On June 4, 2013, the International Trade Commission (the “Commission”) issued a notice in Certain Electronic Devices, Including Wireless Communication Devices, Portable Music and Data Processing Devices, and Tablet Computers (Inv. No. 337-TA-794).  In the notice, the Commission determined that Respondent Apple Inc. (“Apple”) had violated Section 337 in connection with the importation and sale of wireless communication devices, portable music and data processing devices, and tablet computers that infringe certain claims of U.S. Patent No. 7,706,348 (the ‘348 patent).  The Commission issued a limited exclusion order and a cease and desist order directed at Apple, and terminated the investigation.

By way of background, the Complainants in this investigation are Samsung Electronics Co., Ltd. and Samsung Telecommunications America, LLC (collectively, “Samsung”).  On September 14, 2012, ALJ E. James Gildea issued an Initial Determination (“ID”) finding no violation of Section 337 with respect to the ‘348 patent or U.S. Patent Nos. 7,486,644 (the ‘644 patent), 7,450,114 (the ‘114 patent), and 6,771,980 (the ‘980 patent).  Specifically, ALJ Gildea found that the ‘348, ‘644, and ‘980 patents were valid but not infringed and that the ‘114 patent was both invalid and not infringed.   The ALJ also found that the economic prong of the domestic industry requirement was satisfied with respect to each of the patents, but that the technical prong was not satisfied for any of the patents.

On November 19, 2012, the Commission determined to review the ID in its entirety and issued a notice requesting written submissions from the parties and the public on certain patent issues, the assertion of FRAND-related patents at the Commission, and on the issues of remedy, public interest and bonding.  See our November 20, 2012 post for more details.

On March 13, 2013, the Commission issued another notice requesting written submissions from the parties and the public on various additional topics, including some FRAND-related topics.  See our March 21, 2013 post for more details.  According to the June 4 notice, the Commission received written submissions from Samsung, Apple, and the Commission Investigative Staff addressing all of the Commission’s questions.  With respect to the FRAND-related topics, the Commission received additional responses from the Association for Competitive Technology, Business Software Alliance, Cisco Systems, Inc., Hewlett Packard Company, Innovation Alliance, Micron Technology, Inc., and Retail Industry Leaders Association.

According to the June 4 notice, after examining the record of the investigation, including the ID and the submissions from the parties and the public, the Commission determined that Apple had violated Section 337 based on the importation and sale of articles that infringe claims 75-76 and 82-84 of the ‘348 patent.  In particular, the Commission determined to modify the ALJ’s construction of certain terms in the asserted claims of the ‘348 patent, and to find that, under the modified constructions, Apple’s iPhone 4 (AT&T models), iPhone 3GS (AT&T models), iPhone 3 (AT&T models), iPad 3G (AT&T models), and iPad 2 3G (AT&T models) infringe the asserted claims of the ‘348 patent.  The Commission further determined that the properly construed claims had not been proven by Apple to be invalid and that Samsung had proven that a domestic industry exists with respect to the ‘348 patent.  The Commission also determined that Apple had failed to prove an affirmative defense based on Samsung’s FRAND declarations.  However, the Commission determined that Samsung had not proven a violation of Section 337 with respect to the ‘644, ‘980, and ‘114 patents.

The notice further states that the Commission determined that the appropriate remedy is a limited exclusion order and a cease and desist order prohibiting Apple from importing into the U.S. or selling or distributing within the U.S. wireless communication devices, portable music and data processing devices, and tablet computers that infringe claims 75-76 and 82-84 of the ‘348 patent.  The Commission further determined that the public interest factors enumerated in Section 337(d)(1) and (f)(1) do not preclude issuance of the limited exclusion order and cease and desist order.  The Commission also determined that Samsung’s FRAND declarations do not preclude those remedies.  Finally, the Commission determined that a bond in the amount of zero percent of the entered value is required to permit temporary importation during the Presidential review period.

According to the notice, Commissioner Pinkert dissented on public interest grounds from the determination to issue an exclusion order and cease and desist order.