[Federal Register Volume 63, Number 48 (Thursday, March 12, 1998)]
[Notices]
[Pages 12113-12114]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-6383]


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INTERNATIONAL TRADE COMMISSION

[Inv. No. 337-TA-383 Sanctions Proceeding]


In the Matter of Certain Hardware Logic Emulation Systems and 
Components Thereof; Notice of Commission Decision Regarding Appeals of 
ALJ Order No. 96

AGENCY: U.S. International Trade Commission.

ACTION: Notice.

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SUMMARY: Notice is hereby given that the U.S. International Trade 
Commission has determined to deny appeals of ALJ Order No. 96 in the 
above-captioned investigation and to adopt that order with the two 
exceptions identified below.

FOR FURTHER INFORMATION CONTACT: Jay H. Reiziss, Esq., Office of the 
General Counsel, U.S. International Trade Commission, telephone 202-
205-3116.

SUPPLEMENTARY INFORMATION: This patent-based section 337 investigation 
was instituted on March 8, 1996, based upon a complaint and motion for 
temporary relief filed on January 26, 1996, by Quickturn Design 
Systems, Inc. (``Quickturn''). 61 Fed. Reg. 9486 (March 8, 1996). The 
respondents are Mentor Graphics Corporation (``Mentor'') and Meta 
Systems (``Meta'') (collectively ``respondents''). After an 11-day 
evidentiary hearing, in April and May of 1996, the presiding 
administrative law judge (``ALJ'') issued an initial determination 
(``TEO ID'') granting Quickturn's motion for temporary relief.
    On August 5, 1996, the Commission determined not to modify or 
vacate the TEO ID and issued a temporary limited exclusion order and a 
temporary cease and desist order against domestic respondent Mentor. 
The Commission imposed a bond of 43 percent of entered value on 
respondents' importations and sales of emulation systems and components 
thereof during the remaining pendency of the investigation. The 
Commission set complainant's bond at $200,000.
    On September 24, 1997, the Commission determined to modify 
respondents' temporary relief bond in the investigation. Respondents' 
temporary relief bond remained at 43 percent of the entered value of 
the subject imported articles if the entered value equals transaction 
value as defined in applicable U.S. Customs Service regulations. 
Respondents' temporary relief bond increased to 180 percent of the 
entered value of the subject imported articles if the entered value 
does not equal transaction value as defined in applicable U.S. Customs 
Service regulations.
    Beginning on April 7, 1997, the ALJ held a pre-hearing conference 
and a 14-day evidentiary hearing concerning permanent relief issues and 
several sanctions-related motions. Closing arguments were held on June 
25 and 26, 1997. On July 31, 1997, the ALJ issued an initial 
determination (``Final ID''), finding that respondents had violated 
section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), by 
infringing claims of all five of Quickturn's asserted patents. The ALJ 
found: (1) There has been importation and sale of the accused products; 
(2) Quickturn practices the patents in controversy and satisfies the 
domestic industry requirements of section 337; (3) the claims in issue 
are valid; (4) the accused products directly infringe the claims in 
issue; (5) components of the accused products contributorily infringe 
the claims in issue; and (6) respondents have induced infringement of 
the claims in issue. Based on these findings, the ALJ concluded there 
was a violation of section 337. The ALJ recommended issuance of a 
permanent exclusion order and a cease and desist order.
    On October 2, 1997, the Commission determined not to review the 
Final ID, thereby finding that respondents violated section 337. On 
December 3, 1997, the Commission issued a limited exclusion order 
directed to Meta and a cease and desist order against domestic 
respondent Mentor. The Commission set the bond for the 60-day 
Presidential review period at 43 percent of the entered value of the 
subject imported articles if the entered value equals transaction value 
as defined in applicable U.S. Customs Service regulations and at 180 
percent of the entered value of the subject imported articles if the 
entered value does not

[[Page 12114]]

equal transaction value as defined in applicable U.S. Customs Service 
regulations.
    On July 31, 1997, the ALJ also issued Order No. 96 in the 
investigation finding that respondents and certain of their counsel 
have engaged in discovery abuses and abuse of process justifying the 
imposition of evidentiary and monetary sanctions. Pursuant to rule 
210.25(d) of the Commission's Rules of Practice and Procedure, 19 
C.F.R. Sec. 210.25(d), the Commission on October 2, 1997, specified the 
schedule for the filing of petitions appealing Order No. 96 and 
responses thereto. On August 13, 1997, August 14, 1997, October 2, 
1997, and November 6, 1997, respondents filed petitions appealing Order 
No. 96. Quickturn filed a reply to respondents' petitions on November 
14, 1997. The Commission investigative attorneys filed a reply to 
respondents' petitions on November 17, 1997.
    Having examined the record in this investigation, including Order 
No. 96, the petitions appealing Order No. 96, and the responses 
thereto, the Commission determined to deny the appeals and to adopt 
Order No. 96 with the exception of those portions of Order No. 96 
granting Motion Docket No. 383-116 and Motion Docket No. 383-124, both 
of which the Commission did not adopt. The Commission also determined 
to deny respondents' request for a hearing and their motion for leave 
to file a reply to Quickturn's and the Commission investigative 
attorneys' responses to respondents' petitions. In connection with the 
final disposition of this matter, the Commission has ordered the 
presiding administrative law judge to issue an initial determination 
within six months ruling on the precise dollar amount of sanctions to 
be awarded pursuant to Order No. 96.
    A Commission opinion in support of its determination will be issued 
shortly.
    This action is taken under the authority of section 337 of the 
Tariff Act of 1930 (19 U.S.C. 1337) and sections 210.4, 210.25, 210.27, 
and 210.33 of the Commission's Rules of Practice and Procedure (19 CFR 
210.4, 210.25, 210.27, and 210.33).
    Copies of the public versions of the Final ID, Order No. 96, 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, SW, 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. General information concerning the Commission 
may also be obtained by accessing its Internet server (http://
www.usitc.gov).

    Issued: March 6, 1998.

    By order of the Commission.
Donna R. Koehnke,
Secretary.
[FR Doc. 98-6383 Filed 3-11-98; 8:45 am]
BILLING CODE 7020-02-P