Yesterday, Administrative Law Judge David P. Shaw issued a Notice of Initial Determination in In the Matter of Certain Audiovisual Components and Products Containing Same (No. 337-TA-837), an ITC Section 337 investigation based on an infringement complaint brought by LSI and Agere against Funai, Realtek, and Mediatek (who had previously settled out of the case). LSI and Agere accused the respondents of infringing four patents, including three that were allegedly standard-essential: two relating to the IEEE 802.11 Wi-Fi standard, and 1 relating to the ITU-T H.264 standard. In fact, you may recall that the two 802.11 patents at issue were the subject of a recent district court order that purported to prevent LSI and Agere from enforcing any exclusionary relief that it might win at the ITC.
But barring a decision by the full Commission to overturn ALJ Shaw, we won’t have to worry about the potential effect of that district court order — ALJ Shaw has concluded that neither Realtek nor Funai infringe any of the 802.11 or H.264 patents at issue in the case. At this point, it’s not clear whether ALJ Shaw concluded that the patents were not truly standard-essential, or whether he found non-infringement based on some other reason (e.g., the patents may be “essential” to only an optional, non-implemented portion of the standards). Within 30 days, a public version of the full Initial Determination should issue, so we should get some insight into ALJ Shaw’s reasoning for his decision.
It wasn’t all bad news for LSI and Agere, though. ALJ Shaw did find a violation of Section 337 based on Funai’s infringement of a non-standard-essential patent relating to memory and data storage technology. He also concluded that LSI and Agere satisfied the domestic industry requirement for all asserted patents, the respondents failed to prove that any asserted claims were invalid, and further noted that the respondents did not prevail on any equitable or RAND-defense. (Again, we’ll check back in once we see a public version of the initial determination.)
This is the second time in the last few weeks that a standard-essential patent holder has received an unfavorable initial determination from the ITC on standard-essential patents (at least for the infringement issues). But stay tuned to this case and the parties’ post-ID briefing — as we saw with the Samsung-Apple case, the Commission can and often does overrule the administrative law judges’ initial findings.