[Federal Register Volume 62, Number 76 (Monday, April 21, 1997)]
[Notices]
[Pages 19353-19354]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-10219]



[[Page 19353]]

=======================================================================
-----------------------------------------------------------------------

INTERNATIONAL TRADE COMMISSION

[Investigation No. 337-TA-382]


Notice of Commission Decision to Review Portions of an Initial 
Determination, Not To Review the Remainder of the Initial 
Determination, and Schedule for Filing of Written Submissions on the 
Issues Under Review and on Remedy, the Public Interest, and Bonding

    In the Matter of: Certain Flash Memory Circuits and Products 
Containing Same.
AGENCY: International Trade Commission.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: Notice is hereby given that the U.S. International Trade 
Commission has determined to review portions of the final initial 
determination issued by the presiding administrative law judge on 
February 26, 1997, in the above-captioned investigation, and not to 
review the remainder of the initial determination.

FOR FURTHER INFORMATION CONTACT: Carl P. Bretscher, Esq., Office of the 
General Counsel, U.S. International Trade Commission, telephone (202) 
205-3107.

SUPPLEMENTARY INFORMATION: The Commission instituted this patent-based 
section 337 investigation on February 20, 1996 (61 FR 7122 (Feb. 20, 
1996)) based on a complaint and motion for temporary relief filed by 
SanDisk Corp. (``SanDisk'') of Santa Clara, California. Complainant 
SanDisk alleged violation of section 337 in the importation, sale for 
importation, and/or sale within the United States after importation of 
certain flash memory circuits and products containing same, by reason 
of infringement of claims 1, 2, 3, and 4 of U.S. Letters Patent 
5,418,752 (the `` `752 patent'') and/or claims 27, 32, and 44 of U.S. 
Letters Patent 5,172,338 (the `` `338 patent''), both owned by 
complainant. The Commission's notice of investigation named Samsung 
Electric Co., Ltd. of Seoul, Korea and Samsung Semiconductor, Inc. of 
San Jose, California (collectively, ``Samsung'') as respondents.
    The scope of the investigation was subsequently narrowed to cover 
only claims 1, 2, and 4 of the '752 patent and claim 27 of the '338 
patent. The presiding administrative law judge (``ALJ'') held an 
evidentiary hearing on the merits, which concluded on October 4, 1996. 
The ALJ issued his final initial determination (``ID'') on February 26, 
1997, in which he found: (1) there have been importations and sales 
after importation of the accused products; (2) respondents did not 
demonstrate by clear and convincing evidence that claims 1, 2, or 4 of 
the '752 patent or claim 27 of the '338 patent are invalid; (3) 
respondents' so-called ``original'' design products infringe claims 1, 
2, and 4 of the '752 patent; (4) all of respondents' products at issue 
infringe claim 27 of the '338 patent; and (5) complainant satisfied the 
domestic industry requirements of section 337. The ALJ declined to 
determine whether respondents' so-called ``new'' design products 
infringe the '752 patent, citing in part inadequacies in the 
documentation produced by respondents. Based on these findings, the ALJ 
concluded there was a violation of section 337 of the Tariff Act of 
1930, as amended (19 U.S.C. Sec. 1337).
    Having examined the record in this investigation, including the ID, 
the Commission has determined to review the following two issues: (1) 
whether the ALJ erred in finding that respondents could be held liable 
for contributory or induced infringement of claims 1, 2, and 4 of the 
'752 patent; and (2) whether the ALJ erred in declining to determine 
whether respondents' new design products infringe claims 1, 2, and 4 of 
the '752 patent. The Commission has determined not to review the 
remainder of the ID; thus, the Commission has found a violation of 
section 337, regardless of the eventual resolution of the two issues 
identified for review, based on the ALJ's finding that Samsung's 
original design products infringe the '752 patent and that all of 
Samsung's product at issue infringe the '338 patent. The Commission has 
also determined to deny a motion filed by Samsung for leave to file a 
reply to the responses filed by SanDisk and the Commission 
investigative attorneys to Samsung's petition for review. The 
Commission's rules do not provide for such replies, and the Commission 
sees no reason to make an exception here. On review, the Commission is 
particularly interested in receiving answers to the following 
questions.

