[Federal Register Volume 77, Number 126 (Friday, June 29, 2012)]
[Notices]
[Pages 38826-38829]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-15916]


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INTERNATIONAL TRADE COMMISSION

[Investigation No. 337-TA-745]


Certain Wireless Communication Devices, Portable Music and Data 
Processing Devices, Computers and Components Thereof, Commission 
Decision To Review in Part a Final Initial Determination Finding a 
Violation of Section 337; Request for Written Submissions

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 review in part the presiding 
administrative law judge's (``ALJ'') final initial determination 
(``ID'') issued on April 24, 2012, finding a violation of section 337 
of the Tariff Act of 1930, 19 U.S.C. 1337 in the above-captioned 
investigation.

FOR FURTHER INFORMATION CONTACT: Megan M. Valentine, Office of the 
General Counsel, U.S. International Trade Commission, 500 E Street SW., 
Washington, DC 20436, telephone (202) 708-2301. Copies of non-
confidential 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, DC 20436, 
telephone (202) 205-2000. General information concerning the Commission 
may also be obtained by accessing its Internet server at http://www.usitc.gov. The public record for this investigation may be viewed 
on the Commission's electronic docket (EDIS) at http://edis.usitc.gov. 
Hearing-impaired persons are advised that information on this matter 
can be obtained by contacting the Commission's TDD terminal on (202) 
205-1810.

SUPPLEMENTARY INFORMATION: The Commission instituted this investigation 
on November 8, 2010, based on a complaint filed by Motorola Mobility, 
Inc. of Libertyville, Illinois. 75 FR 68619-20 (Nov. 8, 2010). The 
complaint alleges violations of section 337 of the Tariff Act of 1930, 
as amended, 19 U.S.C. Sec.  1337 (``section 337''), in the importation 
into the United States, the sale for importation, and the sale within 
the United States after importation of certain wireless communication 
devices, portable music and data processing devices, computers and 
components thereof by reason of infringement of certain claims of U.S. 
Patent Nos. 6,272,333 (``the `333 patent''); 6,246,862 (``the `862 
patent''); 6,246,697 (``the `697 patent''); 5,359,317 (``the `317 
patent''); 5,636,223 (``the `223 patent''); and 7,751,826 (``the `826 
patent''). The complaint further alleges the existence of a domestic 
industry. The Commission's notice of investigation named Apple Inc. of 
Cupertino, California as respondent. The Office of Unfair Import 
Investigation (``OUII'') was named as a participating party, however, 
on July 29, 2011, OUII withdrew from further participation in the 
investigation. See Commission Investigative Staff's Notice of 
Nonparticipation (July 29, 2011). The

[[Page 38827]]

