfying any one of the three tests set 

forth in Section 337(a)(3).29 The complainant bears the burden of establishing that the domestic 

industry requirement is ~atisfied.~’ 

26(. . .continued) 

27 Id. at 62 (footnotes omitted). 

28 19 U.S.C. 0 1337(a)(3). 

29 See Certain Plastic Encapsulated Integrated Circuits, Inv. No. 337-TA-3 15, U.S.I.T.C. 

Pub. No. 2574 (November 1992), Initial Determination at 83,1992 WL 813952 (U.S.I.T.C., October 

15, 1991) (unreviewed by Commission in relevant part) (“Certain Encapsulated Circuits”). 

30 See Certain Set-Top Boxes and Components Thereof; Inv. No. 337-TA-454, U.S.I.T.C. 

(continued ...) 

Opinion at 61, 1987 WL 450856 (U.S.I.T.C., September 21, 1987) (“Certain DRAMS”). 

10 
Section 337(a)(3)(C) provides for domestic industry based on “substantial investment” in the 

enumerated activities, including licensing of a patent.31 Mere ownership of the patent is insufficient 

to satis@ the domestic industry req~irement.~~ However, entities that are actively engaged in 

licensing their patents in the United States can meet the domestic industry req~irement.~~ In 

establishing a domestic industry under Section 337(a)(3)(C), the complainant does not need to show 

that it or one of its licensees is practicing a patent-in-~uit.~~ Thecomplainant must, however, receive 

revenue, e.g. royalty payments, from its licensing activitie~.~~ 

30(. ..continued) 

Pub. No. 3564 (November 2002), Initial Determination at 294,2002 WL 3 1556392 (U.S.I.T.C., June 

2 1,2002), unreviewed by Commission in relevantpart, Commission Opinion at 2 (August 29,2002) 

(“Certain Set-Top Boxes”). 

See Certain Digital Processors and Digital Processing Systems, Components Thereox and 

Products Containing Same, Inv. No. 337-TA-559, Initial Determination at 88 (May 11, 2007) 

(“Certain Digital Processors”). 

32 Certain Digital Processors at 93. (Citing the Senate and House Reports on the Omnibus 

Trade and Competitiveness Act of 1988, S.Rep. No. 71. 

33 Certain Digital Processors at 93. 

34 See Certain Semiconductor Chips with Minimized Chip Package Size and Products 

Containing Same, Inv. No. 337-TA-432, Order No. 13, at 11, (Jan. 24, 2001) (“Certain 

Semiconductor Chips”). 

35 Certain Digital Processors, at 93-95 (“Commission decisions also reflect the fact that a 

complainant’s receipt of royalties is an important factor in determining whether the domestic 

industry requirement is satisfied ...[ tlhere is no Commission precedent for the establishment of a 

domestic industry based on licensing in which a complainant did not receive any revenue from 

alleged licensing activities. In fact, in previous investigations in which a complainant successfully 

relied solely on licensing activities to satisfl section 337(a)(3), the complainant had licenses yielding 

royalty payments.”) (citations omitted). See also Certain Video Graphics Display Controllers and 

Products Containing Same, Inv. No. 337-TA-412, Initial Determination at 13 (May 14, 1999) 

( “Certain Video Graphics Display Controllers”); Certain Integrated Circuit Telecommunication 

Chips and Products Containing Same Including Dialing Apparatus, Inv. No. 337-TA-337, 

U.S.I.T.C. Pub. No. 2670, Initial Determination at 98 (March 3,1993) (“Certain Integrated Circuit 

Telecommunication Chips”); Certain Zero-Mercury-Added Alkaline Batteries, Parts Thereof and 

Products Containing Same, Inv. No. 337-TA-493, Initial Determination at 142 (June 2, 2004) 

( “Certain Zero-Mercury-Added Alkaline Batteries ”); Certain Semiconductor Chips, Order No. 1 3 

at 6 (Jan. 24,2001); Certain Digital Satellite System DSS Receivers and Components Thereof, Inv. 

(continued. ..) 

11 
IV. The ‘066 Patent and ‘094 Patent 

Based on the evidence presented in this investigation, the undersigned finds that it is 

unnecessary to perform a complete analysis of the ‘066 patent and ‘094 patent because an analysis 

of McCabe’s economic prong for domestic industry will be sufficient to show that there can be no 

relief for McCabe regarding either the ‘066 patent or the ‘094 patent because McCabe’s evidence 

falls significantly below the standard of meeting his “preponderance of the evidence” burden.36 

While it has been customary for administrative law judges to address all outstanding issues 

in their initial determination, the undersigned finds that this is an appropriate case where it would 

be a waste of judicial resources to go through a complete analysis of claim construction, 

infringement, domestic industry technical prong, validity, and enforceability, when it is clear that the 

economic prong of domestic industry has not been met. 

A. Staff and McCabe’s Arguments 

Staff and McCabe argue that McCabe meets the economic prong of the domestic industry 

requirement under section 337(a)(3)(C) by engineering, research and development, and licensing of 

McCabe’s patents. First, Staff and McCabe argue that McCabe has made substantial investment 

exploiting the patents through engineering, research and development efforts.37 Staff and McCabe 

35(. ..continued) 

No. 337-TA-392, Initial and Recommended Determinations at 11 (Dec. 4, 1997) (“Certain Digital 

Satellite System DSS Receivers”). 

36 See Certain Encapsulated Integrated Circuit Devices and Products Containing Same, Inv. 

No. 337-TA-50 1 (Remand), Initial Determination at 1 02 (Nov. 9, 2005) (“Certain Encapsulated 

Integrated Circuits ”) (“The burden of showing something by a ‘preponderance of the evidence’ ... simply requires the trier of fact to believe that the existence of a fact is more probable than its 

nonexistence before [he] may find in favor of the party who the burden to persuade the Ijudge] of 

the fact’s existence.”). 

37 CIB 22. 

12 
also assert that McCabe has made substantial investments in licensing McCabe’s patents.38 

1. Research and Development 

Staff and McCabe assert that McCabe has continuously engaged in research and development 

since the 1980s. Staff and McCabe assert that McCabe’s research efforts began in 1988 when 

McCabe had his first prototype manufactured for $3,500 and, while there was some interest in 

McCabe’s designs from Kahler and Gibson Guitar Corporations, both Kahler and Gibson Guitar 

deferred discussions until after McCabe had obtained patents covering his designs.39 Staff and 

McCabe assert that shortly after filing McCabe’s initial patent application in 1990, McCabe spent 

$4,000 to manufacture a second pr~totype.~’ Staff and McCabe assert that from that point through 

1 999, McCabe “continued engineering, research and de~elopment.”~’ 

In 1998, Staff asserts that McCabe attended the annual National Association of Music 

Merchants (“NAMM’) show to find manufacturers willing to manufacture McCabe’s designs.42 

Staff asserts that many companies were interested in McCabe’s design, including Schaller who 

offered to manufacture McCabe’s tremolo if McCabe could guarantee minimum sales.43 Staff asserts 

that shortly after the 1998 NAMM show, McCabe developed a third prototype that could be used on 

a Fender Stratocaster style guitar.44 Staff asserts that McCabe also incorporated “Coherent Sounds 

in Light, Inc.” in order to further his attempts at finding manufacturers and venture capitalists to help 

38 CIB 22. 

39 SIB 38 citing CX-6 (“Claim chart for ‘066 patent”) and CX-97 (“McCabe’s Direct”); CIB 

40 SIB 38 citing CX-97 (“McCabe’s Direct”) and CX-14 (“Claim chart for ‘094 patent”); CIB 

41 SIB 38 citing CX-97 (“McCabe’s Direct”); CIB 22. 

42 SIB 39 citing CX-97 (“McCabe’s Direct”). 

43 SIB 39 citing CX-97 (“McCabe’s Direct”). 

44 SIB 39 citing CX-97 (“McCabe’s Direct”). 

22 citing CX-97 (“McCabe’s Direct”). 

