• ITC Issues Opinion On Public Remedy, Public Interest, And Bonding In Certain Inkjet Ink Supplies (337-TA-730)
  • March 6, 2012 | Author: Alexander E. Gasser
  • Law Firm: Oblon, Spivak, McClelland, Maier & Neustadt, L.L.P. - Alexandria Office
  • Further to our December 1, 2011 post, on February 24, 2012, the International Trade Commission (the “Commission”) issued the public version of its opinion supporting the issuance of a general exclusion order (“GEO”) excluding all inkjet ink cartridges and components thereof that infringe two asserted patents, and for a bond in the amount of 100% of the entered value of goods imported during the Presidential review period in Certain Inkjet Ink Supplies and Components Thereof (Inv. No. 337-TA-730).

    By way of background, on August 3, 2011, ALJ Theodore R. Essex issued the Initial Determination (“ID”) granting Complainants Hewlett-Packard Company and Hewlett-Packard Development Company’s (collectively, “HP”) motion for summary determination that HP satisfied the domestic industry requirement and that defaulting Respondents Shanghai Angel Printer Supplies Co., Ltd., Zhuhai National Resources & Jingjie Imaging Products Co., Ltd., Tatrix International, and Ourway Image Co. Ltd. (collectively, the “Defaulting Respondents”) had violated Section 337 with respect to certain claims of U.S. Patent Nos. 6,959,985 (the ‘985 patent) and 7,104,630 (the ‘630 patent).  According to the opinion, non-defaulting Respondents Mipo International, Ltd., Mextec Group Inc., and Shenzhen Print Media Co., Ltd. were terminated from the investigation based on either a settlement agreement with HP or because HP withdrew its allegations against them.  ALJ Essex’s ID further recommended that the Commission issue a GEO and require a bond in the amount of 100% of the entered value of goods imported during the Presidential review period.

    According to the opinion, the Commission agreed with the ID’s recommendation that a GEO was an appropriate remedy.  The Commission first determined that a GEO was necessary to prevent circumvention of an exclusion order limited to products of named persons.  The Commission cited evidence, including that it is difficult to identify the sources of infringing products because of the ability to package infringing ink cartridges in unmarked, generic packaging, and “manufacturers can easily evade limited exclusion orders by establishing shell offshore companies with unclear ties to the original manufacturer.”  The Commission also determined that a GEO was appropriate due to patterns of violation of Section 337 with respect to the infringing articles, noting: “(1) the unauthorized importation of infringing articles by identified foreign manufacturers; (2) the unauthorized importation of infringing articles by unidentified foreign manufacturers; (3) the unauthorized sale after importation within the United States of infringing articles; and (4) the continuation of infringing activities despite HP’s ongoing enforcement efforts.”  The Commission further cited that “current industry publications show that well over 350 Chinese printing supply companies are currently in operation and have the industrial expertise and marketing connections to enter into the market and fill the void left by companies subject to a limited exclusion order.”

    The Commission also determined that with respect to public interest, the infringing products are not the sort of products that typically implicate public interest concerns, noting that historically, relief was denied on public interest grounds only on three occasions with regard to fuel-efficient automobiles, atomic research, and medical supplies.  The Commission further determined with respect to economic factors, that there is no evidence that HP and legitimate re-manufacturers could not meet U.S. demand for HP compatible ink cartridges, or that an exclusion order would be an undue burden on competitive conditions in the U.S.

    Accordingly, based on the above, the Commission determined to issue a GEO excluding all inkjet ink cartridges and components thereof that infringe claims 1-5, 7, 22-25, 27 and 28 of the ‘985 patent and claims 1-7, 11-12, 14, 26-30, 32, 34 and 35 of the ‘630 patent.

    Finally, with respect to bond, the Commission agreed with the ID’s recommendation for a bond set at 100 percent during the Presidential review period, citing the ID’s finding that due to Defaulting Respondents not participating in discovery, there was insufficient price information to set a bond based on price differential between the domestic product and the imported, infringing product.