In the Matter of Certain Recordable Compact Disc And Rewritable Compact Discs; Notice of Issuance of General Exclusion Order and Cease and Desist Orders; Termination of the Investigation, 6286-6288 [E7-2196]

Download as PDF 6286 Federal Register / Vol. 72, No. 27 / Friday, February 9, 2007 / Notices • Fargo, ND, Ramada Plaza Suites and Conference Center, Brahms Room, 1635 42nd Street SW., 58103. • Fort Yates, ND, Prairie Knights Casino and Resort, 7932 Highway 24, 58538–9736. • New Town, ND, 4 Bears Casino and Lodge, Hidatsa/Arikara Room, 202 Frontage Road, 58763. FOR FURTHER INFORMATION CONTACT: Ms. Signe Snortland, telephone: (701) 250– 4242 extension 3619, or FAX to (701) 250–4326. You may submit e-mail comments to ssnortland@gp.usbr.gov or through the Red River Valley Water Supply Project Web site at https:// www.rrvwsp.com. SUPPLEMENTARY INFORMATION: The Supplemental DEIS is available for public inspection at the following locations: Iowa • Des Moines Public Library, 100 Locust Street, Des Moines, IA. Kansas • Topeka and Shawnee County Public Library, 1515 SW 10th Street, Topeka, KS. Minnesota • Breckenridge Public Library, 205 7th Street North, Breckenridge, MN. • East Grand Forks Library, 422 4th Street Northwest, East Grand Forks, MN. • Moorhead Public Library, 118 5th Street South, Moorhead, MN. • Perham Public Library, 225 2nd Ave. NE, Perham, MN. • Red Lake Band of Chippewa Indians, PO Box 550, Red Lake, MN. • St. Paul Public Library, 90 West 4th Street, St. Paul, MN. • Warroad City Library, 202 Main Ave. NW, Warroad, MN. • White Earth Reservation, 26246 Crane Road, White Earth, MN. Missouri • Kansas City Public Library, 14 West 10th Street, Kansas City, MO • Missouri River Regional Library, 214 Adams Street, Jefferson City, MO Montana • Bureau of Reclamation, Great Plains Regional Office, 316 N. 26th Street, Billings, MT. jlentini on PROD1PC65 with NOTICES Nebraska • Lincoln City Libraries, 136 South 14th Street, Lincoln, NE. North Dakota • Alfred Dickey Public Library, 105 3rd Street SE, Jamestown, ND. • Bureau of Indian Affairs, Turtle Mountain Agency, PO Box 60, Highway 5 West, Belcourt, ND. VerDate Aug<31>2005 21:06 Feb 08, 2007 Jkt 211001 • Bureau of Indian Affairs, Fort Berthold Agency, 202 Main Street, New Town, ND. • Bureau of Indian Affairs, Fort Totten Agency, PO Box 270 / Main Street, Fort Totten, ND. • Bureau of Reclamation, Dakotas Area Office, 304 E. Broadway Ave., Bismarck, ND. • Fargo Public Library, 102 3rd Street North, Fargo, ND. • Garrison Diversion Conservancy District, 401 Highway 281 NE, Carrington, ND. • Grand Forks Public Library, 2110 Library Circle, Grand Forks, ND. • Leach Public Library, 417 2nd Ave. North, Wahpeton, ND. • North Dakota State Library, 603 East Blvd. Ave., Bismarck, ND. • Standing Rock Administrative Service Center, Bldg. #1, North Standing Rock Avenue, Fort Yates, ND. • West Fargo Public Library, 109 3rd Street East, West Fargo, ND. South Dakota • Bureau of Indian Affairs, Sisseton Agency, Veterans Memorial D, Agency Village, SD. • South Dakota State Library, 800 Governors Drive, Pierre, SD. Province of Manitoba • Millennium Library, 251, Donald Street, Winnipeg, Manitoba, Canada. Province of Ontario • Kenora Branch Library, 24 Main Street South, Kenora, Ontario, Canada. Our practice is to make comments, including names, home addresses, home phone numbers, and e-mail addresses of respondents, available for public review. Individual respondents may request that we withhold their names and/or home addresses, etc., but if you wish us to consider withholding this information you must state this prominently at the beginning of your comments. In addition you must present a rationale for withholding this information. The rationale must demonstrate that the disclosure would constitute a clearly unwarranted invasion of privacy. Unsupported assertions will not meet this burden. In the absence of exceptional, documentable circumstances, this information will be released. We will always make submissions for organizations or businesses, and from individuals identifying themselves as representatives or officials of organizations or businesses, available for public inspection in their entirety. PO 00000 Frm 00093 Fmt 4703 Sfmt 4703 Dated: January 8, 