[Federal Register Volume 81, Number 207 (Wednesday, October 26, 2016)]
[Notices]
[Pages 74479-74480]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-25829]


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INTERNATIONAL TRADE COMMISSION

[Investigation No. 337-TA-963]


Certain Activity Tracking Devices, Systems, and Components 
Thereof; Commission Determination Not To Review a Final Initial 
Determination Finding No Violation of Section 337; Termination of the 
Investigation

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 not to review the final initial determination 
(``ID'') issued by the presiding administrative law judge (``ALJ'') on 
August 23, 2016, finding no violation of section 337 of the Tariff Act 
of 1930, as amended, in connection with alleged misappropriation of 
certain trade secrets.

FOR FURTHER INFORMATION CONTACT: Panyin A. Hughes, Office of the 
General Counsel, U.S. International Trade Commission, 500 E Street SW., 
Washington, DC 20436, telephone 202-205-3042. 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 (https://www.usitc.gov). The public record for this investigation may be viewed 
on the Commission's electronic docket (EDIS) at https://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 Inv. No. 337-TA-
963 on August 21, 2015, based on a complaint filed by AliphCom d/b/a 
Jawbone of San Francisco, California and BodyMedia, Inc. of Pittsburgh, 
Pennsylvania (collectively, ``Jawbone''). 80 FR 50870-71 (Aug. 21, 
2015). The complaint alleges violations of section 337 of the Tariff 
Act of 1930, as amended (19 U.S.C. 1337), in the importation into the 
United States, the sale for importation, and the sale within the United 
States after importation of certain activity tracking devices, systems, 
and components thereof by reason of infringement of certain claims of 
U.S. Patent No. 8,529,811 (``the '811 patent); U.S. Patent No. 
8,398,546 (``the '546 patent); U.S. Patent No. 8,793,522 (``the '522 
patent); U.S. Patent No. 8,446,275 (``the '275 patent); U.S. Patent No. 
8,961,413 (``the '413 patent); and U.S. Patent No. 8,073,707 (``the 
'707 patent''). The complaint further alleges misappropriation of trade 
secrets, the threat or effect of which is to destroy or substantially 
injure an industry in the United States. The notice of investigation 
named the following respondents: Fitbit, Inc. of San Francisco, 
California (``Fitbit''); Flextronics International Ltd. of San Jose, 
California; and Flextronics Sales & Marketing (A-P) Ltd. of Port Louis, 
Mauritius (collectively, ``Flextronics''); Fitbit and Flextronics are 
collectively referred to as ``Respondents.'' The Office of Unfair 
Import Investigations (``OUII'') is a party to the investigation.
    On February 22, 2016, the ALJ granted Jawbone's unopposed motion to 
terminate the investigation as to the '522 patent; claims 8-10, 13, 14, 
and 18 of the '275 patent; claim 6 of the '811 patent; and claims 5 and 
8 of the '413 patent. See Order No. 32. The Commission determined not 
to review the ID. See Comm'n Notice of Non-review (Mar. 21, 2016).
    On March 3, 2016, the ALJ granted Fitbit's motion for summary 
determination that the asserted claims of the '546 and '275 patents are 
directed to ineligible subject matter under 35 U.S.C. 101. See Order 
No. 40. The Commission determined to review the

[[Page 74480]]