22 citing CX-97 (“McCabe’s Direct”). 

13 
in the manufacture of his tremolo designs.45 However, the business is now defunct.46 

Staff asserts that in 2000, McCabe developed a fourth prototype, which he presented at the 

2001 NAMM, along with his patents and designs, to a variety of manufacturers, including Schaller 

and Rose.47 

Staff asserts that during his employment with West L.A. Music in 2002, McCabe was 

introduced to a guitar parts supplier, Sonic Sales.48 Staff asserts that their collaboration also led to 

another prototype, which McCabe presented at the 2003 NAMM show and was well received by the 

industry.49 

Staff asserts that in the spring of 2004, McCabe began discussions with RKS Guitars, a new 

company affiliated with the design house, RKS Design.” Staff asserts that RKS and McCabe 

worked together to produce a new prototype based on McCabe’s last few years of research and 

development that was presented at the 2005 NAMM However, a pending deal with RKS 

fell through when financial improprieties within the company 

Staff asserts that in 2005, McCabe rekindled negotiations with Kahler in August 2005 

concerning Kahler’s possible manufacture and sale of McCabe’s designs.53 Staff and McCabe assert 

45 SIB 39 citing CX-97 (“McCabe’s Direct”). 

46 SIB 39 citing CX-97 (“McCabe’s Direct”). 

47 SIB 39 citing CX-97 (“McCabe’s Direct”). 

48 SIB 40 citing CX-97 (“McCabe’s Direct”). 

49 SIB 40 citing CX-97 (“McCabe’s Direct”). 

50 SIB 41 citing CX-97 (“McCabe’s Direct”). 

51 SIB 42 citing CX-97 (“McCabe’s Direct”) and CX-54 (“Email between RKS and 

McCabe”) and CX-55 (“Email between RKS and McCabe”); CIB 24 citing CX-97 (“McCabe’s 

Direct”), CX-33 (“Email between RKS and McCabe”), CX-54 (“Email between RKS and 

McCabe”), and CX-55 (“Email between RKS and McCabe”). 

52 SIB 42 citing CX-97 (“McCabe’s Direct”). 

53 SIB 42 citing CX-97 (“McCabe’s Direct”) and CX-45 (“Letter from McCabe to G. 

(continued. ..) 

14 
that McCabe and Kahler produced CAD drawings of the various components parts of McCabe’s 

designs, including what became model 7 170, a version that comports with the Fender standard.54 

Staff asserts that the design was included in Kahler’s catalog and shown at the 2006 NAMM show.” 

2. Licensing 

Staff and McCabe further argue that McCabe has made substantial investments in exploiting 

his patented inventions through licensing of McCabe’s patents. McCabe argues that he promoted 

his prototypes and patents in “an effort to procure licensing or manufacturing deals” at the 2001 

NAMM.56 McCabe asserts that in May 2001, he received an offer from Seymour Duncan Company 

to license the technology of the subject patents.57 Staff asserts that Seymour Duncan Company 

showed an interest in McCabe’s design and presented it to Fender hoping to convince Fender to 

incorporate McCabe’s tremolo on the Fender guitars.58 Staff and McCabe assert that during 

McCabe’s relationship with Seymour Duncan Company, McCabe was introduced to a metal 

fabricator, All-New Stamping Company, with whom McCabe worked closely with on design and 

manufacturing techniques (including costs analysis).59 However, by August 200 1, Staff and McCabe 

assert that the business relationship between McCabe and Seymour Duncan Company had 

53(. ..continued) 

Kahler”); CIB 24 citing CX-97 (“McCabe’s Direct”). 

54 SIB 42 citing CX-97 (“McCabe’s Direct”); CIB 24 citing CX-97 (“McCabe’s Direct”) and 

CX-45 (“Letter from McCabe to G. Kahler”). 

55 SIB 42 citing CX-97 (“McCabe’s Direct”). Staff also cites CPX-13 to support its 

argument. However, CPX-13 has not been submitted as an exhibit in this investigation and, 

therefore, will not be considered in this initial determination. 

56 CIB 22. 

57 CIB 22 citing CX-97 (“McCabe’s Direct”); CX-52 (“Email between Seymour Duncan and 

58 SIB 39. 

59 CIB 22 and SIB 40 citing CX-97 (“McCabe’s Direct”) and CX-16 (“All-New Stamping 

McCabe”) and CX-15 (“OEM Margin Analysis”). 

Quotation”). 

15 
deteriorated due to differences and, as a result, McCabe and Seymour Duncan Company ended their 

business relationship.60 

Staff and McCabe assert that shortly thereafter, McCabe began working with Kahler 

International, Inc.61 McCabe asserts that he received an offer from Kahler International, Inc. to 

license his patents “in order to start manufacturing guitar bridges incorporating [his] technology and 

designs.”62 Staff and McCabe assert that no licensing agreement resulted from their collaboration 

due to “other concerns” by Kahler.63 

Staff and McCabe assert that from October 2002 through July 2003, McCabe and Sonic Sales 

worked together on the licensing and manufacturing of McCabe’s designs.64 Staff asserts that 

interest was so great that Sonic Sales explored the possibility of manufacturing McCabe’s designs 

in Asia and distributing it through a retail chain store, the Guitar Center.65 McCabe further asserts 

that he received an offer “to license and manufacture [his] invention and technology” from Sonic 

Sales.66 Staff and McCabe assert that it was during the 2003 NAMM show that McCabe first learned 

of the accused Speedloader bridges.67 Staff and McCabe assert that McCabe met Jack Weistheimer 

at the same show, who became interested in licensing and manufacturing McCabe’s technology and 

patents.68 Staff and McCabe assert that Sonic Sales, concerned over the similarities between the 

6o CIB 22 citing CX-97 (“McCabe’s Direct”); SIB 40 citing CX-97 (“McCabe’s Direct”). 

SIB 40 citing CX-97 (“McCabe’s Direct”); CIB 23. 

62 CIB 23. 

63 SIB 40 citing CX-97 (“McCabe’s Direct”); CIB 23. 

64 SIB 40 citing CX-97 (“McCabe’s Direct”); CIB 23. 

65 SIB 40 citing CX-97 (“McCabe’s Direct”). 

66 CIB 23. 

” SIB 40 citing CX-97 (“McCabe’s Direct”); CIB 23. 

68 CIB 23 citing CX-97 (“McCabe’s Direct”) and CX-44 (“Letter from McCabe to J. 

Westheimer”). 