2007. Michael J. Ryan, Regional Director, Great Plains Region. [FR Doc. E7–1774 Filed 2–8–07; 8:45 am] BILLING CODE 4310–MN–P INTERNATIONAL TRADE COMMISSION [Inv. No. 337–TA–474] In the Matter of Certain Recordable Compact Disc And Rewritable Compact Discs; Notice of Issuance of General Exclusion Order and Cease and Desist Orders; Termination of the Investigation U.S. International Trade Commission. ACTION: Notice. AGENCY: SUMMARY: Notice is hereby given that the U.S. International Trade Commission has determined to reversein-part the presiding administrative law judge’s (‘‘ALJ’s’’) final initial determination of October 24, 2003, in the above-captioned investigation and has determined that the patents in issue are not unenforceable for patent misuse. Having found a violation of section 337 of the Tariff Act of 1930, 19 U.S.C. 1337, in the above-captioned investigation, the Commission has issued a general exclusion order and cease and desist orders directed to four domestic respondents, and has terminated the investigation. In its discretion, the Commission has also determined to grant Philips’ motion for leave to reply and to deny respondents’ request to reopen the record for further discovery. FOR FURTHER INFORMATION CONTACT: Clara Kuehn, Esq., Office of the General Counsel, U.S. International Trade Commission, 500 E Street, SW., Washington, DC 20436, telephone (202) 205–3012. Copies of the Commission’s orders, the public version of its opinion, the public version of the ALJ’s ID, and all other non-confidential documents filed in connection with this investigation are or will be available for inspection during official business hours (8:45 a.m. to 5:15 p.m.) in the Office of the Secretary, U.S. International Trade Commission, 500 E Street, SW., Washington, DC 20436, telephone 202–205–2000. General information concerning the Commission may also be obtained by accessing its Internet server (https://www.usitc.gov). The public record for this investigation may be viewed on the Commission’s electronic docket (EDIS) at https:// edis.usitc.gov. Hearing-impaired persons are advised that information on E:\FR\FM\09FEN1.SGM 09FEN1 jlentini on PROD1PC65 with NOTICES Federal Register / Vol. 72, No. 27 / Friday, February 9, 2007 / Notices this matter can be obtained by contacting the Commission’s TDD terminal on 202–205–1810. SUPPLEMENTARY INFORMATION: The Commission instituted this investigation on July 26, 2002, based on a complaint filed by U.S. Philips Corporation of Tarrytown, New York (‘‘Philips’’ or ‘‘complainant’’). 67 FR 48,948 (2002). The complaint, as supplemented, alleged violations of section 337 of the Tariff Act of 1930 in the importation into the United States, the sale for importation, and the sale within the United States after importation of certain recordable compact discs and rewritable compact discs by reason of infringement of certain claims of six U.S. patents: claims 1, 5, and 6 of U.S. Patent No. 4,807,209; claim 11 of U.S. Patent No. 4,962,493; claims 1, 2, and 3 of U.S. Patent No. 4,972,401; claims 1, 3, and 4 of U.S. Patent No. 5,023,856; claims 1–5, and 6 of U.S. Patent No. 4,999,825; and claims 20, 23–33, and 34 of U.S. Patent No. 5,418,764. 67 FR 48,948 (2002). The notice of investigation named 19 respondents, including Gigastorage Corporation Taiwan of Hsinchu, Taiwan; Gigastorage Corporation USA of Livermore, California (collectively, ‘‘Gigastorage’’); Linberg Enterprise Inc. (‘‘Linberg’’) of West Orange, New Jersey; and DiscsDirect.Com of Campbell, California. 67 FR. 48,948 (2002). On August 14, 2002, the ALJ issued an initial determination (ALJ Order No. 2) granting a motion to intervene as respondents by Princo Corporation of Hsinchu, Taiwan, and Princo America Corporation of Fremont, California (collectively, ‘‘Princo’’). The Commission determined not to review Order No. 2. On October 24, 2003, the ALJ issued his final initial determination (‘‘ID’’) of no violation of section 337. When the ID issued, Gigastorage, Linberg, and Princo (collectively, ‘‘respondents’’) were the only remaining active respondents in the investigation. See ALJ Order No. 6 (an unreviewed initial determination terminating eight respondents on the basis of a consent order); ALJ Order No. 17 (an