On August 9, 2012, the International Trade Commission (“the Commission”) issued a notice of its decision to review in part an enforcement initial determination (“EID”) finding a violation of the August 13, 2010 consent order in Certain DC-DC Controllers and Products Containing Same (Inv. No. 337-TA-698).

By way of background, the Commission instituted this enforcement proceeding on September 6, 2011 based on an enforcement complaint filed by Richtek Technology Corp. and Richtek USA, Inc. (collectively, “Richtek”) alleging violations of the August 13, 2010 consent orders in the underlying investigation by respondents uPI Semiconductor Corp. (“uPI”) and Sapphire Technology Limited (“Sapphire”) through the continued importing, offering for sale, and selling for importation of DC-DC controllers that infringe one or more of U.S. Patent Nos. 7,315,190; 6,414,470 and 7,132,717.  See our July 25, 2011 and September 5, 2011 posts for more details.  On March 20, 2012, ALJ David P. Shaw issued an initial determination granting a joint motion to terminate the enforcement proceeding as to Sapphire based on a settlement agreement.  See our March 22, 2012 post for more details.  The ALJ issued his EID on June 8, 2012 finding a violation of the August 13, 2010 consent order by uPI in connection with certain infringing uPI DC-DC controllers and downstream products containing accused uPI controllers that had been imported and/or sold in the U.S. without Richtek’s consent.  The recommendations in ALJ Shaw’s EID included modifying the consent order to clarify that it applies (and has always applied) to all uPI affiliates, and imposing a civil penalty of $750,000 against uPI.  On June 25, 2012, uPI and Richtek each filed a petition for review of the EID.

After reviewing the parties’ filings, the Commission determined to review the EID in part.  Specifically, the Commission determined to review the ALJ’s finding of infringement of the ‘470 patent, infringement of the ‘190 patent, and that uPI violated the August 13, 2010 consent order.  The Commission requested that the parties’ submit briefing limited to the following issues:  (1) the test for determining whether uPI violated the consent order prohibition against “knowingly aid[ing], abet[ting], encourag[ing], participat[ing] in, or induc[ing]” importation, sale, sale for importation, or use after importation of infringing controllers; (2) whether there is a factual basis in the evidentiary record proving that a violation of the foregoing consent order prohibition occurred in light of the evidence of uPI’s efforts to comply with the consent order; (3) whether there is a factual basis in the evidentiary record proving that uPI violated the consent order prohibition against “import[ing] into the United States, sell[ing] for importation into the United States, or sell[ing] or offer[ing] for sale in the United States after importation” any controllers or products containing same that infringe the asserted patent claims or contain Richtek’s asserted trade secrets; and (4) the specific date(s) on which an importation or sale in the U.S. occurred for each line item of the table included in the EID.  The Commission also requested written submissions addressing the form of remedy, if any, that should be ordered, particularly how revocation of the consent order and issuance of an exclusion order would effect the public health and welfare, competitive conditions in the U.S. economy, domestic production of articles that are like or directly competitive with those at issue in the investigation, and U.S. consumers.