ID, and on review to affirm the ID with certain modifications. See 
Comm'n Notice affirming the ID with modification (Apr. 4, 2016).
    On March 11, 2016, the ALJ granted Jawbone's unopposed motion to 
terminate the investigation as to the remaining claims of the '811 
patent. See Order No. 42. The Commission determined not to review the 
ID. See Comm'n Notice of Non-review (Apr. 4, 2016).
    On April 27, 2016, the ALJ granted Fitbit's motion for summary 
determination that the asserted claims of the '413 and '707 patents 
(the two patents remaining in the investigation), are directed to 
ineligible subject matter under 35 U.S.C. 101. See Order No. 54. The 
Commission determined not to review the ID. See Comm'n Notice of Non-
review (Jun. 2, 2016). Thus, all the patent infringement allegations 
were terminated from the investigation. Only the allegations of trade 
secret misappropriation remain at issue in the investigation.
    The ALJ held an evidentiary hearing from May 9, 2016 through May 
17, 2016, and thereafter received post-hearing briefing from the 
parties. During discovery, Jawbone identified 154 trade secrets 
allegedly misappropriated by Respondents (Trade Secret Nos. 1-144, 
including Nos. 1.A-1.G, 92-A, 139-A, and 141-A.). ID at 3. Yet at the 
hearing, Jawbone presented evidence and argument on only 38 of the 
alleged trade secrets (Trade Secret Nos. 1, 1A-G, 2-4, 12-14, 17, 18, 
33, 52, 53, 55, 58, 91, 92, 92-A, 93-102, 128, 129, 141, 141-A). 
Jawbone's post-hearing briefs addressed only five of the alleged trade 
secrets (Trade Secret Nos. 92, 92-A, 98, 128, and 129). Specifically, 
Jawbone argued that Fitbit misappropriated alleged Trade Secret Nos. 98 
and 128, and Flextronics misappropriated alleged Trade Secret Nos. 92, 
92-A, and 129. ID at 3-4.
    On June 15, 2016, Jawbone moved to terminate the investigation as 
to all of the trade secrets except for the five alleged trade secrets 
addressed in its post-hearing briefing. ID at 4 (citing Mot. Docket No. 
963-072). Respondents opposed the motion, arguing that they are 
``entitled to a determination that Jawbone failed to present sufficient 
evidence showing actual misappropriation as to all of the trade secrets 
that Jawbone now seeks to abandon. . . .'' See id. at 23 (quoting Mot. 
072 Rsp. at 8) (emphasis in original). The ALJ denied Jawbone's motion 
as outside the scope of Commission Rule 210.21(a). She also denied 
Fitbit's request for a determination on whether the withdrawn trade 
secrets were misappropriated. Id. at 20, 23-24. The ALJ stated that 
``[p]arties are free to waive arguments'' and that Fitbit failed to 
provide ``any support for the proposition that arguments that have been 
waived and abandoned should be considered on their merits.'' Id. The 
ALJ also granted Jawbone's June 30, 2016 motion to strike Section V.A. 
of Fitbit's post-hearing reply brief for improperly raising a new 
argument based on news articles that are not in the record of the 
investigation. Id. at 25. No party petitioned for review of the ALJ's 
determinations as to these motions.
    On August 23, 2016, the ALJ issued her final ID finding no 
violation of section 337 by Respondents in connection with the alleged 
trade secrets misappropriation. Specifically, the ALJ found that the 
Commission has subject matter jurisdiction, in rem jurisdiction over 
the accused products, and in personam jurisdiction over Respondents. ID 
at 15-16. The ALJ further found that Jawbone satisfied the importation 
requirement of section 337, noting that Respondents have stipulated 
that the accused products have been imported into the United States. 
Id. at 16. The ALJ, however, found that Jawbone failed to show that the 
alleged trade secrets constitute actual trade secrets, and that 
Respondents did not misappropriate any of Jawbone's alleged trade 
secrets. ID at 28, 38, 45-46. Finally, the ALJ found that Jawbone 
failed to prove a threat of substantial injury to a domestic industry 
as required by 19 U.S.C. 1337(a)(1)(A)(i). See ID at 79-80. In that 
regard, the ALJ referenced her finding of no misappropriation of trade 
secrets and added that ``even if Jawbone had proven misappropriation of 
the five asserted trade secrets, there is no way to decide on this 
record what specific injury is attributable to these trade secrets, and 
whether the injury is substantial.'' Id. at 80.
    On September 6, 2016, Jawbone filed a petition for review of the 
ID, challenging only the ALJ's findings as to alleged Trade Secret Nos. 
92, 92-A, and 98. On September 14, 2016, Respondents and the Commission 
investigative attorney filed responses to the petition for review. 
Having examined the record of this investigation, including the ALJ's 
final ID, the petition for review, and the responses thereto, the 
Commission has determined not to review the final ID. This 
investigation is therefore terminated.
    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 Part 210 of the Commission's Rules of Practice and Procedure (19 CFR 
part 210).

    By order of the Commission.

    Issued: October 20, 2016.
Lisa R. Barton,
Secretary to the Commission.
[FR Doc. 2016-25829 Filed 10-25-16; 8:45 am]
 BILLING CODE 7020-02-P