[Federal Register Volume 83, Number 199 (Monday, October 15, 2018)]
[Notices]
[Pages 51980-51982]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-22325]
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INTERNATIONAL TRADE COMMISSION
[Investigation No. 337-TA-1046]
Certain Non-Volatile Memory Devices and Products Containing Same
Notice of the Commission's 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 prohibiting importation of
infringing non-volatile memory devices and products containing the same
and issued cease and desist orders directed to the domestic respondents
Toshiba America, Inc. and its subsidiaries, Toshiba America Electronic
Components, Inc. and Toshiba America Information Systems, Inc. The
investigation is terminated.
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-
1046 on April 12, 2017, based on a complaint filed by Macronix
International Co., Ltd. of Hsin-chu, Taiwan and Macronix America, Inc.
of Milpitas, California (collectively, ``Macronix''). 82 FR 17687-88
(Apr. 12, 2017). The complaint alleges violations of section 337 of the
Tariff Act of 1930, as amended (19 U.S.C. 1337), in the
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importation into the United States, the sale for importation, and the
sale within the United States after importation of certain non-volatile
memory devices and products containing the same that infringe one or
more of claims 1-8 of U.S. Patent No. 6,552,360 (``the '360 patent'');
claims 1-12 and 16 of U.S. Patent No. 6,788,602 (``the '602 patent'');
and claims 1-7, 11-16, and 18 of U.S. Patent No. 8,035,417 (``the '417
patent''). The notice of investigation named the following respondents:
Toshiba Corporation of Tokyo, Japan; Toshiba America, Inc. of New York,
New York; Toshiba America Electronic Components, Inc. of Irvine,
California; Toshiba America Information Systems, Inc. of Irvine,
California; and Toshiba Information Equipment (Philippines), Inc. of
Binan, Philippines (collectively, ``Toshiba''). The Office of Unfair
Import Investigations is a party to the investigation.
On June 16, 2017, the Commission determined not to review the ALJ's
order (Order No. 11) granting an unopposed motion to amend the Notice
of investigation to add Toshiba Memory Corporation of Tokyo, Japan as a
respondent. See Order No. 11, Comm'n Notice of Non-Review (June 16,
2017).
On October 17, 2017, the Commission determined not to review the
ALJ's order (Order No. 20) granting an unopposed motion to terminate
the investigation as to claims 11, 12, and 16 of the '602 patent. See
Order No. 20, Comm'n Notice of Non-Review (Oct. 17, 2017).
On October 4, 2017, the ALJ held a Markman hearing to construe
certain disputed claim terms. On December 5, 2017, the ALJ issued Order
No. 23 (Markman Order), setting forth her construction of the disputed
claim terms.
On January 18, 2018, the Commission determined not to review the
ALJ's order (Order No. 24) granting an unopposed motion to terminate
the investigation as to claims 1-7 and 18 of the '417 patent. Order No.
24; Comm'n Notice of Non-Review (Jan. 18, 2018).
The ALJ held an evidentiary hearing from February 8, 2018, through
February 14, 2018, and thereafter received post-hearing briefs.
On April 27, 2018, the ALJ issued her final ID, finding no
violation of section 337 by Toshiba in connection with the remaining
claims, i.e., claims 1-8 of the '360 patent; claims 1-10 of the '602
patent; and claims 11-16 of the '417 patent. Specifically, the ALJ
found that the Commission has subject matter jurisdiction, in rem
jurisdiction over the accused products, and in personam jurisdiction
over Toshiba. ID at 15-17. The ALJ also found that Macronix satisfied
the importation requirement of section 337 (19 U.S.C. 1337(a)(1)(B)).
Id. The ALJ, however, found that the accused products do not infringe
the asserted claims of the '360 patent and '417 patent. See ID at 19-
65, 118-130. The ALJ also found that Toshiba failed to establish that
the asserted claims of the '417 patent are invalid for obviousness. ID
at 132-141. Toshiba did not challenge the validity of the '360 patent.
ID at 70. With respect to the '602 patent, the ALJ found that certain
accused products infringe asserted claims 1-10, but that claims 1-5 and
7-10 are invalid for obviousness. ID at 71-88, 91-117. Finally, the ALJ
found that Macronix failed to establish the existence of a domestic
industry that practices the asserted patents under 19 U.S.C. 1337(a)(2)
and also failed to show a domestic industry in the process of being
established. See ID at 257-261, 288-294.
