On August 17, 2012, ALJ E. James Gildea issued the public versions of Order No. 61 (dated July 26, 2012), Order No. 65 (dated July 31, 2012), Order No. 66 (dated August 2, 2012) and Order No. 68 (dated August 2, 2012) in Certain Portable Electronic Devices and Related Software (Inv. No. 337-TA-797).

By way of background, the investigation is based on a July 8, 2011 complaint filed by Apple Inc. alleging violation of Section 337 in the importation into the U.S. and sale of certain portable electronic devices and related software that infringe certain claims of U.S. Patent Nos. 7,844,915; 7,469,381; 7,084,859; RE 42,738 and 7,920,129.  The respondents in this investigation are HTC Corp., HTC America, Inc., and Exedea, Inc. (collectively, “HTC”).  See our July 11, 2011 post for more details. 

According to Order No. 61, HTC sought to preclude Apple from introducing evidence or argument on induced infringement of the ‘859, ‘381 and ‘915 patents because Apple’s contentions relating to certain method claims are insufficient as a matter of law.  Specifically, HTC argued that (1) Apple intends to present evidence that HTC has used its products in the U.S., and that such evidence should be excluded because HTC’s use of its own devices is insufficient to support a finding of direct infringement and may not form the basis of a violation of Section 337; (2) Apple should be precluded from introducing evidence regarding instructional and marketing materials HTC provides to users demonstrating how its devices operate because such evidence cannot establish the requisite intent for induced infringement; and (3) Apple should be precluded from presenting evidence that HTC copied Apple’s inventions to show HTC’s intent to induce infringement because such evidence is irrelevant in light of HTC’s good faith defenses.  In opposition, Apple argued that HTC simply made a motion for summary determination “masquerading” as a motion in limine which ignores substantial evidence regarding direct infringement and intent to induce infringement that is highly relevant and which should be admitted to establish a complete record.  The Commission Investigative Staff (“OUII”) also opposed the motion, arguing that the evidence HTC would exclude is potentially circumstantial evidence of intent which may be related to other substantive issues, and that the ALJ can determine the appropriate weight such evidence should be given.  ALJ Gildea agreed with Apple and the OUII that HTC improperly sought summary determination on the issue of induced infringement through the motion in limine, finding that HTC’s allegations regarding the sufficiency of Apple’s evidence are more appropriately directed to the weight such evidence should be afforded and not to its admissibility.  Thus, the ALJ denied the motion.

According to Order No. 65, HTC sought to preclude Apple from presenting evidence and arguments first introduced in Apple’s supplemental expert reports which HTC claimed were untimely and impermissible under Ground Rule 5.  According to HTC, the parties agreed to the mutual exchange of supplemental expert reports limited only to new issues raised by discovery from HTC and third-party Cypress after the close of fact discovery, but Apple’s supplemental reports advanced new theories which did not address new functionality in new products or otherwise address issues that could not have been addressed in its experts’ opening or rebuttal reports.  In particular, HTC argued that (1) Dr. Baudisch’s supplemental report was limited to HTC Android 4.0 products but improperly accused functionality that was present in earlier products and versions of the Android operating system; (2) Dr. Balakrishnan’s supplemental report improperly addressed functionality that was disclosed prior to the original expert reports and which should have been addressed in his opening report; and (3) Dr. Cairns’ supplemental report includes new opinions about the sense trace design in the accused products and not based on new evidence made available after his opening report.  Apple countered that supplementation on HTC’s most recently imported products running Android 4.0, HTC’s accused products running Windows, and technical discovery on certain touchscreen designs incorporated into HTC’s accused products was necessary because HTC withheld discovery on these topics and only agreed to provide the discovery after Apple filed (and subsequently withdrew) a motion to compel.  The OUII supported the motion in part, arguing that the reports are untimely to the extent they supplement opinions regarding pre-Android 4.0 products, and that whether Dr. Cairns’ supplemental report provides a different opinion than his original report can be explored during cross-examination.  ALJ Gildea granted the motion in part, finding that the parties did not provide sufficient basis to determine whether the supplemental reports ran afoul of the parties’ private agreement and declined to speculate on its scope, but stating that the opinions presented in the reports would be limited to the products listed therein, e.g., the Android 4.0 and Windows products.  The ALJ noted that to the extent HTC believes there are inconsistencies between the original and supplemental expert reports, it can explore them during cross-examination.

According to Order No. 66, HTC sought to preclude Apple from introducing evidence and arguments that prior art U.S. Patent No. 7,663,607 did not provide a disclosure sufficient to enable a person of ordinary skill in the art to practice the patent as used in the iPhone 4 because Apple had successfully argued that the ‘607 patent is valid and enabling in Certain Mobile Devices and Related Software (Inv. No. 337-TA-750).  Apple responded that HTC erroneously believes that the scope of the ‘607 patent’s claims as litigated in the previous investigation is the same as the scope of the ‘129 patent’s claims for purposes of anticipation in the current investigation, and that neither collateral estoppel nor judicial estoppel apply.  The OUII supported the motion in part, stating that Apple should be precluded from arguing that the ‘607 patent does not disclose drive traces that are widened based on the references to Apple’s expert testimony in the previous investigation as cited by HTC, but that it would not be inconsistent for Apple to argue that the ‘607 patent does not teach using widened drive traces for shielding purposes as taught by the ‘129 patent.  ALJ Gildea denied the motion, finding that the evidence cited by HTC and the OUII does not show that Apple took the position in the previous investigation that the ‘607 patent teaches wider drive traces in relation to narrower sense traces as in the asserted claims of the ‘129 patent, and further noting that whether the iPhone 4 practices the ‘607 patent is not identical to the issue of whether the ‘607 patent anticipates the ‘129 patent.

According to Order No. 68, HTC sought to preclude Apple from offering expert opinions and testimony regarding an obviousness combination for the ‘859 patent raised for the first time in its prehearing brief.  In particular, HTC argued that even though Apple’s expert, Dr. Baudisch, declined to address in his rebuttal report the combination of a thesis entitled “The Automatic Recognition of Gestures” with a multitouch capacitive screen as set forth in the report of HTC’s expert, Apple nevertheless addressed this combination in its prehearing brief.  Apple countered that its expert opined regarding the combination with at least the same level of detail as HTC’s expert, who failed to provide any rationale or explanation for the motivation to combine the references.  The OUII also opposed the motion, stating that there are multiple obviousness combinations involving the references at issue and since HTC’s expert blended the disclosures to opine that one informs the other, Apple’s expert should be allowed to testify about the weight a mix of those reference should be given and need not rebut any combination with any more specificity than HTC’s invalidity allegations provide.  ALJ Gildea agreed with Apple and the OUII and denied the motion, observing that the bulk of the parties’ arguments relate only to the level and extent that their experts explained their opinions regarding the combination of references, and that the parties may raise appropriate objections at the hearing should they or their experts stray outside the scope of the expert reports and deposition testimony.