16 
Speedloader bridge and McCabe’s designs, retained an attorney to analyze whether the Speedloader 

infringed McCabe’s patents.69 Staff and McCabe assert that since Rose had also patented its 

Speedloader project, Sonic Sales and Jack Weistheimer’s corporation ultimately decided not to 

pursue their interest in McCabe’s patent^.^' 

Staff asserts that following McCabe’s discovery ofthe Speedloader, he and his attorneys had 

ongoing discussions with Rose’s counsel regarding potential licensing of McCabe’s patents, 

including a meeting between McCabe’s counsel and Rose’s counsel at the 2004 NAMM 

Staff asserts that during this period, McCabe continued to contact entities in an effort to bring the 

manufacturing of his designs to realization and received manufacturing quotes from several 

machinists while pursuing the idea of manufacturing his design himself.72 Staff asserts that from 

this, McCabe produced cost sheets for component parts which were maintained in a database 

wherein each component was designated a part number and assembly lists created.73 Staff asserts 

that at this point, McCabe’s “fulcrum tremolo designs had expanded through [R&D] from 2001 to 

include a version for a Fender standard, two versions for Floyd Rose standards . . . providing broader 

choices for guitarists and guitar companies to improve their in~tnunents.”~~ 

Staff asserts that during McCabe and Kahler’s collaboration in 2005, Kahler again 

69 SIB 40-41 citing CX-97 (“McCabe’s Direct”); CIB 23. 

70 SIB 41 citing CX-97 (“McCabe’s Direct”) and CX-44 (“Letter from McCabe to J. 

Westheimer”). 

SIB 41 citing CX-97 (“McCabe’s Direct”). 

72 SIB 41 citing CX-97 (“McCabe’s Direct”) and CX-17-20 (“Quotations from 

73 SIB 41 citing CX-97 (“McCabe’s Direct”) and CX-23-26 (“FileMaker Pro database 

74 SIB 41 citing CX-97 (“McCabe’s Direct”) and CX-28 (“Tremolo part analysis”). 

manufacturers”). 

sheets”). 

17 
considered the possibility of manufacturing and selling McCabe’s designs.75 Kahler, however, 

having previously been involved in protracted litigation with Rose, got “cold feet,” telling McCabe 

that it could not go forward until McCabe eliminated the possibility (through, for example, a crosslicense) of a countersuit by Rose for infringement of its Speedloader patent portf01io.~~ McCabe 

asserts, however, that he currently has a conditional verbal agreement with Kahler to manufacture 

his inventions should McCabe obtain a covenant not to sue from Rose.77 

Staff and McCabe assert that discussions with Hoshino regarding the potential licensing of 

the asserted patents began again in the fall of 2004.78 Staff and McCabe assert that as part of these 

ongoing negotiations, McCabe met with Hoshino representatives at the 2006 NAMM 

Hoshino finally entered into a licensing agreement with McCabe as part of a settlement that 

terminated it from this investigation wherein [ 

IS1 80 

Staff asserts that throughout 2004 and 2005, McCabe continued licensing negotiations with 

Rose.82 McCabe asserts that in 2005, McCabe approached Rose to negotiate a license agreement for 

the ‘094 patent, which Rose refb~ed.’~ 

75 SIB 42 citing CX-97 (“McCabe’s Direct”) and CX-45. 

76 SIB 42-43 citing CX-97 (“McCabe’s Direct”). 

77 CIB 24 citing CX-66 (“Letter from G. Kahler ro McCabe”). 

78 SIB 42 citing CX-97 (“McCabe’s Direct”); CIB 24 citing CX-97 (“McCabe’s Direct”). 

79 SIB 42 citing CX-97 (“McCabe’s Direct”); CIB 24 citing CX-97 (“McCabe’s Direct”). 

8o SIB 42 citing Order No. 9 and Hoshino Settlement Agreement at 2(b)-(c), p. 3 (definition 

of “McCabe Patents”) (attachment to Order No. 9); CIB 24 citing CX-97 (“McCabe’s Direct”). 

SIB 42 citing Hoshino Settlement Agreement at T[ 2(b). 

82 SIB 42 citing CX-97 (“McCabe’s Direct”). 

83 CIB 24 citing CX-97 (“McCabe’s Direct”), CX-70 (“Email from McCabe to Rose”), CX- 

(continued ...) 

18 
In 2007, McCabe has also [ 

84 

185 

Based on the foregoing, Staff and McCabe argue that McCabe has met the economic prong 

of the domestic industry requirement through substantial investment in research and development 

of the subject matter of the asserted patent and substantial investment in licensing activities, 

including the Hoshino and Vigier licenses. 

B. Discussion 

McCabe and Staff argue that McCabe has met the economic prong of the domestic industry 

requirement based on substantial investment in research and development and licensing activities, 

i.e. that McCabe has met subsection (C) of Section 337(a)(3). According to McCabe and Staff, the 

substantial investments made by McCabe consist of a few prototypes, discussions and collaborations 

with various companies and manufacturers in the guitar industry, discussions for potential license 

agreements and, after the complaint was filed, two license agreements. For the reasons set forth 

below, the undersigned finds that McCabe’s activities fail to establish a domestic industry under 

Section 337(a)(3)(C). 

The Commission has held that subsection (C) requires a “simpler test” for domestic industry 

83( .. .continued) 

72 (“Letter from Rose’s patent counsel to McCabe”), and CX-73C‘Email from McCabe to Rose’s 

patent counsel, Mr. Nelson”). 

84 SIB 43 citing Order No. 1 1. 

85 SIB 43 citing Order No. 11 and Vigier Settelement Agreement at p. 2 (definition of 

“McCabe Patent”). 

19 
than that of subsections (A) and (B).86 In relying on licensing activities to satisfy subsection (C), the 

complainant need not show that it or one of its licensees practices the patent-in-suit in order to 

establish a domestic indu~try.’~ However, there must be a “nexus” between the activities upon which 

it relies and the asserted patents.” Moreover, the statute specifically states that there must be a 

“substantial investment” in the research and development and licensing activities of the patent. 

“[Mlere ownership of a patent is insufficient to meet the domestic industry req~irernent.”~’ 

Congress created subsection (C) primarily in response to the Commission’s decision in 

Certain Products with Gremlin Depictions, which found that the complainant had failed to establish 

a domestic industry despite substantial investment in the extensive licensing of its intellectual 

pr~perty.’~ By including the activities enumerated in subsection (C), Congress intended to make 

Section 337 remedies available to “persons who have made a substantial investment in facilities or 

activities relating to the exploitation of a patent, copyright, trademark, or mask work, including 

research and development, [and] licensing.”” In doing so, Congress noted that “[tlhis adjustment 

will assure continued access to the ITC by entities, including universities, who have a substantial 

stake in the United state^."'^ 

86 Certain Digital Processors at 85 (Citing Certain Microlithographic Machines and 

Components ThereoJ; Inv. No. 337-TA-468, Initial Determination at 346, adopted in relevant part 

in Notice of Commission Determination Not to Review a Final Initial Determination Finding No 

Violation of Section 337 [and] Termination of the Investigation (Mar. 17, 2003)). 

87 Certain Digital Processors at 85 (Citing Certain Semiconductor Chips at 11). 

Certain Digital Processors at 85 (Citing Certain Microlithographic Machines at 346). 

89 Certain Digital Processors at 85 (Citing S. Rep. No. 71, looth Cong., lst Session at 130 

90 Certain Digital Processors at 89. 

91 Certain Digital Processors at 89. 

92 Certain Digital Processors at 89 (citing Rep. Kastenmeier, 132 Cong. Rec. H. 1782,99” 

(1 987); H.R. Rep. No. 40, 1 OOfh Cong., 1’‘ Session, at 157 (1 987)). 

Congress, 2nd Sess. (Apr. 10, 1986)). 

20 
In creating subsection (C), Congress specifically modified the term “investment” using 

“substantial.” Under the canons of statutory interpretation, the inclusion of the word “substantial” 

cannot be overlooked and must be given effect. 

