Source: http://www.itcblog.com/component/tags/tag/commission-opinions?start=40
Timestamp: 2020-01-18 23:58:47
Document Index: 210720627

Matched Legal Cases: ['§112', '§112', '§112', '§112', '§ 1337', '§ 102', '§ 102', '§ 102', '§ 103', '§ 103', '§ 103', 'art 1', 'art 2', '§ 101', '§ 102', '§ 102', '§ 112', '§ 102', '§ 102', '§ 261', '§ 261', '§ 261', '§ 103']

Further to our July 20, 2011 post, on August 2, 2011, the International Trade Commission issued its opinion with respect to remedy, public interest, and bonding in Certain Foam Footwear(Inv. No. 337-TA-567). By way of background, Complainant Crocs, Inc. (“Crocs”) filed a complaint with the ITC naming eleven respondents, alleging violations of Section 337 by infringement of U.S. Patent Nos. 6,993,858 (the ‘858 patent) and D517,789 (the ’789 patent) and the Crocs trade dress. All respondents except Double Diamond Distribution Ltd. and Effervescent, Inc. (collectively, the “Respondents”) were terminated from the investigation. On April 11, 2008, ALJ Bullock issued an initial determination finding no violation of Section 337 by reason of invalidity of the ‘858 patent and non-infringement/non-satisfaction of the technical prong of the domestic industry requirement concerning the ‘789 patent. ALJ Bullock made no findings regarding the enforceability of the ‘858 and ‘789 patents. On July 25, 2008, the ITC affirmed ALJ Bullock’s initial determination with certain modifications and clarifications. Crocs appealed the ITC decision and on February 24, 2010, the Federal Circuit overturned the ITC’s findings regarding invalidity of the ‘858 patent and non-infringement/non-satisfaction of the technical prong of the domestic industry requirement concerning the ‘789 patent, remanding the investigation for a determination of infringement and any appropriate remedies. See our February 24, 2010 post for more details. On February 9, 2011, ALJ Charles E. Bullock issued a remand ID (“ID”) determining that Respondents had not shown by clear and convincing evidence that the ‘858 patent and the ’789 patent are unenforceable due to inequitable conduct. See our April 1, 2011 post for more details. On April 25, 2011, the ITC determined not to review the remand ID and found a violation of Section 337. Specifically, the ITC found a violation of Section 337 by Double Diamond and Effervescent with respect to the ‘858 patent and a violation of section 337 by Holey Soles with respect to the ‘789 patent. The ITC requested written submissions on the issues of remedy, public interest, and bonding from the parties and interested non-parties. See our April 27, 2011 post for more details. In accordance with the ITC’s request Crocs, Double Diamond, Effervescent, and the Commission Investigative Attorney (“OUII”) submitted briefs regarding remedy, public interest, and bonding. Holey Soles made no submissions. As to remedy, the ITC agreed with ALJ Bullock’s recommendation that a general exclusion order should issue. The ITC reasoned that there is a pattern of violation with regard to the foam footwear at issue and it is difficult to identify the source of the infringing goods. Specifically, the ITC determined that Crocs had identified over 60 non-respondents practicing the ‘858 and ‘789 patents and that those non-respondents were using established chains for distribution. In addition, the opinion explained that many of those sales were made over the Internet and that there is widespread copying of molds for the footwear. The ITC also agreed with the ALJ that cease and desist orders were warranted as to the Respondents. The opinion indicated that such an order was warranted because the Respondents maintain a significant number of infringing shoes in U.S. inventory and those inventories have a significant value. With regard to public interest, the ITC agreed with OUII and Effervescent that any issued remedial order would not be contrary to the public interest since U.S. demand for foam footwear can be met by other entities, including Crocs, as well as by non-infringing alternatives. As to bonding, because evidence of exact price differences between each of the Respondents’ products and Crocs’ products was available, the ITC determined that separate bonds should be set for each Respondent. In proportion to those respective price differences, the ITC set bond at $0.00 per infringing pair of shoes for Double Diamond, $0.01 per infringing pair of shoes for Holey Soles, and $0.05 per pair of infringing shoes for Effervescent. Because a large number of non-respondents import infringing footwear at unknown sales prices, some well below Crocs sales price, the ITC determined that a 100% bond should be entered for all infringing non-respondent products during the period of Presidential Review.
On November 9, 2011, the International Trade Commission (“ITC”) issued the public version of an opinion in Certain Products and Pharmaceutical Compositions Containing Recombinant Human Erythropoetin (Inv. No. 337-TA-568) terminating the investigation based on a settlement agreement reached between the parties. By way of background, Amgen, Inc. (“Amgen”) holds several U.S. patents relating to recombinant human erythropoietin and derivatives (“EPO”) and processes for making EPO. Roche Holding Ltd. of Basel, Switzerland; F. Hoffman-La Roche, Ltd. of Basel, Switzerland; Roche Diagnostics GmbH of Mannheim, Germany; and Hoffman La Roche, Inc. of Nutley, New Jersey (collectively, “Roche”) produced EPO in Europe and imported it into the U.S. for the purpose of obtaining FDA approval of Roche’s own EPO drug in the U.S. Roche continued importing EPO after its FDA application was complete, although not for sale or contract to sell in the U.S. Amgen initiated a Section 337 action asserting that Roche’s imported EPO and the process by which it is produced in Europe are covered by one or more claims of Amgen’s U.S. patents. The Commission instituted an investigation on May 12, 2006 based on the complaint. On August 31, 2009, after a remand of the original investigation from the United States Court of Appeals for the Federal Circuit (see our May 1, 2009 post for more details), Amgen moved to terminate the investigation with respect to certain claims and moved for summary determination that Roche violated Section 337 by importing and using an EPO product that infringed a different claim of its patents. Amgen also requested a limited exclusion order that would preclude importation of Roche’s product regardless of the party seeking to import such product. As reported in our April 8, 2010 post, the Commission granted Amgen’s motion to terminate the investigation with respect to particular claims but determined that further briefing was necessary to decide the motion for summary determination. However, on December 18, 2009 the parties executed a settlement agreement that allows Roche to begin selling the accused products in the United States in mid-2014, and on March 11, 2011 the ITC issued an order to show cause why the investigation should not be terminated in view of the parties’ settlement based on the ITC’s longstanding policy in such situations. Amgen and Roche filed a joint response on April 21, 2011 seeking a termination of the investigation based on a consent order instead of an exclusion order, supporting their position with reference to Certain Digital Multimeters, Inv. No. 337-TA-588 (the “588 investigation”). In the opinion, the ITC terminated the investigation based on the settlement order, but declined to exercise its discretion to issue a consent order. Specifically, the ITC pointed to three reasons why a consent order is not proper in this situation. First, the settlement agreements and consent orders in the 588 investigation were “bound up together as part of a single negotiation between the parties, and the issuance of a consent order may have facilitated the settlement.” The ITC further pointed out that there is no such nexus in the present case and the settlement agreement is silent as to a consent order. Second, the ITC noteed that the settlement agreement in the 588 investigation specifically granted jurisdiction to the ITC to oversee disputes, and that this jurisdictional grant was not included in Amgen and Roche’s settlement agreement. As such, “the Commission would appear to lack jurisdiction to enforce a consent order insofar as such enforcement would involve a dispute concerning the settlement agreement.” Lastly, the ITC specifically stated in the Order to Show Cause that it expected that any proposed consent order “will not deviate in form, substance, or scope from consent orders ordinarily issued.” Notwithstanding that direct language, Amgen and Roche chose to use atypical language, against the ITC’s express guidance. For these reasons the ITC determined that there is no basis in law or policy to support issuance of a consent order and terminated the investigation merely on the basis of the settlement agreement between the parties.
Further to our October 26, 2011 post, the International Trade Commission (the “Commission”) on November 10, 2011, issued the public version of its opinion modifying the final initial determination (“ID”) issued by former Chief ALJ Paul J. Luckern on June 17, 2011, finding a violation of Section 337 in Certain Biometric Scanning Devices, Components Thereof, Associated Software, and Products Containing the Same (Inv. No. 337-TA-720). By way of background, the Complainant in this investigation is Cross Match Technologies, Inc. (“Cross Match”) and the Respondents are Suprema, Inc. (“Suprema”) and Mentalix, Inc. (“Mentalix”) (collectively, the “Respondents”). Cross Match asserted that Suprema manufactures and imports hardware and software for scanning fingerprints. Suprema’s accused scanners are provided with software development kits (SDKs) that allow customers to create their own scanner operating software, and Mentalix integrates its own proprietary FedSubmit software with Suprema’s scanners. In the ID, ALJ Luckern determined that a violation of Section 337 had occurred by Suprema through its infringement of one or more of claims 10, 12, and 15 of U.S. Patent No. 5,900,993. ALJ Luckern also found a violation of Section 337 by reason of infringement of claim 19 of U.S. Patent No. 7,203,344 (the ‘344 patent). The ALJ found no violation of Section 337 with respect to U.S. Patent No. 7,277,562. See our June 21, 2011 post for more details. Cross Match, the Respondents, and the Commission Investigative Staff (“OUII”) each filed a petition for review of the ID. On August 18, 2011, the Commission determined to review the ID with respect to it’s finding of a violation of Section 337 based on infringement of claim 19 of the ‘344 patent and requested briefing on (1) who infringes claim 19 of the ‘344 patent and what type of infringement occurred, and (2) whether there is a sufficient nexus between the infringer’s unfair acts and importation to find a violation of section 337. See our August 24, 2011 post for more details. Infringement of Claim 19 of the ‘344 Patent ALJ Luckern’s ID found that several of Suprema’s RealScan products infringe claim 19 of the ‘344 Patent, but identified neither the infringer nor whether the infringement was direct or indirect. Cross-Match and the OUII argued that Mentalix directly infringed claim 19 of the ‘344 patent, at least when Mentalix integrated its own FedSubmit software with the Suprema scanner units and tested the products in the U.S. Respondents do not contest that Mentalix directly infringed claim 19 through such testing but contend there is an insufficient nexus between these acts and the importation of Suprema’s scanners to support finding a violation of section 337. Cross Match further asserted that Suprema indirectly infringed claim 19 through inducement and contributory infringement, while OUII argued only for inducement. The Commission first determined that Mentalix indeed directly infringed claim 19 when it integrated its FedSubmit software with the imported Suprema scanners and SDK software to produce a scanner system that practices claim 19. The Commission further determined that the required nexus between this infringement and the importation of scanners was provided by the evidence discussed below regarding Suprema’s induced infringement of claim 19. With respect to inducement, the Commission determined that Suprema aided and abetted Mentalix’s direct infringement by collaborating with Mentalix to import the scanners and helping to adapt Mentalix’s FedSubmit software to work with Suprema’s imported scanners and SDK to practice claim 19 of the ‘344 patent. The Commission further found that Suprema “willfully” blinded itself to the infringing nature of Mentalix’s activities and deliberately avoided acquiring knowledge of the ‘344 patent by (1) not acting on the numerous references to the ‘344 patent within the ‘562 patent, including separate incorporations by reference on at least three occasions; (2) the fact that the ‘562 patent and ‘344 patent have the same assignee, Cross Match; (3) both patents have overlapping inventors; and (4) not obtaining an opinion of counsel that would have undoubtedly uncovered the ‘344 patent. Regarding contributory infringement, the Commission determined that Cross Match failed to prove that the accused products had no substantially non-infringing uses. In particular, the Commission found it inconsistent that Cross Match alleged that several third parties directly infringed certain claims of the ‘562 and/or ‘344 patents, but Suprema chose not to allege that any of these third parties specifically infringed claim 19 of the ‘344 parties. The Commission further determined that the operation of Suprema’s scanners and SDK requires development of unique end-user software, and that these scanners and SDK are capable of substantial non-infringing uses with third-party customers other than Mentalix. Based on the above, the Commission determined to modify-in-part the ID to find that (1) Mentalix directly infringed claim 19 of the ‘344 patent; (2) Suprema induced infringement of claim 19; and (3) Suprema did not infringe claim 19 through contributory infringement. Remedy and Bonding The Commission determined that the appropriate remedy for the violation was a limited exclusion order prohibiting the unlicensed entry of biometric scanning devices, components thereof, associated software and products containing the same that infringe one or more of claims 10, 12, and 15 of the ‘993 patent and claim 19 of the ‘344 patent. The Commission also determined that based on Mentalix’s “commercially significant” inventory of accused scanner systems using the FedSubmit software, it is appropriate to issue a cease and desist order prohibiting Mentalix from importing, selling, marketing, advertising, distributing, offering for sale, transferring (except for exportation), and soliciting U.S. agents or distributors for such infringing devices, components, software, and products. The Commission clarified, however, that a cease and desist order directed to Suprema, a foreign entity, was not warranted, based on long-standing precedent and the difficulty in enforcing such an order. The Commission further determined there was no need for an order excluding electronic importation, since Suprema’s SDK software, by itself was not found to infringe directly or indirectly, and enforcing such provisions is impractical. The Commission also agreed with the ALJ that Cross Match would be subject to a reporting requirement with respect to the ‘993 patent to ensure that it continues to exploit the patent while the remedy is in place. Finally, the Commission determined that the public interest factors did not preclude this relief and that a 100% bond should be required during the period of Presidential review.