Commission later partially terminated the investigation as to the `317 
patent and the `826 patent. Notice (June 28, 2011); Notice (Jan 27, 
2012).
    On April 24, 2012, the ALJ issued his final ID, finding a violation 
of section 337 as to the `697 patent and finding no violation as to the 
`223, `333, and `697 patents. On May 9, 2012, the ALJ issued his 
recommended determination on remedy and bonding. In his final ID, the 
ALJ found that the products accused of infringing the `697 patent 
literally infringe claims 1-4 of that patent, and that Apple induces 
others to infringe the asserted claims of the `697 patent. The ALJ also 
found that the asserted claims of the `697 patent are not invalid as 
anticipated under 35 U.S.C. 102, as obvious under 35 U.S.C. 103, or for 
failure to satisfy the written description requirement or the best mode 
requirement of 35 U.S.C. 112. The ALJ also found that the `697 patent 
is not unenforceable for unclean hands. The ALJ further found that 
Motorola has satisfied the domestic industry requirement for the `697 
patent. The ALJ also found that the products accused of infringing the 
`223 patent literally infringe the asserted claim of that patent and 
that Apple induces others to infringe the claim 1 of the `223 patent. 
The ALJ further found, however, that the asserted claim of the `223 
patent is invalid as anticipated under 35 U.S.C. 102. The ALJ also 
found that Motorola has satisfied the domestic industry requirement for 
the `223 patent. The ALJ further found that the products accused of 
infringing the `333 patent do not literally infringe claim 12 of that 
patent. The ALJ also found that the asserted claim of the `333 patent 
is not invalid as anticipated under 35 U.S.C. 102 or for obviousness 
under 35 U.S.C. 103. The ALJ further found that Motorola has not 
satisfied the domestic industry requirement for the `333 patent. The 
ALJ also found that that claim 1 of the `862 patent is invalid as 
indefinite under 35 U.S.C. 112, ] 2 and, therefore, that the products 
accused of infringing the `862 patent do not literally infringe the 
asserted claim of that patent and that Motorola has not satisfied the 
domestic industry requirement for the `862 patent.
    On May 7, 2012, Motorola filed a joint petition for review and 
contingent petition for review of certain aspects of the final ID's 
findings concerning claim construction, infringement, validity, and 
domestic industry. Also on May 7, 2012, Apple filed a joint petition 
for review and contingent petition for review of certain aspects of the 
final ID's findings concerning claim construction, infringement, 
validity, and patent unenforceability. On May 15, 2012, Motorola filed 
a response to Apple's petition. Also on May 15, 2012, Apple filed a 
response to Motorola's petition.
    On June 6, 2012, Apple filed a post-RD statement on the public 
interest pursuant to Commission Rule 201.50(a)(4). Also on June 6, 
2012, several non-parties filed public interest statements in response 
to the post-RD Commission Notice issued on May 15, 2012. See 77 FR. 
28621-22 (May 15, 2012). The non-parties include: Federal Trade 
Commission; Business Software Alliance; Association for Competitive 
Technology; Retail Industry Leaders Association; Verizon; Nokia 
Corporation; Hewlett-Packard Company; and Microsoft Corporation.
    Having examined the record of this investigation, including the 
ALJ's final ID, the petitions for review, and the responses thereto, 
the Commission has determined to review the final ID in part. 
Specifically, with respect to the `223 patent the Commission has 
determined to review the ID's claim construction of the claim 
limitation ``access priority value'' in claim 1. The Commission has 
also determined to review the ID with respect to the validity of claim 
1 of the `223 patent under 35 U.S.C. 102 in light of U.S. Patent No. 
5,453,987 to Tran (``Tran `987) and U.S. Patent No. 5,657,317 to Mahany 
et al (``Mahany `317'') and under 35 U.S.C. 103 in light of Tran `987 
in combination with Mahany `317. The Commission has further determined 
to review the ID's finding that the 802.11 standard necessarily 
practices claim 1 of the `223 patent, and thus, the ID's findings 
concerning infringement and whether Motorola has satisfied the 
technical prong of the domestic industry requirement with respect to 
the `223 patent.
    With respect to the `697 patent, the Commission has determined to 
review the ID's construction of the limitation ``selecting a chip time 
in a complex PN [pseudonoise] sequence generator'' in claim 1. The 
Commission has also determined to review the ID's construction of the 
claim limitation ``restricting a phase difference between a previous 
complex PN chip and a next complex PN chip to a preselected phase 
angle.'' The Commission has further determined to review the ID's 
findings with respect to the validity of claims 1-4 the `697 patent 
under 35 U.S.C. 102 in light of prior art [pi]/2-shift BPSK modulation 
and under 35 U.S.C. 103 in light of the combination of prior art QPSK 
and [pi]/2-shift BPSK modulation schemes. The Commission has also 
determined to review the ID's finding of direct and induced 
infringement with respect to the `697 patent. The Commission has 
further determined to review the ID's finding that Motorola has 
satisfied the technical prong of the domestic industry requirement for 
the `697 patent.
    With respect to the `862 patent, the Commission has determined to 
review the ID's construction of the limitation ``close proximity to a 
user'' in claim 1 and his finding that claim 1 is indefinite.
    With respect to the `333 patent, the Commission has determined to 
review the ID's construction of the limitation ``a list of all software 
applications that are currently accessible to the subscriber unit'' in 
claim 12. The Commission has further determined to review the ALJ's 
finding that claim 12 is not invalid under 35 U.S.C. 102 in light of 
U.S. Patent Nos. 5,502,831 to Grube et al. (``Grube `831''), 6,008,737 
to DeLuca et al. (``DeLuca `797''), or 5,612,682 to DeLuca et al. 
(``DeLuca `682''), or under 35 U.S.C. 103 in view of Grube `831 
combined with DeLuca `682 and DeLuca `737. The Commission has also 
determined to review the ALJ's finding of non-infringement of claim 12. 
The Commission has further determined to review the ID's finding that 
Motorola's domestic industry product does not practice claim 12 of the 
`333 patent.
    With respect to whether Motorola has satisfied the economic prong 
of the domestic industry requirement, the Commission has determined to 
review the ID's finding that Motorola has not satisfied the economic 
prong as to the `333 patent under section 337(a)(3)(C) for its 
investments in licensing. The Commission has also determined to review 
in part the ID's finding that Motorola has satisfied the economic prong 
with respect to the `223 and `697 patents under section 337(a)(3)(A) 
and (B).
    The Commission has determined not to review the remaining issues 
decided in the ID.
    The parties are requested to brief their positions on the issues 
under review with reference to the applicable law and the evidentiary 
record. In connection with its review, the Commission is particularly 
interested in responses to the following questions:
    1. Does the description of the present invention in the 
specification of the `697 patent (e.g., at col. 4, lns. 54-64) limit 
the scope of claim 1 to a [pi]/2 BPSK modulation scheme at ``selected 
chip times?'' If so, does this restriction in the scope of claim 1 
affect the validity of claim 4 under 35 U.S.C. 112, ] 4, where claim 4 
is also limited to a [pi]/2 BPSK modulation scheme at ``selected chip 
times?''

