• ITC Decides to Review-In-Part Initial Determination in Certain Consumer Electronics with Display and Processing Capabilities (337-TA-884)
  • November 22, 2014 | Authors: Katherine Cappaert; Eric W. Schweibenz
  • Law Firm: Oblon, McClelland, Maier & Neustadt, L.L.P. - Alexandria Office
  • On October 30, 2014, the International Trade Commission ("the Commission") issued a notice determining to review-in-part ALJ E. James Gildea's final Initial Determination ("ID") finding a violation of Section 337 in Certain Consumer Electronics With Display and Processing Capabilities (Inv. No. 337-TA-884).

    By way of background, this investigation was instituted on June 25, 2013 based on a complaint filed by Complainant Graphics Properties Holdings, Inc. ("GPH") alleging violation of Section 337 by Respondents Panasonic Corporation and Panasonic Corporation of North America (collectively, "Panasonic"), Toshiba Corporation and Toshiba America Information Systems (collectively, "Toshiba"), Toshiba America, Inc. ("Toshiba America"), Vizio, Inc. ("Vizio"), AmTran Logistics, Inc. ("AmTran"), and ZTE Corporation, ZTE (USA) Inc., and ZTE Solutions (collectively, "ZTE") in the importation into the U.S., sale of importation into the U.S., or sale after importation into the U.S. of certain consumer electronics with display and processing capabilities that infringe one or more claims of U.S. Patent Nos. 6,650,327 (the '327 patent), 8,144,158 (the '158 patent), and 5,717,881 (the '881 patent) (collectively, "the Asserted Patents"). The Commission later terminated the investigation with respect to Panasonic, Vizio, AmTran, and ZTE. Additionally, the '881 patent was terminated from the investigation after ALJ Gildea granted respondents' motion for summary determination that claim 1 of the '881 patent was invalid for indefiniteness.

    According to the notice, ALJ Gildea found a violation of Section 337 with respect to Toshiba. Specifically, ALJ Gildea found that (1) all of the accused products literally infringed the asserted claims of the '327 and '158 patent, (2) none of the asserted claims of the '327 patent or the '158 patent were invalid, and (3) Respondents did not establish that any of the asserted patents were unenforceable due to estoppel based on GPH's obligation to license the asserted patents under reasonable and nondiscriminatory ("RAND") terms or that license exhaustion applied with respect to any of the patents. ALJ Gildea found, however, that there was no violation of Section 337 as to respondent Toshiba America with respect to the asserted claims of the '327 and '158 patents because GPH failed to satisfy the importation of sale requirement of Section 337 establishing subject matter jurisdiction as to Toshiba America.

    According to the October 30, 2014 notice, Toshiba filed a petition for review. In particular, Toshiba requested a review of the final ID's findings concerning claim construction, invalidity, infringement, the economic prong of domestic industry, Toshiba's license defense, and Toshiba's RAND defense. GPH also filed a contingent petition for review concerning the ALJ's lack of findings regarding whether GPH additionally satisfies the economic prong of the domestic industry requirement based on the domestic activities of its licensees.

    The Commission determined to review (1) ALJ Gildea's construction of the claim limitations "frame buffer," "scan converter," and "scan convert data;" (2) the finding that claim 1 of the '158 patent is not invalid under 35 U.S.C. ยง 112 for failure to satisfy the written description requirement; (3) the finding that the reference Martin, P. et al., "Turbo VRX: A High-Performance Graphics Workstation Architecture" ("the Martin publication") does not anticipate claim 2 of the '327 patent and claims 1, 4, 7, and 10 of the 'l 58 patent; (4) that Toshiba failed to show by clear and convincing evidence that the asserted claims of the '327 and '158 patents are obvious in view of Martin, U.S. Patent No. 5,977,983 to Einkauf ("Einkauf"), and AT&T's Pixel Machine ("Pixel Machine"), alone or in combination with other asserted prior art; (5) the finding of infringement with respect to all of the accused graphics processing units, including ones that were not in Toshiba's petition for review; (6) the finding that GPH has satisfied the economic prong of the domestic industry requirement; (7) the finding that GPH satisfied the technical prong of the domestic industry requirement; (8) the finding that the defense of license exhaustion does not apply to certain of Toshiba's accused products due to a license agreement concerning Toshiba's display panel manufacturers; and (9) the finding that the '327 patent is not subject to RAND encumbrances.

    Accordingly, the parties were requested to brief their positions on the issues under review, particularly in response to the fifteen specific questions posed by the Commission. The first eight questions are directed to claim construction and prior art references, the ninth through eleventh to the domestic industry requirement, and the twelfth through fifteenth to licensing and membership agreements.

    Finally, the Commission asked the parties to address the amount of bond that should be imposed if a remedy is ordered. Specifically, the Commission requested written submissions addressing the effect that an exclusion order and/or cease and desist orders would have on (1) the public health and welfare, (2) competitive conditions in the U.S. economy, (3) U.S. production of articles that are like or directly competitive with those that are subject to investigation, and (4) U.S. consumers.