Further to our December 19, 2011 post, the International Trade Commission (the “Commission”) on December 29, 2011, issued the public version of its opinion finding a violation of Section 337 and modifying the June 17, 2011 final Initial Determination (“ID”) issued by ALJ Carl C. Charneski in Certain Personal Data and Mobile Communication Devices and Related Software (Inv. No. 337-TA-710). By way of background, the Complainants in this investigation are Apple Inc. and NeXT Software, Inc. (collectively, “Apple”) and the Respondents are High Tech Computer Corp., HTC America Inc., and Exedia, Inc. (collectively, “HTC”). On July 15, 2011, ALJ Charneski determined that HTC violated Section 337 through its infringement of claims 1, 8, 15, and 19 of U.S. Patent No. 5,946,647 (the ‘647 patent) and claims 1, 2, 24, and 29 of U. S. Patent No. 6,343,263 (the ‘263 patent). The ID found no violation of Section 337 with respect to U.S. Patent Nos. 5,481,721 (the ‘721 patent) and 6,275,983 (the ‘983 patent) because Apple had not demonstrated that HTC infringed the asserted claims of these patents or that Apple had satisfied the domestic industry requirement with respect to these patents. The ID concluded that HTC had not demonstrated that any of the asserted patent claims are invalid. See our September 2, 2011 post for more details. In sum, the Commission determined that HTC violated Section 337 by importing and selling articles that infringe claims 1 and 8 of the ‘647 patent, but reversed the ALJ’s finding of violation as to claims 15 and 19 of the ‘647 patent and as to the asserted claims of the ‘263 patent. Lastly, the Commission affirmed the ALJ’s conclusion of no violation as to the ‘721 and ‘983 patents. The ‘263 Patent The ‘263 patent relates to a telecommunications interface for real-time processing. The Commission first interpreted a limitation within claim 1, which required “at least one realtime application program interface (API) coupled between the subsystem and the realtime signal processing subsystem to allow the subsystem to interoperate with said realtime services.” The parties and the ALJ agreed that “realtime” means “within a defined upper bounded time limit,” and thus the issue was whether the term “realtime” modified each term it precedes in the claims including “API,” as asserted by HTC and the Investigative Attorney (“OUII”), or whether any “API that allows realtime interaction between” subsystems is a “realtime API,” as proposed by Apple and adopted by ALJ Charneski. The Commission determined that the API itself has defined upper bounded time limits, and that Apple’s and the ALJ’s construction “improperly reads the term ‘realtime’ out of the API limitation,” and renders the term “realtime” at most nominal and without any purpose of its own. Under this revised construction, the Commission determined there is no genuine dispute that the identified API in both the HTC and Apple products do not operate within a “defined upper bounded time limit.” The Commission also reviewed the construction of the term “device handler” within claims 1 and 24. ALJ Charneski adopted Apple and OUII’s interpretation, namely: “software associated with an interface device that sets up dataflow paths, and also presents data and commands to a realtime signal processing subsystem.” HTC previously sought to add the requirement that the device handler be “specific to the device,” but in its briefing on Commission review, the opinion held that HTC sought instead a different argument that “associated with” in the ALJ’s construction means that “the device handler must know…about the device it supposedly handles,” as opposed to the device “merely be[ing] somewhere in the data path for data that originated at the ‘device.’” The Commission determined that HTC’s argument concerned the application of claim construction, rather than claim construction itself, and if it were a claim construction argument, it was waived. The Commission determined that disagreements over an application of construction “do not themselves give rise to opportunities, after the fact, to change the agreed-upon or adopted constructions.” As to infringement, the Commission agreed with the ALJ’s interpretation and determination that HTC’s accused products contain a device handler. As to the validity of the ‘263 patent, the Commission agreed with HTC and OUII that the ALJ’s findings constituted legal error. According to the opinion, in finding that AT&T’s prior art VCOS system did not anticipate the asserted claims, the ALJ appeared to compare the VCOS system to certain prior art central to the ‘263 patent’s prosecution history, essentially assuming that the VCOS system was similar to the prosecution history’s prior art, and if the ‘263 patent were patentable over the prosecution’s prior art, then the ‘263 patent should be patentable over the VCOS system. However, the Commission found this error rendered moot by the Commission’s revised construction of “realtime API” that required the API itself to operate within a defined upper bounded time limit - a construction under which HTC did not contend the VCOS system anticipates the ‘263 patent’s claims. Nonetheless, the Commission determined that if “realtime API” were construed as requested by Apple and found by the ALJ, the VCOS system would anticipate the ‘263 patent, because contrary to the ALJ’s findings, the Commission determined the VCOS system indeed would have such a “realtime API” and a claimed “device handler.” The ‘647 Patent The ‘647 patent relates to identifying certain “structures” - i.e., names, phone numbers, or email addresses - in a document and then highlighting them on a display so that a user can perform a linked action on the particular structure (for example, dialing a telephone number). Claim 1 requires “linking actions to the detected structures” while claim 15 requires “linking at least one action to the detected structure.” The ALJ adopted Apple’s construction of these “linking” phrases, namely: “linking detected structures to computer subroutines that cause the CPU to perform a sequence of operations on the particular structures to which they are linked.” HTC did not challenge this interpretation on review, and the Commission granted review on infringement and invalidity of the ‘647 patent. The Commission first determined that the ALJ’s invalidity analysis for the ‘647 patent erroneously relied upon the ‘647 patent’s alleged use of the term “structure,” rather than an agreed-upon construction by the parties, namely, “an instance of a pattern, where a ‘pattern refers to data, such as grammar, regular expression, string, etc., used by a pattern analysis unit to recognize information in a document, such as dates, addresses, phone numbers, etc.” The ALJ determined that the mere search of a database of contact names and subsequent comparison to entered text cannot constitute detecting a “structure,” and at least on that basis determined that a so-called “Perspective” prior art system did not invalidate claims in the ‘647 patent. The Commission determined that the ALJ’s invalidity analysis was incorrect (1) for not relying upon the construction of “structure” agreed-upon by the parties and used in the ALJ’s infringement analysis, and (2) because the specification and preferred embodiment of the ‘647 patent did not support the ALJ’s narrow interpretation used in the invalidity analysis. The Commission determined that the prior art “Perspective” system automatically linked contact information to a contact by recognizing that a contact exists and putting the name in bold - and on that basis, the Commission determined that independent claim 15 and its dependent claim 19 were invalid, since each of those claims required only one action. Claim 1, and its dependent claim 8, however, were determined by the Commission not to be invalidated by the “Perspective” system because claims 1 and 8 require multiple linked actions, and HTC was unable to show that this prior art contained an “analyzer server” for “linking actions to the detected structures,” or a “user interface” for enabling the selection of a “linked action.” As to infringement of claims 1 and 8, the Commission summarily affirmed the ALJ’s determination for the reasons set forth in the ID. As to claim 15 (and dependent claim 19), HTC argued that the steps of method 15 must be performed exactly in order, but the Commission determined that the “Perspective” system invalidates claim 15 regardless whether the steps must be performed in the order in which they appear, or whether the enabling section to claim 15’s selection of the structure is one or two steps, and so the Commission deemed these infringement defenses moot, and did not reach them. After the Commission determined to review the ALJ’s ID, HTC filed a motion for summary determination with the Commission on October 17, 2011, wherein HTC argued that reexamination proceedings concerning the ‘647 patent provided HTC with intervening rights that precluded the issuance of an exclusion order against HTC as to the ‘647 patent. In an order to show cause why HTC’s motion was procedurally permitted, the Commission observed that Rule 210.18 required filing a motion for summary determination “at least 60 days before the date fixed for any hearing,” and any motion for termination (not involving settlement, consent order, or arbitration agreement) under Rule 210.21(a) must be made “prior to the issuance of an initial determination on violation of Section 337.” HTC asserted in response that Rule 210.18(a) allows late filing for summary determination under exceptional circumstances when “good cause” exists, and Rule 201.4(b) provides the Commission with authority to waive or suspend a procedural rule when the Commission finds “good and sufficient reason therefore, provided the rule is not a matter of procedure required by law.” The Commission rejected HTC’s arguments, determining that Rule 210.18(a) specifically cites that the “presiding administrative law judge” (rather than Commission) determines whether good cause exists to permit a tardy motion for summary determination, and Rule 201.4(b)’s authority for the Commission to waive or suspend procedural rules does not “provide a basis for permitting the substantive filing HTC seeks to make.” The Commission additionally denied intervening rights on the grounds that (1) no reexamination certificate had issued yet, and thus HTC’s argument was premature; (2) the basis for the alleged intervening rights - an Apple statement that the ‘647 patent describes linking an action directly to the detected structure - is not different from the position taken by Apple during the ITC proceedings; and (3) the September 21, 2011 Federal Circuit Marine Polymer Technologies, Inc. v. Hemcon Inc. decision relied upon by HTC was inapposite, since unlike in this proceeding, in Marine Polymer the patentee made arguments and claim withdrawals amounting to narrowed claim scope. The ‘721 Patent The ‘721 patent is directed to facilitating object oriented messaging with a procedural operating system, and of the three asserted claims, independent claim 1 recites a method, and dependent claims 5 and 6 add more steps to the method. The Commission first addressed the construction of “processing means” - specifically, “first processing means” and “second processing means” included in each of the asserted claims. ALJ Charneski adopted HTC’s and OUII’s arguments that “processing means” invoked 35 U.S.C. §112 ¶ 6, and the ALJ determined that the method steps of the claims were recited functions of the “processing means” and further agreed with HTC’s identified corresponding structures from the specification. Before the ALJ, Apple argued that the claims should not be construed under 35 U.S.C. §112 ¶ 6, and before the Commission, Apple argued that if the claims are to be construed under 35 U.S.C. §112 ¶ 6, then the function should be “processing” and that a general purpose computer performs that function. The Commission disagreed with the ALJ’s construction and agreed instead with Apple’s argument that “processing means” should be construed under 35 U.S.C. §112 ¶ 6, the function should be “processing” and that a general purpose computer performs that function. The Commission determined that Apple’s construction more closely aligns with the prosecution history and preserves the claims as methods, rather than converting the claims to apparatuses, which was a concern for the Commission under the ALJ’s analysis. As to validity, HTC argued the ‘721 patent was anticipated by a 1988 Ph.D. thesis by John Bennet (“Bennet”), or in the alternative, rendered obvious by a combination of Bennet and prior art called “Mach messages.” The ALJ did not address the validity question because of his means-plus-function construction of the “processing means” limitations. One issue was whether Bennet was “based on an operating system,” as required by the claims, and the Commission determined that Bennet could not anticipate, because HTC had not shown that “the pertinent messages are specific to any particular operating system.” However, the Commission did find the asserted claims of the ‘721 patent obvious over the combination of Bennet and “Mach messages,” which in turn was operating-system based. Although Apple pointed to certain compatibility issues between the two systems, the Commission rejected Apple’s arguments, determining instead that Apple had not demonstrated that choosing one protocol over another, “is anything more than a design choice.” The Commission also reviewed the construction of “dynamic binding,” which the ALJ had construed by combining aspects of HTC’s and the OUII’s proposed constructions, such that the term was defined as: “permitting messages to be bound to the actual methods to be invoked depending on the class of the receiver, allowing objects of any classes that implement a given method to be substituted for the target object at run time. Apple proposed a broader definition, and the dispute revolved around whether dynamic binding requires, as set forth in the specification of the ‘721 patent, that the “actual method corresponding to the class of target object does not need to be determined until the message must be sent.” The Commission agreed with the ALJ’s construction, and determined that the description of dynamic binding used in the specification was definitional, and did not merely describe aspects of a preferred embodiment. The Commission also determined that the ALJ’s construction was supported by a similar definition of dynamic binding recited in a NeXTSTEP manual, a public document by NeXT, the assignee listed on the face of the patent. As to infringement of the ‘721 patent, the Commission determined that Apple had waived its infringement claims, because it advanced new infringement theories for the first time on review. The Commission determined that simply because the ID departed slightly from HTC’s proposed construction does not permit new infringement theories, and that “Apple bore the burden of demonstrating infringement and with it the risk that its theories would not result in infringement under all possible constructions of disputed claim terms.” The ‘983 Patent Apple asserted claims 1 and 7 from the ‘983 patent, which involves subject matter similar to the ‘721 patent. The Commission first reviewed the construction of the term “loading,” which the ALJ had construed after adopting Apple’s contentions, to mean “loading is not limited to physical copying, but includes virtual copying as well.” The opinion referred to the ID to define “virtual copying” of a method as “a process of putting into executable program memory a pointer to the method’s existence elsewhere.” HTC argued for a construction that excluded such virtual copying, and on review pointed to the plain meaning of “load” and additionally argued that the ‘983 patent’s prosecution history disclaimed virtual copying. Although the Commission rejected HTC’s plain meaning argument due to the specification’s use of “copying” to include virtual copying, the Commission agreed that Apple indeed disclaimed “virtual loading” by distinguishing the virtual copying of prior art. The Commission acknowledged that this construction possibly excludes Apple’s preferred embodiment, but the preference to avoid doing so is not absolute. The Commission also reviewed the term “selectively load required object-oriented methods.” The ALJ had rejected Apple’s arguments to construe the term as requiring loading a “class” of methods rather than just the required methods themselves. The Commission affirmed the ALJ’s construction as supported by the plain meaning of the claims, and the prosecution history of the ‘983 patent. As to invalidity, the Commission determined that HTC demonstrated the prior art loaded classes, but did not offer an invalidity analysis under the Commission’s construction of “selectively,” which excludes class loading. The Commission determined that but for this particular requirement, the claims of the ‘983 patent would be invalid. With respect to infringement, the Commission determined summarily that HTC’s accused products did not meet the “loading” and “selectively load” limitations construed above. The Commission additionally determined that HTC’s products did not practice claim limitations calling for “executable program memory.” Based on the Commission’s prior determination that Apple disclaimed pointing to a method already in executable program memory, the Commissioned determined that the issue is whether the accused products (i) “determine during runtime” if object oriented methods are already in executable program memory, and (ii) whether methods are loaded “into” the executable program memory at runtime as called for by claims 1 and 7. The Commissione determined that the accused products do not infringe the executable program memory” limitations at least because as found by the ALJ, all methods in the accused devices are loaded into the task address space at startup and are therefore loaded prior to runtime. The Commission took no position on whether Apple’s domestic industry product practices this claimed limitation. Remedy The Commission determined that the appropriate remedy is a limited exclusion order prohibiting the entry of HTC’s personal data and mobile communications devices and related software into the U.S. that infringe claims 1 or 8 of the ‘647 patent. The Commission also determined that the public interest factors enumerated in Section 337 do not preclude the issuance of the limited exclusion order. With respect to U.S. consumers, and public health and welfare effects, the Commission rejected many of HTC’s arguments as applying to Android phones generally, rather than just HTC’s Android phones. The Commission determined that the relief to be granted by the Commission would be directed solely to HTC’s Android smartphones, and ample substitutes exist for these HTC phones. Notwithstanding the foregoing, the Commission determined that in light of competitive conditions in the U.S. economy, and submissions by T-Mobile that it would have difficulty substituting HTC’s Android smartphones in the short term, the exclusion of HTC devices subject to the order would be delayed for approximately four months, and will commence on April 19, 2012, to provide a transition period for U.S. carriers. Moreover, the Commission determined that HTC may import refurbished handsets to be provided to consumers as replacements under warranty or an insurance contract (whether the warranty or contract is offered by HTC, a carrier, or by a third party) until December 19, 2013. The Commission further emphasized that “[t]his exemption does not permit HTC to call new devices ‘refurbished’ and to import them as replacements.” The Commission agreed with the ALJ’s recommendation that no cease-and-desist order against HTC is needed, citing evidence that “HTC surrenders all title and interest to its commercial products when they arrive and are warehoused in the United States.” The Commission further agreed that Apple failed to satisfy its burden that a bond is required during the Presidential review period, in view of evidence “that the HTC and Apple products are similarly priced (before carrier subsidies).” Commissioner Pinkert concurred with his colleagues as to the appropriate remedy, but wrote separately to express his additional views. In this respect, Commissioner Pinkert “emphasize[d] that the existence of substitutes for the infringing devices does not obviate consideration of the likely impact of exclusion on the range of choices available to consumers.” Commissioner Pinkert added: “Such impact may warrant more searching inquiry in other investigations.”