On May 10, 2018, the ALJ issued her recommended determination on
remedy and bonding. Recommended Determination on Remedy and Bonding
(``RD''). The ALJ recommends that in the event the Commission finds a
violation of section 337, the Commission should issue a limited
exclusion order prohibiting the importation of Toshiba's accused
products that infringe the asserted claims of the asserted patents. RD
at 1-5. The ALJ also recommends issuance of cease and desist orders
against the domestic Toshiba respondents based on the presence of
commercially significant inventory in the United States. RD at 5. With
respect to the amount of bond that should be posted during the period
of Presidential review, the ALJ recommends that the Commission set a
bond in the amount of 100 percent of entered value for Toshiba flash
memory devices and solid state drives, and a bond in the amount of six
percent of entered value for Toshiba PCs imported during the period of
Presidential review. RD at 6-9.
On May 14, 2018, Macronix filed a petition for review challenging
the ID's finding of no violation of section 337. The IA also filed a
petition for review that day, challenging the ID's finding that
Macronix failed to establish a domestic industry in the process of
being established and certain findings as to the '602 patent. Also on
May 14, 2018, Toshiba filed a contingent petition for review of the ID
``in the event that the Commission decides to review the ID.'' On May
22, 2018, Macronix and Toshiba filed their respective responses to the
petitions for review. On May 23, 2018, the IA filed a response to the
private parties' petitions for review. The Chairman granted the IA's
motion for leave to file the response one day late.
On June 28, 2018, the Commission determined to review the final ID
in part and requested the parties to brief certain issues. See 83 FR
31416-18 (July 5, 2018). Specifically, the Commission determined to
review the following: (1) The finding that Macronix failed to satisfy
the domestic industry requirement; and (2) the findings of infringement
and invalidity as to the '602 patent. On July 12, 2018, the parties
filed submissions to the Commission's questions and also briefed the
issues of remedy, the public interest and bonding. On July 19, 2018,
the parties filed responses to the initial submissions.
Having examined the record of this investigation, including the
final ID, and the parties' submissions, the Commission has determined
to (1) reverse the ALJ's finding that the accused products do not
directly infringe the asserted claims of the '602 patent; (2) affirm
the ALJ's indirect infringement and invalidity findings as to the '602
patent; and (3) reverse the ALJ's finding that Macronix failed to
establish a domestic industry in the process of being established. The
Commission adopts the ID's findings to the extent they are not
inconsistent with the Commission opinion issued herewith. The
Commission action results in a violation of section 337 as to claim 6
of the '602 patent.
Having found a violation of section 337 in this investigation, the
Commission has determined that the appropriate form of relief is: (1) A
limited exclusion order prohibiting the unlicensed entry of non-
volatile memory devices and products containing the same that infringe
claim 6 of the '602 patent that are manufactured by, or on behalf of,
or are imported by or on behalf of Respondents or any of their
affiliated companies, parents, subsidiaries, agents, or other related
business entities, or their successors or assigns, are excluded from
entry for consumption into the United States, entry for consumption
from a foreign-trade zone, or withdrawal from a warehouse for
consumption, for the remaining term of the '602 patent except under
license of the patent owner or as provided by law; and (2) cease and
desist orders prohibiting domestic respondents Toshiba America, Inc.
and its subsidiaries, Toshiba America Electronic Components, Inc. and
Toshiba America Information Systems, Inc. from conducting any of the
following activities in the United States: Importing, selling,
marketing, advertising, distributing, transferring
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(except for exportation), and soliciting U.S. agents or distributors
for, non-volatile memory device and products containing same covered by
claim 6 of the '602 patent.
The Commission has also determined that the public interest factors
enumerated in section 337(d) and (f) (19 U.S.C. 1337(d) and (f)) do not
preclude issuance of the limited exclusion order or cease and desist
orders. Finally, the Commission has determined that a bond in the
amount of 100 percent of entered value for Toshiba flash memory
devices, solid-state drives, USB flash drives, and microcontroller
units; and a bond in the amount of six percent of entered value for
Toshiba personal computers, multi-function printers, and air
conditioners is required to permit temporary importation during the
period of Presidential review (19 U.S.C. 1337(j)) of products that are
subject to the remedial orders. The Commission's orders and opinion
were delivered to the President and to 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: October 9, 2018
Katherine Hiner,
Supervisory Attorney.
[FR Doc. 2018-22325 Filed 10-12-18; 8:45 am]
BILLING CODE 7020-02-P