UNITED STATES INTERNATIONAL TRADE COMMISSION Washington, D.C.

In the Matter of CERTAIN ELECTRONIC DIGITAL MEDIA DEVICES AND COMPONENTS THEREOF

Investigation No. 337-TA-796

RESPONSE OF THE OFFICE OF UNFAIR IMPORT INVESTIGATIONS TO THE

PRIVATE PARTIES’ PETITIONS FOR REVIEW OF THE INITIAL DETERMINATION ON VIOLATION

Lynn I. Levine, Director David O. Lloyd, Supervisory Attorney Reginald D. Lucas, Investigative Attorney OFFICE OF UNFAIR IMPORT INVESTIGATIONS U.S. International Trade Commission 500 E Street SW, Suite 401 Washington, DC 20436 (202) 205-2036 (Phone) (202) 205-2158 (Facsimile)

November 19, 2012

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TABLE OF CONTENTS

I.  INTRODUCTION ........................................................................................................ 1 

II.  STANDARD OF REVIEW .......................................................................................... 2 

III. OUII’S RESPONSE TO THE PRIVATE PARTIES’ PETITION FOR REVIEW ..... 2 

A.  Complainant’s Petition for Review of the ID Should Be Denied ......................... 2 

1. Alleged Errors In the Initial Determination Relating To the D’678 And D’757 Design Patents ................................................................................................... 2 

a.  The D’757 Patent ............................................................................ 2 

b. The D’678 Patent ............................................................................ 9 

2. Alleged Errors In the Initial Determination Relating to the ‘949 and ‘922 Patents ............................................................................................................. 10 

a.  Contributory Infringement ............................................................ 10 

b.  Infringement of Claims 31 and 32 of the ‘922 Patent ................... 12 

3. Alleged Errors In the Initial Determination Relating to the ‘501 and ‘697 Patents ............................................................................................................. 13 

a.  Alleged Error in Concluding the Galaxy Tab 7.0 and Galaxy S II do not Infringe Claims of the ‘501 Patent ..................................... 13 

b. Alleged Error in Concluding the Galaxy Tab/S Products’ Combination of Software Executing on an Application Processor Does Not Satisfy the claimed “Microphone Detection Circuitry” of the ‘501 Patent .............................................................................. 15 

c.  Alleged Error in Concluding That the Products Represented By the Transform SPH-M920 do not Infringe Claim 4 of the ‘501 patent is Erroneous .................................................................................. 16 

d. Alleged Error in Concluding That the SPH-M920 and the Accused Products Representing the SPH-M920 Do Not Infringe Claims 3 and 8 of the ‘501 patent ................................................................ 17 

e.  Alleged Error in Finding No Violation With Respect to the ‘697 Patent............................................................................................. 18 

4. Alleged Error In Adjudication Relating To the “Design Around” Products .. 20 

B.  Respondents’ Petition for Review of the ID Should Be Denied ......................... 22 

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1. Alleged Errors In the Initial Determination Relating To the D’678 And D’757 Patents ............................................................................................................. 22 

a.  Alleged Error In the Initial Determination Regarding the Legal Standard for Design Patent Infringement ..................................... 22 

b. Alleged Errors In Construing the D’678 Patent ............................ 24 

c.  Alleged Errors In “Factor[ing] Out” Functional Elements of the D’678 Design ................................................................................ 25 

d. Alleged Errors In Concluding That the Relevant Accused Products Do Not Infringe the D’678 Patent ................................................. 26 

e.  Alleged Errors In Concluding That the D’678 Domestic Industry Products Practice the D’678 Patent............................................... 26 

f.  Alleged Errors In Concluding That the D’678 Patent is Not Invalid as Obvious In Light of the Prior Art ............................................. 27 

g. Alleged Errors In Finding That The D’757 Domestic Industry Products Practice the D’757 Patent............................................... 29 

h. Alleged Errors In Not Finding That the D’757 Patent Is Invalid as Obvious In Light of the Prior Art ................................................. 29 

2. Alleged “Prejudicial Procedural Errors” ......................................................... 30 

3. Alleged Errors In the Initial Determination Relating to the ‘922 Patent ........ 31 

a.  Alleged Errors In Finding That Samsung Induced Infringement of the ‘922 Patent By Relying Only on Circumstantial Evidence as Proof of Direct Infringement ........................................................ 31 

b. Alleged Errors In the Standard for Intent to Induce Infringement 32 

c.  Alleged Errors In Reliance on Expert Testimony That Text Selection Uses a Translucent Overlay .......................................... 33 

d. Alleged Errors In Finding that Some References Do Not Render the ‘922 Patent Claims Invalid ...................................................... 33 

e.  Alleged Errors In the Legal Standard for Non-Obviousness ........ 34 

4. Alleged Errors In the Initial Determination Relating to the ‘949 Patent ........ 35 

a.  Alleged Error in Finding Literal Infringement Based On the Claimed “[B]ased on an Angle” Limitation .................................. 35 

b. Alleged Error Regarding the Claimed “Initial Movement” .......... 36 

c.  Alleged Error in Construing the Claim Term “Heuristics” .......... 37 

d. Alleged Error in the Standard for Induced Infringement of Claims 11-16 of the ‘949 patent ................................................................ 38 

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e.  Alleged Error in Concluding That the Apple Domestic Industry Products Practice the ‘949 Patent ................................................. 38 

f.  Alleged Errors In Finding that Certain References Do Not Render the ‘949 Patent Claims Invalid ...................................................... 39 

5. Alleged Errors In the Initial Determination Relating To the ‘501 Patent ....... 39 

a.  Alleged Errors Involved In Excluding Produced Third-Party Documents from Motorola and Texas Instruments ...................... 39 

b. Alleged Errors In the Initial Determination Relating To Finding That Some References Do Not Render the ‘501 Patent Claims Invalid ........................................................................................... 39 

6. Alleged Errors In the Initial Determination Relating To Finding that Some References Do Not Render the ‘697 Patent Claims Invalid ........................... 40 

7. Alleged Errors In the Initial Determination Relating To Domestic Industry (Economic Prong) ........................................................................................... 40 

IV. CONCLUSION .......................................................................................................... 43 

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TABLE OF AUTHORITIES

CASES 

Amini Innovation Corp. v. Anthony California, Inc., 439 F.3d 1365 (Fed. Cir. 2006) ................. 23

Apple Inc. v. Samsung Electronics Co., Ltd., LLC, 678 F.3d 1314 (Fed. Cir. 2012).................... 28

Arminak & Assocs. v. Saint-Gobain Calmar, 501 F.3d 1314 (Fed. Cir. 2007) .............................. 5

Catalina Lighting, Inc. v. Lamp Plus, Inc., 295 F.3d 1277 (Fed. Cir. 2002) .................................. 3

Certain Flash Memory Circuits and Products Containing Same, Inv. No. 337-TA-362,

Commission Opinion, USITC Pub. 3046 (July 1997) .............................................................. 21

Crocs, Inc. v. ITC, 598 F.3d 1294 (Fed. Cir. 2010) ........................................................................ 3

CVI/BETA Ventures, Inc. v. Tura LP, 112 F.3d 1146 (Fed. Cir. 1997) ........................................ 12

Edge Wireless LLC v. U.S. Cellular Corp., 312 F. Supp.2d 1325 (D. Or. 2003) ........................... 7

Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665 (Fed. Cir. 2008) ..................................... 5, 23

Gorham Co. v. White, 81 U.S. 511 (1872) ...................................................................................... 6

i4i Ltd. P’ship v. Microsoft Corp., 598 F.3d 831 (Fed. Cir. 2010) ............................................... 11

In re Alappat, 33 F.3d 1526 (Fed. Cir. 1994) ............................................................................... 15

KeyStone Retaining Wall Sys., Inc. v. Westrock, Inc., 997 F.2d 1444 (Fed. Cir. 1993) ............... 23

L.A. Gear, Inc. v. Thom McAn Show Company and Melville Corp., 988 F.2d 1117 (Fed. Cir.

1993) ......................................................................................................................................... 23

Lucent Technologies, Inc. v. Gateway, Inc., 580 F.3d 1301 (Fed. Cir. 2009) .............................. 10

Moen Inc. v. Foremost International Trading, Inc., 38 F. Supp. 2d 680 (E.D. IL. 1999) ............ 23

Multiform Desiccants, Inc. v. Medzam Ltd., 133 F.3d 1473 (Fed. Cir. 1988) .............................. 13

Overhead Door Corp. v. Chamberlain Group, Inc., 194 F.3d 1261 (Fed. Cir. 1999) .................. 15

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Toshiba Corp. v. Imation Corp. 681 F.3d 1358 (Fed. Cir. 2012) ................................................. 32

Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576 (Fed. Cir. 1996) ................................... 12, 14

RULES 

19 C.F.R. § 210.42 .......................................................................................................................... 3

19 C.F.R. § 210.43 .................................................................................................................... 2, 31

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I. INTRODUCTION

On July 5, 2011, Complainant Apple, Inc. (“Apple”) filed a complaint with the

Commission pursuant to Section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. §

1337. The complaint named Samsung Electronics Co., Ltd., Samsung Electronics America,

Inc., and Samsung Telecommunications America, LLC (collectively “Samsung”) as

Respondents and indicated that Complainant was asserting claims 1, 3-6, and 9-20 of the

‘949 patent; claims 29-35 of the ‘922 patent; claims 1-3, 11-16, and 21-27 of the ‘697 patent;

claims 1-4 and 8 of the ‘501 patent; and claims 1, 4, 7, 9, 11, 12, 15-17, 19, and 20 of the

‘533 patent, as well as the claim of the D’757 patent and the claim of the D’678 patent. The

Commission instituted this investigation to determine whether an industry in the United

States exists as required by Section 337(a)(2) and whether there has been a violation of

Section 337(a)(1)(B). See 76 Fed. Reg. 47610 (Aug. 5, 2011).

On November 21, 2011, the Administrative Law Judge (“ALJ”) held a Markman

hearing, and the Judge issued a Markman order on March 6, 2012. (See Order No. 16). On

April 17, 2012, the Judge issued an Initial Determination terminating the investigations as to

the asserted claims of the ‘533 patent, claims 1-3, 11, 12, 15, 16, and 21-27 of the ‘697

patent, and claim 3 of the ‘949 patent. (See Order No. 17; Commission Decision not to

Review, May 3, 2012).