I. Regarding the ALJ's Findings on Contributory and Induced 
Infringement of the '752 Patent

    1. Is there sufficient evidence of record to find that Samsung may 
be held liable as a contributory infringer of the '752 patent? In 
answering this question, the parties should discuss whether the 
evidence shows any direct infringement by one of Samsung's customers, 
whether Samsung knew that the products it was selling contributed to 
such infringement, whether Samsung's products have substantial non-
infringing uses, and any other relevant issues. The parties should also 
clearly identify the Samsung products involved in any such contributory 
infringement.
    2. Is there sufficient evidence of record to find that Samsung may 
be held liable as having induced infringement of the '752 patent? In 
answering this question, the parties should discuss whether the 
evidence shows any direct infringement by one of Samsung's customers, 
whether Samsung had knowledge of such infringement, whether Samsung 
actively induced the party to infringe the '752 patent, and any other 
issues relevant to this question. The parties should also clearly 
identify the Samsung products involved in any such induced 
infringement.
    3. If a controller were required to practice the '752 patent, as 
assumed arguendo by the ALJ in his footnote 85 on page 109 of the ID, 
would this affect the ALJ's finding that SanDisk has met the domestic 
industry requirement with respect to the '752 patent, and if so, how?

II. Regarding the ALJ's Decision Not To Determine Whether Samsung's New 
Design Products Infringe the '752 Patent

    1. During this investigation, did SanDisk allege that Samsung's new 
design products infringe the '752 patent? If so, did SanDisk ever 
communicate to Samsung and/or the ALJ that it was withdrawing this 
allegation? In addressing this question, the parties should identify 
both Samsung's new and original products by their serial numbers, such 
as those given on page 11 of the ALJ's final ID.
    2. When during this investigation did SanDisk receive documentation 
from Samsung regarding the new design products? When did SanDisk become 
aware that this documentation was (allegedly) inaccurate or inadequate 
for the purpose of determining whether Samsung's new design products 
infringe the '752 patent?
    3. What actions, such as filing motions to compel production or for 
sanctions, did SanDisk take to require Samsung to produce more accurate 
or sufficient information regarding Samsung's new design products? When 
did SanDisk take such action? Did SanDisk ever ask the ALJ to draw 
inferences adverse to Samsung on the basis of Samsung's alleged 
unwillingness to produce accurate and complete documentation on its new 
design products? If SanDisk did not take any such actions, why did it 
not? What was Samsung's response to such actions, if any?
    4. What information does SanDisk believe it needs, but has not yet 
received, in order to determine whether

[[Page 19354]]