We are not at liberty to construe any statute so as to deny effect to any part of its 

language. It is a cardinal rule of statutory construction that significance and effect 

shall, if possible, be accorded to every word. As early as in Bacon’s Abridgment, sect. 

2, it was said that “a statute ought, upon the whole, to be so construed that, if it can 

be prevented, no clause, sentence, or word shall be superfluous, void, or 

insignificant.’’ This rule has been repeated innumerable times. Market Co. v. 

Hoffman, 101 U.S. 112, 115-116 (U.S. 1879).93 

Moreover, the legislative history behind subsection (C) shows that both the Senate and the House 

repeatedly used the word “substantial” or “significant” in describing the investment activity 

enumerated therein: 

Second, modify the domestic industry requirement by allowing complainant to be 

filed by persons who have made a substantial investment in facilities or activities 

relating to the exploitation of apatent, copyright, trademark, or mask work, including 

research and development, licensing ...94 

For those who make substantial investments in research, there should be a remedy. 

For those who make substantial investments in the creation of intellectual property 

and then license creations, there should be a remedy. Let me give one example, there 

is a startup biotech firm in my state. Its product is its patents. It hasn’t reached the 

stage to manufacture ...[ a] party could get relief if it has made significant investment 

in R&D, engineering or li~ensing.’~ 

This definition does not require actual production of the article in the United States 

if it can be demonstrated that substantial investment and activities of the type 

enumerated are taking place in the United States. Marketing and sales in the United 

States alone would not, however, be sufficient to meet this test. The definition could, 

93 See also Duncan v. Walker, 533 U.S. 167, 174 (U.S. 2001); United States v. Campos94 Certain Digital Processors at 89 (citing Rep. Kastenmeier, 132 Cong. Rec. H. 1782, 99‘h 

95 Certain Digital Processor at 92 (citing Senator Lautenberg, 133 Cong. Rec. S. 1794,l OOth 

Serrano, 404 U.S. 293,301 n.14 (U.S. 1971). 

Congress, 2nd Sess. (Apr. 10, 1986)) (emphasis added). 

Cong. 1” Sess. (Feb. 4, 1987)) (emphasis added). 

21 
however, encompass universities and other intellectual property owners who engage 

in extensive licensing of their rights to man~facture.~~ 

The amendment makes clear that a “domestic industry” can exist through the 

development of a “licensing” industry. The amendment also makes certain the 

availability of Section 337 relief to universities who have made substantial 

investment in engineering, or research and development in connection with the 

exploitation of an intellectual property right.97 

Thus, it is evident that Congress intended to provide Section 337 relief to intellectual property 

holders who have made a substantial investment in research and development, such as those made 

by “universities” and small businesses like “start up biotech firm[s] .” Similarly, Congress sought 

to provide relief to those who made a substantial investment in licensing activities thereby creating 

a “licensing” industry and a “larger service industry exploiting the intellectual property right within 

the United States.”98 Each of these examples indicates that, in addition to ownership of the 

intellectual property rights, Congress intended to provide access to the trade remedies available at 

the ITC to those who have actually made a significant investment into the exploitation of their 

intellectual property rights. 

McCabe has failed to show that he has made a “substantial investment” in research and 

development and licensing activities. As set forth above, Congress’s intent in adding subsection (C) 

was to provide relief to those entities such as universities who license out their patents, small start 

up companies that do not yet have manufacturing capabilities, and larger service industries exploiting 

intellectual property, e.g. “the licensing ofthe Gremlin image for products mass marketed to children 

96 Certain Digital Processors at 92-93 (citing Senate Finance Committee Report, S. Rep. No. 

97 Representative Kastenmeier, 132 Cong Rec H 9965. 

98 Representative Kastenmeier, 132 Cong Rec H 9965. 

71, lOO* Cong., 1‘‘ Sess., at 129 (1987)) (emphasis added). 

22 
in the United States.”” Up until the filing of McCabe’s complaint, the evidence shows that 

McCabe’s investment in research and development consists of (1) a few prototypes costing a total 

of approximately $8,500; (2) the presentation his prototypes and designs at industry trade shows; (3) 

the incorporation of a now dehct company;’oo (4) short collaborations with a few manufacturers 

in the guitar industry and (5) some discussions with a few companies in the guitar industry. 

Regarding his licensing activities, McCabe argues that he received bona fide offers to license 

his designs. However the evidence shows otherwise. For example, while McCabe argues that 

Seymour Duncan company offered him a license, the evidence shows that Seymour Duncan was 

actually offering to represent McCabe in trying to procure a license from Rose.”’ Similarly, while 

McCabe asserts that he has a verbal agreement with Kahler International, the evidence cited by 

McCabe-a letter-only indicates the reasons for Kahler International Inc.’s refusal to enter into any 

agreement with McCabe. The letter does not state or indicate that there is any sort of verbal 

agreement between the two parties.’o2 Thus, McCabe’s investment over the span of nearly 20 years 

was limited to a few prototypes and short collaborations and discussions with various companies and 

manufacturers in the guitar industry, which failed to produce any commercial products or result in 

any license agreements. 

Furthermore, such activities do not meet the level of “substantial investment” in research 

and development and engineering as set forth in previous investigation^."^ The $8,500 in 

99 Certain Digital Processors at 89. 

loo There is no evidence in the record that this company generated any revenues or employed 

lo’ CX-52 (“Email between Seymour Duncan and McCabe”). 

lo2 CX-66 (“Letter from G. Kahler ro McCabe”). 

lo3 See Certain Semiconductor Chips at 7-8 and Certain Digital Processors at 96-97. The 

(continued. ..) 

any employees. 

23 
investments made by McCabe in research and development for his prototypes and short 

collaborations with manufacturers is significantly less than that of previous complainants for which 

the Commission found that a domestic industry existed, and in the undersigned’s view, does not 

constitute a “substantial investment.” 

Similarly, the total amount of revenue generated thus far through McCabe’s [ 

3 is far less than the amounts received by other complainants that have relied 

on licensing activities to establish a domestic industry. The license agreement with Hoshino has 

produced [ 3 in revenue, and the license agreement with Vigier has only produced [ 

] Both license agreements provide [ 

3 lo4 However, in Certain Digital Processors, the complainant received “millions 

of dollars in royalties due to the successful licensing of its patent portf~lio.”’~~ Thus, regardless of 

whether the cutoff for activities necessary to establish domestic industry is at the time the complaint 

was filed or at the discovery cut-off date,lo6 McCabe fails to meet the domestic industry requirement 

lo3(. ..continued) 

undersigned does not cite to the specific amounts enumerated in these two decisions based on the 

confidential nature of such information. 

lo4 See Certain Digital Processors at 94 (“The existence of a domestic industry is determined 

with reference to the time that the complaint was filed.”) (“There is no Commission precedent for 

the establishment of a domestic industry based on licensing in which a complainant did not receive 

any revenue from the alleged licensing activities. In fact, in previous investigations in which a 

complainant successfully relied solely on licensing activities to satisfy section 337(a)(3), the 

complainant had licenses yielding royalty payments.”). 

IO5 Certain Digital Processors at 98. See also Semiconductor Chips at 6. Once again, the 

undersigned does not cite to specific amounts in this decision based on the confidential nature of the 

information. 

lo6 Compare Certain Digital Processors at 84 (“The existence of a domestic industry is 

determined with reference to the time that the complaint was filed.”) (citing BallyMidway Mfg. v. 