A pre-hearing conference was held on May 30, 2012, and the evidentiary hearing was

held from May 31 – June 7, 2012. The Judge issued the Final Initial Determination on

October 24, 2012, finding that a violation of Section 337 has occurred with respect to the

D’678 patent; claims 1, 4-6, and 10-20 of the ‘949 patent; claims 29, 30, and 33-35 of the

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‘922 patent; and claims 1-4 and 8 of the ‘501 patent. No violation was found with respect to

the D’757 patent and claims 13 and 14 of the ‘697 patent. (ID at 1). Both Apple and

Samsung have petitioned for review of the ID.

II. STANDARD OF REVIEW

Pursuant to Commission Rule 210.43(b)(1), a party seeking review of an Initial

Determination must specify the issues upon which review of the Initial Determination is sought

and, with respect to each such issue, must specify one or more of the following grounds for

review:

(i) that a finding or conclusion of material fact is clearly erroneous; (ii) that a legal conclusion is erroneous, without governing precedent, rule or law, or

constitutes an abuse of discretion; or (iii) that the determination is one affecting Commission policy.

19 C.F.R. § 210.43(b)(1). A petition for review will be granted only “if it appears that an error

or abuse of the type described in paragraph (b)(1) of this section is present or if the petition raises

a policy matter connected with the initial determination, which the Commission thinks is

necessary or appropriate to address.” 19 C.F.R. § 210.43(d)(2).

III. OUII’S RESPONSE TO THE PRIVATE PARTIES’ PETITION FOR REVIEW

A. Complainant’s Petition for Review of the ID Should Be Denied

1. Alleged Errors In the Initial Determination Relating To the D’678 And D’757 Design Patents

a. The D’757 Patent

Apple alleges that the ALJ “committed legal error and adopted several clearly erroneous

findings of fact in analyzing infringement of the D’757 patent, leading the ALJ to make the

clearly erroneous finding that the accused Samsung products do not infringe the D’757 patent.”

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(Apple’s Petition at 12.) At the hearing, OUII argued that Respondents had infringed this

patent. However, infringement of a design patent is a question of fact. See, e.g., Catalina

Lighting, Inc. v. Lamp Plus, Inc., 295 F.3d 1277, 1287 (Fed. Cir. 2002). OUII submits that

Apple not shown that the ALJ’s factual findings concerning infringement of the D’757 patent are

clearly erroneous, as is required to warrant Commission review. See 19 C.F.R. § 210.42(b)(1)(i).

Moreover, as discussed below and in the context of Samsung’s petition, the ALJ applied the

correct standard of law for purposes of his infringement analysis. (See ID at 37-41). OUII

therefore submits that Complainant’s petition should be denied in this regard.

In particular, Apple first alleges that the ALJ incorrectly interpreted the omission of

oblique lines as excluding a transparent or reflective front surface from the claimed design and,

therefore, committed legal error and abused his discretion. (Apple Pet. at 14.) Apple further

alleges that the D’757 patent “is silent as to the transparency, reflectivity, or opacity of its front

surface.” (Id.) OUII submits that the Initial Determination did not err in this respect. As Apple

notes, the Manual of Patent Examining Procedure (“MPEP”) requires that “[o]blique line

shading must be used to show transparent, translucent and highly polished or reflective surfaces,

such as a mirror.” See MPEP, § 1503.02 (eighth edition, August 2001, latest revision, August

2012) (emphasis added). OUII submits, however, that contrary to Apple’s allegation that the

D’757 patent is silent as to the transparency or reflective front surface of its claimed design, the

patent indicates that its surface is not transparent or reflective in that it fails to define its surface

as such in accordance with the above-identified requirement of the MPEP.

In an attempt to support its allegation regarding the purported error in the ID, Apple relies

on Crocs, Inc. v. ITC, 598 F.3d 1294 (Fed. Cir. 2010). According to Apple, “[j]ust as the lack of

a color claim cannot render colorful products non-infringing, the lack of a reflectivity or

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transparency claim cannot render reflective products non-infringing.” (Apple Pet. at 14.) In

response, OUII submits that Apple’s analogy is inapposite. In stark contrast to color

specification in design patents, a claim of transparency or reflectivity must be indicated by a

specific marking in accordance with the MPEP; otherwise, the claimed design is interpreted as

not including transparency or reflectivity. In light of the foregoing, the Initial Determination

correctly interpreted the D’757 patent’s omission of oblique lines as excluding a transparent or

reflective surface.

Apple further argues that the ALJ “clearly erred” by failing to recognize that the visual

elements on the front face of the D’757 patent would be the most important in forming an

ordinary observer’s overall visual impression of the design.” (Apple pet. at 16.) According to

Apple, “the ALJ improperly concluded that each view must be given equal weight in the

infringement analysis.” (Id.) OUII submits that although the Initial Determination reflects an

analysis based on all views of the claimed D’757 design, the Initial Determination does not

appear to reflect a conclusion that “each view must be given equal weight in the infringement

analysis,” as Apple alleges (Id; ID at 49.) Rather, the ALJ simply found that “Apple’s argument

that features on the back of the accused products should be given less weight” was unpersuasive.

(ID at 49.)

OUII further submits that assuming arguendo that the ID does, in fact, reflect an

infringement analysis which attributes “all views [of the patented design] equal weight,” as

alleged by Apple, this is not per se legal error. Although the case law identified by Apple may

include analyses that include placing greater focus on a particular portion of a claimed patented

design, Apple has not identified any case law holding that views of a patented design must be

given varying weights. In fact, OUII submits that the case law simply indicates that “[t]he

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ordinary observer will likely attach importance to those differences [between the patented design

and the accused design] depending on the overall effect of those differences on the design.”

Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d, 665, 681 (Fed. Cir. 2008); see also Arminak &

Assocs. v. Saint-Gobain Calmar, 501 F.3d 1314, 1324 (Fed. Cir. 2007). Thus, in some instances

all views of the patented design may be provided equal weight. For example, although Mr.

Bressler testified that an ordinary observer’s overall impression of the patented and accused

designs would be derived primarily from the front surface, he specifically indicated that he

afforded “equal weight to the views [of the compared designs]”:

16 Is it true that when you did your

17 invalidity analysis in this case, you gave

18 different weight to different perspectives or

19 views of the designs that you were evaluating?

20 A. No, I gave equal weight to the views.

(6/6/12 Hearing Tr. at 2039:16-20.)1

Next, Apple argues that the ALJ “committed legal error by failing to analyze the prior art

appropriately as required by the Federal Circuit’s en banc Egyptian Goddess decision.” (Apple

Pet. at 16.) According to Apple, the ALJ was “required to analyze what the prior art discloses in

relation to the patented and accused designs.” (Apple Pet. at 17.) OUII submits that contrary to

Apple’s allegation, the Initial Determination reflects an analysis that indicates consideration of

1 Mr. Bressler was one of Apple’s expert witnesses. Although the above-identified testimony was directed to Mr. Bressler’s invalidity analysis, OUII submits that Mr. Bressler’s testimony equally applies to his infringement analysis, as he is required to use the same claim construction for both analyses. See Pozen Inc. v. Par Pharm., Inc., 696 F.2d 1151, 1165-66 (Fed. Cir. 2012) (recognizing that it is improper to use a different claim construction for determining infringement than that used for determining invalidity).

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the prior art in finding non-infringement. In fact, in each and every comparison of the D’757

claimed design to an accused product, the Initial Determination specifically indicates that the

comparison is made “[i]n light of the prior art.” Moreover, OUII submits that it is readily

apparent from the Initial Determination that the prior art devices were considered in the D’757

infringement analysis. For example, the Initial Determination includes side-by-side comparisons

of the patented D’757 design with the accused design and the prior art designs. (e.g., ID at 57,

62.) In light of the foregoing, OUII submits that Apple’s argument regarding legal error directed

to “treatment of the prior art for purposes of infringement” is without merit.

Additionally, Apple argues that the ALJ committed legal error in his holding regarding

the “degree of attention” paid to the design comparison. According to Apple, the ALJ modified

the infringement tests to “heighten the attention level that a purchaser would pay to ‘significant

attention’ constitutes legal error, as it converts the ‘ordinary’ observer into an ‘extraordinary’

observer.” (Apple Pet. at 18.) In this respect, the Initial Determination states that “. . . I have

kept it in mind that a purchaser of the kind of devices at issue in this investigation will pay

significant attention to what they are buying.” (ID at 49.)

And, indeed, the design patent infringement test determines “if, in the eye of an ordinary

observer, giving such attention as a purchaser usually gives, two designs are substantially the

same.” Gorham Co. v. White, 81 U.S. 511, 528 (1872). OUII submits that the Initial

Determination does not reflect a legal error in this respect. In particular, contrary to Apple’s

allegation that the ALJ modified the design patent infringement test and converts the “ordinary”

observer into an “extraordinary” observer, OUII submits that the Initial Determination essentially

notes a purchaser of the relevant devices is an “ordinary observer” – i.e., a person who pays

“significant attention to what [he or she] is buying.” That is, the Initial Determination notes

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nothing more than a recognized attribute – “paying significant attention to what [he or she] is

buying” – of an ordinary observer of the devices at issue. As such, the ID does not modify the

design patent infringement test, nor does the ID convert the “ordinary observer” into an

“extraordinary observer,” as it simply specifies the “attention as a purchaser [of smartphones]

usually gives,” in accordance with the test for design patent infringement. OUII further submits

that in light of the overall context of purchasing smart phones (e.g., consumers are aware they

are entering into multi-year contracts), ample support exists in the record for characterizing the

relevant “ordinary observer” as reflected in the ID. (See 6/6/12 Hearing Tr. at 709:21-25.)

OUII, therefore, submits that the Initial Determination does not reflect legal error in this respect.

Contrary to Apple’s assertion that there is “no factual support for the ALJ’s assertion that

the accused products are relatively expensive and not an ‘impulse purchase,’” OUII submits that

the Initial Determination notes that “[c]ourts have recognized that consumers purchasing

electronics for hundreds of dollars are sophisticated, take care in making their purchases, and

have knowledge of the range of products under consideration.” (ID at 49; see also, e.g., Edge

Wireless LLC v. U.S. Cellular Corp., 312 F. Supp.2d 1325, 1333 (D. Or. 2003).)2 Moreover,

Apple’s own expert, Mr. Bressler, acknowledged that ordinary observers in this instance (i.e.,

purchasers of smart phones) study and compare phone models before purchasing. (6/6/12

Hearing Tr. at 709:21-25.) Thus, there is ample factual support for the assertion regarding

“significant attention” identified in the ID. In light of the foregoing, OUII submits that the

2 Although Apple argues that the cases on which the Initial Determination relies are not relevant legal authority on the test for design patent infringement, OUII submits that the cases are relevant insofar as the Initial Determination is relying on them simply to establish the attributes of a consumer purchasing electronics.