Samsung's new design products infringe the '752 patent? Is it SanDisk's 
position that it could not have received such information prior to the 
hearing, or is it SanDisk's position that it did not receive such 
information from Samsung?
    5. Based on the documents produced by Samsung and any other 
relevant materials, does the record show that SanDisk's or Samsung's 
experts made any determination as to whether Samsung's new design 
products infringe the '752 patent?
    6. If a determination were to be made on the basis of the present 
record, would the evidence show that Samsung's new design products 
infringe the '752 patent? In answering this question, the parties may 
take note of but should not reiterate arguments made previously to the 
Commission regarding the construction of the claims at issue.
    7. If the Commission were to conclude that SanDisk has failed to 
carry its burden of proving that Samsung's new design products infringe 
the '752 patent, what would be the preclusive effect, if any, of this 
finding of non-infringement both at the Commission and in a federal 
district court?
    8. In the absence of any consent or settlement agreement between 
the parties, does the Commission have the authority to impose a 
certification requirement on the importation of Samsung's new product 
designs where the ALJ declined to determine whether these products 
infringe the '752 patent?
    In connection with the final disposition of this investigation, the 
Commission may issue (1) an order that could result in the exclusion of 
the subject articles from entry into the United States, and/or (2) 
cease and desist orders that could result in respondents being required 
to cease and desist from engaging in unfair acts in the importation and 
sale of such articles. Accordingly, the Commission is interested in 
receiving written submissions that address the form of remedy, if any, 
that should be ordered. If a party seeks exclusion of an article from 
entry into the United States for purposes other than entry for 
consumption, the party should so indicate and provide information 
establishing that activities involving other types of entry either are 
adversely affecting it or likely to do so. For background, see the 
Commission Opinion, In the Matter of Certain Devices for Connecting 
Computers via Telephones Lines, Inv. No. 337-TA-360.
    If the Commission contemplates some form of remedy, it must 
consider the effects of that remedy upon the public interest. The 
factors the Commission will consider include the effect that an 
exclusion order and/or cease and desist orders would have on (1) the 
public health and welfare, (2) competitive conditions in the U.S. 
economy, and (3) U.S. production of articles that are like or directly 
competitive with those that are subject to investigation, and (4) U.S. 
consumers. The Commission is therefore interested in receiving written 
submissions that address the aforementioned public interest factors in 
the context of this investigation.
    If the Commission orders some form of remedy, the President has 60 
days to approve or disapprove the Commission's action. During this 
period, the subject articles would be entitled to enter the United 
States under a bond, in an amount determined by the Commission and 
prescribed by the Secretary of the Treasury. The Commission is 
therefore interested in receiving submissions concerning the amount of 
the bond that should be imposed.

Written Submissions

    The parties to the investigation are requested to file written 
submissions on the issues under review. The submissions should be 
concise and thoroughly referenced to the record in this investigation, 
including references to specific exhibits and testimony. Additionally, 
the parties to the investigation, interested government agencies, and 
any other interested parties are encouraged to file written submissions 
on the issues of remedy, the public interest, and bonding. Such 
submissions should address the March 5, 1997, recommended determination 
by the ALJ on remedy and bonding. Complainant and the Commission 
investigative attorneys are also requested to submit proposed remedial 
orders for the Commission's consideration. The written submissions and 
proposed remedial orders must be filed no later than close of business 
on April 28, 1997. Reply submissions must be filed no later than the 
close of business on May 5, 1997. No further submissions will be 
permitted unless otherwise ordered by the Commission.
    Persons filing written submissions must file with the Office of the 
Secretary the original document and 14 true copies thereof on or before 
the deadlines stated above. Any person desiring to submit a document 
(or portion thereof) to the Commission in confidence must request 
confidential treatment unless the information has already been granted 
such treatment during the proceedings. All such requests should be 
directed to the Secretary of the Commission and must include a full 
statement of the reasons why the Commission should grant such 
treatment. See 19 CFR 201.6. Documents for which confidential treatment 
by the Commission will be treated accordingly. All nonconfidential 
written submissions will be available for public inspection at the 
Office of the Secretary.
    This action is taken under the authority of section 337 of the 
Tariff Act of 1930, as amended (19 U.S.C. Sec. 1337) and sections 
210.45-210.51 of the Commission's Rules of Practice and Procedure (19 
CFR 210.45-210.51).
    Copies of the public version of the ID and all other 
nonconfidential documents filed in connection with this investigation 
are or will be available for inspection during official business hours 
(8:45 a.m. to 5:15 p.m.) in the Office of the Secretary, U.S. 
International Trade Commission, 500 E Street, S.W., Washington, D.C. 
20436, telephone 202-205-2000. Hearing-impaired persons are advised 
that information can be obtained by contacting the Commission's TDD 
terminal on 202-205-1810.

    By order of the Commission.

    Issued: April 15, 1997.
Donna R. Koehnke,
Secretary.
[FR Doc. 97-10219 Filed 4-18-97; 8:45 am]
BILLING CODE 7020-02-P