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ITC Issues Public Version of Opinion In Certain Optoelectronic Devices For Fiber Optic Communications (337-TA-860)




by:
Eric W. Schweibenz
Thomas C. Yebernetsky
Oblon, Spivak, McClelland, Maier & Neustadt, L.L.P. - Alexandria Office

 
May 26, 2014

Previously published on May 15, 2014

Further to our April 23, 2014 post, on May 9, 2014, the International Trade Commission (the “Commission”) issued the public version of its opinion finding a violation of Section 337 by Respondents IPtronics A/S; IPtronics, Inc.; FCI SA; FCI Deutschland GmdH; FCI USA, LLC; Mellanox Technologies, Ltd.; and Mellanox Technologies, Inc. (collectively, the “Respondents”) in Certain Optoelectronic Devices for Fiber Optic Communications, Components Thereof, and Products Containing the Same (Inv. No. 337-TA-860).

By way of background, this investigation is based on a complaint filed by Avago Technologies Fiber IP (Singapore) Pte. Ltd.; Avago Technologies General IP (Singapore) Pte. Ltd.; and Avago Technologies U.S. Inc. (collectively, “Avago”) alleging violation of Section 337 in the importation and sale of certain optoelectronic devices for fiber optic communications, components thereof, and products containing the same that infringe one or more claims of U.S. Patent Nos. 6,947,456 (the ‘456 patent) and 5,596,595 (the ‘595 patent). See our September 26, 2012 and October 30, 2012 posts for more details about the complaint and Notice of Investigation, respectively. On December 13, 2013, ALJ Essex issued a final ID determining that a violation of section 337 had occurred by reason of infringement of certain claims of the ‘595 patent and recommended issuance of a limited exclusion order directed to Respondents and cease and desist orders against respondents FCI USA, LLC and Mellanox Technologies, Inc. See our January 22, 2014 post for more details on the ID.

In the Opinion, the Commission determined to (a) affirm the ALJ’s claim construction of the ‘595 patent’s “current-spreading layer” limitation and infringement and domestic industry determinations relating to that limitation with certain modifications, (b) affirm the ALJ’s finding that Avago met the economic prong with respect to the ‘595 patent under U.S.C. 1337(a)(3)(C), (c) affirm the ALJ’s infringement and domestic industry (technical prong) determinations as to the ‘456 patent with certain modifications in rationale, and (d) affirm the ALJ’s finding that Avago met the economic prong with respect to the ‘456 patent under U.S.C. 1337(a)(3)(C).

The ‘595 Patent

According to the Respondents and the Commission Investigative Staff (“OUII”), the ALJ applied a construction of the “current-spreading layer” limitation in the infringement determination that was different from how the term was construed during claim construction. The Commission disagreed with Respondents and OUII, finding that the ALJ properly applied the claim construction of “current-spreading layer” in his infringement determination. Additionally, the Commission held that the record supports the ALJ’s determination of infringement and domestic industry (technical prong). Specifically, the Commission determined that the testimony of Dr. Deppe supported the ALJ’s infringement determination. The Commission struck certain language in the ID because it determined that the language was unsupported by the record and unnecessary for the ALJ’s infringement determination.

Respondents further argued that the ALJ erred in finding that Avago met the economic prong of the domestic industry requirement under 337(a)(3)(B) and 337(a)(3)(C). Respondents argued that research and investments are cognizable solely under 337(a)(3)(C) and not 337(a)(3)(A) or 337(a)(3)(B). Additionally, Respondents asserted that ALJ’s economic prong determination was erroneous becuase Avago’s expenditures were not devoted to products that practiced the ‘595 patent, the expenditures included foreign personnel, and the expenditures were not substantial. The Commission rejected Respondents arguments, finding that the evidence of record supported the ALJ’s determination. Accordingly, the Commission affirmed the ALJ’s determination that Avago satisfied the domestic industry requirement under 337(a)(3)(C). Based on this determination, the Commission held that it was unnecessary to reach the merits of whether Avago satisfied the domestic industry requirement under 337(a)(3)(A) or 337(a)(3)(B).

The ‘456 Patent

According to Avago, the ALJ improperly construed the “parameter for affecting the negative peak portion of the drive waveform” claim limitation and, therefore, reached erroneous determinations on infringement and the technical prong of the domestic industry requirement. Specifically, Avago argued that the ALJ improperly included an intent requirement into the claim term, thereby requiring “proof that the value of the parameter was specified by the user with the intent of affecting the negative peak portion.” The Commission determined that the ALJ properly construed the claim limitation at issue to mean “a parameter with the purpose of digitally affecting the feature of the drive waveform mentioned in the claim.” Accordingly, the Commission affirmed the ALJ’s infringement and domestic industry analysis. However, the Commission determined that the ALJ’s use of the word “intent” in the ID was unnecessary and confusing and, therefore, modified the ID to remove references to “intent.”

Avago further challenged the ALJ’s determination that it did not satisfy the economic prong of the domestic industry requirement under 337(a)(3)(A). For the same reasons as discussed in reference to the ‘595 patent, the Commission held that the ALJ properly determined that Avago met the domestic industry requirement under 337(a)(3)(C). Accordingly, it was unnecessary for the Commission to reach the merits as to 337(a)(3)(A) or 337(a)(3)(B).

Remedy, Public Interest, and Bond

Regarding the limited exclusion order recommended by the ALJ, Respondents argued that any remedial order should exempt warranty and replacement parts. Additionally, the Mellanox respondents asserted that any exclusion order imposed on the Respondents should not apply to them based on public interest considerations. The Commission denied the Respondents arguments and imposed a limited exclusion order on Respondents. Furthermore, the Commission determined that issuing this remedy would not be contrary to the public interest.

As to the cease and desists orders recommended by the ALJ, the Commission affirmed the ALJ’s determination that FCI USA, LLC and Mellanox Technologies, Inc. maintain commercially significant amounts of the accused products in inventory in the United States. Accordingly, the Commission issued cease and desists orders to both respondents. Furthermore, the Commission determined that issuing this remedy would not be contrary to the public interest.

With respect to bond, the Commission determined “that the bond during the Presidential review period should be set in the amount of three percent of the entered value of the products covered by the remedial orders.”



 

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
 

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Author
 
Eric W. Schweibenz
Thomas C. Yebernetsky
Practice Area
 
Intellectual Property
 
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