On January 20, 2012, the International Trade Commission (the “Commission”) issued the public version of its opinion reviewing-in-part and affirming the initial determination of no violation of Section 337 in Certain Video Game Systems and Controllers (Inv. No. 337-TA-743). By way of background, the Complainant in this investigation is Motiva, LLC (“Motiva”) and the Respondents are Nintendo Co., Ltd. and Nintendo of America Inc. (collectively “Nintendo”). As explained in our November 4, 2011 post, ALJ Rogers determined in the Initial Determination (“ID”) that there was no violation of Section 337. Specifically, ALJ Rogers found that the accused Nintendo products do not infringe and that an industry does not exist in the U.S. that exploits the patents-in-issue, as required by 19 U.S.C. § 1337(a)(2). Motiva and the Commission investigative attorney filed petitions for review of portions of the ID. Having examined the record of this investigation, the Commission determined to deny the petitions for review and, upon its own initiative, further determined to review “(1) a statement in the ID connecting the relevant level of skill in the art to the skill of the inventors, and (2) the relevant time frame for considering whether a domestic industry exists or is in the process of being established.” See our January 10, 2012 post for more details. The first point addressed by the Commission related to level of one skilled in the art. According to the opinion, in evaluating Nintendo’s obviousness and invalidity arguments ALJ Rogers had to determine “what experience one of ordinary skill in the art would have had at the time of the relevant inventions.” The ALJ rejected Nintendo’s definition of one skilled in the art as having at least a master’s degree and five years of relevant experience because this standard would exclude both named inventors, and “a definition of one of ordinary skill in the art that excludes both inventors cannot be correct.” As such, the ALJ adopted a lower standard, concluding that one of ordinary skill in the art would have a bachelor’s degree in computer science or electrical/computer engineering and three to five years of relevant experience. Although the Commission did not disturb the ALJ’s definition of one skilled the art, the Commission clarified that “we do not adopt the ALJ’s statement connecting the relevant level of skill in the art to skill of the inventors,” vacating the ALJ’s conclusion that a definition that excluded the inventors “cannot be correct.” Specifically, the Commission referred to relevant Federal Circuit precedent that states “it is only that hypothetical person who is presumed to be aware of all the pertinent prior art. The actual inventor’s skill is irrelevant to the inquiry.” Standard Oil Co. v. American Cyanamid Co., 774 F.2d 448, 454 (Fed. Cir. 1985). The second point addressed by the Commission was related to the relevant time for evaluating the existence or establishment of a domestic industry, although, again, the Commission did not disturb the ALJ’s findings. The Commission agreed with the ALJ’s determination in the context of this investigation that the “date for determining whether a domestic industry exists is the filing date of the complaint.” However, the Commission went on to clarify that in some scenarios evidence subsequent to the filing of the complaint may be considered, such as “when a significant and unusual development has occurred after the complaint has been filed,” referring to several cases. In other words, the Commission explained that it is not a bright line rule, and “in appropriate situations based on the specific facts and circumstances of an investigation, the Commission may consider activities and investments beyond the filing of the complaint.”
Further to our December 5, 2011 post, on January 20, 2012, the International Trade Commission issued its opinion with respect to remedy, public interest, and bonding in Certain Electric Paper Towel Dispensing Devices And Components Thereof (Inv. No. 337-TA-718). By way of background, Complainant Georgia-Pacific Consumer Products LP of Atlanta, Georgia (“Georgia-Pacific”) filed a complaint with the ITC naming seventeen Respondents, alleging violations of Section 337 by infringement of claims 4-7 of U.S. Patent No. 6,871,815; claims 8-22 of U.S. Patent No. 7,017,856; claims 1-3 of U.S. Patent No. 7,182,289; and claims 4-22 of U.S. Patent No. 7,387,274. All Respondents except Stefco Industries, Inc. (“Stefco”), Cellynne Corporation (“Cellynne”), and NetPak Elektronik Plastik ve Kozmetik Sanayi Ve Ticaret Ltd. (“NetPak”) were terminated from the investigation by consent order. On December 30, 2010, ALJ Gildea issued an Initial Determination (“ID”) finding Stefco, Cellynne, and NetPak in default. The ITC determined not to review the ALJ’s determination. On July 21, 2011, ALJ Gildea issued the public version of an ID (dated July 12, 2011) granting Georgia-Pacific’s motion for summary determination that defaulting Respondents Stefco, Cellynne, and NetPak (collectively, the “Defaulting Respondents”) violated Section 337. The ALJ also recommended that the ITC issue general exclusion orders and cease and desist orders and impose a bond of 100 percent on the Defaulting Respondents. See our July 29, 2011 postfor more details. On August 19, 2011, the ITC determined not to review the ALJ’s determination and requested briefing on remedy, the public interest, and bonding. Only Georgia-Pacific and the Commission investigative attorney (“OUII”) timely filed submissions. As to remedy, the ITC agreed with ALJ Gildea’s recommendation that a general exclusion order should issue. The ITC reasoned that there is both a likelihood of circumvention of a limited exclusion order, in violation of Section 337(d)(2)(A), and that there is “(i) a pattern of violation and (ii) difficulty in identifying the source of the products,” in violation of Section 337(d)(2)(B). Specifically, with respect to the “likelihood of circumvention” analysis, the ITC determined that infringing products can be made easily and at a low cost using well-established distribution channels, “in which molds for manufacturing infringing products may be resold and/or noninfringing molds may be retooled at low cost.” With respect to the “pattern of violation” analysis, the ITC determined that Georgia-Pacific had identified “four nonrespondents that also may infringe the asserted patents, and identified 21 other nonrespondents that may infringe and could enter the market.” In addition, the opinion explained that many of the products are often sold unlabeled, making it difficult to identify the source of the infringing goods. The ITC also agreed with the ALJ that cease and desist orders were warranted as to Respondents Stefco and Cellynne because both maintain significant domestic inventories of infringing dispensers. The ITC further agreed with Georgia-Pacific and the OUII that a general exclusion order and cease and desist orders would not harm the public interest because there was no evidence that U.S. demand for the dispensers cannot be met by Georgia-Pacific or by the sale of non-infringing alternatives offered by Respondents and other nonrespondent distributors. Finally, as to bond, the ITC determined that because Georgia-Pacific leases its dispensers while most Respondents and nonrespondents sell their dispensers, it is impossible to calculate a bond based upon a set price differential between the product made by the domestic industry and the lower price of the infringing imported product. The ITC also determined that a reasonable royalty rate could not be established for the infringing imported product because each Respondent in the investigation who did not default was terminated by consent order. Accordingly, a bond set at 100 percent of the entered value for any electronic paper towel dispenser covered by the general exclusion order and cease and desist orders was determined to be appropriate during the period of Presidential review.
ITC Issues Opinion On Public Remedy, Public Interest, And Bonding In Certain Inkjet Ink Supplies (337-TA-730)
Further to our December 1, 2011 post, on February 24, 2012, the International Trade Commission (the “Commission”) issued the public version of its opinion supporting the issuance of a general exclusion order (“GEO”) excluding all inkjet ink cartridges and components thereof that infringe two asserted patents, and for a bond in the amount of 100% of the entered value of goods imported during the Presidential review period in Certain Inkjet Ink Supplies and Components Thereof (Inv. No. 337-TA-730). By way of background, on August 3, 2011, ALJ Theodore R. Essex issued the Initial Determination (“ID”) granting Complainants Hewlett-Packard Company and Hewlett-Packard Development Company’s (collectively, “HP”) motion for summary determination that HP satisfied the domestic industry requirement and that defaulting Respondents Shanghai Angel Printer Supplies Co., Ltd., Zhuhai National Resources & Jingjie Imaging Products Co., Ltd., Tatrix International, and Ourway Image Co. Ltd. (collectively, the “Defaulting Respondents”) had violated Section 337 with respect to certain claims of U.S. Patent Nos. 6,959,985 (the ‘985 patent) and 7,104,630 (the ‘630 patent). See our August 30, 2011 post for more details. According to the opinion, non-defaulting Respondents Mipo International, Ltd., Mextec Group Inc., and Shenzhen Print Media Co., Ltd. were terminated from the investigation based on either a settlement agreement with HP or because HP withdrew its allegations against them. ALJ Essex’s ID further recommended that the Commission issue a GEO and require a bond in the amount of 100% of the entered value of goods imported during the Presidential review period. According to the opinion, the Commission agreed with the ID’s recommendation that a GEO was an appropriate remedy. The Commission first determined that a GEO was necessary to prevent circumvention of an exclusion order limited to products of named persons. The Commission cited evidence, including that it is difficult to identify the sources of infringing products because of the ability to package infringing ink cartridges in unmarked, generic packaging, and “manufacturers can easily evade limited exclusion orders by establishing shell offshore companies with unclear ties to the original manufacturer.” The Commission also determined that a GEO was appropriate due to patterns of violation of Section 337 with respect to the infringing articles, noting: “(1) the unauthorized importation of infringing articles by identified foreign manufacturers; (2) the unauthorized importation of infringing articles by unidentified foreign manufacturers; (3) the unauthorized sale after importation within the United States of infringing articles; and (4) the continuation of infringing activities despite HP’s ongoing enforcement efforts.” The Commission further cited that “current industry publications show that well over 350 Chinese printing supply companies are currently in operation and have the industrial expertise and marketing connections to enter into the market and fill the void left by companies subject to a limited exclusion order.” The Commission also determined that with respect to public interest, the infringing products are not the sort of products that typically implicate public interest concerns, noting that historically, relief was denied on public interest grounds only on three occasions with regard to fuel-efficient automobiles, atomic research, and medical supplies. The Commission further determined with respect to economic factors, that there is no evidence that HP and legitimate re-manufacturers could not meet U.S. demand for HP compatible ink cartridges, or that an exclusion order would be an undue burden on competitive conditions in the U.S. Accordingly, based on the above, the Commission determined to issue a GEO excluding all inkjet ink cartridges and components thereof that infringe claims 1-5, 7, 22-25, 27 and 28 of the ‘985 patent and claims 1-7, 11-12, 14, 26-30, 32, 34 and 35 of the ‘630 patent. Finally, with respect to bond, the Commission agreed with the ID’s recommendation for a bond set at 100 percent during the Presidential review period, citing the ID’s finding that due to Defaulting Respondents not participating in discovery, there was insufficient price information to set a bond based on price differential between the domestic product and the imported, infringing product.
