On May 9, 2014, ALJ Gildea issued the public version of Order No. 78 (dated April 18, 2014)  denying Complainant’s first motion for summary determination as to domestic industry and making certain undisputed fact findings pursuant to Commission Rule 210.18(e) in Certain Consumer Electronics With Display and Processing Capabilities (337-TA-884).

By way of background, the investigation is based on a complaint filed by Graphics Properties Holding Inc. (“Complainant”) alleging a violation of Section 337 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; 8,144,158; and 5,717,881 by numerous Respondents.  See our May 21, 2013 and June 24, 2013 posts for more details on the complaint and Notice of Investigation, respectively.

According to the Order, Complainant filed a motion seeking summary determination that the domestic industry requirement was satisfied based on Complainant’s licensing activities.  Complainant relied on its investments in its licensing program and litigation-related expenditures to support its motion.  Complainant also noted that the scope of its motion was not limited to the economic prong of the domestic industry requirement.

Respondents Toshiba Corporation, Toshiba America, Inc., Toshiba American Information Systems, Inc., and Vizio, Inc. (collectively, the “Respondents”) opposed the motion, arguing that, in light of two recent Federal Circuit decisions, the Commission is considering whether asserting a licensing-based domestic industry must satisfy the technical prong.  Respondents also identified material facts in dispute which they argued prevented a grant of summary determination, and noted that Complainant had failed to produce certain discovery regarding its alleged litigation expenses.  Respondents also sought an extension of time to respond to the motion, which ALJ Gildea denied, and filed a motion to compel the discovery at issue, which they later withdrew. 

Respondents later supplemented their opposition pursuant to Order Nos. 36 and 47, arguing that the discovery produced by Complainant bolstered their argument that Complainant’s alleged litigation expenses are not substantial and that certain invoices created disputed issues of material fact precluding summary determination.  Respondents also filed a notice of supplemental authority in support of their opposition stating that the Commission had found that Complainant must demonstrate the existence of an article protected by the asserted patent in every investigation.  Complainant sought leave to file a reply in support of its motion, which was granted in part to the extent that Complainant discussed the change in the law in Certain ComputersSee our January 15, 2014 post for more details.  Additionally, since the motion was filed, Vizio had been terminated by initial determination and any issues related to Vizio with respect to the motion for summary determination were determined to be moot and not considered.  Further, the ‘881 patent which was a subject of the investigation was found to be indefinite in Order No. 53 and portions of the motion pertaining to the ‘881 patent were not considered. 

ALJ Gildea noted that Complainant was relying on subsection (C) of 19 U.S.C. §1337(a)(3) in order to demonstrate the domestic industry requirement with respect to substantial investments in licensing, however, did not appear to acknowledge in its original motion that such a showing, if made, would apply solely to the economic prong of the domestic industry requirement after recent changes in Federal Circuit law.  ALJ Gildea stated that, with respect to subsection (C), the new cases appear to require proof of articles protected by the patent, and that, if Complainant sought to meet the domestic industry requirement in its entirety, this portion of the motion must be denied because Complainant had not met its new burden with respect to the technical prong of the domestic industry requirement.   

Because Complainant requested in its reply an alternative form of summary determination with respect to only the economic prong, ALJ Gildea assessed whether Complainant’s licensing expenditures and litigation costs met the Commission’s standards.  ALJ Gildea found that, based on Complainant’s alleged licensing activities, disputed issues of material fact prevented a summary determination with respect to the economic prong of the domestic industry requirement.  ALJ Gildea noted that both Respondents and the Commission Investigative Staff had identified material issues of disputed fact with respect to the degree that certain salaries and payments may be attributed to Complainant’s licensing program, and that there were also disputed issues of material fact with respect to the scope and significance of Complainant’s alleged litigation-related activities.  Accordingly ALJ Gildea denied the motion for summary determination.  Under Commission Rule 210.18(e), ALJ Gildea also identified numerous facts in this investigation that are undisputed and established.