[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

[[Page 51981]]

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

[[Page 51982]]

(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