ITC Issues Opinion In Certain Electronic Imaging Devices (337-TA-726)
Further to our December 1, 2011 post, on March 26, 2012, the International Trade Commission (the “Commission”) issued its opinion reviewing-in-part and affirming the initial determination of no violation of Section 337 in Certain Electronic Imaging Devices(Inv. No. 337-TA-726). By way of background, the Complainant in this investigation is Flashpoint Technology, Inc. (“Flashpoint”) and the remaining Respondents are HTC Corp. and HTC America, Inc. (collectively, “HTC”). The asserted patents are U.S. Patent Nos. 6,262,769 (the ‘769 patent) and 6,163,816 (the ‘816 patent). On July 28, 2011, former Chief ALJ Paul J. Luckern issued an Initial Determination (“ID”) finding no violation of Section 337 by HTC. Specifically, ALJ Luckern determined, inter alia, that (i) Flashpoint failed to show that the asserted claims of the ‘769 and ‘816 patents are infringed, (ii) it has been established that the asserted claims of the ‘816 patent are invalid under 35 U.S.C. § 102(b) (on sale bar), (iii) it was not established that the asserted claims of the ‘769 and ‘816 patents are invalid in view of prior art, (iv) Flashpoint’s rights under the ‘816 and ‘769 patents were not exhausted with respect to HTC’s accused Windows Phone 7 (“WP7”) products, and (v) Flashpoint did not establish a domestic industry with respect to either of the ‘769 or ‘816 patents. See our September 30, 2011 post for more details. On September 26, 2011, the Commission issued a notice determining to review the ID in part. In particular, the Commission determined to review (1) infringement of the asserted claims of the ‘769 patent by the accused HTC Android smartphones, (2) infringement of the asserted claims of the ‘769 patent by the accused HTC WP7 smartphones, (3) the technical prong of the domestic industry requirement for the ‘769 patent with respect to the licensed Motorola smartphones, (4) the technical prong of the domestic industry requirement for the ‘769 patent with respect to the licensed Apple smartphones, and (5) the enforceability of the asserted patents under the doctrines of implied license and exhaustion. The Commission also determined to review and take no position on the validity of the asserted claims of the ‘816 patent under 35 U.S.C. §§ 102 and 103. The Commission requested that the parties brief their positions on the issues under review with reference to the applicable law and the evidentiary record. See our September 27, 2011 post for more details. According to the opinion, after examining the record of the investigation, including the ID and the submissions of the parties, the Commission determined to affirm ALJ Luckern’s determination of no violation of Section 337 with respect to the ‘769 patent on the bases that (1) the accused HTC Android smartphones and the accused HTC WP7 smartphones do not infringe the ‘769 patent, and (2) HTC has established that it has an implied license to practice the ‘769 patent with respect to the accused WP7 smartphones. The Commission further determined to take no position on the ALJ’s finding that HTC has not established the right to practice the ‘769 patent with respect to the accused WP7 smartphones under the defense of patent exhaustion. The Commission also determined to take no position on the ALJ’s finding that Flashpoint has not met the technical prong of the domestic industry requirement for the ‘769 patent. While the Commission ultimately affirmed ALJ Luckern’s determination that the accused Android smartphones do not infringe the ‘769 patent, it reversed ALJ Luckern’s subsidiary finding that these smartphones do not meet the limitations of “determining a first orientation associated with the image at capturing of the image” and “a first orientation determined at capturing of the image.” Specifically, the Commission found that “the ALJ misapplied his claim construction of the ‘at capturing of the image’” language, and that the accused Android smartphones do in fact determine a first orientation “at capturing of the image” under ALJ Luckern’s construction of the term, i.e., “the time period following the determination by the image capture unit that an image is to be captured and before the completion of generating image data from the image sensor.” Despite its reversal of ALJ Luckern’s findings with respect to these particular claim terms, the Commission affirmed ALJ Luckern’s ultimate determination of non-infringement because it found that the ALJ correctly determined that the accused Android smartphones do not meet the limitations of “storing the image, including storing the information relating to the first orientation associated with the image” and “determining whether the third orientation is different from the second orientation, the first orientation, or both.” The Commission further found that, although ALJ Luckern’s infringement analysis did not reach the limitation of “rotating the image to be displayed in the third orientation,” the evidence did not show that the Android smartphones “rotate[] the image to be displayed, i.e., “store[] the image data in a buffer in one of two directions such that the orientation of the image is the same as the orientation of the image capture unit.” With respect to the accused WP7 smartphones, Flashpoint had taken issue with ALJ Luckern’s finding that Flashpoint had failed to prove infringement due in part to “the unavailability of specific source code to support complainant’s allegations.” On review, the Commission found that ALJ Luckern did not abuse his discretion in noting that Flashpoint did not cite to specific source code to support its infringement case. In particular, the Commission found that the ALJ’s non-infringement determination with respect to the WP7 smartphones was not based solely on the lack of specific source code, but on his conclusion that Flashpoint had not made a sufficient showing of infringement by a preponderance of the evidence. The Commission further found that ALJ Luckern had never stated that “printed copies” of the source code were necessary, as argued by Flashpoint. Rather, ALJ Luckern merely noted the lack of “specific” source code—which could include both printed and electronic copies of the source code. Thus, the fact that Microsoft Corporation (“Microsoft”) had only made available an electronic version of its source code during discovery and had not produced paper copies was not a valid explanation for Flashpoint’s failure to cite specific source code. In any event, the Commission affirmed ALJ Luckern’s ultimate finding of non-infringement with respect to the accused WP7 smartphones. The Commission found that there was insufficient evidence showing that these smartphones store “information relating to the first orientation” as required by the claims. The Commission further found that there was insufficient evidence that the WP7 smartphones meet the limitations of “determining whether the third orientation is different from the second orientation, the first orientation, or both” and “rotating the image to be displayed in the third orientation.” However, the Commission found that Flashpoint had shown by a preponderance of the evidence that the WP7 smartphones meet the limitations of “determining a first orientation associated with the image at capture of the image” and “an image associated with a first orientation determined at capturing of the image.” As to HTC’s defense under the doctrine of implied license, the Commission found that Microsoft had acquired an express license to sell the WP7 software for uses that would otherwise infringe the ‘769 patent. The Commission therefore found that since HTC had purchased the WP7 software from Microsoft, HTC had thereby obtained an implied license to use the WP7 software in a way that would otherwise infringe the ‘769 patent. Accordingly, the Commission reversed ALJ Luckern’s finding that HTC had not established an implied license to practice the ‘769 patent with respect to the accused WP7 smartphones. In light of the Commission’s finding in favor of HTC on the implied license defense, the Commission determined to take no position on the issue of whether HTC had also established the affirmative defense of patent exhaustion for the ‘769 patent with respect to the accused WP7 smartphones. Lastly, because the Commission found that the asserted claims of the ‘769 patent were not infringed and that HTC had established an implied license to practice the ‘769 patent with respect to the accused WP7 smartphones, the Commission took no position on ALJ Luckern’s finding that Flashpoint had not established the technical prong of the domestic industry requirement with respect to the ‘769 patent. Accordingly, based on its findings of non-infringement and implied license, the Commission affirmed ALJ Luckern’s determination that there has been no violation of Section 337.
ITC Issues Opinion In Certain Mobile Devices (337-TA-750)
Further to our March 20, 2012 post, on April 10, 2012, the International Trade Commission (the “Commission”) issued the public version of its opinion reviewing-in-part and affirming the initial determination of no violation of Section 337 in Certain Mobile Devices, and Related Software Thereof(Inv. No. 337-TA-750). By way of background, the Complainant in this investigation is Apple Inc., f/k/a Apple Computer, Inc. (“Apple”) and the remaining Respondent is Motorola Mobility, Inc. (“Motorola”). The asserted patents are U.S. Patent Nos. 7,812,828, 7,663,607 (the ‘607 patent), and 5,379,430. On January 13, 2012, ALJ Theodore R. Essex issued an Initial Determination (“ID”) finding no violation of Section 337 by Motorola. Specifically, ALJ Essex determined, inter alia, that the asserted claims of the ‘607 patent are invalid for anticipation under 35 U.S.C. § 102 and invalid for obviousness under 35 U.S.C. § 103. On March 16, 2012, the Commission issued a notice determining to review the ID in part, and on review, to affirm the ID’s finding of no violation of Section 337 and to terminate the investigation. In particular, the Commission determined to review the ID’s finding that the asserted claims of the ‘607 patent are obvious under 35 U.S.C. § 103 in view of the reference “SmartSkin: An Infrastructure for Freehand Manipulation on Interactive Surfaces” by Jun Rekimoto (“SmartSkin”), either alone or in combination with Japan Unexamined Patent Application Publication No. 2002-342033A to Jun Rekimoto (“Rekimoto ‘033”). On review, the Commission affirmed ALJ Essex’s finding of obviousness in view of the SmartSkin reference in combination with Rekimoto ‘033 and found that Motorola had demonstrated by clear and convincing evidence that the asserted claims of the ‘607 patent are invalid under 35 U.S.C. § 103 based on modified reasoning. According to the opinion, the ‘607 patent is directed to a touch panel that has a transparent capacitive sensing medium configured to detect multiple touches or near touches that occur simultaneously and at different locations on the touch panel. In response to the multiple touches, the sensing medium produces distinct signals representative of the location of the touches. Asserted claim 1 and its dependent asserted claims 2-7 call for a touch panel that comprises two layers of transparent electrically-isolated conductive lines where the two layers are spatially separated from each other and where the conductive lines in one layer are positioned transverse to the conductive lines in the other layer, creating an array of intersection points. Capacitive monitoring circuitry is configured to detect changes in the capacitance between the two layers of conductive lines, thereby indicating the location of the multiple touches on the touch panel. In the ID, ALJ Essex had found that the SmartSkin reference does not anticipate the asserted claims of the ‘607 patent because SmartSkin does not disclose “the use of transparent conductive lines using [indium tin oxide] ITO.” However, the ALJ also found that “SmartSkin alone would render the use of transparent electrodes obvious.” In particular, he found that “SmartSkin would motivate one of ordinary skill in the art to use transparent electrodes and that the use of materials, such as ITO, in creating the transparent electrodes was well known at the time.” ALJ Essex also found that SmartSkin in combination with Rekimoto ‘033 would have rendered the asserted claims obvious. In the opinion, the Commission agreed with ALJ Essex’s conclusion that SmartSkin provides the reason to combine the use of transparent electrodes made of materials such as ITO with the mutual-capacitance sensor for detecting multiple touches on the sensor surface disclosed in SmartSkin. The Commission also agreed that SmartSkin in combination with Rekimoto ‘033 discloses the transparent electrode limitations, the layer limitations, and the glass member limitations recited in the asserted claims of the ‘607 patent, with Rekimoto ‘033 disclosing the layer and glass member limitations. However, the Commission determined that SmartSkin provides one of ordinary skill with a reasonable expectation of success in combining the mutual-capacitance touch screen disclosed in SmartSkin with transparent ITO electrodes for different reasons than those articulated in the ID. Citing KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007), the Commission determined that “the use of transparent ITO in combination with the mesh grid touch sensor of SmartSkin is just the type of ‘combination of familiar elements’ that KSR discussed.” According to the opinion, “the evidence supports the conclusion that using transparent ITO for the ‘transparent conductive lines’ claimed in the ‘607 patent and discussed in SmartSkin would have been within the ability of one of ordinary skill in the art.” In coming to this conclusion, the Commission cited testimony from Motorola’s expert, Dr. Wolfe, and discounted testimony from Apple’s expert, Dr. Subramanian. The Commission also considered but ultimately rejected an argument by Apple that SmartSkin does not enable the use of a transparent ITO sensor with the multi-touch mutual-capacitance system disclosed in that reference because substituting transparent ITO conductive lines for the opaque copper lines used with one embodiment of the voltage-based sensing system of SmartSkin would require a complete redesign. According to the opinion, “Apple’s arguments concerning the difficulty of implementing a transparent ITO sensor with a voltage-sensing system are irrelevant since the claimed invention is not drawn to a particular sensing arrangement.” In any event, the Commission found that the concept of using a voltage-sensing system with high-resistance transparent electrodes was known in the art at the time of the ‘607 patent. In view of the above, the Commission found that the asserted claims of the ‘607 patent are obvious in view of SmartSkin in combination with Rekimoto ‘033.
ITC Issues Public Version Of Opinion Finding No Violation of Section 337 In Certain Portable Electronic Devices and Related Software (337-TA-721)
On April 19, 2012, the International Trade Commission (the “Commission”) issued the public version of its opinion affirming the initial determination of no violation of Section 337 in Certain Portable Electronic Devices and Related Software (Inv. No. 337-TA-721). By way of background, the Complainant in this investigation is HTC Corporation (“HTC”) and the Respondent is Apple, Inc. (“Apple”). On December 21, 2011, ALJ Charles E. Bullock determined in his Initial Determination (“ID”) that no violation of Section 337 had occurred by Apple in the importation into the U.S., sale for importation, or sale within the U.S. after importation of certain portable electronic devices and related software. Specifically, the ALJ found that Apple did not infringe various claims of U.S. Patent Nos. 6,999,800 (the ‘800 patent), 5,541,988 (the ‘988 patent), 6,320,957 (the ‘957 patent), and 7,716,505 (the ‘505 patent). ALJ Bullock also found that the asserted claims are not invalid. Lastly, the ALJ found that a domestic industry exists with respect to the ‘988 and ‘957 patents, but not with respect to the ‘800 and ‘505 patents. See our January 5, 2012 post for more details. HTC filed a petition for review of the ID, and Apple filed a contingent petition for review. HTC challenged the ALJ’s infringement findings and claim constructions with respect to the ‘800 patent. Apple argued that the accused iPhones and HTC’s domestic industry products do not meet the requirements of the ‘800 patent or, alternatively, that the claims are invalid. The Commission determined to review the final ID with respect to the ‘800 patent and requested briefing on several issues. See our December 20, 2011 post for more details. The technology at issue in the ‘800 patent is directed to the power management of smartphones, and the accused products are Apple models of the iPhone, iPod Touch, and iPad. The ALJ’s final ID only addressed two elements of claim 1, and having found that both element were not present in the accused devices, did not analyze the claim further. The Commission opinion addresses the same two claim elements, 1f and 1g. Element 1f of claim 1 is “switching the PDA system from normal mode to sleep mode when the PDA system has been idle for a second period of time.” The Commission noted that its determination of whether or not element 1f is met was based on the determination of what constitutes a “sleep mode” and what constitutes “off mode.” The ALJ found that the accused devices do not meet this limitation. Based on evidence and testimony redacted from the opinion, the Commission determined that the accused devices did meet the “sleep mode” limitation of element 1f, reversing the ALJ’s finding that the accused devices do not meet this element. Element 1g of claim 1 is “implementing a power detection method comprising steps of detecting an amount of power of a source in a power system; switching the mobile phone system to off mode when the detected amount is less than a first threshold; and switching the PDA system to off mode when the detected amount is less than a second threshold.” The Commission determined that the accused products do not meet the steps of “implementing a power detection method” because they do not include separately set thresholds, agreeing with the ALJ. In addition to affirming the ALJ’s ID that Apple’s products do not infringe the claims of the ‘800 patent, the Commission also found that “the ALJ correctly determined that the HTC [domestic industry] products do not practice claim 1 of the ‘800 patent” in relation to element 1g. The Commission declined to take a position on Apple’s continent petition for consideration of constructions of other claim elements in relation to invalidity, and whether HTC’s petition should be dismissed based on waiver (finding that the waiver argument is moot). The Commission further specifically noted that it takes no position on whether or not HTC can prevail in light of its recent decision in Certain Electronic Devices with Image Processing Systems, Components Thereof, and Associated Software (Inv. No. 337-TA-724), and found no violation of Section 337 by Apple with respect to the ‘800 patent.