unreviewed initial determination terminating each of three respondents on the basis of a consent order and settlement agreement); ALJ Order No. 18 (an unreviewed initial determination terminating one respondent on the basis of a consent order and settlement agreement); and ALJ Order No. 21 (an unreviewed initial determination finding four respondents, including DiscsDirect.Com, in default). In his final ID, the ALJ found that none of the asserted claims are invalid, that the VerDate Aug<31>2005 21:06 Feb 08, 2007 Jkt 211001 accused products infringe the asserted patent claims,1 and that the domestic industry requirement of section 337 had been satisfied. Nonetheless, the ALJ found no violation of section 337 because he concluded that all of the asserted patents were unenforceable by reason of patent misuse by Philips. On November 5, 2003, complainant Philips petitioned for review of the portion of the final ID that found the asserted patents unenforceable due to patent misuse. On the same day, respondents filed a paper entitled ‘‘Statement of Respondents Princo Corp., Princo America Corp., Gigastorage Corp. Taiwan, Gigastorage Corp. USA, and Linberg Enterprises, Inc. Regarding the Initial Determination,’’ in which respondents urged the Commission to adopt the ID in its entirety. Respondents and the Commission investigative attorney (‘‘IA’’) filed responses to Philips’ petition for review. On December 8, 2003, the ALJ issued his recommended determination on remedy and bonding. On December 10, 2003, the Commission determined to review all of the ID’s findings of fact and conclusions of law concerning patent misuse. The Commission determined not to review the remainder of the ID, thereby adopting the unreviewed portions. The Commission issued a notice dated December 10, 2003, in which it requested briefing on the issues under review, and invited interested persons to file written submissions on the issues of remedy, the public interest, and bonding. 68 FR 70036 (2003). In accordance with that notice, all parties to the investigation filed timely written submissions, and timely reply submissions, regarding the issues under review. In the final ID, the ALJ found the asserted patents to be unenforceable for patent misuse per se, and he also found patent misuse under a ‘‘rule of reason’’ standard. On review, the Commission affirmed the ALJ’s conclusion that the asserted patents are unenforceable for patent misuse per se, but on the ground that Philips’ practice of mandatory package licensing constituted patent misuse per se as a tying arrangement between (1) licenses to patents that are essential to manufacture CD–Rs or CD– RWs according to Orange Book standards and (2) licenses to four other patents that are not essential to that activity, viz., U.S. Patent No. 5,001,692 (‘‘the Farla ’692 patent’’), U.S. Patent 1 In his final ID, the ALJ identified claims 1, 2, 4, 5, and 6 of U.S. Patent No. 4,999,825 as asserted by Philips. ID at 111–116. PO 00000 Frm 00094 Fmt 4703 Sfmt 4703 6287 No. 5,060,219 (‘‘the Lockhoff ’219 patent’’), U.S. Patent No. 5,740,149 (‘‘the Iwasaki ’149 patent’’), and U.S. Patent No. Re. 34,719 (‘‘the Yamamoto ’719 patent’’). 69 FR 12711, 12712 (March 17, 2004); Commission opinion at 23–25 (issued March 25, 2004).2 The Commission took no position on the ALJ’s conclusion that the asserted patents are unenforceable for patent misuse per se based on theories of price fixing and price discrimination. 69 FR at 12712 n.1; Commission opinion at 5 n.3. The Commission also adopted the ALJ’s conclusion that the asserted patents are unenforceable for patent misuse under a rule of reason standard based on the ALJ’s analysis of and findings as to the tying arrangement. 69 FR at 12712; Commission opinion at 50– 52. The Commission took no position on the ALJ’s conclusion that the royalty rate structure of the CD–R/RW patent pools is an unreasonable restraint of trade. 69 FR at 12712 n.2; Commission opinion at 5, 51. The Commission also affirmed the ALJ’s conclusion that the patent misuse has not been shown to have been purged. 