[[Page 38828]]

    2. If claim 4 of the `697 patent is not invalid under 35 U.S.C. 
112, ] 4, can a claim differentiation argument be made with respect to 
claims 1 and 4 that would resolve the appropriate scope of claim 1, 
considering the description of the present invention in the 
specification of the `697 patent?
    3. With respect to the `333 patent, does the limitation ``currently 
available'' in claim 12 require that a non-web based software 
application need only be installed on a subscriber unit or does the 
software application have to be both installed and enabled for use? In 
discussing this issue, please refer to the ALJ's finding that the `333 
Accused Products do not communicate with Apple's servers regarding 
changes in user credentials (see Final ID at 254). Also, please provide 
citations to the record in support of any arguments.
    4. With regard to the `697 and `223 patents, are there substantial 
costs and delays associated with switching away from the standardized 
technology in question?
    5. With regard to the `697 and `223 patents, do the patents in 
question cover relatively minor components of the accused products?
    6. Has Apple waived its right to assert that Motorola failed to 
offer a license on reasonable and non-discriminatory (``RAND'') terms? 
In discussing this issue, please refer to Commission Investigative 
Staff Motion in Limine to Exclude The Expert Opinion of Jerry Hausman 
filed July 14, 2011, and to Respondent Apple Inc.'s Opposition to 
Commission Investigative Staff's Motion In Limine to Exclude the Expert 
Opinion of Robert O'Hara at page 1, n. 1 filed July 22, 2011.
    7. If the record of an investigation lacks evidence sufficient to 
support a RAND-based affirmative defense (e.g., equitable estoppel, 
implied license, waiver, etc.), under what circumstances (if any) 
should a RAND obligation nonetheless preclude issuance of an exclusion 
order? Please discuss theories in law, equity, and the public interest, 
and identify which (if any) of the 337(d)(1) public interest factors 
allegedly precludes issuance of such an order.
    8. Does the mere existence of a RAND obligation preclude issuance 
of an exclusion order? Please discuss theories in law, equity, and the 
public interest, and identify which (if any) of the 337(d)(1) public 
interest factors allegedly precludes issuance of such an order.
    9. Should a patent owner that has refused to offer a license to a 
named respondent in a Commission investigation on a RAND obligated 
patent be able to obtain an exclusion order? Please discuss theories in 
law, equity, and the public interest, and identify which (if any) of 
the 337(d)(1) public interest factors allegedly precludes issuance of 
such an order.
    10. Should a patent owner that has refused to offer a license on a 
RAND obligated patent to some entity (regardless of whether that entity 
is a named respondent in a Commission investigation) be able to obtain 
an exclusion order? Please discuss theories in law, equity, and the 
public interest, and identify which (if any) of the 337(d)(1) public 
interest factors allegedly precludes issuance of such an order.
    11. Should a patent owner that has refused to negotiate a license 
on RAND terms with a named respondent in a Commission investigation be 
precluded from obtaining an exclusion order? Please discuss theories in 
law, equity, and the public interest, and identify which (if any) of 
the 337(d)(1) public interest factors allegedly precludes issuance of 
such an order.
    12. Should a patent owner that has refused to negotiate a license 
on RAND terms with some entity (regardless of whether that entity is a 
named respondent in a Commission investigation) be precluded from 
obtaining an exclusion order? Please discuss theories in law, equity, 
and the public interest, and identify which (if any) of the 337(d)(1) 
public interest factors allegedly precludes issuance of such an order.
    13. Should a patent owner who has offered a RAND license that the 
named respondent in a Commission investigation has rejected be 
precluded from obtaining an exclusion order? Please discuss theories in 
law, equity, and the public interest, and identify which (if any) of 
the 337(d)(1) public interest factors allegedly precludes issuance of 
such an order.
    The parties have been invited to brief only these discrete issues, 
as enumerated above, with reference to the applicable law and 
evidentiary record. The parties are not to brief other issues on 
review, which are adequately presented in the parties' existing 
filings.
    In connection with the final disposition of this investigation, the 
Commission may (1) issue an order that could result in the exclusion of 
the subject articles from entry into the United States, and/or (2) 
issue one or more cease and desist orders that could result in the 
respondent(s) 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 In the Matter of Certain Devices for Connecting 
Computers via Telephone Lines, Inv. No. 337-TA-360, USITC Pub. No. 2843 
(December 1994) (Commission Opinion).
    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, (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 U.S. Trade 
Representative, as delegated by the President, has 60 days to approve 
or disapprove the Commission's action. See Presidential Memorandum of 
July 21, 2005, 70 FR 43251 (July 26, 2005). During this period, the 
subject articles would be entitled to enter the United States under 
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 if a remedy is ordered.
    Written Submissions: The parties to the investigation are requested 
to file written submissions on the issues identified in this notice. 
Parties to the investigation, interested government agencies, the 
Office of Unfair Import Investigations, 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 recommended determination by the ALJ on remedy and bonding. 
Complainant is also requested to submit proposed remedial orders for 
the Commission's consideration. Complainant is also requested to state 
the dates that the patents expire and the HTSUS numbers under which the 
accused products are