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Initial Determination does not reflect an erroneous legal conclusion nor a clearly erroneous

finding or conclusion of material fact.

Finally, Apple alleges that the ALJ committed legal error because he allegedly found that

the Accused Products do not infringe the D’757 patent based on “a variety of minor differences

between the designs of the products and the patented design.”3 (Apple Pet. at 22.) OUII

submits that Apple has not shown that the Initial Determination committed reversible error in

this respect. For example, in accordance with proper design patent infringement analysis, the

Initial Determination reflects analysis involving a comparison of the patented design as a whole

to the accused design. (See, e.g., ID at 65, 71-75 (considering multiple views of the devices in

question.)) In addition to considering all views of the compared designs, the Initial

Determination also repeatedly indicates consideration of the overall appearances and

impressions of the claimed design and the accused designs are “not substantially the same.”

(See, e.g., ID at 65.) In light of the foregoing, OUII submits that Apple’s allegations in this

respect are without merit, as Apple has not has not met its burden of establishing that the Initial

Determination includes an erroneous legal conclusion or a finding or conclusion of material fact

that is clearly erroneous.

In addition to the alleged foregoing errors, Apple also argues that “[u]nder the correct

infringement analysis, each accused Samsung product infringes the D’757 patent.” (Apple Pet.

at 28.) According to Apple, “[t]he Staff agreed [that the accused products would appear to be

substantially the same as the D’757 design to an ordinary observer when viewed in light of the

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prior art], concluding that “the evidence has shown that the designs of the Samsung accused

devices are substantially the same as the D’757 claimed design.” (Id.)

In response, OUII submits that although the Staff believes that the accused products

would appear to be substantially the same as the D’757 design to an ordinary observer when

viewed in light of the prior art, Apple has not met its burden in establishing that the Initial

Determination relies on an erroneous legal conclusion or a clearly erroneous finding or

conclusion of material fact. OUII further submits that Apple simply re-argues its non-

infringement points and does not allege a specific “clearly erroneous” factual finding in the

Initial Determination. For example, in comparing the D’757 design with the design of the

Galaxy S 4G, Apple simply alleges that the comparison “shows that the ALJ’s list of differences

is insufficient to alter the conclusion that the overall visual impression of the D’757 design is

substantially the same as that of the Galaxy S 4G and Vibrant.” (Apple Pet. At 29-30.) The only

alleged legal error involved in the various comparisons is in regard to exclusion of a reflective

front surface front the D’757 claimed design, which is not legal error for the reasons set forth

above.

b. The D’678 Patent

In addition to alleging the above-identified errors with respect to the D’757 claimed

design, Apple also argues that the ALJ committed legal error in concluding that the T-Mobile S

II accused device does not infringe the D’678 claimed design. (Apple Pet. at 44-48.) According

to Apple, the ALJ’s finding in this respect is “clearly erroneous for many of the same reasons set

forth for the D’757 patent.” (Apple Pet. At 44.) Again, however, infringement of design patents

is a question of fact, and while OUII would have reached a different conclusion, Apple has

simply not shown that the ALJ’s finding is “clearly erroneous.” OUII further submits that its

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comments above regarding the D’757 claimed design also apply to Apple’s allegations regarding

the D’678 claimed design. In light of the foregoing, Apple’s petition should be denied in this

regard.

2. Alleged Errors In the Initial Determination Relating to the ‘949 and ‘922 Patents

a. Contributory Infringement

Apple alleges that the ALJ committed legal error in not finding a violation with respect to

the ‘949 and ‘922 patents based on Samsung’s alleged contributory infringement of the patent

claims. (Apple Pet. at 48.)4 Apple notes that “[w]hen addressing patented methods implemented

in software, the Federal Circuit has held that the relevant ‘material or apparatus’ under section

271(c) is the accused feature, not the entire software product.” (Apple Pet. at 49; see also Lucent

Technologies, Inc. v. Gateway, Inc., 580 F.3d 1301, 1310 (Fed. Cir. 2009).)

OUII submits that the ID correctly identifies the “material or apparatus” in question as

the Browser and Gallery applications. (ID at 191; see also RX-3636C (van Dam RWS) at Q&A

579 and CX-0341 at 140, 162.)5 As noted by the ID, both the Browser and Gallery applications

have substantial non-infringing uses. Contrary to Apple’s assertion that the Federal Circuit has

held that the relevant ‘material or apparatus’ under section 271(c) is the accused feature instead

of the entire software product, OUII submits that the Federal Circuit’s holding is limited to

particular facts. In fact, the Federal Circuit has clarified that “a particular tool within a larger

software package may be the relevant ‘material or apparatus’ when that tool is a separate and

distinct feature.” See i4i Ltd. P’ship v. Microsoft Corp., 598 F.3d 831, 849 (Fed. Cir. 2010)

4 The ALJ properly found induced infringement (See ID at 186-88, 267-69.) 5 See 35 U.S.C. § 271(c) (reciting the words “material or apparatus”).

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(emphasis added). In i4i, Microsoft argued that for purposes of determining infringement, the

relevant “material or apparatus” was the Microsoft Word software application, not the XML

editor embedded within the Word application. In holding that the jury had sufficient evidence to

conclude that the relevant “material or apparatus” was the XML editor, the Federal Circuit noted

that the XML editor could be removed or omitted from the Microsoft Word software package

and, therefore, was a separate and distinct feature. See i4i Ltd. P’ship, 598 F.3d at 849 (citing

expert testimony that “this ability to ‘leave [the editor] out or put it in’ various Word products

showed that the editor was a separate and distinct feature”). Similarly, in Lucent, the Federal

Circuit held that the relevant “material or apparatus” was a “date-picker” tool within the

Microsoft Outlook software package but carefully noted that the tool was a separate and distinct

feature of the Outlook software in which the tool was embedded. See Lucent, 580 F.3d at 1320-

1321; see also i4i Ltd., 598 F.3d at 849 (noting that “[a]s we explained in Lucent, a particular

tool within a larger software package may be the relevant ‘material or apparatus’ when that tool

is a separate and distinct feature”) (emphasis added)).

OUII submits that unlike in Lucent and i4i Ltd., here, neither the ‘949 “feature”

employing heuristics nor the ‘922 feature creating interactive translucent windows is separate

and distinct from their applications. For example, the “feature” of the ‘949 patent employing

heuristics is not a tool but simply a representation of some of the functionality of the Browser

application software. (See CX-2428C (Balakrishnan) at 51-80, Q87-115 and at 80-81, Q116-

122; see also 6/6/12 Hearing Tr. at 1154:8-10 and 1237:3-9.) Thus, in stark contrast to the XML

editor at issue in i4i, for instance, the “feature” of the ‘949 patent employing heuristics is not a

separate software package that can be conveniently omitted from the Browser software to allow

the Browser package to be sold separately, for example. In light of the foregoing, OUII submits

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that the ALJ did not commit legal error in holding that the relevant “material or apparatus” for

purposes of determining contributory infringement is the Browser and Gallery applications.6

b. Infringement of Claims 31 and 32 of the ‘922 Patent

Apple alleges that the ALJ committed legal error in finding that the claim term “feature

of interest” “refer[s] to a feature on which the user is interested in conducting an image

operation.” (Apple Pet. at 52 (emphasis in original).) OUII submits that although Apple

contends that the ALJ’s claim construction was “incorrect as a matter of law,” Apple does not

specifically identify the alleged legal error. Instead, Apple simply re-argues its infringement

theory.

In response, OUII submits that the ALJ did not commit legal error in this respect.

Relying on the specification to interpret a claim term, as the ALJ did, is not only legally proper;

such reliance is axiomatic. See Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed.

Cir. 1996). Moreover, the Initial Determination’s finding is also based on the prosecution

history. (See ID at 241.) Again, OUII submits that using the prosecution history to assist with

interpreting a claim term is also axiomatic. See, e.g., CVI/BETA Ventures, Inc. v. Tura LP, 112

F.3d 1146, 1155-57 (Fed. Cir. 1997) (holding that the prosecution history is often of “critical

significance” in determining the meaning of the claims.

More specifically, the Initial Determination reflects a finding that in the context of the

‘922 patent, the plain and ordinary meaning of the term “feature of interest” is a feature on which

6 OUII further submits that, in any event, Apple has not cited any legal authority establishing that the relevant “material or apparatus” under § 271(c) is necessarily limited to the accused feature. To the contrary, the legal authority cited by Apple merely establishes that in particular situations – “when that tool is a separate and distinct feature” – the relevant “material or apparatus” may be the “tool.” See Lucent, 580 F.3d at 1320-1321; see also i4i Ltd., 598 F.3d at 849.

13

the user is interested in conducting an image operation. (See ID at 241.) OUII submits that there

is ample support in the record for such a finding. (See JX-0004 at 9:1-10:50; RX-3636C at 65-71,

Q&A 610-612, p. 74, Q&A 616.) And with respect to the accused products, OUII submits that

instead of being a feature on which the user is interested in conducting an image operation, the

buttons in the Gallery application are used by the user to perform a function; the user simply uses

the buttons as tools and has no interest in the buttons other than their use in assisting him or her

to accomplish a function. (JX-0004 at 9:1-10:50; RX-3636C at 74, Q&A 616.) The buttons in

the Gallery application are thus analogous to the “wand” control icon in the ‘922 patent, and Dr.

Balakrishnan has acknowledged that the ‘922 patent does not describe the wand icon as a feature

of interest. (Tr. 1197:24-1198:2; 1198:21-1199:3.) Hence, the ALJ did not commit legal error in

this respect, as both the specification and prosecution history include ample support for the

finding that the ‘922’s claimed “features of interest” are not present in the relevant accused

products.

Apple also argues that the doctrine of claim differentiation undercuts the ALJ’s

construction. OUII submits that is well accepted that the doctrine of claim differentiation cannot

broaden claims beyond their correct scope, determined in light of the specification . See

Multiform Desiccants, Inc. v. Medzam Ltd., 133 F.3d 1473, 1480 (Fed. Cir. 1988). Hence,

contrary to Apple’s assertion, the doctrine of claim differentiation does not undermine the

construction adopted in the ID.