69 FR at 12712; Commission opinion at 63. Based on these determinations, the Commission found no violation of section 337 in this investigation. Id. Philips appealed the Commission’s final determination to the United States Court of Appeals for the Federal Circuit (‘‘the Federal Circuit’’), and respondents intervened. On September 21, 2005, the Federal Circuit reversed the Commission’s final determination of no violation of section 337 in this investigation, and remanded the case for further proceedings consistent with the Court’s opinion. U.S. Philips Corp. v. Int’l Trade Comm’n, 424 F.3d 1179 (Fed. Cir. 2005). The Court issued its mandate on December 27, 2005, returning jurisdiction over this investigation to the Commission. The Supreme Court denied respondents’ petition for a writ of certiorari on June 19, 2006. On January 17, 2006, the Commission issued an order seeking comments from the parties as to how to proceed on remand. The Commission specifically 2 The ALJ identified twelve patents included in the CD–R or CD–RW package licenses as nonessential to manufacture CD–Rs or CD–RWs according to Orange Book standards. ID at 196–213. The Commission took no position on the ALJ’s analysis of eight of those patents, viz., U.S. Patent Nos. 4,962,493 (‘‘the Kramer ’493 patent’’); 4,807,209 (‘‘the Kramer ’209 patent’’); 4,942,565 (‘‘the Lagadec ’565 patent’’); 5,126,994 (‘‘the Ogawa ’994 patent’’); 5,978,351 (‘‘the Spruit ’351 patent’’); 5,835,462 (‘‘the Mimnagh ’462 patent’’); 4,990,388 (‘‘the Hamada ’388 patent’’); and 5,090,009 (‘‘the Hamada ’009 patent’’). Commission opinion at 43 n.28, 50–51 (March 25, 2005). E:\FR\FM\09FEN1.SGM 09FEN1 jlentini on PROD1PC65 with NOTICES 6288 Federal Register / Vol. 72, No. 27 / Friday, February 9, 2007 / Notices requested comments as to how it should proceed with those portions of the October 24, 2003, final ID upon which the Commission did not take a position. On February 21, 2006, Philips filed comments pursuant to the Commission’s January 17, 2006, order. On the same day, respondents jointly filed comments. On February 23, 2006, the IA filed his comments, in which he requested, inter alia, that all parties be given the opportunity to respond to the comments filed by the private parties. On March 10, 2006, Philips filed a memorandum in reply to respondents’ February 21, 2006, comments. On March 21, 2006, the Commission issued an order directing the parties to file responses to the comments of the private parties filed on February 21, 2006. The Commission also denied Philips’ motion to file its March 10, 2006, reply memorandum without prejudice to its re-submission as part of Philips’ response. On April 18, 2006, all parties filed response comments pursuant to the Commission’s March 21, 2006, order. On April 25, 2006, Philips filed a motion for leave to reply, with attached reply, to the response comments filed by the IA on April 18, 2006. On May 2, 2006, respondents filed an opposition to Philips’s motion for leave to reply to the IA’s response comments. In its discretion, the Commission has determined to grant Philips’ motion for leave to reply and to deny respondents’ request to reopen the record for further discovery. Having reviewed the record in this investigation, including the parties’ written submissions, the Commission has determined to reverse the ALJ’s findings of patent misuse per se on theories of price fixing and price discrimination, has determined to reverse the ALJ’s findings of patent misuse under the rule of reason standard, and has found a violation of section 337 of the Tariff Act of 1930, 19 U.S.C. 1337. The Commission has further determined that the appropriate form of relief is a general exclusion order prohibiting the unlicensed entry for consumption of recordable and rewritable compact discs that infringe the claims in issue of the six patents asserted by Philips in this investigation. The Commission has also determined to issue four cease and desist orders directed to domestic respondents Princo America Corporation; Gigastorage Corporation USA; Linberg; and DiscsDirect.Com. The Commission has also determined that the public interest factors enumerated in subsections (d), (f), and (g) of section 337 of the Tariff Act of VerDate Aug<31>2005 21:06 Feb 08, 2007 Jkt 211001 1930 (19 U.S.C. 1337(d), (f), and (g)) do not preclude the issuance of the aforementioned general exclusion order and cease and desist