ITC Issues Second Remand Opinion In Certain Agricultural Vehicles (337-TA-487)
Further to our January 23, 2012 post, on April 23, 2012, the International Trade Commission (the “Commission”) issued the public version of its opinion finding on remand that Respondents Bourdeau Bros., Inc., OK Enterprises, and Sunova Implement Co. (collectively, the “Bourdeau Respondents”) have violated Section 337 through gray market sales of self-propelled forage harvesters that infringe Complainant Deere & Co.’s (“Deere”) trademarks in Certain Agricultural Vehicles and Components Thereof (Inv. No. 337-TA-487). The Commission also reinstated a general exclusion order against the subject harvesters and cease and desist orders that had issued in the original investigation. By way of background, the Commission instituted an investigation in February 2003 based on a complaint filed by Deere alleging that the Bourdeau Respondents and other Deere dealers had unlawfully imported and sold Deere’s European-version harvesters in the U.S. in violation of Section 337’s prohibition against importation of products “produced by the owner of the United States trademark or with its consent, but not authorized for sale in the United States,” often called “gray market goods.” In May 2004, the Commission determined that there were material differences between Deere’s North American-version and European-version harvesters, supporting a finding of trademark infringement and thus a general exclusion order. In March 2006, the Federal Circuit vacated-in-part and remanded the Commission’s decision based on the additional requirement that Deere also show that “all or substantially all” of its authorized domestic products (North American version) are materially different from the accused gray market goods (European version). On remand, in December 2006, the ALJ issued an initial determination of infringement, finding that the original record showed that Deere did not authorize the sales of the European-version harvesters in the U.S., that new evidence of alleged Deere financing of the European version sold by its dealers did not show authorization, and that the number of sales the Bourdeau Respondents alleged were authorized was in any event so small that “substantially all” of Deere’s authorized U.S. sales were of the North American version. In August 2008, the Commission reversed the ALJ, finding substantial evidence that Deere’s U.S. and European dealers had apparent authority to sell the European version, that Deere itself sold and/or facilitated the sale of the European version in the U.S., and that not “all or substantially all” of the authorized harvesters sold in the U.S. were the North American version. The Commission noted that since the total number of authorized sales of the North American version in the U.S. was approximately only 4400, the introduction of even a small number of the European version could cause substantial consumer confusion. The Commission then found such confusion based on its determination that at least 141 European version harvesters sold in the U.S. were sold by official Deere dealers. The Commission considered 141 to be a “substantial quantity” of nonconforming goods because it constituted 40 to 57% of the 247 to 347 European version harvesters sold in the U.S. by both official and independent (in some cases, accused) dealers. Importantly, the Commission did not use as its denominator the total number of authorized harvesters sold in the U.S., which would have been the number of authorized North American-version harvesters (4400) plus the number of authorized European-version harvesters (141), or 4541. In May 2010, the Federal Circuit held that the Commission had misapplied the “all or substantially all” test, and that the denominator should have been the total authorized sales in the U.S. in accordance with the court’s remand instructions, not the total European-version sales in the U.S. Using the ratio dictated by its remand instructions as well as the Commission’s lower-end and upper-end findings, the court concluded that a total of 3.1 to 3.4% of the authorized harvesters sold in the U.S. were the European version, or conversely that 96.6 to 96.9% of the authorized harvesters sold in the U.S. were the North American version. The court observed that those figures may be insubstantial, but that that was for the Commission to determine on remand based on all of the relevant facts, noting that “[t]he cutoff as to what is to be considered ‘substantially all’ is a question of fact.” See our May 27, 2010 post for more details. According to the April 23, 2012 opinion, the Commission determined on this second remand from the Federal Circuit that it was unnecessary to remand for any further proceedings before an ALJ, and ordered full briefing of the parties’ positions on final disposition. In the briefing, Deere argued that the Federal Circuit had provided the figures that the Commission must use on remand in determining whether Deere had satisfied the “all or substantially all” test. Deere further argued that the “all or substantially all” test is designed to determine whether consumers will likely experience gray market product confusion caused by materially different goods, and that the small number of authorized sales of European-version harvesters in the U.S. was insufficient to remove the threat of gray market product confusion. According to Deere, if the 141 to 155 authorized sales of European-version harvesters were significant, then the average U.S. consumer would be accustomed to the differences between European-version and North American-version harvesters and would not expect to receive all of the features of a North American-version harvester when purchasing a European-version harvester. However, Deere contended that the evidence of record showed the opposite to be true. The Bourdeau Respondents argued that the Federal Circuit had not definitively provided the figures that the Commission must use on remand in determining whether Deere had satisfied the “all or substantially all” test. According to the Bourdeau Respondents, the proper denominator for the “all or substantially all” test was only 1355 because only sales of new North American-version harvesters should be included—not sales of used North American-version harvesters. Thus, the Bourdeau Respondents argued that a range of ratios from 3.1% to 18.8% should be considered by the Commission. And, according to the Bourdeau Respondents, this range failed to demonstrate that “substantially all” of Deere’s authorized sales in the U.S. were sales of the North American-version harvesters. The Bourdeau Respondents additionally argued that Deere had failed to meet its alleged burden of proving a diminishment of value of its trademarks. After examining the record of the investigation, including the parties’ submissions, the Commission determined that Deere had established that substantially all of the U.S. sales of the subject harvesters were of the North American version, and that Deere had therefore met its burden to prove on remand that it satisfied the “all or substantially all” test for gray market trademark infringement. The Commission agreed with Deere that the Federal Circuit had already adjudicated the numerical baseline to be used on remand in considering the “all or substantially all” test. The Commission then found that 96.6 percent to 96.9 percent constitutes “substantially all” on the record presented. In particular, the Commission found that if the number of authorized European-version harvesters sold in the U.S. were significant, then an ordinary U.S. consumer would be accustomed to the differences between European-version and North American-version harvesters. However, the Commission found that the evidence showed the opposite to be true—consumers have consistently been confused and frustrated by the differences between the two versions of harvesters. Accordingly, the small number of authorized sales of European-version harvesters in the U.S. was insufficient to prevent Deere from obtaining relief on its claim of gray-market trademark infringement. The Commission further found that, contrary to the Bourdeau Respondents’ assertions, the Federal Circuit’s remand instructions did not pose the additional question of whether Deere had established the diminishment in value of its trademarks. With respect to remedy, the Commission found that given that the record of the investigation was unchanged, the scope of the Federal Circuit’s remand did not invite revisiting the original remedy determination, and there was no basis for doing so in any event. Accordingly, the Commission reinstated the general exclusion order and cease and desist orders with respect to European versions of the subject harvesters that had been issued by the Commission in the original investigation.
ITC Issues Public Version Of Opinion In Certain Ground Fault Circuit Interrupters (337-TA-739)
On June 8, 2012, the International Trade Commission (the “Commission”) issued the public version of the opinion reversing the initial determination of no violation of Section 337 in Certain Ground Fault Circuit Interrupters and Products Containing Same (Inv. No. 337-TA-739). By way of background, the Complainant in this investigation is Leviton Manufacturing Co., Inc. (“Leviton”), which alleges violation of Section 337 with respect to certain ground fault circuit interrupters and products containing the same that infringe certain claims of U.S. Patent Nos. 7,463,124 (the ‘124 patent), 7,737,809 (the ‘809 patent), and 7,764,151 (the ‘151 patent). Although the Notice of Investigation named numerous respondents, several were found in default or were terminated due to settlement, consent orders, or withdrawn allegations. The seven remaining respondents were Zhejiang Trimone Electric Science & Technology Co. Ltd. (“Trimone”), Fujian Hongan Electric Co, Ltd. (“Hongan”), TDE, Inc. (“TDE”), Shanghai ELE Manufacturing Corp., Orbit Industries, Inc., American Electric Depot Inc., and Shanghai Jia AO Electrical Co. ALJ Bullock issued an initial determination (“ID”) on December 20, 2011 finding no violation of Section 337 on the grounds that Leviton had not sufficiently shown that a domestic industry exists with respect to the three asserted patents and/or articles protected by those patents. See our February 24, 2012 post for more details. On February 21, 2012, the Commission issued a notice that it had determined to review the ID in its entirety and requested submissions from the parties on certain issues under review, and from the parties and the public on the issues of remedy, the public interest, and bonding. Our May 3, 2012 post contains a summary of the Commission’s findings, and the public version of the opinion discussed below provides the details underlying these findings. The technology at issue, ground fault circuit interrupters, are the electrical outlets typically found in bathrooms and kitchens. The three asserted patents include claims directed to these devices and solve the problem of “reverse wiring,” a situation where the device is installed incorrectly and thus does not protect a user from a ground fault. The opinion includes a list of representative accused products for each respondent. The Commission first analyzed the ALJ’s claim construction, noting that, contrary to the law, “the ALJ appeared to apply a different claim construction when analyzing the validity of certain patent claims than was applied when analyzing infringement of the same claims.” Construction of the term “reverse wired” was determined differently from the ALJ, with the Commission relying on the “well-established doctrine of claim differentiation.” In other words, only one claim explicitly required that the device prevents electrical continuity when “reverse wired,” and thus, the other claims do not include this requirement. The Commission adopted the same constructions as the ALJ via different reasoning or found no error in the ALJ’s construction for all other claim terms. Notably, Respondents Trimone, Hongan, and TDE put forward a new claim construction of the phrase “at lease one of…and” as requiring that all elements in the list be required by the claim. The Commission found this argument to be waived as untimely and also noted that the proposed construction would be rejected. In keeping with the ALJ’s determination, the Commission concluded that the record evidence supports a finding of infringement for all three patents. However, the Commission found that the ‘124 and ‘151 patents were invalid over the prior art, contrary to ALJ Bullock’s ID. Specifically, the ALJ had relied on the fact that the device in the Echtler reference was incapable of being reverse wired, and had read this limitation into the claims of the ‘124 patent. However, the Commission determined that the ALJ’s determination “does not apply a consistent interpretation of the patent claims” and was erroneous. Under the Commission’s claim construction, “which does not include those extraneous unclaimed features, the Echtler reference compels a finding [of anticipation].” A similar finding of anticipation was made with regard to the Bereskin reference when the “extraneous limitations” were properly not considered. The Commission found the ‘151 patent to be obvious over the combination of Bereskin with a secondary reference, but found all other combinations of prior art to be unpersuasive. Similarly, the Commission agreed with the ALJ on the validity of the patents in the face of enablement, inequitable conduct, and prosecution laches challenges, and confirmed the validity of the ‘809 patent. Regarding domestic industry, the Commission reversed the ALJ’s determination that Leviton had not satisfied both prongs of the domestic industry requirement. The Commission agreed with the ALJ that Leviton’s products that practice particular claims of the asserted patents could be relied on to meet the requirements of the technical prong. However, the ALJ’s determination that Leviton failed to meet the economic prong was found to be based on an erroneous interpretation of the law. Specifically, ALJ Bullock based the ID on the assumption that investments relied on to meet the economic prong must be attributable to individual patents on a patent-by-patent basis. The Commission Investigative Staff (“OUII”) submitted briefing explaining that the economic prong of the domestic industry requirement is met by investments relating to articles that practice the patents, “rather than by trying to determine how much of each individual product can be allocated to each patent.” The Commission determined that, in view of the evidence, Leviton had shown significant investments in infrastructure, equipment, and employment of labor and capital with respect to at least two products, one of which was shown to practice claim 1 of the ‘809 patent, the only asserted patent found to be valid. Thus, the Commission determined that Leviton met the domestic industry requirement, and there was a violation of Section 337 in relation to articles protected by the ‘809 patent. With respect to remedy, the Commission found that a general exclusion order is necessary since two of the respondents “may be attempting to circumvent the limited exclusion order issued in Inv. No. 337-TA-615” and “some respondents and potential manufacturers have a propensity and ability to change names and corporate forms.” Furthermore, cease and desist orders prohibiting importing, selling, marketing, distributing, offering for sale, and advertising such ground fault circuit interrupters and products containing same were imposed. Lastly, the Commission determined that a bond of $0.25 per unit for temporary import of the articles in question during the Presidential review period should be imposed.
