[Federal Register Volume 82, Number 100 (Thursday, May 25, 2017)]
[Notices]
[Pages 24143-24144]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-10709]


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INTERNATIONAL TRADE COMMISSION

[Investigation No. 337-TA-972]


Certain Automated Teller Machines, ATM Modules, Components 
Thereof, and Products Containing the Same; Final Determination Finding 
a Violation of Section 337; Issuance of a Limited Exclusion Order and 
Cease and Desist Orders; 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 found a violation of section 337 in this investigation 
and has issued a limited exclusion order and cease and desist orders 
prohibiting importation of infringing automated teller machines 
(``ATMs''), ATM modules, components thereof, and products containing 
the same.

FOR FURTHER INFORMATION CONTACT: Sidney A. Rosenzweig, Office of the 
General Counsel, U.S. International Trade Commission, 500 E Street SW., 
Washington, DC 20436, telephone 202-708-2532. 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.

[[Page 24144]]


SUPPLEMENTARY INFORMATION: The Commission instituted this investigation 
on November 20, 2015, based on a complaint filed by Diebold 
Incorporated and Diebold Self-Service Systems (collectively, 
``Diebold''). 80 FR 72735-36 (Nov. 20, 2015). The complaint alleged 
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 automated teller machines, ATM modules, components thereof, and 
products containing the same by reason of infringement of certain 
claims of six United States Patents: 7,121,461 (``the '461 patent''); 
7,249,761 (``the '761 patent''); 7,314,163 (``the '163 patent''); 
6,082,616 (``the '616 patent''); 7,229,010 (``the '010 patent''); and 
7,832,631 (``the '631 patent''). Id. The notice of investigation named 
as respondents Nautilus Hyosung Inc. of Seoul, Republic of Korea; 
Nautilus Hyosung America Inc. of Irving, Texas; and HS Global, Inc. of 
Brea, California (collectively, ``Nautilus''). Id. at 72736. The Office 
of Unfair Import Investigations was not named as a party. Id.
    The '461 patent, '761 patent, and '163 patent were previously 
terminated from the investigation. See Order No. 12 (Apr. 28, 2016), 
not reviewed, Notice (May 11, 2016); Order No. 21 (June 28, 2016), not 
reviewed, Notice (July 28, 2016). The presiding administrative law 
judge (``ALJ'') conducted an evidentiary hearing from August 29, 2016 
through September 1, 2016. On November 30, 2016, the ALJ issued the 
final Initial Determination (``final ID'' or ``ID''). The final ID 
found a violation of section 337 with respect to the '616 and '631 
patents, and no violation with respect to the '010 patent. ID at 207-
09. The ALJ recommended that a limited exclusion order and cease and 
desist orders issue against Nautilus.
    Diebold and Nautilus each filed petitions for review concerning 
certain findings with respect to the '616 and '631 patents. On December 
30, 2016, the parties submitted statements on the public interest. 
Diebold contends that the investigation does not raise any public 
interest concerns. Nautilus asserts that a Commission exclusion order 
should include a certification provision and that any Commission 
remedial orders be tailored to allow repair of existing Nautilus ATMs 
in the United States. In addition, the Commission received submissions 
from United States Representative James B. Renacci, United States 
Senator Sherrod Brown, and certain Nautilus customers.
    On January 30, 2017, the Commission determined to review and modify 
two claim constructions for the '616 patent. Notice at 2-3 (Jan. 30, 
2017). The Commission's reasoning in support of its claim construction 
determinations for the '616 patent was set forth more fully in the 
Commission Claim Construction Opinion, which also issued on January 30, 
2017. In view of the Commission's determination to review and modify 
the construction of these two claim limitations, the Commission also 
determined to review for the asserted claims of the '616 patent: (1) 
Infringement; (2) obviousness in view of Diebold's 1064i ATM; and (3) 
the technical prong of the domestic industry requirement. Id. at 3. The 
Commission solicited further briefing from the parties on these issues, 
and briefing from the parties and the public on remedy, the public 
interest, and bonding. Id. at 4. The Commission determined not to 
review the final ID's finding of a section 337 violation as to the '631 
patent. Id. at 2.
    On February 10, 2017, Diebold and Nautilus filed their opening 
submissions on the issues under review and on remedy, the public 
interest, and bonding. On February 17, 2017, Diebold and Nautilus filed 
responses to each other's opening submission. Nautilus also submitted 
letters to the Commission concerning the public interest from 
Nautilus's customers.
    Having reviewed the record of investigation, the Commission has 
determined that there is a violation of section 337 by reason of the 
infringement of claims 1, 6, 10, 16, 26, and 27 of the '616 patent and 
claims 1-7 and 18-20 of the '631 patent. The Commission has further 
determined that the technical prong of the domestic industry 
requirement has been met as to the '616 patent. To the extent that 
Nautilus's arguments concerning obviousness of the asserted claims of 
the '616 patent in view of the Diebold 1064i ATM have not been waived, 
the Commission finds that Nautilus has failed to meet its burden to 
show invalidity by clear and convincing evidence.
    The Commission has further determined that the appropriate remedy 
is (1) a limited exclusion order prohibiting the entry of infringing 
automated teller machines, ATM modules, components thereof, and 
products containing the same, and (2) cease and desist orders directed 
to the respondents. The Commission has determined that the public 
interest factors enumerated in section 337(d) and (f), 19 U.S.C. 
1337(d), (f), do not preclude the issuance of the limited exclusion 
order or the cease and desist orders. The Commission has determined 
that a bond in the amount of 100 percent of the entered value of the 
subject articles is required during the period of Presidential review. 
19 U.S.C. 1337(j)(3). Notwithstanding the foregoing, the exclusion 
order and cease and desist orders permit Nautilus to import replacement 
parts for its customers who need such parts to repair automated teller 
machines that have been imported prior to the date of the orders. 
Commissioner Kieff has provided additional views dissenting from the 
Commission's exception from the remedial orders regarding replacement 
parts for service or repair. The orders do not permit Nautilus to 
import infringing ATMs (as opposed to replacement parts) for any 
purpose, including repair or replacement.
    The investigation is terminated. The Commission's reasoning in 
support of its determinations is set forth more fully in its opinion. 
The Commission's orders and opinion were delivered to the President and 
the United States Trade Representative on the day of their issuance.
    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: May 19, 2017.
Lisa R. Barton,
Secretary to the Commission.

[FR Doc. 2017-10709 Filed 5-24-17; 8:45 am]
BILLING CODE 7020-02-P