orders, and that the recordable and rewritable compact discs in question may be imported into the United States during the period of Presidential review under bond in the amount of US$0.06 per such article. The general exclusion order, cease and desist orders, and Commission opinion supporting its determination were delivered to the United States Trade Representative on the date of issuance. This action is taken under the authority of section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), the Administrative Procedure Act, 5 U.S.C. 551 et seq., and sections 210.45– 210.51 of the Commission’s Rules of Practice and Procedure (19 CFR 210.45– 210.51). By order of the Commission. Issued: February 5, 2007. Marilyn R. Abbott, Secretary to the Commission. [FR Doc. E7–2196 Filed 2–8–07; 8:45 am] BILLING CODE 7020–02–P INTERNATIONAL TRADE COMMISSION [Investigation No. TR–5003–1] Textiles and Apparel: Effects of Special Rules for Haiti on Trade Markets and Industries United States International Trade Commission. ACTION: Institution of investigation and scheduling of hearing. AGENCY: SUMMARY: Pursuant to section 5003 of the Tax Relief and Health Care Act of 2006, signed by the President on December 20, 2006 (Public Law 109– 432), the Commission instituted investigation No. TR–5003–1, Textiles and Apparel: Effects of Special Rules for Haiti on Trade Markets and Industries, for the purpose of submitting a report to Congress on the effects of the amendments made by the act on the trade markets and industries, involving textile and apparel articles, of Haiti, the countries described in clauses (ii) and (iii) of section 213A(b)(2)(C) of the Caribbean Basin Economic Recovery Act (as added by section 5002 of this Act), and the United States. DATES: October 23, 2007: Deadline for filing requests to appear at the public hearing. October 25, 2007: Deadline for filing pre-hearing briefs and statements. PO 00000 Frm 00095 Fmt 4703 Sfmt 4703 November 8, 2007, 9:30 am: Public hearing. February 7, 2008: Deadline for written statements, including any posthearing briefs. June 20, 2008: Deadline for transmittal of Commission report to Congress. ADDRESSES: All Commission offices, including the Commission’s hearing rooms, are located in the United States International Trade Commission Building, 500 E Street SW., Washington, DC. All written submissions, including requests to appear at the hearing, statements, and briefs, should be addressed to the Secretary, United States International Trade Commission, 500 E Street SW., Washington, DC 20436. The public record for this investigation may be viewed on the Commission’s electronic docket (EDIS) at https://edis.usitc.gov. FOR FURTHER INFORMATION CONTACT: Information specific to this investigation may be obtained from Project Leaders William Deese (202–205–2626; william.deese@usitc.gov) and Russell Duncan (202–708–4727; russell.duncan@usitc.gov). For information on the legal aspects of these investigations, contact William Gearhart of the Office of the General Counsel (202–205–3091; william.gearhart@usitc.gov). The media should contact Margaret O’Laughlin of the Office of External Relations (202– 205–1819; margaret.olaughlin@usitc.gov). General information concerning the Commission may also be obtained by accessing its Internet server (https://www.usitc.gov). Hearing-impaired individuals may obtain information on this matter by contacting the Commission’s TDD terminal on 202–205–1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at 202–205–2000. Background: Title V of the Tax Relief and Health Care Act of 2006 (TRHCA), which may also be cited as the Haitian Hemispheric Opportunity through Partnership Encouragement Act of 2006, provides certain trade benefits for Haiti. These benefits are set forth in section 5002 of the TRHCA in the form of an amendment to the Caribbean Basin Economic Recovery Act (CBERA) (19 U.S.C. 2701 et seq.) that adds a new section 213A entitled ‘‘Special Rules for Haiti.’’ Section 5003 of TRHCA directs the Commission to submit a report to Congress on the effects of the amendments made by the act on the trade markets and industries, involving textile and apparel articles, of Haiti, the countries described in clauses (ii) and E:\FR\FM\09FEN1.SGM 09FEN1

