• President Obama Fails to Veto ITC Final Determination of Violation in Certain Electronic Digital Media Devices (337-TA-796)
  • October 17, 2013 | Authors: John F. Presper; Eric W. Schweibenz
  • Law Firm: Oblon, Spivak, McClelland, Maier & Neustadt, L.L.P. - Alexandria Office
  • On October 8, 2013, the U.S. Trade Representative, Ambassador Michael B.G. Froman, issued a statement confirming that President Barack Obama would not disapprove of the International Trade Commission’s (the “Commission”) final determination to issue an exclusion order and cease and desist order in Certain Electronic Digital Media Devices and Components Thereof (Inv. No. 337-TA-796).

    By way of background, the Complainant in this investi is Apple Inc. (“Apple”). On October 24, 2012, ALJ Thomas B. Pender issued an Initial Determination (“ID”) which found that Respondents Samsung Electronics Co., Ltd. and Samsung Telecommunications America, LLC (collectively, “Samsung”) violated Section 337 by infringement of certain valid claims of U.S. Patent Nos. D618,678; 7,479,949 (the ‘949 patent); RE 41,922 (the ‘922 patent); and 7,912,501 (the ‘501 patent). On January 23, 2013, the Commission issued a notice determining to review the ID in its entirety, and also remanded the investigation to ALJ Pender to consider certain issues related to the ‘922 patent and the ‘501 patent.

    On March 26, 2013, ALJ Pender issued the subject Remand ID finding that claims 34 and 35 of the ‘922 patent are infringed by the text-selection feature of Samsung’s accused products, and that claim 3 of the ‘501 patent is not infringed. Both Apple and Samsung petitioned for review of the Remand ID. On May 28, 2013, the Commission issued a notice determining to review the Remand ID in its entirety.

    On August 9, 2013, the Commission issued a notice finding a violation of Section 337 and issuing a limited exclusion order and cease and desist order against Samsung. Specifically, the Commission found that certain Samsung smartphones and tablet computers infringe claims 1, 4-6, 10 and 17-20 of the ‘949 patent and claims 1-4 and 8 of the ‘501 patent, that the asserted claims of the ‘949 and ‘501 patents have not been proven to be invalid, and that a domestic industry exists relating to articles protected by the ‘949 and ‘501 patents.

    Ambassador Froman’s October 8, 2013 notice provides, in pertinent part:

    This Administration remains committed to advancing innovation and economic progress in the United States and globally. Consistent with that policy, ensuring adequate and effective protection of intellectual property rights, including enforcement of such rights at the U.S. border through exclusion orders under section 337, is an important national interest. At the same time, an exclusion order’s impact on competitive conditions in the Unites States and U.S. consumers are considerations relevant to my policy review of USITC determinations under section 337.

    *****

    After carefully weighing policy considerations, including the impact on consumers and competition, advice from agencies, and information from interested parties, I have decided to allow the Commission’s determination in Certain Electronic Digital Media Devices and Components Thereof, Investigation No. 337-TA-796, to become final. In so doing, I am continuing the practice of successive Administrations of exercising section 337 policy review authority with restraint.

    During the course of the USITC’s investigation and during the policy review, Samsung raised concerns about the scope of the USITC’s determination and possible issues that could arise in connection with U.S. Customs and Border Protection (CBP) interpretation and enforcement of the resulting exclusion order. More generally, Samsung and other members of the patent community have expressed concerns regarding the clarity of the USITC’s exclusion orders and, in particular, regarding CBP procedures for interpretation and enforcement of those orders.

    The Office of the Intellectual Property Enforcement Coordinator (IPEC) is conducting an interagency review aimed at strengthening the procedures and practices used during the enforcement of USITC exclusion orders. USTR, the Department of Justice, the Department of Homeland Security, and several other agencies are working with IPEC in this review. I look forward to receiving recommendations to address these issues on a systemic basis.

    With regard to the exclusion order issued in this investigation, I note that the order includes a list of devices that the USITC determined did not infringe the two patents at issue. The order expressly states that these devices and any other Samsung electronic media devices incorporating the approved design-around technologies are not covered. Thus, I do not believe that concerns with regard to enforcement related to the scope of the order, in this case, provide a policy basis for disapproving it. If questions should arise about the scope of the exclusion order, I would urge close coordination between CBP and the USITC in addressing such enforcement issues.

    As we noted in our August 5, 2013 post, President Obama recently vetoed the Commission’s determination to issue an exclusion order and cease and desist order directed at Apple for violating Section 337 in connection with the importation and sale of accused products that infringe certain claims of Samsung’s U.S. Patent No. 7,706,348 in Certain Electronic Devices, Including Wireless Communication Devices, Portable Music and Data Processing Devices, and Tablet Computers (Inv. No. 337-TA-794).