3. Alleged Errors In the Initial Determination Relating to the ‘501 and ‘697 Patents

a. Alleged Error in Concluding the Galaxy Tab 7.0 and Galaxy S II do not Infringe Claims of the ‘501 Patent

Apple alleges that the Commission should review the ALJ’s findings that the Galaxy

14

Tab/S products do not infringe claims of the ‘501 patent “because the findings with respect to

[the sole claim limitation at issue] are based on erroneous legal conclusions.”7 (Apple Pet. At

57-58.)

According to Apple, “[t]he ALJ committed a classic error of claim construction by

importing a limitation from the specification into the claim.” (Apple Pet. at 59.) However, the

Initial Determination states that, “. . . in light of the above evidence, I find that the application

processor is not “circuitry” as that term is used in the context of the ‘501 patent.” (Initial

Determination at 334 (emphasis added).) Thus, contrary to Apple’s allegation that the ALJ

inappropriately imported a limitation from the specification into the claim, OUII submits that the

ALJ simply adopted an interpretation of “circuitry” based on the well-established procedure of

reading the claims in light of the specification. See Vitronics Corp. v. Conceptronic, Inc., 90

F.3d at 1582 (Fed. Cir. 1996). OUII further submits that when the claim is read in light of the

specification, the specification fully supports an interpretation of the claim term “circuitry”

whereby the term is interpreted to mean a hardware embodiment.” (See e.g., JX-6, Fig. 9.)

Moreover, the Initial Determination further states that “. . . was

considered circuitry in the context of the ‘501 patent, the evidence still fails to show that

microphone detection circuitry determines plug type” and that cannot be

considered ‘circuitry’.” (ID at 334.) Thus, regardless of whether “circuitry” is interpreted as

7 The only claim element that Samsung appears to have disputed is the claimed “microphone detection circuitry operative to: determine whether the received plug is the microphone type or the non-microphone type and provide a signal indicative of whether the received plug is the microphone type or the non-microphone type.” (See JX-6 at col. 11:41-46.)

15

“hardware,” the record supports the non-infringement conclusion identified in the Initial

Determination.

b. Alleged Error in Concluding the Galaxy Tab/S Products’

Does Not Satisfy the claimed “Microphone Detection Circuitry” of the ‘501 Patent

Apple alleges that the Commission should review the ALJ’s conclusion that the Galaxy

Tab/S products do not infringe any claim of the ‘501 patent under the Doctrine of Equivalents

because the ALJ’s finding that

purportedly ignores controlling Federal

Circuit case law. (See ID at 61.)

The Initial Determination states that “[t]he evidence shows that ‘the differences between

circuitry like a single transistor performing a determination of plug type and

are anything but

insubstantial.” (See ID at 339; see also (RX-3637C at Q&A 696.) Thus, the Initial

Determination applied the proper test for determining equivalents and found that the record did

not support a finding of equivalents in this case. Hence, OUII submits that no legal error was

committed in this respect. OUII further submits that contrary to Apple’s allegations, such a

finding is consistent with well-established Federal Circuit law. In particular, Federal Circuit

precedent does not indicate that

Rather, the Federal Circuit has merely noted that

16

Here, the Initial Determination is based on specific expert testimony which supports a

conclusion that the particular claimed apparatus and the apparatus of the accused products were

not substantially the same. OUII submits that the ALJ did not commit legal error in this respect.

c. Alleged Error in Concluding That the Products Represented By the Transform SPH-M920 do not Infringe Claim 4 of the ‘501 patent is Erroneous

According to Apple, “[t]he ALJ’s conclusion that the Transform SPH-M920 and the

accused products it represents do not infringe claim 4 of the ‘501 patent is erroneous for several

reasons, and should be reviewed by the Commission.” (See Apple Pet. at 65.) Apple alleges

that the ALJ “concluded that the Transform SPH-M920 . . . and thus that the

Transform ‘does not satisfy

(See Apple Pet. at 66

(emphasis added); see also ID at 326.) According to Apple, claim 4 does not include

and “the ALJ’s conclusion represents a construction of the claim term ‘signal’

that neither party sought and that is contrary to law.” (Apple Pet. at 66.)

OUII submits that the ALJ did not commit reversible error in this respect. In particular,

the Initial Determination explicitly states that

(ID at 325.) OUII submits that the finding of non-infringement of

claim 4 is based on

Contrary to Apple’s assertion that the ALJ erred in this respect, the Initial

17

Determination

Therefore, contrary to Apple’s assertion, the ALJ’s conclusion that the claimed

invention, as defined by claim 4, does not literally read on the accused products and is not

substantially the same as the accused product, is based on a legally correct claim construction

and is fully supported by the evidence of record.

d. Alleged Error in Concluding That the SPH-M920 and the Accused Products Representing the SPH-M920 Do Not Infringe Claims 3 and 8 of the ‘501 patent

Apple alleges that the ALJ did not address its allegations that the SPH-M920 and the

accused products represented by the Transform SPH-M920 infringe claims 3 and 8 of the ‘501

patent. (See Apple Pet. at 65 and 68.) In response, OUII agrees that the evidence shows that the

Transform SPH-M920 and accused products associated therewith infringe claim 3 of the ‘501

patent. (See JX-45C at 5; see also CX-2429C (Phinney) at 67, Q279.) Accordingly, if the

Commission determines to reach this issue, the Commission should find that the relevant

products infringe claim 3.

Apple further alleges that although “[t]he ALJ concluded that the Transform SPH-M920

products infringe claim 8 of the ‘501 patent . . . the conclusions of law set forth at the end of the

ID do not include this finding.” (Apple Pet. at 68.) In response, OUII submits that the Initial

Determination includes a conclusion of law that the Transform SPH-M920 infringes claim 8 of

the ‘501 patent. (See ID at 330 (holding that “I find by a preponderance of the evidence that the

Transform SPH-M920 infringes claim 8.”) Therefore, Apple’s allegation in this respect is

without merit.

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e. Alleged Error in Finding No Violation With Respect to the ‘697 Patent

Apple alleges that “[t]he Commission should review the ALJ’s finding of no violation

with respect to the ‘697 patent, because it is based on erroneous legal conclusions regarding the

construction and application of the claim terms to the undisputed facts.” (Apple Pet. at 68.)

OUII submits that the ALJ did not commit reversible error in the infringement analysis

pertaining to the ‘697 patent. In particular, the Initial Determination correctly states that the

claimed “signal path” exists only when the plug is present. The ‘697 claim language makes this

abundantly clear. (See ID at 388; see also JX-005, claim 12 (reciting “the presence of the plug

within the receptacle creates a plug signal path (emphasis added).) Contrary to Apple’s assertion

that “[t]he ALJ’s construction and application of the key terms render the claims inoperable,”

OUII submits that the construction on which the non-infringement conclusion was reached does

not render the claim inoperable.8 Rather, the construction requires the claim language to recite

no more functionality than it expressly describes – that is, detection of a low impedance path.9

OUII further submits that such a claim construction is consistent with Federal Circuit precedent.

In particular, the Federal Circuit has held that “neither agencies nor courts can rewrite claims to

correct material errors.” See Ultimax Cement Mfg. Corp. v. CTS Cement Mfg. Corp., 587 F.3d

1339, 1353 (Fed. Cir. 2009) (quoting Energizer Holdings v. Int'l Trade Comm'n, 435 F.3d 1366,

8 OUII notes that Apple acknowledges that the claim construction adopted in the ID can describe an operable invention. (See Apple Pet. at 72 (“But if the claim language requiring detection of “a low or high impedance path” is applied literally, the claim can remain operable.” (emphasis added).)

9 As the ID notes, “[t]he evidence . . . shows that removing the plug from the receptacle creates an open air gap between the detect contact and the first receptacle contact.” (ID at 390.) Thus, the detection circuitry cannot detect that the “plug signal path” is a high impedance path, as “when there is high impedance there is no plug signal path.” (ID at 391.)

19

1370 (Fed. Cir. 2006)). Here, the construction advocated by Apple would require the claims to

be re-written to indicate that the “signal path” exists prior to insertion of the plug. (See JX-005,

claim 12 (reciting “the presence of the plug within the receptacle creates a plug signal path”

(emphasis added).)

Apple further argues that “[t]he ALJ’s interpretation and application of the claim

language effectively changed the ‘or’ of the disputed claim element to ‘and,’ requiring the

detection circuitry to detect both when the signal path is (1) a low impedance path and (2) a high

impedance path.” (Apple Pet. at 71.) According to Apple, “. . . the claim language requires only

detection of one of the two specified states – low or high impedance.” (Id.) OUII disagrees with

Apple.

As “literally” written, when the claim language is read in its entirety, it is clear that the

claimed detection circuitry is only capable of detecting that the “signal path” is a low impedance

path because prior to the insertion of the plug, there is no “signal path” (which means that there

can be no detection of a high impedance).10

. Such circuitry is not the same as

the circuitry of the claimed invention, which is only capable of detecting whether the signal path

10 Contrary to Apple’s assertion that “because the impedance of the claims is binary (low/high), the ability to detect even one state (e.g., low impedance) necessarily permits implicit detection of the other (that is, when the circuitry does not detect low impedance, impedance must be high, even if not directly detected as such),” OUII submits that the binary nature of the claimed impedance simply requires a conclusion that impedance is either in a high or low state, not actual detection of a high or low state. As written, however, although the claim language is directed to detection, the claim does not indicate that the claimed invention detects whether the plug is a high impedance path due to the non-existence of “the path” prior to insertion of the plug.

20

is in a low impedance state, as indicated by the expressed language of the claim. The Staff,

therefore, submits that the Initial Determination did not err in this respect.

Apple further argues that under its proposed application of the claim language, the

devices at issue also satisfy the disputed claim element. OUII submits, however, that Apple’s

application of the claim language is based on a claim construction which is diametrically

opposed to the language of the claim. That is, “Apple took the position that the signal path exists

between the detect contact and the first receptacle contact regardless of the presence or absence

of a plug.”) (Apple Pet. at 73.) As noted above, however, the claim language indicates that “the

presence of the plug within the receptacle creates a plug signal path.” (JX-0006, claim 12

(emphasis added).) In an attempt to support its claim construction, Apple further argues that its

construction is consistent with the evidence indicating that the claimed invention includes only

one signal path. (Apple Pet. at 73.) According to Apple “. . . just as a single circuit can have two

states – closed or open – a single signal path can have two states – low or high impedance.” (Id.)