[[Page 38829]]

imported. The written submissions and proposed remedial orders must be 
filed no later than close of business on July 9, 2012. Initial 
submissions are limited to 70 pages, not including any attachments or 
exhibits related to discussion of the public interest. Reply 
submissions must be filed no later than the close of business on July 
16, 2012. Reply submissions are limited to 25 pages, not including any 
attachments or exhibits related to discussion of the public interest. 
No further submissions on these issues will be permitted unless 
otherwise ordered by the Commission.
    Persons filing written submissions must file the original document 
electronically on or before the deadlines stated above and submit 8 
true paper copies to the Office of the Secretary by noon the next day 
pursuant to section 210.4(f) of the Commission's Rules of Practice and 
Procedure (19 C.F.R. 210.4(f)). Submissions should refer to the 
investigation number (``Inv. No. 337-TA-754'') in a prominent place on 
the cover page and/or the first page. (See Handbook for Electronic 
Filing Procedures, http://www.usitc.gov/secretary/fed_reg_notices/rules/handbook_on_electronic_filing.pdf). Persons with questions 
regarding filing should contact the Secretary (202-205-2000).
    Any person desiring to submit a document to the Commission in 
confidence must request confidential treatment. All such requests 
should be directed to the Secretary to 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 is properly sought will be treated accordingly. A 
redacted non-confidential version of the document must also be filed 
simultaneously with the any confidential filing. All non-confidential 
written submissions will be available for public inspection at the 
Office of the Secretary and on EDIS.
    The authority for the Commission's determination is contained in 
section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and 
in sections 210.42-46 and 210.50 of the Commission's Rules of Practice 
and Procedure (19 CFR 210.42-46 and 210.50).

     Issued: June 25, 2012.

    By order of the Commission.
Lisa R. Barton,
Acting Secretary to the Commission.
[FR Doc. 2012-15916 Filed 6-28-12; 8:45 am]
BILLING CODE 7020-02-P