United States Int ’I Trade Comm ’n, 714 F.2d 1 117, 1 122 (Fed. Cir. 1983) with Certain Concealed 

Cabinet Hinges and Mounting Plates, Inv. No. 337-TA-289, Commission Opinion at 2 1 (January 

(continued.. .) 

24 
even taking into consideration the fact that McCabe entered into two license agreements with 

Hoshino and Vigier after the complaint was filed. The revenue generated from McCabe’s licensing 

agreements is significantly less than that of previous complainants for which the Commission found 

that a domestic industry existed, and in the undersigned’s view, does not constitute a “substantial 

investment.” 

In sum, in the undersigned’s view, the activities presented by McCabe and Staff do not 

constitute a substantial investment in research and development and licensing. Short collaborations 

and prototypes do not qualifl as a “substantial investment’’ in research and development. Two 

license agreements that have generated [ ]does not lead to the creation of a “licensing” 

industry. Quite simply, McCabe’s activities are not “substantial investment[s]” in research and 

development or licensing activities as intended by Congress. 

“[Tlhe domestic industry requirement will serve as a gatekeeper to prevent the excessive use 

of the ITC under Section 337.”Io7 Such is the case in this investigation. McCabe is the owner of 

the ‘066 and the ‘094 patents, has made a few prototypes, has had discussions with others in the 

music industry and has entered into two licensing agreements. These activities, however, do not 

establish a domestic industry under Section 337 as required under the statute. McCabe has failed 

to meet his burden to establish a domestic industry and, therefore, cannot seek relief under Section 

337 at the ITC. While McCabe has been denied relief under Section 337, McCabe is not without 

recourse as he can also seek relief from district court where there is no domestic industry 

lo6(.. .continued) 

8, 1990) (“As a preliminary point, we assess the existence of the domestic industry as of the 

discovery cutoff date prior to the evidentiary hearing.”). 

lo7 Representative Kastenmeier, 132 Cong Rec H 9965 

25 
requirement. 

Therefore, based on the foregoing, the undersigned finds that McCabe has failed to meet his 

burden in establishing a domestic industry for the asserted patents and, as such, McCabe cannot seek 

relief under Section 337. Since McCabe failed to meet his burden, the undersigned finds that judicial 

resources need not be spent on a complete analysis of claim construction, infringement, domestic 

industry technical prong, validity, and enforceability. 

26 
CONCLUSIONS OF LAW 

1. 

2. 

The Commission has subject matter jurisdiction in this investigation. 

The Commission has personal jurisdiction over Rose and Schaller. 

3. An industry in the United States does not exist with respect U.S. Patent Nos. 6,175,066 and 

6,891,094, as required by 19 U.S.C. $1337(a)(2) and (3). 

27 
INITIAL DETERMINATION 

Based on the foregoing opinion, findings of fact, conclusions of law, the evidence, and the 

record as a whole, and having considered all pleadings and arguments, including the proposed 

findings of fact and conclusions of law, it is the Administrative Law Judge’s Initial Determination 

that a domestic industry does not exist with respect to U.S. Patent Nos. 6,175,066 and 6,891,094, 

and, therefore, a violation of Section 337 of the Tariff Act of 1930, as amended, has not been found 

in the importation into the United States, the sale for importation, or the sale within the United States 

after importation of certain stringed musical instruments and components thereof, in connection with 

claims 8-9 and 11 0fU.S. PatentNo.6,175,066 and claims 1 and 14-22 0fU.S. PatentNo. 6,892,094. 

The Administrative Law Judge hereby CERTIFIES to the Commission this Initial 

Determination, together with the record of the hearing in this investigation consisting of the 

following: the transcript of the evidentiary hearing, with appropriate corrections as may hereafier be 

ordered by the Administrative Law Judge; and further the exhibits accepted into evidence in this 

investigation as listed in the attached exhibit lists. 

Pursuant to 19 C.F.R. 0 21 0.42(h), this Initial Determination shall become the determination 

of the Commission unless a party files a petition for review pursuant to 19 C.F.R. tj 21 0.43(a) or the 

Commission, pursuant to 19 C.F.R. 3 210.44, orders on its own motion a review of the Initial 

Determination or certain issues therein. 

28 
RECOMMENDED DETERMINATION ON REMEDY AND BOND 

Pursuant to Commission Rules 2 10.36(a) and 2 10.42(a)( l)(ii), the Administrative Law Judge 

is to consider evidence and argument on the issues of remedy and bonding and issue a recommended 

determination thereon. 

V. Remedy and Bonding 

A. Limited Exclusion Order 

Under Section 337(d), the Commission may issue either a limited or a general exclusion 

order. A limited exclusion order instructs the U.S. Customs Service to exclude from entry all articles 

that are covered by the patent at issue and that originate from a named respondent in the 

investigation. A general exclusion order instructs the U.S. Customs Service to exclude from entry 

all articles that are covered by the patent at issue, without regard to source. McCabe requested that 

the Commission issue a general exclusion order."' However, McCabe has waived his right to seek 

a general exclusion order as he failed to raise the issue in his complaint and pre-hearing brief. Staff 

and McCabe, as an alternative to a general exclusion order, request that a limited exclusion order be 

issued that prohibits the importation of all infringing guitars containing either the tremolo or fixed 

bridge Speedloader tremolo and any such Speedloader bridges that are attempted to be imported as 

component parts.'09 The undersigned finds Staff and McCabe's arguments persuasive and, if the 

Commission finds a violation, recommends a limited exclusion order that prohibits the importation 

of all infringing guitars containing either the tremolo or fixed bridge Speedloader tremolo and any 

such Speedloader bridges that are attempted to be imported as component parts. 

lo' CIB 25. 

IO9 CRB 6-7; SIB 44-45. 

29 
B. Cease and Desist Order 

Under Section 337(f)(l), the Commission may issue a cease and desist order in addition to, 

or instead of, an exclusion order. Cease and desist orders are warranted primarily when the 

respondent maintains a commercially significant inventory of the accused products in the United 

States.' lo 

Since Rose failed to appear at the hearing and failed to provide any information on its 

inventory of Speeloader products in the United States, McCabe and Staff assert that the assumption 

that Rose maintains a substantial inventory is proper.'" Therefore, the undersigned finds Staff and 

McCabe's argument persuasive and, if the Commission finds a violation, recommends a cease and 

desist order against Rose. 

C. 

If the Commission enters an exclusion order or cease and desist order, parties may continue 

to import and sell their products during the pendency of the Presidential review under a bond in an 

amount determined by the Commission to be "sufficient to protect the Complainants from any 

inj~ry.""~ McCabe requests a bond in the amount of 100% of the entered value of the accused 

Bond During Presidential Review Period 

infringing unit. ' 

The Commission frequently sets the bond by attempting to eliminate the difference in sales 

prices between the patented domestic product and the infringing pr~duct."~ In the absence of 

'lo Certain Crystalline, 15 U.S.P.Q.2d at 1277-79. 

CIB 25; SIB 44-45. The evidence shows that Schaller does not maintain a significant 

19 U.S.C. § 1337(e); 19 C.F.R. 8 210.50(a)(3). 

inventory of the accused products. SIB 44. 

'13 CIB 26. 

'14 See Certain Microsphere Adhesives, Commission Opinion at 24. 