In response, OUII submits that Apple’s assertion regarding the characteristics of “a signal path”

generally are not as relevant as the explicit language of the ‘697 patent claims directed to “the

signal path.” According to this language, the sole “signal path” identified in the claim simply

does not exist when the plug is absent from the receptacle and, therefore, detection of a high

impedance cannot occur.

4. Alleged Error In Adjudication Relating To the “Design Around” Products

Finally, Apple has petitioned for review of the ALJ’s determination that Samsung’s

“design around” products do not infringe the asserted claims of the ‘922, ‘697 and ‘501 patents.

(Apple Pet. at 76-84). In this respect, Apple has argued that it does not accuse those products of

21

infringement, that the ID represents an improper “advisory opinion” and that, in any event, the

“design around” products actually infringe the asserted claims. (Id.). OUII respectfully submits

that Apple’s arguments concerning these issues should be rejected.

Apple’s contention that the design around products are not properly part of the

investigation and that the finding of non-infringement constitutes an advisory opinion is

disingenuous. Under controlling Commission precedent, when confronted with Samsung’s

evidence of non-infringement, Apple had an obligation to either present evidence of

infringement or withdraw its allegations concerning these products. Instead, Apple chose to do

neither.11 See Certain Flash Memory Circuits and Products Containing Same, Inv. No. 337-TA-

362, Commission Opinion at 12-16, USITC Pub. 3046 (July 1997) (“Flash Memory Circuits”).

Id. In fact, when the ALJ asked for additional briefing to clarify the issue, Apple argued that it

was not accusing those products, but then indicated that any exclusion order should nevertheless

address (not exempt) the products. See Apple’s Brief Regarding the Court’s Adjudication of

Design Around Products, dated Aug. 31, 2012 (EDIS Doc. ID 490099). Under Flash Memory

Circuits, Apple cannot “have it both ways.” In light of the foregoing, OUII submits that the ALJ

properly adjudicated infringement of the design around products.

In addition, Apple’s arguments that the design around products do, in fact, infringe the

asserted claims are not supported by the record. The time for Apple to present evidence and

argument concerning these issues was during the evidentiary hearing. However, Apple failed to

11 Apple’s arguments that the products should not be addressed because Samsung produced insufficient discovery and because Apple did not accuse the products in its pre-hearing brief should be rejected on the same grounds that these arguments were rejected in Flash Memory Circuits. See id.

22

present such evidence, and the ALJ properly credited the testimony of Samsung’s expert and fact

witnesses concerning the operation of the products and whether they infringe the asserted claims.

(See ID at 10-11, 163, 233-34, 310). Under the circumstances, OUII submits that Apple’s

petition should be denied.

B. Respondents’ Petition for Review of the ID Should Be Denied

1. Alleged Errors In the Initial Determination Relating To the D’678 And D’757 Patents

a. Alleged Error In the Initial Determination Regarding the Legal Standard for Design Patent Infringement

Samsung alleges that “[t]he ALJ committed reversible error by announcing and applying

the wrong standard for design patent infringement.” (Samsung Pet. at 9.) According to

Samsung, the Supreme Court has held that “design patent infringement is expressly contingent

on a finding of deceptive similarity.” (Samsung Pet. at 9; see also Gorham Co. v. White, 81 U.S.

511, 528 (1872).)

In response, OUII submits that the Initial Determination adopts the proper test for design

patent infringement, as set forth in Gorham Co. v. White, 81 U.S. 511, 528 (1872). (See ID at

39.) Before providing a detailed analysis of the design patent infringement standard under both

Gorham and Federal Circuit precedent related thereto, the Initial Determination explains:

While it is true that the quotes cited by Samsung in isolation may appear to suggest that the test for design patent infringement requires an affirmative showing that an ordinary observer would be deceived into thinking the accused design is the patented design, I believe such a conclusion would be error and that Samsung misunderstands both the Supreme Court’s and Federal Circuit’s teachings. Contrary to Samsung’s argument, I do not find deceptive similarity to be a prerequisite to a finding of infringement, but merely a consequence, or result, of the designs being substantially the same.

23

(ID at 39.) Thus, the Initial Determination is clear that it disagrees with Samsung’s

interpretation of the test in that contrary to Samsung’s position, “deceptive similarity” is

simply a consequence of “sameness in ‘general appearance and affect.’” (ID at 40; see also

Gorham, 81 U.S. at 527, 531.) OUII submits that the ALJ correctly interpreted Gorham. The

sole test for patent infringement is whether the claimed design is “substantially the same” as

the accused design. See Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d at 678 (Fed. Cir.

2008) (“in accordance with Gorham and subsequent decisions, we hold that the ordinary

observer test should be the sole test for determining whether a design patent has been

infringed.”) Thus, as Gorham describes the test, any deception from the designs is a result of

the designs being substantially the same, not a prerequisite thereto.

For instance, explaining Gorham’s “ordinary observer” test, the Federal Circuit has

clarified that “the deception that arises is a result of similarities in the overall design . . ..”

Amini Innovation Corp. v. Anthony California, Inc., 439 F.3d 1365, 1371 (Fed. Cir. 2006)

(emphasis added); see also, e.g., KeyStone Retaining Wall Sys., Inc. v. Westrock, Inc., 997

F.2d 1444, 1450 (Fed. Cir. 1993); see also Post-hearing Brief of the Commission

Investigative Staff, Appendix A (Supplemental Brief of the Commission Investigative Staff)

at 2. Thus, the “ultimate question [in determining whether a design patent is infringed]

requires determining whether ‘the effect of the whole design [is] substantially the same.’”

L.A. Gear, Inc. v. Thom McAn Show, 988 F.2d 1117, 1125 (Fed. Cir. 1993) (quoting Gorham,

81 U.S. at 530); see also Moen Inc. v. Foremost International Trading, Inc., 38 F. Supp. 2d

680, 682 (E.D. Ill. 1999) (noting that “the question is whether that purchaser [a purchaser

representing an ordinary observer] would find the overall ornamental appearance of the

faucets substantially the same” after quoting Gorham’s “ordinary observer test” language).

24

In light of the foregoing, OUII submits that the Initial Determination adopted the correct

legal standard.

b. Alleged Errors In Construing the D’678 Patent

Samsung next alleges that “[t]he ALJ proceeded to erroneously construe the D’678

patent broadly as claiming ‘a symmetric and minimalistic design’ that ‘give[s] an impression

of simplicity and balance’ rather than the particular ornamental features contained in the

design.” (Samsung Pet. at 16; see also ID at 110, 114.) OUII submits, however, that

contrary to Samsung’s allegation, the ALJ indicates that he considered such details “in the

context of the overall impression” of the claimed and accused designs. (See e.g.,ID at 110-

111.) In other words, it is readily apparent from reading the Initial Determination, that

contrary to Samsung’s allegation that the particular ornamental features were not considered,

such features were, in fact, considered.

For example, in determining that the claimed D’678 design is not substantially similar

to the overall impression of the Galaxy S II (SGH-T989) design, the ALJ applied the same

legal standard that he did in finding infringement for the other products. Thus, the Initial

Determination notes “a number of differences that contribute to the dissimilarity between the

overall impression of the D’678 patent and the overall impression of the Galaxy S II (SGH-

T989).” (ID at 110.) For example, the ALJ compared the top and bottom edges of the

claimed D’678 patent with the accused Galaxy S II design and noted the “dissimilarity

between the D’678 patent’s impression of symmetry and the asymmetric impression of the

Galaxy S II (SGH-T989.)” (ID at 112.) Similarly, the ALJ also noted that “[t]he positioning

of the lozenge-shaped feature on the claimed and accused designs further demonstrates the

dissimilarity between the D’678 patent’s impression of symmetry and the uneven impression

25

of the Galaxy S II (SGH T989.)” (Id; see also JX-0002, CPX-0058; and RDX-37-43.) In

light of the foregoing, OUII submits that the Initial Determination did not commit legal error

in its construction of the D’678 patent.

c. Alleged Errors In “Factor[ing] Out” Functional Elements of the D’678 Design

Samsung further notes that “the ALJ recognized that certain features of the D’678

design were ‘obviously’ functional” and alleges that “the ALJ wrongly concluded the

evidence demonstrated merely that these elements have functionality but not that the

elements ‘are dictated solely by function.’” (Samsung Pet. at 18, 19; see also Hearing Tr. at

430:9-19.) In response, OUII submits that the Initial Determination correctly concluded

that although some of the features of the D’678 patent are functional, “the design

characteristics of these elements and the overall claimed designs are not dictated by

function,” in accordance with the legal test regarding functionality of design patents. (ID at

94; see also L.A. Gear, Inc. v. Thom McAn Shoe Co., 988 F.2d 1117, 1123 (Fed. Cir. 1993).)

For example, the existence of a speaker in the accused products may be functional, but the

size and shape of the speaker are not. (See ID at 94.)

Further, although Samsung alleges that “[t]he ALJ did not conduct a ‘full inquiry’ in

determining whether the presence of alternative designs precluded a determination that the

D’678 design was dictated by function,” OUII submits that the Initial Determination relies on

substantial evidence supporting a conclusion that the D’678 design is not dictated by

function. (See, e.g., ID at 94 (“The evidence suggests, though, that the cost and quality of the

D’678 Accused Devices are not affected by the claimed design.”).) In light of the foregoing,

26

OUII further submits that the Initial Determination did not commit reversible error in this

respect.

d. Alleged Errors In Concluding That the Relevant Accused Products Do Not Infringe the D’678 Patent

Samsung alleges that the finding of substantial similarity between the D’678

claimed design and the Galaxy S II (SGH-1777) was “clearly erroneous.” (Samsung Pet. at 23.)

In response, OUII submits that the evidence shows that Samsung’s analysis is inaccurate or

incomplete. (RX-3631, Q&A 126; RDX-37-33; JX-0002.)