Further to our May 22, 2012 post, on June 5, 2012, the International Trade Commission (“the Commission”) issued the public version of its opinion finding a violation of Section 337 and issuing a limited exclusion order in Certain Mobile Devices, Associated Software, and Components Thereof (Inv. No. 337-TA-744). By way of background, the Complainant in this investigation is Microsoft Corporation (“Microsoft”) and the Respondent is Motorola Mobility, Inc. (“Motorola”). The technology at issue spans several patents, including a number of functionalities and features that are implemented on desktop computers and mobile devices. On December 20, 2011, ALJ Theodore R. Essex issued the initial determination (“ID”) in this investigation finding a violation of Section 337 with respect to certain claims of U.S. Patent No. 6,370,566 (the ‘566 patent) and finding no violation with respect to certain claims of U.S. Patent Nos. 5,758,352 (the ‘352 patent), 6,826,762 (the ‘762 patent), 6,909,910 (the ‘910 patent), 7,644,376 (the ‘376 patent), 5,664,133 (the ‘133 patent), and 6,578,054 (the ‘054 patent) (collectively, “the asserted patents”). See our December 21, 2011 post for more details. On March 2, 2012, the Commission determined to review the ID in part. Specifically, the Commission determined to review 5 separate issues. The Commission first reviewed the ALJ’s determination that Microsoft met the economic prong of the domestic industry requirement as to all of the asserted patents. The Commission affirmed this determination, on review, with certain modifications, including a modification identifying which particular subsections of Section 337(a)(3) had been satisfied. In its second item for review, the Commission evaluated ALJ Essex’s determinations regarding the technical prong of the domestic industry requirement. Specifically, in the ID, ALJ Essex determined that Microsoft met the technical prong of the domestic industry requirement as to the ‘566, ‘133, and ‘910 patents, but had failed to meet this requirement with respect to the ‘054, ‘352, ‘762, and ‘376 patents. In the opinion, the Commission affirmed the ALJ’s determinations as to the ‘566, ‘133, ‘910, ‘762, and ‘376 patents and affirmed the ALJ’s determinations as to the ‘054 patent. As to the portion of the ID regarding the ‘054 patent, however, the Commission determined to modify a particular phrase, describing the relationship between Microsoft’s domestic industry products and Motorola’s products as functioning in the “same way,” rather than “in nearly the exact same way” as was written in the ID. With regard to the remaining patent, the ‘352 patent, the Commission reversed the ALJ’s determination. In the ID, the ALJ determined that Microsoft had failed to meet the technical prong due to a violation of the ALJ’s Ground Rules, providing only an abbreviated discussion of the technical prong issue with respect to the ‘352 patent in its post-hearing brief. The Commission reversed this determination, finding that, because the evidence and analysis at issue were not contested before the ALJ, Microsoft successfully met the technical prong of the domestic industry requirement as to the ‘352 patent. Third, the Commission reviewed ALJ Essex’s determination that the ‘566 patent was not invalid by reason of anticipation or obviousness. The Commission affirmed the ALJ’s determination as to both obviousness and anticipation. The Commission modified the ID with regard to one footnote, clarifying that Motorola had not waived its arguments as to claim 5 of the ‘566 patent, as the footnote indicated. Rather, claim 5 was not anticipated because the prior art of record did not anticipate claim 1 and claim 5 was dependent upon claim 1. The fourth item the Commission reviewed was the ALJ’s determination that the accused products did not directly infringe the ‘352 patent. The Commission reversed this determination, finding that Motorola’s accused products did directly infringe the ‘352 patent. The Commission determined that, like the evidence related to the technical prong of the domestic industry requirement, the evidence of direct infringement with regard to the ‘352 patent was uncontested and that Microsoft’s post-hearing brief provided “ample citations” to the record evidence to support a finding of direct infringement. Lastly, the Commission reviewed ALJ Essex’s determination that Microsoft failed to prove that Motorola induced infringement of the asserted claims of the asserted patents. The Commission affirmed the ALJ’s determination as to all of the patents. With regard to the section of the ID relating to induced infringement of the claims of the ‘566 and ‘352 patents, however, the Commission determined not to adopt the portion of the ID discussing the concept of willful blindness. This section, it found, was unnecessary to support the conclusion that Microsoft had failed to sufficiently prove induced infringement. Regarding remedy, the Commission determined to issue a limited exclusion order directed to Motorola’s products found to infringe the asserted claims of the ‘566 patent. The Commission found that because the alleged infringement was based upon the inclusion of ActiveSync protocol in the accused devices, U.S. Customs and Border Protection (CBP) would be unable to easily determine whether or not Motorola’s mobile devices infringed by inspection. Thus, the Order provided for a certification provision permitting Motorola to certify to CBP that its product do not infringe the ‘566 patent. The Order also provided an exception to the exclusion order for the importation of parts and components used in the maintenance, service, repair, or replacement of Motorola mobile devices previously sold in the United States. According to the opinion, however, a transition period was unwarranted as there was no evidence that consumer demand could not be satisfied by the competing Android devices available on the market or by devices equipped with software from Apple, RIM, or Microsoft. The Commission also declined to issue a cease and desist order. As to public interest, the Commission considered third party submissions from the Association for Competitive Technology, Inc. (“ACT”) and Google, Inc. ACT argued that the public interest factors would not preclude the issuance of a limited exclusion order. Google argued that Motorola’s infringing devices should not be excluded on public interest grounds. After considering these submissions and the submissions of Microsoft and Motorola, the Commission found that the exclusion order would not have a significant negative impact on competitive conditions in the US economy or on US consumers. As to bond, Microsoft asserted that the Commission should base the proper bond on licensing agreements which covered its patents for smartphones. The Commission disagreed, however, determining that the appropriate royalty should be based on licensing agreements which specifically relate to Microsoft’s ActiveSync technology. Thus, the Commission determined that a bond of $0.33 per device would be required for temporary import of the articles in question during the Presidential review period.
On July 6, 2012, the International Trade Commission (the “Commission”) issued the public version of its opinion finding no violation of Section 337 with respect to U.S. Patent Nos. 5,978,063 (the ‘063 patent), 5,648,674 (the ‘674 patent), 5,621,556 (the ‘556 patent), and 5,375,006 (the ‘006 patent) in Certain Liquid Crystal Display Devices, Including Monitors, Televisions, Modules, and Components Thereof (Inv. No. 337-TA-741/749). The Commission also determined to remand the investigation to ALJ Robert K. Rogers, Jr. with respect to U.S. Patent No. 6,121,941 (the ‘941 patent). Due to its size, we have split the opinion into part 1 and part 2. By way of background, the Complainants in this investigation are Thomson Licensing SAS and Thomson Licensing LLC (collectively, “Thomson”), and the Respondents are Chimei InnoLux Corp. and InnoLux Corp. (collectively, “CMI”); Qisda Corp. and Qisda America Corp. (collectively, “Qisda”); BenQ Corp., BenQ America Corp., and BenQ Latin America Corp. (collectively, “BenQ”); AU Optronics Corp. and AU Optronics Corp. America (collectively, “AUO”); Realtek Semiconductor Corp. (“Realtek”); and MStar Semiconductor Inc. (“MStar”) (all collectively, the “Respondents”). Thomson accused the Respondents of infringing certain claims of the ‘063, ‘674, ‘556, ‘006, and ‘941 patents. On January 12, 2012, ALJ Rogers issued an Initial Determination (“ID”) finding a violation of Section 337 with respect to the ‘674 patent. Specifically, the ALJ found that the CMI accused products including the Type 2 Array Circuitry and any Qisda or BenQ accused products incorporating these CMI accused products infringe the asserted claims of the ‘674 patent. No other accused products were found to infringe the ‘674 patent or the other patents at issue. ALJ Rogers also determined that the asserted claims of the ‘674, ‘556, and ‘941 patents are not invalid, but that certain claims of the ‘063 and ‘006 patents are invalid for obviousness and anticipation, respectively. See our January 17, 2012 post for more details. On March 26, 2012, the Commission issued a notice determining to review the ID in part. On review, the Commission determined to reverse ALJ Rogers’ finding of a violation of Section 337 with respect to the ‘674 patent and affirm, with modifications, the findings of no violation of Section 337 with respect to the ‘006, ‘063, and ‘566 patents. The Commission also affirmed that Respondents do not infringe the asserted claims of the ‘941 patent, but remanded to the ALJ to decide whether the ViewFrame II+2 prior art anticipates the asserted claims. The Commission’s detailed findings are discussed below. The ‘006 Patent The Commission first analyzed the ALJ’s construction of the term “layer,” as used throughout the ‘006 patent, and construed the term to mean the “entire thickness of a material.” Under this construction, Thomson could not show that Respondents’ accused products have a single optical axis, as required by the asserted claims. Thus, the Commission affirmed the ALJ’s finding that the accused devices do not literally infringe the ‘006 patent. The Commission also determined that Thomson failed to show that the accused products infringe the ‘006 patent under the doctrine of equivalents. As to validity, the Commission affirmed ALJ Rogers’ finding that Respondents failed to establish by clear and convincing evidence that a U.S. Patent to Scheuble anticipates claims 4 and 7. Both the ALJ and Commission determined that Scheuble does not disclose the “birefringent plate” limitation of the asserted claims. The ‘063 Patent The Commission reviewed the ALJ’s construction of the terms “mechanically rubbing/rubbed,” “a plurality of spacing elements,” and “affixing layer.” With respect to the term “mechanically rubbing/rubbed,” the Commission rejected the ALJ’s findings regarding claim differentiation and found that the proper construction of the term does not contain a directional limitation. As to the term “a plurality of spacing elements,” the Commission reversed the ALJ’s narrow and unsupported construction requiring the “plurality of spacing elements” to contact “the second substrate,” and adopted Thomson’s proposed construction of “more than one spacing element, where a spacing element is a structure that functions to keep the gap between two substrates substantially uniform.” Lastly, as to the term “affixing layer,” the Commission affirmed the ALJ’s construction with the caveat that the “affixing layer” need not be “separate,” only “distinct,” from the “spacing elements.” Under the adopted constructions, the Commission affirmed the ALJ’s finding that the accused AUO and CMI products do not infringe claim 1 and that the accused CMI products do not infringe claim 11. However, the Commission reversed the ALJ’s finding that the accused AUO products do not infringe claim 11. The Commission also determined that claims 12, 14, 17, and 18, which depend from claim 11, were infringed by AUO’s accused products. As to invalidity, the Commission affirmed the ALJ’s finding that claims 1-4, 8, 11, 12, 14, and 18 are obvious over a U.S. Patent to Sugata in view of a U.S. Patent to Tsuboyama. Specifically, the ALJ found that Sugata discloses each limitation of the asserted claims except mechanical rubbing of the substrate and spacers after the spacers have been formed, but that Tsuboyama teaches this limitation. The Commission reversed the ALJ’s finding that claim 17 of the ‘063 patent is not rendered obvious by the combination of Sugata and Tsuboyama after determining that the inherent teachings of the asserted references disclosed a photolithography process as claimed. The Commission also considered whether the asserted claims are anticipated by a U.S. Patent to Lowe or a U.S. Patent to Miyazaki. In doing so, the Commission affirmed the ALJ’s findings that Lowe and Miyazaki are prior art to claims 1-4 and 8 of the ‘063 patent, that Respondents have not shown that Lowe and Miyazaki are prior art to claims 11, 12, 14, 17, and 18, that neither Lowe nor Miyazaki anticipate claims 1-4 and 8, and that, even assuming Lowe and Miyazaki are prior art to claims 11, 12, 14, 17, and 18, only Miyazaki would anticipate those claims. The ‘556 Patent With respect to the ‘556 patent, the Commission determined not to review the ALJ’s finding that Respondents’ accused products do not infringe claim 3 and affirmed the ALJ’s finding that claim 3 is not obvious over a U.S. Patent to Takizawa, either alone or in combination with a U.S. Patent to Possin. The ‘674 Patent As to the ‘674 patent, the Commission determined not to review ALJ Rogers’ finding “that the asserted claims are infringed by the CMI accused product including the ‘Type 2 Array Circuitry’ and any Qisda or BenQ accused product incorporating these CMI accused products.” However, the Commission reversed the ALJ’s findings that claims 1, 7, 8, 14, 16, 17, and 18 are not anticipated by a Japanese Published Application to Fujitsu and that dependent claims 9, 11, and 13 are not obvious over Fujitsu in view of the level of ordinary skill in the art. Accordingly, the Commission determined that there is no violation of Section 337 with respect to the ‘674 patent. The ‘941 Patent Regarding claim construction, the Commission reviewed and adopted the ALJ’s construction of the term “second rate” “determined by.” Specifically, the Commission rejected Thomson’s construction that “determined by” should be construed broadly to mean “based on,” allowing for any conceivable equation to be used for calculating the “second rate,” because the specification of the ‘941 patent only disclosed a single way to calculate the claimed parameter. Accordingly, the Commission adopted the ALJ’s construction, which included the disclosed equation. Moreover, under either construction, the Commission determined that Respondents MStar and Realtek and Respondents CMU, Qisda, and BenQ, which manufacture products including MStar and Realtek scaler ships, do not infringe claims 1 and 4. The Commission also affirmed the ALJ’s finding that the asserted claims are not anticipated by a Japanese Patent Publication to Baba. Domestic Industry Regarding domestic industry, the Commission affirmed the ALJ’s determination that Thomson had satisfied the economic prong of the domestic industry requirement. First, the Commission determined, and Respondents did not dispute, that Thomson’s licensing activities relating to its LCD patent portfolio satisfied the exploitation requirement of Section 337(a)(3)(c). Second, the Commission determined that the money invested by Thomson in licensing the asserted patents is substantial because Thomson invested more resources in the five asserted patents than in its other LCD patents and because Thomson focused heavily on each of the asserted patents during licensing negotiations.