30 
reliable price information, the Commission has used other methods to determine an appropriate 

bond. For example, where a price comparison is unworkable, the Commission has determined that 

a bond of 100% is appropriate.*l5 In other instances where a direct comparison between a patentee’s 

product and the accused product was not possible, the Commission has set the bond at a reasonable 

royalty rate.’ l6 

In this case, the parties did not introduce any evidence of current sales or pricing information 

that would permit the undersigned to determine a price differential. The parties did, however, 

introduce evidence of a reasonable royalty rate. The undersigned finds Staffs arguments persuasive 

and recommends a bond in the amount of $3.00 per infringing unit. 

See, e.g., Certain Wind Turbines, Comm’n Op. at 27-28 and 40. 

’I6 See, e.g., Certain Digital Satellite System (DSg Receivers and Components Thereof, Inv. 

No. 337-TA-392, U.S.I.T.C. Pub. No. 341 8, Initial and Recommended Determinations at 245, 

vacated on other grounds, Comm’n Determination (May 13, 1999), 2001 WL 535427 (U.S.I.T.C., 

October 20, 1997) (“Certain DSS Receivers”). 

31 
Within seven days of the date of this document, each party shall submit to the office of the 

Administrative Law Judge a statement as to whether or not it seeks to have any portion of this 

document deleted fiom the public version. The parties’ submissions must be made by hard copy by 

the aforementioned date. 

Any party seeking to have any portion of this document deleted from the public version 

thereof must submit to this office a copy of this document with red brackets indicating any portion 

asserted to contain confidential business information. The parties’ submission concerning the public 

version of this document need not be filed with the Commission Secretary. 

SO ORDERED. 

i 

Administrative Law Judge 

32 
APPENDIX OF EXHIBIT LISTS 

-Al- 
UNITED STATES INTERNATIONAL TRADE COMMISSION 

WASHINGTON, D.C. 

Before The Honorable Charles E. Bullock 

In the Matter of: 1 

1 

INSTRUMENTS AND 1 

COMPONENTS THEREOF 1 

1 

) 

CERTAIN STRINGED MUSICAL 1 Investigation No. 337-TA-586 

COMPLAINANT GEOFFREY MCCABE'S FINAL EXEDBIT LISTS 

The Complainant submits it's final Complainant Documentary Exhibits (CX), 

Complainant Demonstrative Exbibits (CDX), Complainant Physical Exhibits (CPX) and 

Joint Exhibits (JX) and Joint Physical Exhibits (PX) lists. 

Respectfdly submitted, 

EsqHansen Huang Technology Law Group, LLP 

1725 Eye St. NW, Suite 300 

Washington, DC 20016 

Tel: (202) 465-3294 

Attorneys for Complainant 

Fax: (202) 349-391 5 

Dated: August 3 1,2007 

1 
i 

__ ~ ~~ 

Claim Chart: Claim 8 of ‘066 

i 

Exploded view of 7 170 

cx-10 \ cx-11 

-~ ~ ~ 

Claim chart: Claim 1 of ‘191 

cx-12 r- 

~ 

Duncan OEM Margin Analysis 

CX-13 

CX-14 t cx-1s 

1001 All-New base plate quote 

L 

?oremost Stringclip 200 1 quote 

CX-16 L CX-17 

Purpose 

FINAL LIST OF COMPLAINANT DOCUMENTARY EXHIBITS 

Sponsoring 

Witness Descriptiodfitle Received 

mmrmagazine.com 112003 

interview with Floyd Rose 

Gear Box Article on FR guitar 

Claim Chart: Claim 1 of ‘831 

CAD specification of macro-tune~ 

body 

Current macro-tuner design 

illustration 

2006 Bridge elements with 

enlarged curved surfaces 

2006 Bridge elements without 

enlarged curved surfaces 

Claim Chart: Claim 24 of ‘094 

r 

Geoffrey 

McCabe Infringement 

Geofiy 

McCabe 

Geoeey 

McCabe 

Geoffrey 

McCabe 

Geoffrey 

McCabe 

Infringement 

Domestic Industry 

Domestic Industry 

Domestic Industry 

GeofEey 

McCabe 

Domestic Industry 

Geoffrey I McCabe 

Domestic Industry 

Geofiky 

McCabe 

Geoffrey 

McCabe 

Domestic Industry 

I 

Domestic Industry 

Geoffiey Domestic Industry McCabe 

Geoffrey I McCabe 

~~ 

hmestic Industry 

Geomy Iomestic Industry McCabe 

Geofliey 

McCabe 

Iomestic Industry 

Iomestic Industry 1 Geofiey 1 

2 
Sponsoring 

Witness Purpose Received 

CX-20 2004 &King machining quote I1 

No. 

CX-21 2004 Merlin5 Products quote 11 

Descriptioflitie 

I I 2004 Sm sheet revision - Part I 

CX-18 

CX- 19 

cx-22 I INo.50; 

Cornerstone 2001 Quote 

2004 All-New base plate quote 

I I I FileMaker Pro database 

Geoffrey 

McCabe 

Geoffrey 

McCabe 

Geofiey 

McCabe 

Geoffrey 

McCabe 

Geofiey 

McCabe 

Geoffrey 

McCabe 

Geoffrey 

McCabe 

GeoEey 

McCabe 

Geoffrey 

McCabe 

Geoffrey 

McCabe 

Geoffrey Domestic Industry McCabe 

Domestic Industry Geofiey 

Domestic Industry 

Domestic Industry 

Domestic Industry 

Domestic Industry 

Domestic Industry 

Domestic Industry 

Domestic Industry 

Domestic Industry 

Domestic Industry 

Domestic Industry 

CX-23 

CX-24 

CX-25 

CX-26 

CX-27 

CX-28 

CX-29 

CX-30 

cx-3 1 

I 

component list w/ part numbers 

Pate part no.: 112 

1 FileMaker Pro database Part 

Tracker 

FileMaker Pro database Contact 

List sheet 

2004 FUSS notes for parts pickup 

Tremolo Part Analysis 

2005 McCabe Tremolo spec sheet 

12/3/2005 Fax to Kahler for 2006 

NAMM Prototype 

12/5/05 fax to Walt Jackman with 

McCabe 

Geoffrey 

McCabe Domestic Industry 

3 
Response of Respondent Rose to 

clomplainant’s First Set of 

[nterrogatories (Nos. 1-24) 

February 14,2007 

Xesponse of Respondent Rose to 

2omplainant’s Second Set of (enail) Interrogatories (Nos. 25-26) 

4pd 13,2007 

tespondent Rose’s Response to 

:omplainant’s Third Set of 

nterrogatories (Nos. 27-86) May 

!5,2007 

:omplaint Exhibit 43 

Gary Kahler Letter 82205 

Sponsoring 

Witness Descriptioflitle Purpose Received 

cx-3: 

cx-3: 

.~ cx-34 

prototype base plate order 

1 1 / 1 1 /04 email from Nelson 

Domestic Industry Geoffrey 

/Infringement I McCabe 1 

I Geoffrev I 

April email exchange w/ RKS Domestic Industry ~. d 

McCabe 

Early email Exchange with 

Hoshino 

Domestic Industry 

/Infringement 

Geoffrey 

McCabe 

Setting range on Speedloader 

article 

cx-35 Infiing ement 

CX-36 Reliance July 2004 NDA 

/Infringement McCabe 

Geoflky 

McCabe 

GeofEey 

McCabe 

Geofiy 

McCabe 

I 

Domestic Industry 

/Infringement 

Nov 06 Letter from Nelson to 

Kahler 

cx-37 t CX-38 

Selfauthenticating 

McCabe US Patent No. 6,563,034 

Corrected Specific Responses To 

[ndividual Interrogatories (Nos. 1 

- 17) 