OUII further submits that the Galaxy S 4G, for example, is “much closer” to the D’678

design than the patented design is to the prior art. (2430C at 37, Q&A 178-181, p. 38-39, Q&A

183-185, p. 43, Q&A 204-205; Apple PreH. Br. at 29.) For example, although the JP638 has a

front face that is significantly arched in comparison with the front face of the D’678 design,

Samsung does not appear to have considered this substantial difference. (Id.) Moreover, the

evidence shows that the design of the accused device is not exactly the same as the claimed

D’678 design, differences between the two designs would not affect the overall impression of an

ordinary observer that the designs are substantially the same. (See Tr. 811:19-812:21.) As such

and in light of the evidence provided by Apple, OUII submits that the ALJ did not commit

reversible error in this respect. (See e.g., ID at 110-38.)

e. Alleged Errors In Concluding That the D’678 Domestic Industry Products Practice the D’678 Patent

Samsung alleges that “[p]roperly construed, none of the D’678 Domestic Industry

Products . . . should be found to practice the D’678 patent.” (Samsung Pet. at 32.) OUII submits

that Samsung does not identify an error – legal or factual – in the Initial Determination’s

conclusion that the D’678 Domestic Industry products practice the D’678 patent. (Id.) Instead,

27

Samsung simply makes the same arguments that it did with respect to infringement. OUII

submits that the evidence of record supports a finding that the domestic industry products

practice the D’678 patent. (Compare JX-0002 with CPX-0003, CPX-0004, CPX-0005, CPX-

0006, CPX-0007.) The analysis presented in the Initial Determination properly relies on this

evidence. (ID at 153-154.) Moreover, Samsung’s analysis of the technical prong of domestic

industry with respect to the D’678 patent is cursory and incomplete. (RX-3631 at 99, Q&A

195.) For example, Mr. Anders simply concludes that the iPhone 3GS and iPhone 4 do not

include front faces that protrude above their bezels and provides no explanation as to whether an

ordinary observer would obtain an overall impression of the D’678 claimed design and the

design of the Apple products that is substantially the same. (Id.) Samsung’s allegation regarding

domestic industry should, therefore, be rejected.

f. Alleged Errors In Concluding That the D’678 Patent is Not Invalid as Obvious In Light of the Prior Art

Samsung alleges that “[t]he ALJ erred in failing to find the D’678 patent invalid as

obvious in light of the prior art, including Japanese Design Patent D1241638 and the LG

Chocolate, each of which claims an ornamental design for a mobile phone . . ..” (Samsung Pet.

at 33.) OUII submits that the Initial Determination did not err with respect to this issue. The

evidence shows that the claimed D’678 design would not create substantially the same overall

visual impression as the JP638 design to an ordinary observer due to several differences between

the designs. (CX-2592C at 5, Q&A 26; JX-0099; JX-0002.) For example, the front face of the

claimed D’678 design appears to be straight, whereas the front face of the JP638 design appears

28

to arch downwardly at the top and bottom areas outside of the interior rectangle.12 (CX-2592C at

9, Q&A 38; JX-0099; JX-0002.) In other words, whereas the front face of the D’678 patent is

straight, the ‘638 front face is convex. See Apple Inc. v. Samsung Electronics Co., Ltd., LLC,

678 F.3d 1314, 1326 (Fed. Cir. 2012) (distinguishing the “arched” and “convex” front face of the

JP638 design from the “flat front” of a design of a mobile device by Apple depicted in U.S.

Patent No. D593,087, and rejecting the lower’s court’s decision that the JP638 patent likely

anticipates the ‘087 design.)

Further, the front face surface of the D’678 claimed design includes oblique lines

appearing on both the top and bottom borders outside of the interior rectangle and on the interior

rectangle itself, which indicates that the portions are transparent or reflective. (See, e.g., MPEP §

1503.02; CX-2592C at 9, Q&A 38; JX-0099; JX-0002.) In contrast, the front face surface of the

JP638 patent does not include such lines, which suggests that the surface is not transparent or

reflective. (Id.) Although the front surface material of JP638 representing the display must be

transparent in order to enable the user to view the display, the surfaces outside of the interior

rectangle, that is, the top and bottom borders outside of the display area, do not necessarily have to be

transparent or reflective. (CX-2592C at 9, Q&A 38; JX-0099.) In light of the foregoing, the ALJ

did not commit reversible error, and Samsung has not met its burden of establishing by clear and

convincing evidence that the prior art design renders the claimed D’678 design obvious. (See ID at

142-143 and JX-0002; JX-0099.)

12 The Staff notes that although RDX-31, identified in Mr. Sherman’s witness statement, appears to show the front face of the JP638 design as straight, when viewed in its proper full context, the design includes a front face that arches downwardly at the top and bottom ends. (See CDX-0900 (appearing to be a copy of the design from the JP638 patent).)

29

g. Alleged Errors In Finding That The D’757 Domestic Industry Products Practice the D’757 Patent

Samsung alleges that the “ALJ erred in finding that the iPhone 3G and 3GS practice the

D’757 patent despite the significant differences between them and the D’757 drawings.”

(Samsung Pet. at 35.) OUII submits that, again, Samsung has not identified an error in the

Initial Determination’s findings with respect to this issue. OUII submits that the evidence has

shown that the claimed design of the D’757 patent is substantially the same as at least the iPhone

3G. (Tr. 744:6-9; 744:10-15; 753:6-13; 813:3-11; 813:12-23; RPX-067; Tr. 813:12-23.) As

such, OUII further submits that Commission review of this issue is not warranted.

h. Alleged Errors In Not Finding That the D’757 Patent Is Invalid as Obvious In Light of the Prior Art

Samsung alleges that “[t]he ALJ erred by failing to find the D’757 patent invalid as

obvious in light of the prior art, including Japanese Design Patent D1250487 and Korean Design

Registration KR-30-0304213.” (Samsung Pet. at 37.) Contrary to Samsung’s arguments, OUII

submits that the evidence has shown that the JP487 patent is not a proper primary reference and

that the patent therefore does not render the claimed D’757 design obvious. (CX-2592C at 28-

29, Q&A 110.) In contrast to the D’757 design, which includes a rectangular body with evenly

curved corners, the JP487 design includes a body having corners that are substantially sharper

than the D’757 design. (Id.) The evidence has also shown that unlike the D’757 claimed design,

the JP487 design includes a prominent circular headphone jack protruding from the top of the

device. (Id.) In further contrast to the D’757 design, unlike the smooth and substantially

unadorned appearance of the D’757 design, the back, and top and bottom profile views of the

JP’487 design have significant adornments. (Id.)

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OUII further submits that the evidence has shown that even if the reference could be

modified as proposed by Samsung, this hypothetical piece of prior art would “not appear

substantially the same” as that of the claimed D’757 design. (CX-2592C at 29, Q&A 111.) The

record does not contain clear and convincing evidence that the D’757 patent would have been

obvious in view of the JP487 patent either alone or in combination with other alleged prior art

references. (CX-2592C at 29, Q&A 111; Tr. at 1743:24-1744:6 and 1752:16-22.) In light of the

foregoing, OUII submits that the ALJ did not err in finding the D’757 patented design is not

invalid as obvious in light of the prior art. (See ID at 76-81.)

2. Alleged “Prejudicial Procedural Errors”

Samsung alleges that “before and during the Hearing, the ALJ committed procedural

errors that severely prejudiced Samsung by precluding legitimate and compelling non-infringement

and invalidity arguments.” (Samsung Pet. at 38.) First, Samsung alleges that “[t]he ALJ erred in

denying Samsung’s Motion for Leave to File an Amended Notice of Prior Art.” (Id.) Samsung

argued in its motion that amending its Notice of Prior Art would not have resulted in prejudice to

Apple. As Order No. 18 noted, however, the ALJ’s Ground Rules explicitly state that “lack of

prejudice does not equate to good cause.” (See Order No. 18 at 5; see also Ground Rule 1.10.)

OUII submits that Samsung’s position is without merit, as Samsung did not show good cause for its

proposed amendment at the time it moved the ALJ for leave to amend its Notice.

Second, Samsung argues that “[t]he ALJ improperly excluded evidence of the Nokia

Fingerprint design . . . and the testimony of its inventor, non-party witness Richardo Vilas-Boas.”

(Samsung Pet. at 40.) In response, OUII submits that the ALJ noted that the testimony of Mr.

Vilas-Boas was essentially directed to a device that Samsung sought to add to its Notice of Prior Art

via its motion to amend the Notice. Thus, the ALJ held that the testimony of Mr. Vilas-Boas was

31

being excluded because to hold otherwise would render Order No. 18 a nullity. (See Hearing Tr. at

1572:19-24.) OUII submits that Samsung’s position regarding Mr. Vilas-Boas is without merit for

at least the reasons presented above in response to Samsung’s allegation that the ALJ improperly

denied Samsung’s Motion for Leave to File an Amended Notice of Prior Art.

Third, Samsung argues that “[t]he ALJ erred in refusing to admit relevant non-asserted

Apple patents because the patents had no ‘sponsoring witness.’” (Samsung Pet. at 42; see also

Hearing Tr. 1883:1-18, 2302:21-2304:17, 2324:6-23.) OUII submits, however, that although

Samsung notes that “patents are subject to judicial notice,” it has not presented authority

establishing that judicial notice must be taken. (Samsung Pet. at 42.) The ALJ noted that the

non-asserted Apple patents sought to be admitted by Samsung are not prior art because they were

filed after the filing date of the asserted patents and that he was not required to take judicial

notice of the patents under Egyptian Goddess. (See Hearing Tr. at 2324:6-18.) OUII, therefore,

further submits that the Initial Determination did not commit error in this respect. Finally, OUII

submits that all of the above-identified alleged “procedural errors” relate to issues that are within

the ALJ’s well-founded discretion. Samsung has not shown an abuse of discretion. See 19

C.F.R. § 210.43(d)(2)(ii).

3. Alleged Errors In the Initial Determination Relating to the ‘922 Patent

a. Alleged Errors In Finding That Samsung Induced Infringement of the ‘922 Patent By Relying Only on Circumstantial Evidence as Proof of Direct Infringement

Samsung alleges that “[t]he ALJ committed legal error in finding that Samsung induced

infringement of Claims 29-30 and 33-35 of the ‘922 patent.” (Samsung Pet. at 43; see also ID at

262-69). According to Samsung, “[t]he ALJ failed to require any direct evidence that a third

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party practiced the claimed methods.” (Samsung Pet. at 43.) OUII submits that the ALJ did not

err in this respect.