Further to our June 15, 2012 post, on July 13, 2012, the International Trade Commission (the “Commission”) issued the public version of its opinion finding no violation of Section 337 in Certain Reduced Ignition Proclivity Cigarette Paper Wrappers and Products Containing Same (Inv. No. 337-TA-756). By way of background, the Complainant in this investigation is Schweitzer-Mauduit International, Inc. (“Schweitzer”) and the remaining Respondents are Julius Glatz GmbH, LIPtec GmbH, and KneX Worldwide LLC (collectively, “Glatz”). In the Initial Determination (“ID”), ALJ E. James Gildea determined that no violation of Section 337 had occurred by Glatz in the importation into the U.S., sale for importation, or sale within the U.S. after importation of certain reduced ignition proclivity cigarette paper wrappers and products containing the same that allegedly infringe U.S. Patent Nos. 5,878,753 (the ‘753 patent) and 6,725,867 (the ‘867 patent). Seeour February 29, 2012 post for more details. On April 2, 2012, the Commission issued a notice determining to review the ID in part. See our April 4, 2012 post for more details. The ‘753 and ‘867 patents are both directed to lower ignition proclivity (“LIP”) cigarettes and related products that are designed to reduce the likelihood of accidental fire if a cigarette is left or dropped on a surface such as upholstery or bedding. The ‘753 patent had 15 asserted claims and the ‘867 patent had three asserted claims. Ten different Glatz LIP paper products were accused of infringing the patents. The ‘753 Patent With respect to the ‘753 patent, the Commission determined to review the construction of the terms “gradually” and “ramp-shaped profile” and the issues of direct and indirect infringement, obviousness, definiteness, utility, and the technical prong of the domestic industry requirement. As to the term “gradually,” the Commission adopted the ALJ’s construction of “incrementally” with the clarification that, in the context of the claims, “gradually means an increase or decrease in the permeability that occurs in small steps or degrees and that is not abrupt or sudden.” In adopting this construction, the Commission rejected Glatz’s argument that the term “gradually” is insolubly ambiguous, finding that a person of ordinary skill in the art can “ascertain whether a permeability change is gradual or abrupt, based on the specification and figures in the specification.” As to the term “ramp-shaped profile,” the Commission affirmed the ALJ’s determination that the term defines the physical shape of the cigarette bands and not their permeability characteristics. Regarding direct infringement, the Commission affirmed the ALJ’s finding that Schweitzer’s method of testing the accused products was unreliable and, thus, that Schweitzer did not meet its burden of proof that the accused products’ permeability characteristics change “gradually,” as recited by claims 12-18 and 25. The Commission also affirmed ALJ Gildea’s finding that the accused cigarette papers do not have a “ramp-shaped profile,” as that term was construed by the ALJ. Because Schweitzer failed to prove a single instance of direct infringement, Glatz could not, as a matter of law, indirectly infringe the asserted claims. As to validity, the Commission first analyzed Glatz’s argument that the asserted claims lack utility under 35 U.S.C. § 101 because the claimed invention does not accomplish the stated purpose of diminishing discernable changes in taste and smoke delivery of LIP cigarettes. The Commission rejected Glatz’s narrow articulation of the invention’s purpose and affirmed the ALJ’s finding that the invention is useful, based on the ignition characteristics of the cigarette paper. Regarding obviousness, the Commission affirmed the ALJ’s determination that a person of ordinary skill in the art would not have combined the asserted references because the prior art taught away from Schweitzer’s invention. As to the domestic industry requirement, the Commission affirmed the ALJ’s finding that Schweitzer failed to establish that an industry within the U.S. exists with respect to the ‘753 patent. Specifically, the Commission determined that the products Schweitzer alleged to practice claim 12 of the ‘753 patent were not shown to have the required gradually changing permeability profiles. The ‘867 Patent With respect to the ‘867 patent, the Commission determined to review the construction of the term “film forming composition” and the issues of direct and indirect infringement, anticipation, statutory bar under 35 U.S.C. § 102(b), obviousness, written description, enablement, and the technical prong of the domestic industry requirement. As to the term “film forming composition,” the Commission construed the term to mean any composition that dries as a film (including both solutions and fibrous slurries), which is consistent with the parties’ stipulation that the term carries a consistent meaning in both the ‘753 and ‘867 patents. Under this construction, the Commission determined that the accused products directly infringe claims 36 and 43. Glatz did not contest liability for contributory infringement of claim 45 of the ‘867 patent. As to anticipation, the Commission affirmed the ALJ’s finding that none of the four references cited by Glatz disclosed the claim elements “permeability” and “Burn Mode Index” by clear and convincing evidence. With respect to an “on sale” bar under 35 U.S.C. § 102(b), the Commission determined that certain “PaperSelect” cigarette wrappers were on sale more than one year before the critical date, thus invalidating claim 36. As to claims 43 and 45, they were invalidated as obvious in view of two different combinations of references. Lastly, the Commission determined that the asserted claims of the ‘867 patent are not invalid for failure to satisfy the written description and enablement requirements of 35 U.S.C. § 112. As to the domestic industry requirement, the Commission affirmed the ALJ’s determination that Schweitzer’s alginate papers satisfy the technical prong of the inquiry, based on the Commission’s construction of “film forming composition,” noted above.
Further to our July 23, 2012 post, on August 10, 2012, the International Trade Commission (the “Commission”) issued the public version of its opinion finding no violation of Section 337 in Certain Mobile Telephones and Wireless Communication Devices Featuring Digital Cameras, and Components Thereof (Inv. No. 337-TA-703). By way of background, the Complainant in this investigation is Eastman Kodak Company (“Kodak”). The Respondents are Apple Inc. (“Apple”) and Research in Motion, Ltd. and Research in Motion Corp. (collectively, “RIM”). On January 24, 2011, former Chief ALJ Paul J. Luckern issued an Initial Determination (“ID”) finding no violation of Section 337. See our March 18, 2011 post for more details. On June 30, 2011, the Commission issued a notice determining to affirm-in-part, reverse-in-part, and remand-in-part the ID. See our July 6, 2011 and August 8, 2011 posts for more details. After remand, the investigation was reassigned to ALJ Pender. On May 21, 2012, ALJ Pender issued a Remand Initial Determination (“RID”) finding no violation of Section 337. Specifically, ALJ Pender determined that the Apple iPhone 3G and the accused RIM products infringed claim 15 of U.S. Patent No. 6,292,218 (the ‘218 patent) and that the accused Apple iPhone 3GS and iPhone 4 did not infringe claim 15 of the ‘218 patent under the doctrine of equivalents. In addition, ALJ Pender determined that claim 15 of the ‘218 patent was invalid for obviousness in view of a Japanese patent application to Mori (“Mori”) and a U.S. patent to Parulski (“Parulski”). See our July 2, 2012 post for more details. Kodak, Apple, RIM, and the Commission Investigative Staff (“OUII”) each filed petitions for review of various portions of ALJ Pender’s RID. OUII, Apple, and RIM filed responses to Kodak’s petition. OUII and Kodak filed responses to Apple’s and RIM’s petitions. After considering the ID, RID, and the parties’ briefing, the Commission determined to review the RID in-part. Specifically, the Commission determined to review ALJ Pender’s finding of infringement by the accused RIM products and the Apple iPhone 3G. The Commission also determined to review ALJ Pender’s finding that claim 15 is invalid as obvious in view of Mori and Parulski. The ‘218 patent is directed to a digital camera with an LCD screen that enables images to be previewed in real time. Claim 15 of the ‘218 patent, the sole claim at issue in this investigation, recites such a camera, generally comprising of an image sensor, a motion processor, a color display, a capture button, a still processor, and a digital memory. Infringement The Commission’s analysis as to infringement focused on its previous claim construction finding that the two processors recited in claim 15, the motion processor and the still processor, could share circuitry but could not have total overlap. Regarding RIM’s accused devices, ALJ Pender previously determined that although these accused products’ processors shared some circuitry, they were in-fact distinct. Although the Commission disagreed with the ALJ’s analysis as to the distinctness of certain components, overall, it affirmed ALJ Pender’s finding of infringement, determining that even though some components of the RIM products’ processors were shared, each included enough unique components so as to be sufficiently distinct for purposes of claim 15. Similarly, as to the accused Apple iPhone 3G, ALJ Pender determined that the iPhone 3G’s motion processor and still processor shared some circuitry, but, for purposes of claim 15, were distinct. The Commission affirmed this finding, determining that even though some components of the iPhone 3G’s processors were shared, each included enough unique components so as to be sufficiently distinct. Thus, the Apple iPhone 3G infringed claim 15. Invalidity As to invalidity, in the RID, ALJ Pender determined that claim 15 was rendered obvious by Mori in view of Parulski, finding no objective indicia of nonobviousness. Though it ultimately agreed with ALJ Pender’s finding of invalidity, the Commission disagreed with the ALJ’s determination as to the existence of objective indicia of nonobviousness. Specifically, ALJ Pender reasoned in the RID that no such indicia need be substantively considered because Kodak had not established a sufficient nexus between the ‘218 patent and its licensing program. The Commission reversed this analysis, finding that Kodak did in fact show the required nexus, but ultimately determining that even with the objective indicia in mind, claim 15 was obvious for the reasons set forth in the ID and RID. Having affirmed ALJ Pender’s determination that claim 15 is invalid for obviousness, the Commission also upheld ALJ Pender’s ultimate finding of no violation of Section 337, and terminated the investigation.