1 cx-39 Iniiingement 

CX-41 L Geofiy infringement 

3 

McCabe 

cx-44 

Geofiey [nfkingement McCabe 

Geoffrey 

McCabe Wingement 

)ornestic Industry 

I McCabe 

4 
I 

5 

Sponsoring 

Witness 

No. DescriptiodTitle Purpose Received 

Complaint Exhibit 44 Geofiey 

Jun 20 Letter to Jack Westheimer McCabe 

Response of Respondent Rose to 

Complainant McCabe’s First Set Geoffrey 

of Requests for Admission (Nos. McCabe 

Response of Respondent Rose to 

Complainant McCabe’s Second Geoffrey 

McCabe 

cx-45 Domestic Industry 

IufXngement 

1-65) 

IufXng ement cx-47 Set of Requests for Admission 

(NOS. 66-82) 6/04/07 

Response of Respondent Rose to 

Complainant’s First Set of Geoffrey 

McCabe Documents and Things (Nos. 1-6) 

Craig’s List LA ad for guitar w/ Geoffrey 

tremolo 5/26/07 McCabe 

Complaint Exhibit 34 

Geoffrey 

McCabe Prelimimary Offer 

Complaint Exhibit 35 Domestic Industry GeofEey 

Invite to Ibanez to cooperate /Infringement McCabe 

Complaint Exhibit 38 Geoffi.ey 

Seymour Duncan Compensation McCabe 

Complaint Exhibit 39 

GeofEey 

McCabe 

Prop 

Complaint Exhibit 40 Geofiey 

RKS Licensing discussion. McCabe 

Complaint Exhibit 41 GeofEey cx-55 Domestic Industry RKS Prototype discussion McCabe 

CX-56 Cornplaint Exhibit 42 Domestic Industry Geoffrey 

Infiing ement cx-48 Requests for Production of 

CX-49 tuning pegs using Speedloader Infijngement 

CX-50 Redacted Nov. ‘01 Kahler Domestic Industry 

cx-5 1 

CX-52 Domestic Industry 

CX-53 redacted Sonic Sales_KaBlam Lic Domestic Industry 

cx-54 Domestic Industry 
i 

I I 

I Comdaint Exhibit 3 1 1 Domestichdustry I 

No. 

CX-57 

~~ 

Descriptioflitle 

Attn Smith Inquiry on RKS deal 

Respondent Schaller’s Motion ~~~~d~ industry 

June 29,2007 for Summary Determination hxfiingeb.?nt 

Purpose 

CX-58 

cx-59 

CX-66 

Complainant’s Response to Domestic Industry Respondent Schaller’s Motion for 

Summary Determination /Infringement 

Commission Investigative Stafls 

Response to Respondent Domestic Industry 

Determination 

Complaint Exhibit 19 

Kahler ‘06 Letter 

Schaller’s Motion for Su~nary /Infringement 

Infiing ement 

CX-67 Complaint Exhibit 20 

Kahler 71 70 Infringement 

CX-68 Complaint Exhibit 25 

Floyd Rose website Infringement 

Complaint Exhibit 26 

Floyd Rose website 

Complaint Exhibit 27 

Email to Rose for cooperation 

CX-69 

CX-70 

Domestic Industry 

hi?ingement 

Domestic Industry 

4ufiingement 

Sponsoring 

Witness 

Received 

Complaint Exhibit 28 

Rebuttal to Rose on ‘83 1 

Complaint Exhibit 29 

Rose response to rebuttal 

Complaint Exhibit 30 

Rebuttal to Rose on ‘094 

CX-7 1 

ZX-72 

2x-73 

McCabe 

McCabe 

Domestic Industry 

/Infringement 

Domestic Industry 

hfiingement 

Domestic Industry 

hfikgement 

I I 

:x-74 

McCabe 

GeofTrey 

McCabe 

I Locki fhx 11502 to revive I 4ufiingement - I McCabe 

McCabe 

:x-74 

:x-75 

I McCabe 

A 

Lockett fhx 11502 to revive 4ufiingement McCabe 

Complaint Exhibit 32 GeoEey 

Speeloader Manual McCabe Infikg ement 

Geofiey 

McCabe 

GeofEey 

McCabe 

Geoffrey 

McCabe 

Geoffrey 

McCabe 

Geofky 

McCabe 

:x-75 

Seof&ey 

McCabe 

Complaint Exhibit 32 GeoEey 

Speeloader Manual McCabe Infikg ement 

I 3eofiey 

6 
CX-76 L 

Floyd Rose Guitar Infiing ement 

Purpose Sponsoring 

Witness 

Received 

Geoffrey 

McCabe 

Geofiey 

McCabe 

Geofiey 

McCabe 

Descrip tion/Title 

Speedloader Headstock Miingement 

ex-77 c 

ex-7: t cx-7! 

Rose ‘693 patent Fig. 7 Infiingement 

Miingement Geofiey Rose ‘693 patent Fig. 12 

I I McCabe I 

Geofiey hage ‘of Speedloader tremolo Infikgement 1 

McCabe 

hge of Speedloader tremolo 

with lever up 

Geoffrey 

McCabe 

Geofiy 

McCabe 

Geoffrey 

McCabe 

Geof3ti.e~ 

McCabe 

Geoffky 

McCabe 

CX-8 1 Infiingement 

CX-82 831 patent Figs. 5A & B Infiingement 

CX-83 2ose ‘693 patent Fig. 17 Infringement 

CX-84 366 patent Figs. 6A- 6F Infringement 

I CX-85 166 patent Figs. 6G-6J Miingement 

I-- ~~ 

mage of Rose bridge elements &gement 3eofjti.ey 

McCabe 

3eofky 

vlcCabe 

jeofiley 

dcCabe 

ieoffrey 

dcCabe 

i CX-86 

CX-87 Lose ‘236 patent Fig. 3 Infiingement 

CX-88 .ose ‘661 patent Fig. 7 Infr-ingement 

CX-89 L 194 patent Fig. 11A Infringement 

7 
No. 

CX-90 

DeseriptiodI‘itle 

‘094 patent Fig. 11B 

Purpose 

CX-91 ‘094 patent Fig. 11C 

hfikgement 

CX-92 

ex-93 

CX-94 

‘094 patent Fig. 11D Infringement 

Image of Speedloader Fixed 

bridge 

Rose ‘693 patent Fig. 18 

Mingement 

hfibgement 

Infi-ingement 

CX-97 

I I 

I 

Infling emend 

Domestic Industry 

McCabe Witness Statement 

Infringement 

CX-96 hfibg ement 

tremolo 

Sponsoring 

Witness 

Received 

I Geoffrey 

McCabe 

Geoffrey 

McCabe 

Geoffiey 

McCabe 

McCabe I 

Geoffrey 

I McCabe 

Geofiey 

McCabe 

Geofiy 

McCabe 

Geofiey 

McCabe 

8 
F'INU LIST OF COMPLAINANT DEMONSTRATIW EXHIBITS 

CDX-1 

CDX-2 

CDX-3 

CDX-4 

Witness 

Photo of fulcrum tremolo Domestic Industry Geoffrey 

shown in '066, '831 and /Infringement McCabe 

'094 

Photo of prototype Domestic Industry Geoffrey 

llcnun tremolo shown in /Infringement McCabe 

'191 

Photo of nylon prototype Domestic Industry Geofiitey 

of '1 9 1 macro-tuner /Infringement McCabe 

Photo of Kahler NAMM Domestic Industry Geofiey 

2006 '7 170' prototype on /Infringement McCabe 

I '066-md SpeedLoader I McCabe I I 

9 
FINAL LIST OF COMPLAINANT PHYSICAL EXHIBITS 

No. 