In particular, the Initial Determination holds that Apple has proven direct infringement of

claims 29, 30, and 33-35 of the ‘922 patent by the end users of the relevant '922 accused

products, based on Samsung’s instructions to its end users via user manuals. See Toshiba Corp.

v. Imation Corp. 681 F.3d 1358, 1365 (Fed. Cir. 2012) (“[W]here an alleged infringer designs a

product for use in an infringing way and instructs users to use the product in an infringing way,

there is sufficient evidence for a jury to find direct infringement.”); see also CX-2428C

(Balakrishnan DWS) at Q&A 344. Moreover, the Initial Determination also relies on the holding

of Certain Semiconductor Chips, which holds that “evidence of extensive sales in the United

States has been found sufficient to show direct infringement by end users that perform a claimed

method when operating an accused product as the manufacturer intended.” Inv. No. 337-TA-

661, ID at 43.

Samsung argues that cases such as Toshiba are distinguishable in view of Mirror Worlds,

LLC v. Apple Inc., 692 F.3d 1351 (Fed. Cir. 2012) and E-Pass Techs., Inc. v. 3Com Corp., 473

F.3d 1213, 1222-23 (Fed. Cir. 2007) because cases such as Toshiba allegedly “involved products

whose intended use necessarily infringed the asserted patents.” (See Samsung Pet. at 44.) In

response, OUII submits that Samsung has not proffered any reason as to why the holding of

Toshiba, which allows a finding of direct infringement based on circumstantial evidence such as

when an alleged infringer designs a product for use in an infringing way and instructs users to

use the product accordingly, is limited in the manner suggested by Samsung.

b. Alleged Errors In the Standard for Intent to Induce Infringement

Samsung alleges that “[t]he ALJ also failed to apply the heightened standard for intent

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mandated by the Federal Circuit and prior Commission opinions in finding that Samsung had the

requisite intent to induce infringement.” (Samsung Pet. at 45; see also ID at 267-69). In

response, OUII submits that the ALJ correctly found that “Samsung instructs its end users to use

the Gallery and Browser applications in such a manner that necessarily infringes the '922 patent.”

(ID at 268; see Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 936 (2005)

(recognizing that providing instruction on how to engage in an infringing use “show[s] an

affirmative intent that the product be used to infringe”). Samsung’s allegation is, therefore,

without merit.

c. Alleged Errors In Reliance on Expert Testimony That Text Selection Uses a Translucent Overlay

Samsung alleges that “[t]he ALJ erred in finding that the accused text selection feature

uses a ‘translucent image’ that overlays a ‘base image’ as required by the claims of the ‘922

patent.” (Samsung Pet. at 47.) According to Samsung, “[t]he ALJ relied only on the

unsupported, incomplete opinions of Apple’s expert, Dr. Balakrishnan, while ignoring the

evidence to the contrary.” (Id.) In response, OUII submits that the ALJ did not err in this

respect. In particular, the Initial Determination relies on a thorough analysis by Apple expert Dr.

Balakrishnan, which includes references to and explanations of specific source code routines.

(See ID at 256-259.) Therefore, Samsung’s argument is without merit. The record contains

ample evidence supporting a finding of infringement.

d. Alleged Errors In Finding that Some References Do Not Render the ‘922 Patent Claims Invalid

Samsung alleges that the Initial Determination erred in finding that certain references do

not render the ‘922 patent claims invalid. (Samsung Pet. at 50-56.) In response, OUII submits

that the ALJ’s findings are fully supported by the record. In particular, OUII submits that the

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Initial Determination provides a detailed and accurate analysis directed to invalidity based on

ample evidence in the record. Simply put, Samsung did not prove by clear and convincing

evidence that the ‘922 patent is invalid. (ID at 278-284.).

e. Alleged Errors In the Legal Standard for Non-Obviousness

Samsung alleges that “[t]he ALJ failed to apply Federal Circuit obviousness law in finding

that Samsung failed to show motivation to modify or combine Barrett.” (Samsung Pet. at 57.) In

response, OUII submits that Samsung has not provided convincing rationale as to why one of

ordinary skill would have been motivated to modify the teachings of the Barrett reference to

develop the required translucency. (Id.) For example, Samsung has not provided evidence

regarding the differences and similarities between the claimed invention and the prior art. See In

re Chapman, 595 F.3d 1330, 1337 (Fed. Cir. 2010) (noting that one of the facts on which a

determination of obviousness is made includes considering the differences between the claimed

invention and prior art). As Samsung expert, Dr. Van Dam, acknowledges, Barrett is directed to

a technique for combining graphical data from a standard display buffer and an ink plane buffer

(i.e., a virtual device) whereas, as Dr. Van Dam also acknowledges, the claimed ‘922 invention

is directed to methods for presenting translucent images and windows on the display screen of a

computer system and allowing the user to interact with those images. (RX-3448C at 207-208,

Q&A 332, p. 238-239, Q&A 359, p. 239-242, Q&A 361.)

Dr. Van Dam also concludes that a person of ordinary skill in the art “could come up with

any number of ways to implement translucent images” based on the image combining operations

allegedly suggested by Barrett and then appears to explain how such an implementation could be

accomplished. (3448C at 236-237, Q&A 356.) However, OUII submits that this does not

explain why a person of ordinary skill would have arrived at the particular solution claimed in

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the ‘922 patent. In light of the foregoing, OUII submits that Samsung did not meet its burden of

establishing a prima facie case of obviousness as Samsung has not provided facts to support a

motivation to modify the disclosed Barrett system. (Id; see also ID at 303-304 (noting that

“Samsung makes the mistake of arguing that the invention is obvious because someone could

have developed translucency, instead of showing how Barrett would motivate/teach one of

ordinary skill in the art to do it”).

4. Alleged Errors In the Initial Determination Relating to the ‘949 Patent

a. Alleged Error in Finding Literal Infringement Based On the Claimed “[B]ased on an Angle” Limitation

With respect to the ‘949 patent, Samsung alleges that “[i]n essence, the ALJ found literal

infringement because the values used in Samsung’s accused products were equivalent to using an

angle.” (Samsung Pet. at 59.) According to Samsung, “[t]his misapplication of literal

infringement, however, vitiates the requirement that the determination be ‘based on an angle of

initial movement’.” (Id.) OUII submits, however, that Samsung is incorrect. In particular,

Samsung’s argument is based on the incorrect assertion that the claim language “based on an

angle of initial movement” requires that the products actually calculate an angle.

Although Samsung argues that “the ALJ found literal infringement because the values

used in Samsung’s accused products were equivalent to using an angle,” OUII submits that the

36

Initial Determination found infringement because the values used in Samsung’s accused products

are involved in a method that performs scrolling based on an angle.

In light of the foregoing, OUII submits that the ALJ did not err

with respect to this issue.

b. Alleged Error Regarding the Claimed “Initial Movement”

Samsung next alleges that “[i]n finding infringement, the ALJ erroneously found that

(Samsung Pet. at 61.) (ID at 175-76). According to

Samsung, “[t]he ALJ’s conclusion is based on a wrong assumption that discarding input slop is

necessary to distinguish between a ‘tap’ and a ‘swipe.’” (Samsung Pet. at 61.) In response,

OUII submits that Apple presented convincing evidence that one of ordinary skill in the art

would not consider movement corresponding to “input slop” to be movement and would,

therefore, discard such movement. (See CX-2428C at 37-38, Q&A 67; Balakrishnan Tr.

1223:3-8.) Moreover, not only did Apple provide evidence as to how one of ordinary skill in the

art would understand “initial movement,” Apple also provided evidence that the claimed

invention and products

37

Additionally, Samsung alleges that “[t]he ALJ also erred in finding that the Galaxy

Nexus devices determine scrolling ‘based on an angle of initial movement.’” (Samsung Pet. at

63.) In response, OUII submits that the Initial Determination did not commit reversible error in

this respect for at least the above-identified reasons.

c. Alleged Error in Construing the Claim Term “Heuristics”

Samsung alleges that “[t]he ALJ erred in construing the term ‘heuristics’ by finding the

term was not indefinite under 35 U.S.C. § 112, ¶ 2, and by not construing the term as a means-

plus-function limitation governed by 35 U.S.C. § 112, ¶ 6.” (Samsung Pet. at 64.) In particular,

Samsung alleges that the term “offers no insight into the bounds of what would be considered a

‘heuristic.’” (Id.)

In response, OUII submits that the claim term “heuristics” is not indefinite when the

claims are read in light of the specification. For example, as recited in the claim language, the

term is associated with an explanation of the function that is performed by the particular

heuristic. (See JX-0003 at 122:52-58.) In addition, the description of the term “heuristic”

provided in the specification of the ‘949 patent is consistent with the claim language. For

example, the specification states, “[t]he device applies one or more heuristics to the one or more

finger contacts to determine a command for the device.” (See JX-0003 at 109:60-62.) The

specification further states that one of the heuristics is a heuristic for determining that one or

more finger contacts correspond to a one-dimensional vertical screen scrolling command, for

example. In accordance with such a heuristic, in response to an imprecise substantially vertical

upward swipe gesture by the user, a web page, for example, may determine whether the user's

swipe is within a predetermined angle of being perfectly vertical and scroll one-dimensionally

upward in the vertical direction. (See JX-0003 at 64:17-24.) In light of the explicit claim

38

language identifying and describing the function of a “heuristic” and the many examples of

“heuristics” provided in the lengthy specification of the ‘949 patent, OUII submits that the claim

term is not indefinite.

Samsung also alleges that the term “heuristics” should alternatively be construed under

35 U.S.C. § 112, ¶ 6. In response, OUII submits that Samsung has not provided convincing

rationale as to why the standard presumption regarding the construction of means-plus-function

terms – that only a limitation using the word “means” is interpreted as “means-plus-function”

language – does should not apply in this instance. See Watts v. XL Sys., Inc., 232 F.3d 877, 880

(Fed. Cir. 2000); see also Apex Inc. v. Raritan Computer, Inc., 325 F.3d 1364, 1371-72 (Fed. Cir.

2003).

d. Alleged Error in the Standard for Induced Infringement of Claims 11-16 of the ‘949 patent

Samsung alleges that “[t]he ALJ’s erroneous conclusion that Samsung induced

infringement of the ‘949 patent is based on the same flawed legal analysis based on the same

types of insufficient evidence relied upon with respect to the ‘922 patent.” (Samsung Pet. at 66.)

In response, OUII submits that the ALJ did not err in this respect for the reasons presented above

for the ‘922 patent.

e. Alleged Error in Concluding That the Apple Domestic Industry Products Practice the ‘949 Patent

Samsung alleges that “[t]he ALJ found that the Apple domestic industry products

practiced the ‘949 patent based on the same erroneous conclusions regarding input slop and

heuristics discussed above.” (Samsung Pet. at 66.) In response, OUII submits that the ALJ did

not commit legal error for the reasons provided above in the discussion regarding “input slop”

and “heuristics.”