Further to our July 27, 2012 post, on August 17, 2012, the International Trade Commission (the “Commission”) issued the public version of its opinion finding no violation of Section 337 in Certain Semiconductor Chips and Products Containing Same (Inv. No. 337-TA-753). By way of background, the Complainant in this investigation is Rambus Inc. of Sunnyvale, California (“Rambus”). Rambus accused Respondents of infringing certain claims of U.S. Patent Nos. 6,470,405; 6,591,353; and 7,287,109 (collectively, “the Barth patents”), and Nos. 7,602,857 and 7,715,494 (collectively, “the Dally patents”). Although the Notice of Investigation named numerous respondents, many were terminated due to settlement. In particular, Mediatek Inc., Audio Partnership PLC, and Oppo Digital, Inc. settled with Rambus following the ALJ’s issuance of the ID. Two remaining Respondents are LSI Corporation (“LSI”) and STMicroelectronics N.V. and STMicroelectronics Inc. (collectively, “STMicro”). With LSI and STMicro as additional Respondents are seven of their respective customers. On March 2, 2012, ALJ Theodore R. Essex issued the Final Initial Determination (“ID”) finding no violation of Section 337 because all of the asserted claims (in both patent families) were found to be invalid in view of certain prior art under 35 U.S.C. §§ 102 and 103. The Barth patents were also found to be unenforceable under the doctrine of unclean hands by virtue of Rambus’s destruction of documents. The ID also found that Rambus had exhausted its rights under the Barth patents as to certain products of one respondent. The ID found that all of the asserted patent claims were infringed and rejected numerous affirmative defenses raised by the Respondents. See our March 7, 2012 post for more details. On May 3, 2012, the Commission issued a notice determining to review the ID in its entirety. The Commission requested the parties to brief issues relating to claim construction, validity, infringement, unclean hands, inequitable conduct, domestic industry, and standing. Each will be discussed in turn. Claim Construction Rambus and Respondents petitioned for review of the terms “output frequency,” “processor,” and “transmitter circuit” / “transmitter” as used in the Dally patents. The Commission confirmed the ALJ’s construction of “output frequency” to mean “output data rate,” confirmed the ALJ’s finding that Respondents waived their arguments regarding the term “processor,” and determined that the terms “transmitter circuit” and “transmitter” should be given their plain and ordinary meaning. Validity The Commission affirmed the ALJ’s conclusion that all of the asserted claims are invalid under 35 U.S.C. §§ 102 or 103. As to the Dally patents, the Commission affirmed the ALJ’s determination that an article written by two IBM scientists entitled “Single-Chip 4x500Mbaud CMOS Transceiver” (“Widmer Article”) anticipates claims 1, 4-6, 9-10, 24-28, 35-36, 39-44, 47, and 53 of the Dally ‘857 patent, and claims 1, 2, 6, and 8 of the Dally ‘494 patent. All remaining asserted claims of the Dally patents were determined to be invalid as obvious over the Widmer Article in view of an article entitled “Single Chip 1062Mbaud CMOS transceiver for Serial Data Communication” (“Ewen Article”). As to the Barth patents, the Commission affirmed ALJ Essex’s determination that certain Barth patent claims were anticipated by Japanese Pat. Pub. No. 3-276344 (“Yano”), European Pat. App. No. 94,304,672.2 (“Dan”), NextBus Specification, U.S. Pat. No. 5,313,624 (“Harriman”), and U.S. Pat. No. 5,218,684 (“Hayes”). Further, the Commission affirmed the ALJ’s obviousness conclusions regarding the combination of U.S. Pat. No. 5,584,037 (“Farmwald”) with the Yano, Dan, NextBus, or Harriman references. In particular, the Commission noted that it would be obvious to combine the teachings of asynchronous memory systems (such as Yano or Dan) with Farmwald’s synchronous memory system because asynchronous systems had functionalities well-known to a person of ordinary skill in the art, which could be combined with synchronous systems to achieve “predictable results” under KSR v. Teleflex. The fact that it took a “consensus-oriented organization” multiple years to arrive at an agreed-upon combination of prior art elements did not alter the Commission’s decision. Inequitable Conduct The Commission affirmed the ALJ’s ultimate conclusion of no inequitable conduct; however, its decision with respect to materiality differed from that of the ALJs. “[R]espondents argued that the Barth patents are unenforceable because the inventors withheld a SyncLink standards document from the PTO during prosecution,” which disclosed a standard for high-speed memory interfaces that Respondents argued anticipated certain claims of the Barth ‘109 patent. In the ID, the ALJ found that the SyncLink standard document was cumulative and, therefore, not material. The ALJ also found that the named inventors and prosecution counsel lacked a specific intent to deceive the PTO. On review, the Commission determined that Respondents failed to prove that the SyncLink standards document was anticipatory, given that the sole document relied upon for inequitable conduct was found not to be prior art. In addition to finding that the materiality prong was not met, the Commission affirmed the ALJ’s determination that Respondent’s failed to show a specific intent to deceive. Infringement As to direct infringement, the Commission determined that all asserted claims of the Barth and Dally patents are infringed by Respondents’ accused products, excluding the multiple-transmitter claims of the Dally ‘857 patent and the Dally ‘494 method claims (as applied to LSI or Cisco’s accused products). Regarding indirect infringement, the Commission affirmed the ALJ’s findings that Respondents induced and contributorily infringed the method claims of both patent families. For inducement, intent to cause infringement was found in light of certain advertisements promoting an infringing use and further in view of product instructions directing end users to operate the accused products in an infringing manner. The Commission also found that Respondents’ self-proclaimed “plausible litigation defenses” were insufficient to establish a lack of specific intent. With respect to contributory infringement, the Commission presumed Respondents’ knowledge of infringement because no substantial noninfringing uses were established at trial, citing Spansion Inc. v. ITC, 629 F.3d 1331, 1355 (Fed. Cir. 2010). Domestic Industry The Commission reversed the ALJ’s determination that Rambus had satisfied the economic prong of the domestic industry requirement, finding that Rambus had not met its burden of proving a “substantial investment” in the exploitation of the patents. Specifically, the Commission determined that circumstantial evidence of Rambus’s licensing revenues and the number of its licenses, standing alone, were an inadequate proxy for its licensing-based investments, and that Rambus was required under Section 337(a)(3)(C) to provide at least some direct evidence of specific licensing-based investments directed to the asserted patents. Unclean Hands The Commission affirmed the ALJ’s finding of unclean hands as to the Barth patents based on Rambus’s document destruction occurring after July 1998, when infringement litigation was determined to be reasonably foreseeable. In view of this, and the ALJ’s determination that Rambus did not carry its burden of showing no prejudice as a result of the document destruction, the Commission affirmed the ALJ’s conclusion that no lesser sanctions were appropriate under the circumstances, and held the Barth patents unenforceable. Standing As a bona fide purchaser of the Dally patents, the Commission determined that Rambus has standing to enforce its rights at the ITC. More specifically, the Commission determined that although ownership of the Dally patents vested with the University of North Carolina (“UNC”), rather than the Massachusetts Institute of Technology (“MIT”) whom Rambus acquired its rights from, Rambus had standing as a bona fide purchaser under 35 U.S.C. § 261. In pertinent part, § 261 provides that an “assignment, grant, or conveyance shall be void as against any subsequent purchaser or mortgagee for valuable consideration, without notice, unless it is recorded in the Patent and Trademark Office within three months from its date or prior to the date of such subsequent purchase or mortgage.” Because UNC never recorded its subcontract with MIT that gave UNC ownership rights under the Dally patents, and because Rambus lacked actual or inquiry notice of the MIT-UNC sublicense, the Commission found that § 261 operated to give Rambus sufficient title to the Dally patents and, thus, standing to sue. Lastly, without extensive analysis, the Commission affirmed the ALJ’s findings regarding patent exhaustion, importation, and certain challenges to the ALJ’s evidentiary determinations.
On September 17, 2012, the International Trade Commission (the “Commission”) issued the public version of the opinion affirming in part and denying in part the initial determination of no violation of Section 337 in Certain Wireless Communication Devices, Portable Music and Data Processing Devices, Computers and Components Thereof(Inv. No. 337-TA-745). By way of background, the Complainant in this investigation is Motorola Mobility, Inc. (“Motorola”) and the Respondent is Apple Inc. (“Apple”). In the initial determination (“ID”), ALJ Thomas B. Pender determined that a violation of Section 337 had occurred by Apple in the importation into the U.S. and sale of certain wireless communication devices, portable music and data processing devices, computers, and components thereof that infringe U.S. Patent No. 6,246,697 (the ‘697 patent). However, ALJ Pender found no violation of Section 337 with respect to U.S. Patent Nos. 6,272,333 (the ‘333 patent), 6,246,862 (the ‘862 patent), and 5,636,223 (the ‘223 patent) and the Commission determined to review the ID in part. See our May 31, 2012 post for more details on the ID. The ‘223 Patent With respect to the ‘223 patent, the Commission began by amending the ALJ’s claim construction of the term “access priority value” to a narrower definition, noting that the ALJ’s construction did not explicitly account for the concept of priority. Even in view of this narrower construction, the Commission agreed that the claims of the ‘223 patent were anticipated. The Commission also carried out an obviousness analysis of the ‘223 patent, which the ALJ had not done because the arguments were based on a claim construction he did not adopt. After its analysis, the Commission determined that claim 1 of the ‘223 patent would have been obvious. Regarding infringement, the Commission reversed the ALJ’s determination that the accused Apple products directly infringed the ‘223 patent and reversed the determination that Motorola meets the technical prong of the domestic industry requirement. Thus, the finding of no Section 337 violation was affirmed with respect to the '223 patent. The ‘697 Patent As to the ‘697 patent, the Commission carried out a detailed claim construction, affirming the conclusions of the ID in part (though by a different route) and adopting a new construction of some terms. Regardless, the ALJ’s conclusions in the ID based on anticipation and obviousness finding the ‘697 patent to be valid were affirmed. However, in light of the Commission’s claim construction, the Commission determined that Apple’s accused products do not infringe the ‘697 patent either literally or under the doctrine of equivalents. Furthermore, as with the ‘223 patent, the Commission found that Motorola failed to satisfy the technical prong of the domestic industry requirement for the ‘697 patent. Thus, the ID finding of violation of Section 337 was reversed with respect to the '697 patent. The ‘862 Patent In the ID, the ALJ found claim 1 of the ‘862 patent to be invalid as being indefinite. The Commission reviewed this finding, concluding that claim 1 is not indefinite. Thus, the Commission remanded the case to the ALJ for further proceedings on claim construction, the remaining invalidity challenges, infringement, and domestic industry in relation to the ‘862 patent. The ‘333 Patent Regarding the ‘333 patent, the Commission revised the claim construction of various terms. Although this revision forced the Commission to carry out a revised analysis of validity, infringement, and domestic industry, the Commission agreed with the ALJ’s conclusions. Specifically, claim 12 of the ‘333 patent was found to be valid over the asserted prior art. Relying on different reasoning, the Commission found that the accused products did not infringe the ‘333 patent. Furthermore, Motorola’s Droid 2 was found not to practice the ‘333 patent, and thus, the technical prong of the domestic industry requirement was not met (although the economic prong was met by the Droid). Therefore, the ID finding of no violation of Section 337 was affirmed with respect to the '333 patent.
On October 10, 2012, the International Trade Commission (the “Commission”) issued the public version of its opinion finding no violation of Section 337 in Certain Integrated Circuits, Chipsets, and Products Containing Same Including Televisions(Inv. No. 337-TA-786). By way of background, the investigation is based on a complaint filed by Complainant Freescale Semiconductor, Inc. (“Freescale”) alleging violation of Section 337 in the importation into the U.S., sale for importation, and/or sale within the U.S. after importation of certain integrated circuits, integrated circuit chipsets, and products containing the same, including televisions, that infringe one or more claims of U.S. Patent No. 5,467,455 (the ‘455 patent). See our December 2, 2011 post for more details on Freescale’s complaint. The remaining respondents in this investigation are MediaTek Inc. and Zoran Corp (collectively, “Respondents”). On July 12, 2012, ALJ Rogers issued his final ID, finding no violation of Section 337 with respect to the ‘455 patent. More specifically, ALJ Rogers found that an industry does not exist in the U.S. that exploits the ‘455 patent. ALJ Rogers also found claims 9 and 10 of the ‘455 patent to be invalid under 35 U.S.C. § 103 and that Freescale failed to show that the Accused Zoran Hybrid Termination Circuits infringe these claims. See our July 16, 2012 post for more details. The Commission’s findings regarding validity and domestic industry will be discussed in turn. Validity The Commission reversed the ALJ’s finding that Japanese Patent Application JP H05-83113-A to Kuboki (“Kuboki”) discloses the limitation “[a] data processor within an integrated circuit package comprising … a plurality of bus termination circuits” of claim 9 of the ‘455 patent. Specifically, the Commission reversed the ALJ’s finding that Kuboki discloses a microprocessor and bus termination circuitry integrated onto a single chip because Kuboki did not explicitly recite this feature and testimony from Freescale’s expert suggested that the two elements may be decoupled, depending on design requirements, without hindering operability. However, because the evidence of record suggested an industry trend towards single chip integration, the Commission affirmed the ALJ’s finding that Kuboki, in combination with the knowledge of one of ordinary skill in the art, renders claims 9 and 10 of the ‘455 patent obvious. The Commission also determined that Kuboki, in combination with U.S. Patent No. 5,479,123 to Gist (“Gist”) and the knowledge of one of ordinary skill in the art, renders claims 9 and 10 obvious. Domestic Industry To satisfy the economic prong of the domestic industry requirement, Freescale relied on its investments in licensing the asserted patent. Freescale’s arguments regarding the extent of its licensing efforts were redacted from the public version of the Commission’s opinion. In affirming the ALJ’s determination that Freescale failed to prove that it made a substantial investment in the exploitation of the ‘455 patent through its licensing activities, the Commission stated that “the evidence presented by Freescale here does not allow the Commission to ascertain how the ‘455 patent relates to its overall licensing program,” citing Certain Semiconductor Chips and Products Containing Same, Inv. No. 337-TA-753, Comm’n Op. at 44-51 (July 31, 2012). In that investigation, the Commission determined that the complainant failed to establish the substantiality of its licensing activities because it did not specifically demonstrate what portion of its overall company wide licensing expenses/revenues were directly tied to the asserted patents. Lastly, the Commission found that it was inappropriate for Freescale to rely primarily on post-complaint activities in attempting to establish its domestic industry. In particular, the Commission noted that Freescale did not point to any circumstances justifying a post-complaint perspective, which can include post-complaint bankruptcy filings, the identification of “new, relevant and timely disclosed evidence,” or evidence of “dwindling” industry.
On November 6, 2012, the International Trade Commission (the “Commission”) issued an opinion in Certain Video Game Systems and Wireless Controllers and Components Thereof (337-TA-770) construing the term “toy wand” and remanding the case to Chief ALJ Charles E. Bullock to determine infringement in light of the Commission’s construction. On the same day, the Commission also issued a notice determining to remand and review in part ALJ Bullock’s August 31, 2012 initial determination (“ID”), which found no violation of Section 337 by the Respondents in this investigation. See our November 8, 2012 post for more details regarding the notice. By way of background, this investigation was instituted on April 20, 2011 based on a complaint filed by Creative Kingdoms, LLC and New Kingdoms, LLC (collectively, “CK”) alleging a violation of Section 337 by Respondents Nintendo of America, Inc. and Nintendo Co., Ltd. (collectively, “Nintendo”) for the importation into the U.S. and sale of certain video game systems and wireless controllers and components thereof including Nintendo’s Wii wireless game system and controllers. CK alleged that Nintendo violated Section 337 with respect to U.S. Patent Nos. 7,850,527 (the ‘527 patent), 7,500,917 (the ‘917 patent), and 7,896,742 (the ‘742 patent). The ‘917 patent is directed to a toy wand that allows users to electronically interact with a physical or computer environment by moving the wand in a particular direction and “comprises an elongated hollow pipe or tube having a handle on one end and an activation circuitry and transmitter located within the body on the other end.” The ALJ construed the term “wand” as “an elongated hollow pipe or tube consistent with a wand associated with magic or illusion,” as proposed by the Commission Investigative Attorney and Nintendo. The ALJ rejected CK’s broader construction of “a handheld electronic device with an elongated body,” because the specification repeatedly emphasized that the claimed wand is “seemingly magical,” or associated with magic or illusion. In its petition for review, CK argued that the references in the specification to the wand being “seemingly magical” are descriptions of the preferred embodiment and are not intended to limit the claims to a single embodiment. Upon review, the Commission agreed with CK and construed the term “toy wand” to mean “an elongated hollow pipe or tube used for play.” Although the Commission acknowledged that the ‘917 patent includes numerous descriptions of a “magical” wand used in an interactive wizardry game, the Commission found that the patent also envisions other types of wands including wands implemented as an input device for an array of variously themed video and computer games. Accordingly, the Commission determined that there was not a clear case of subject matter disclaimer warranting a construction that limited the scope of “toy wand” to magic wands.
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