• ALJ Luckern Grants Summary Determination On Economic Prong Of Domestic Industry Requirement In Certain Biometric Scanning Devices (337-TA-720)
  • May 11, 2011 | Authors: John F. Presper; Eric W. Schweibenz
  • Law Firm: Oblon, Spivak, McClelland, Maier & Neustadt, L.L.P. - Alexandria Office
  • On May 3, 2011, Chief ALJ Paul J. Luckern issued the public version of Order No. 24 (dated February 16, 2011) finding that Complainant Cross Match Technologies, Inc. (“Cross Match”) satisfied the economic prong of the domestic industry requirement in Certain Biometric Scanning Devices,Components Thereof, Associated Software, and Products Containing the Same (Inv. No. 337-TA-720).

    According to the Order, Cross Match moved for summary determination that it satisfied the economic prong on the grounds that its ID500 device practices U.S. Patent No. 5,900,933, and that its Guardian and SEEK devices separately practice U.S. Patent Nos. 7,203,344 and 7,277,562.  Respondents Supreme, Inc. and Mentalix, Inc. (collectively, “Respondents”) opposed the motion, arguing that because the Guardian and SEEK are hardware devices they cannot establish a domestic industry with respect to Cross Match’s software-related patents.  Respondents also argued that the declaration and testimony of Cross Match’s witness were not credible because the witness allegedly did not know the answers to multiple questions and lacked personal knowledge of the facts in his declaration, which also contained a “false statement.”  The Commission Investigative Staff supported the motion.

    ALJ Luckern rejected Respondents’ first argument, finding that it is the combination of the hardware and software that is the protected article under Section 337, and therefore it is appropriate to consider investments made in the SEEK and Guardian hardware in determining whether the economic prong has been satisfied.  The ALJ also was not persuaded by Respondents’ allegations regarding Cross Match’s witness, noting that (1) Cross Match provided documentary support for its manufacturing processes and output, which Respondents never raised with the witness; (2) Respondents misrepresented the purported “false statement” in the declaration with respect to where the domestic industry products were manufactured, which was in fact confirmed by the witness’s deposition testimony; (3) Respondents likewise misrepresented the witness’s accounting of the number of employees who worked on the assembly of the domestic industry products, which was confirmed by Cross Match’s documentary evidence; and (4) the witness’s alleged “lack of personal knowledge” of the statements in his declaration was based on a statement relating to the technical prong of domestic industry that the witness included in his declaration merely to frame the scope of the products discussed therein as appropriately considered for the economic prong analysis.

    Thus, after reviewing the parties’ submissions, including Cross Match’s facilities and payroll expenses related to the production facility in Florida where its domestic industry products are manufactured and assembled, ALJ Luckern granted the motion, finding that Cross Match made significant investment in plant and equipment, as well as significant employment of labor and capital, with respect to the patents at issue.