39

f. Alleged Errors In Finding that Certain References Do Not Render the ‘949 Patent Claims Invalid

Samsung alleges that the Initial Determination erred in finding that some references do

not render the ‘949 patent claims invalid. (Samsung Pet. at 66-72.) In response, OUII submits

that the ALJ correctly found that Samsung had not presented clear and convincing evidence of

invalidity. In particular, OUII submits that the Initial Determination provides a detailed and

accurate analysis directed to invalidity based on ample evidence in the record, which shows that

the ‘949 patent is not invalid in light of any of the cited references. (See ID at 278-284.)

5. Alleged Errors In the Initial Determination Relating To the ‘501 Patent

a. Alleged Errors Involved In Excluding Produced Third-Party Documents from Motorola and Texas Instruments

Samsung alleges that the ALJ committed error or abused his discretion in excluding

third-party documents from Motorola and Texas Instruments, in excluding expert testimony

related to the Motorola and Texas Instruments documents, and in excluding deposition testimony

of Motorola and Texas Instruments witnesses. (See Samsung Pet. at 73-75.) In response, OUII

submits that the decision to exclude was based on a violation of the ALJ’s ground rules, and as

such, was within the ALJ’s well-founded discretion. (See Hearing Tr. at 316:8-12.)

b. Alleged Errors In the Initial Determination Relating To Finding That Some References Do Not Render the ‘501 Patent Claims Invalid

Samsung alleges that the Initial Determination erred in finding that certain of the asserted

references do not render the ‘501 patent claims invalid. (Samsung Pet. at 75-87.) In response,

OUII submits that invalidity for anticipation is a factual inquiry. See Hoover Group, Inc. v.

Custom Metal Craft, Inc., 66 F.3d 299, 302, 36 U.S.P.Q.2D (BNA) 1101, 1103 (Fed. Cir. 1995)

(“Anticipation is a question of fact.”). Similarly, although an obviousness determination is a

40

question of law, it is based on “underlying factual determinations.” In re NTP, Inc., 654 F.3d

1279, 1297 (Fed. Cir. 2011). OUII submits that Samsung has not identified clear factual error in

the Initial Determination’s invalidity analyses, nor has Samsung convincingly established that

the Initial Determination includes legal error with respect to this issue. The Initial Determination

provides a detailed and accurate analysis directed to invalidity based on ample evidence in the

record, which shows that Samsung has not proven by clear and convincing evidence that the ‘501

patent is invalid. (See ID at 351-379.)

6. Alleged Errors In the Initial Determination Relating To Finding that Some References Do Not Render the ‘697 Patent Claims Invalid

Samsung alleges that the Initial Determination erred in finding that certain of the asserted

references do not render the ‘697 patent claims invalid. (Samsung Pet. at 75-95.) In response,

OUII submits that invalidity for anticipation is a factual inquiry. See Hoover Group, Inc. v.

Custom Metal Craft, Inc., 66 F.3d 299, 302, 36 U.S.P.Q.2D (BNA) 1101, 1103 (Fed. Cir. 1995)

(“Anticipation is a question of fact.”). Similarly, although an obviousness determination is a

question of law, it is based on “underlying factual determinations.” In re NTP, Inc., 654 F.3d

1279, 1297 (Fed. Cir. 2011). OUII submits that Samsung has not identified clear factual error in

the Initial Determination’s invalidity analyses, nor has Samsung convincingly established that

the Initial Determination includes legal error regarding this issue. The Initial Determination

provides a detailed and accurate analysis directed to invalidity based on ample evidence in the

record, which shows that Samsung has not proven by clear and convincing evidence that the ‘697

patent is invalid. (See ID at 385-439.) As such, Samsung’s petition should be denied.

7. Alleged Errors In the Initial Determination Relating To Domestic Industry (Economic Prong)

Finally, Samsung alleges that the Commission should review and reverse the ALJ’s

41

findings that Apple satisfied the economic prong of the domestic industry requirement for all of

the asserted patents “because the ALJ improperly credited investments in discontinued products

and because Apple did not show the requisite nexus between the domestic industry products and

Apple’s domestic investments.” (Samsung Pet. at 96-99.)

According to Samsung, “Apple discontinued the iPhone, iPhone 3G, iPad, and 1st-3rd

generation iPod Touch before it filed the complaint.” (Samsung Pet. at 96.) In response, OUII

submits that regardless of whether Apple has discontinued the products, the evidence shows that

Apple has made significant investments in labor and capital in connection with both these

products and its current products. For instance, Apple has presented convincing evidence that

the majority of its U.S. retail stores feature customer service centers known as Genius Bars,”

where specially trained employees provide customer training, support, and repairs for the

products. (See CX-2432C at 10; CX-2434C at 18; CDX-107C.) For example, Apple presented

evidence that at the end of FY 2011, it employed over of these types of employees

worldwide and over in the U.S. (See CX-2432C at 10; CX-2434C at 18; CDX-107C;

CDX-203C.)

Apple has also presented evidence that it provides customer support through its network

of authorized service centers, which includes U.S. providers authorized to service iPad and iPod

products, including the allegedly discontinued products. (See CX-2432C at 11; CX-2434C at 18;

CDX-108C; CDX-204C.) Further, Apple presented evidence that to train Geniuses and

authorized service providers, it maintains a training and certification program, which employs

more than individuals in the U.S. (See CX-2432C at 11.) Finally, Apple has shown that in

the first three quarters of FY 2011, it spent more than on its training and certification

program. (Id.; CX-21C at 6; see also CX-2434C at 19; see also ID at 451-454.) In light of the

42

foregoing, Samsung’s allegation that the ALJ improperly credited investments in discontinued

products is without merit.

Samsung next alleges that “[t]he ALJ erred by finding that Apple invested substantially

in each asserted patent, despite that Apple did not establish a nexus between its claimed

investments and the Asserted Patents or the domestic industry products.” (Samsung Pet. at 98.)

According to Samsung, “. . . no evidence establishes that Apple expends research and

development funds after any of its products – much less the discontinued domestic industry

products – is discontinued.” (Id.) In response, OUII submits that Samsung ignores the evidence

presented above pertaining to Apple’s investments in the alleged discontinued products.

Therefore, OUII submits that Samsung’s argument is without merit.

Additionally, Samsung notes that “CX-20C purports to show ‘expenditures incurred in

connection with developing each version of iOS on a version-by-version and quarter-by-quarter

basis’.” (Samsung Pet. at 98; see also CIB at 267.) According to Samsung, “Apple claims that it

‘spent more than in the U.S. on research and development of iOS 5.0 and ‘more than

in the U.S. on research and development of iOS 3.0 . . .’.” (Id.) Samsung argues

that the record reflects insufficient evidence for the ALJ or the Commission “to sua sponte

allocate these investments for Apple” and that Apple’s proposition that “some of the domestic

industry products operate with iOS 3.0 and/or iOS 5.0 does not establish that all products

executing these versions of iOS are domestic industry products.” (Samsung Pet. at 98-99.) In

response, OUII submits that, regardless, Apple has presented sufficient statistics that reflect

Apple’s U.S. R&D investments, categorized by Domestic Industry product on a patent-by-patent

basis. (See CX-19C; see also ID at 450.) Samsung’s allegations regarding the economic prong

of the domestic industry requirement, therefore, should be rejected.

43

IV. CONCLUSION

For the foregoing reasons, the OUII submits that the Administrative Law Judge did not

commit legal or factual error. As such, Respondents’ petition should be denied. With the

exception of entering a conclusion of law that the SPH-M920 and associated accused products

infringe claim 3 of the ‘501 patent, Complaint’s petition should also be denied.

Respectfully submitted,

/s/ Reginald Lucas Lynn I. Levine, Director David O. Lloyd, Supervisory Attorney Reginald D. Lucas, Investigative Attorney OFFICE OF UNFAIR IMPORT INVESTIGATIONS U.S. International Trade Commission 500 E Street SW, Suite 401 Washington, DC 20436 (202) 205-2221 (Phone) (202) 205-2158 (Facsimile)

November 19, 2012

1

CERTAIN ELECTRONIC DIGITAL MEDIA DEVICES AND COMPONENTS THEREOF

Investigation No. 337-TA-796

CERTIFICATE OF SERVICE The undersigned certifies that on November 19, 2012, he caused the foregoing RESPONSE OF THE OFFICE OF UNFAIR IMPORT INVESTIGATIONS TO THE PRIVATE PARTIES’ PETITIONS FOR REVIEW OF THE INITIAL DETERMINATION ON VIOLATION to be served by hand upon Administrative Law Judge Thomas B. Pender (2 copies) and to be served upon the parties in accordance with the following:

Counsel for Complainant Apple, Inc. by Email Alexander J. Hadjis, Esq. G. Brian Busey, Esq. Kristin L. Yohannan, Esq. MORRISON & FOERSTER LLP 2000 Pennsylvania Avenue NW, Suite 6000 Washington, DC 20006 Telephone: (202) 887-1500 Facsimile: (202) 887-0763 Email: ahadjis@mofo.com Email: gbusey@mofo.com Email: kyohannan@mofo.com Counsel for Respondents Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., and Samsung Telecommunications America, LLC by Email Eric Huang, Esq. Quinn Emanuel Urquhart & Sullivan, LLP 51 Madison Ave., 22nd Floor New York, NY 10010 Telephone: 212-849-7000 Facsimile: 212-849-7100 Email: erichuang@quinnemanuel.com Alex Lasher, Esq. Quinn Emanuel Urquhart & Sullivan, LLP 1299 Pennsylvania Ave., NW, Suite 825 Washington, D.C. 20004 Telephone: 202-538-8000 Facsimile: 202-538-8100 Email: alexlasher@quinnemanuel.com Charles F. Schill, Esq. Steptoe & Johnson LLP 1330 Connecticut Avenue, NW Washington, DC 20036

2

Telephone: 202-429-8162 Facsimile: 202.429.8162 Email: cschill@steptoe.com

/s/ Reginald D. Lucas Reginald D. Lucas Investigative Attorney OFFICE OF UNFAIR IMPORT INVESTIGATIONS U.S. International Trade Commission 500 E Street, S.W., Suite 401 Washington, D.C. 20436 Telephone: 202.205.2036

Facsimile: 202.205.2158