CPX-11 

CPX- 12 

CPX-14 

D escrip ti0 n/Title Purpose Sponsoring Received 

Witness 

Original Floyd Rose Jnfiing ement Geoffrey 

fulcrum Tremolo McCabe 

Floyd Rose SpeedLoader hiiingement Geoffkey 

Fulcrum Tremolo McCabe 

Floyd Rose Discover Domestic Industry Geoffrey 

Series Guitar with hfiingement McCabe 

SpeedLoader Fulcrum 

Tremolo 

i 

10 
FINAL LIST OF JOINT EXHIBITS 

I I 

No. 

Reference 

Reference 

DescriptioIlrritle 

Self-authenticating 

Self-authenticating 

I JX-1 I U.S. Patent No. 6,175,066 

JX-9 

JX-10 

PJX-2 I U.S. Patent No. 6,891,094 

U.S. Patent No. 4,192,213 

US. Patent No. 4,549,461 

I 

JX-3 I U.S. Patent No. 5,965,831 

JX-13 US. Patent No. 4,608,905 

JX-14 US. Patent No. 4,672,877 

JX-15 U.S. Patent No. 4,742,750 

JX-16 U.S. Patent No. 4,768,415 

JX-17 U.S. Patent No. 4,793,236 1 

I 

3X-4 I U.S. Patent No. 5,986,191 

Reference 

Reference 

Reference 

Reference 

Reference 

Reference 

Reference 

Reference 

Reference 

Xeference 

I 

I CODY of Prosecution Histow 

Self-authenticating 

Self-authenticating 

Self-authenticating 

Self-authenticating 

Self-authenticating 

Self-authenticating 

Self-authenticating 

Self-authenticating 

Self-authenticating 

Self-authenticating 

IS I I for U.S. Patent No. 6,175,066 

JX-20 

JX-21 

JX-22 

JX-23 

t t COW of Prosecution Histow I 

U.S. Patent No. 5,198,601 Reference Self-authenticating 

U.S. Patent No. 5,277,095 Reference Self-authenticating 

U.S. Patent No. 6,046,397 Reference Self-authenticating 

U.S. Patent No. 7,045,693 Reference Self-authenticating 

1 I for L.S. Patent No. 5,965,831 

Copy of Prosecution History 

for U.S. Patent No. 6,891,094 

Copy of Prosecution History 

for U.S. Patent No. 5,986,191 

I 

JX-1 1 I US. Patent No. 4,555,970 

1 x-12 i u.s. Patent No. 4,608,904 

I 

JX-18 I U.S. Patent No. 4,882,967 I 

JX-19 I U.S. Patent No. 4,967,631 

Purpose Sponsoring 

Witness 

Received 

1 I 

Infringement I Self-authenticating I 

hfiingement I Self-authenticating I I I 

Idiingement 1 Self-authenticating I 

Infringement I Self-authenticating I 

Infiingement Self-authenticating 

Reference Self-authenticating 

Reference Self-authenticating 

11 
No. DescriptiodTitle Purpose 

JX-24 US. Patent No. 4,632,005 Reference 

12 

Sponsoring 

Witness 

Self-authenticating 

Received 
FINAL LIST OF JOINT PHYSICAL EXHIBITS 

No. 

JPX-1 

JPX-2 

Sponsoring 

Witness 

Des cription/Title Purpose Received 

Floyd Rose Original Tremolo Physical Specimen Floyd Rose 

Floyd Rose Pro Tremolo PhysicaI Specimen Floyd Rose 

13 . 
UNITED STATES INTERNATIONAL TRADE COMMISSION 

Washington, D.C. 

Sponsoring 

Witness 

Before Charles E. Bullock 

Administrative Law Judge 

Exhibit 

Status 

Inv. No. 337-TA-586 

Respondent Schaller ’s 

Response to Commission 

Investigative Staff’s First Set of 

Interrogatories 

Respondent Rose’s Response 

to Commission Investigative 

Staffs First Set of 

Interrogatories 

Complainant’s Response to 

Commission Investigative 

Staffs First Set of 

Interrogatories. 

In the Matter of 

~ ~ 

Background, remedy, By motion 

claim construction 

Admitted 

Background, remedy By motion Admitted 

Background, domestic By motion Admitted 

industry 

CERTAIN STRINGED INSTRUMENTS AND 

COMPONENTS THEREOF 

Sales of Rose Accused 

Products 

Price List of Rose Accused 

Product 

Letter from Hanser to Nelson 

Rose Fixed Bridge Speedloader 

Package of Speedloader Guitar 

Strings 

Exh. 

No. 

Importation, remedy By motion Admitted 

Remedy, bonding By motion Admitted 

Domestic Industry By motion Admitted 

Infringement By motion Admitted 

Infringement By motion Admitted 

sx-IC 

sx-2 

sx-3 

~~ 

sx-4c 

sx-5c 

SX-6C 

SPX- 1 

SPX-2 

COMMISSION INVESTIGATIVE STAFF”S 

FINAL EXHIBIT LIST 

(September 14,2007) 

Exhibit 

Title 

Exhibit 

Purpose 
CERTAIN STRINGED MUSICAL INSTRUMENTS AND COMPONENTS THEREOF 

Inv. No. 337-TA-586 

CERTIFICATE OF SERVICE 

I, Marilyn R. Abbott, hereby certifjr that the attached ORDER was served upon Rett Snotherly, 

Esq., Commission Investigative Attorney, and the following parties via first class mail and air mail 

where necessary On December 14 ,2007. 

A) 

yn R./hbbott, Secretary d& 

U.S. International Trade Commission 

500 E Street, SW, Room 112A 

Washington, DC 20436 

FOR COMPLAINANT GEOFFREY McCABE: 

Robert M. Hansen, Esq. 

Stephen D. Huang, Esq. 

Reza Ghafoorian, Esq. 

HANSEN HUANG TECHNOLOGY LAW GROUP, LLP 

1725 Eye Street, N.W. 

Suite 300 

Washington, DC 20006 

FOR RESPONDENT SCHALLER ELECTRONIC: 

Marina F. Cunningham, Esq. 

Wm. Tucker Griffith, Esq. 

Jeanne M. Tanner, Esq. 

Justin R. Sauer, Esq. 

MCCORMICK, PAULDING & HUBER LLP 

City Place I1 

185 Asylum Street 

Hartford, CT 06 103 
CERTAIN STRINGED MUSICAL INSTRUMENTS AND COMPONENTS THEREOF 

Inv. No. 337-TA-586 

FOR RESPONDENT FLOYD ROSE MARKETING, INC.: 

Joseph S. Littenberg,Esq. 

William L. Mentlik, Esq. 

Roy H. Wepner, Esq. 

John R. Nelson, Esq. 

Mitchell Mehlman, Esq. 

LERNER, DAVID, LITTENBERG, KRUMHOLZ & MENTLIK, LLP 

600 South Avenue West 

Westfield, NJ 07090 

PUBLIC MAILING LIST 

Sherry Robinson 

8891 Gander Creek Drive 

Miamisburg, OH 45342 

LEXIS - NEXIS 

Ronnita Green 

Thomson West 

1100 Thirteen Street, NW, Suite 200 

Washington, DC 20005