Agencies

[Federal Register Volume 72, Number 27 (Friday, February 9, 2007)]
[Notices]
[Pages 6286-6288]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-2196]


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INTERNATIONAL TRADE COMMISSION

[Inv. No. 337-TA-474]


In the Matter of Certain Recordable Compact Disc And Rewritable 
Compact Discs; Notice of Issuance of General Exclusion Order and Cease 
and Desist Orders; Termination of the Investigation

AGENCY: U.S. International Trade Commission.

ACTION: Notice.

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SUMMARY: Notice is hereby given that the U.S. International Trade 
Commission has determined to reverse-in-part the presiding 
administrative law judge's (``ALJ's'') final initial determination of 
October 24, 2003, in the above-captioned investigation and has 
determined that the patents in issue are not unenforceable for patent 
misuse. Having found a violation of section 337 of the Tariff Act of 
1930, 19 U.S.C. 1337, in the above-captioned investigation, the 
Commission has issued a general exclusion order and cease and desist 
orders directed to four domestic respondents, and has terminated the 
investigation. In its discretion, the Commission has also determined to 
grant Philips' motion for leave to reply and to deny respondents' 
request to reopen the record for further discovery.

FOR FURTHER INFORMATION CONTACT: Clara Kuehn, Esq., Office of the 
General Counsel, U.S. International Trade Commission, 500 E Street, 
SW., Washington, DC 20436, telephone (202) 205-3012. Copies of the 
Commission's orders, the public version of its opinion, the public 
version of the ALJ's ID, and all other non-confidential documents filed 
in connection with this investigation are or will be available for 
inspection during official business hours (8:45 a.m. to 5:15 p.m.) in 
the Office of the Secretary, U.S. International Trade Commission, 500 E 
Street, SW., Washington, DC 20436, telephone 202-205-2000. General 
information concerning the Commission may also be obtained by accessing 
its Internet server (https://www.usitc.gov). The public record for this 
investigation may be viewed on the Commission's electronic docket 
(EDIS) at https://edis.usitc.gov. Hearing-impaired persons are advised 
that information on

[[Page 6287]]

this matter can be obtained by contacting the Commission's TDD terminal 
on 202-205-1810.

SUPPLEMENTARY INFORMATION: The Commission instituted this investigation 
on July 26, 2002, based on a complaint filed by U.S. Philips 
Corporation of Tarrytown, New York (``Philips'' or ``complainant''). 67 
FR 48,948 (2002). The complaint, as supplemented, alleged violations of 
section 337 of the Tariff Act of 1930 in the importation into the 
United States, the sale for importation, and the sale within the United 
States after importation of certain recordable compact discs and 
rewritable compact discs by reason of infringement of certain claims of 
six U.S. patents: claims 1, 5, and 6 of U.S. Patent No. 4,807,209; 
claim 11 of U.S. Patent No. 4,962,493; claims 1, 2, and 3 of U.S. 
Patent No. 4,972,401; claims 1, 3, and 4 of U.S. Patent No. 5,023,856; 
claims 1-5, and 6 of U.S. Patent No. 4,999,825; and claims 20, 23-33, 
and 34 of U.S. Patent No. 5,418,764. 67 FR 48,948 (2002).
    The notice of investigation named 19 respondents, including 
Gigastorage Corporation Taiwan of Hsinchu, Taiwan; Gigastorage 
Corporation USA of Livermore, California (collectively, 
``Gigastorage''); Linberg Enterprise Inc. (``Linberg'') of West Orange, 
New Jersey; and DiscsDirect.Com of Campbell, California. 67 FR. 48,948 
(2002). On August 14, 2002, the ALJ issued an initial determination 
(ALJ Order No. 2) granting a motion to intervene as respondents by 
Princo Corporation of Hsinchu, Taiwan, and Princo America Corporation 
of Fremont, California (collectively, ``Princo''). The Commission 
determined not to review Order No. 2.
    On October 24, 2003, the ALJ issued his final initial determination 
(``ID'') of no violation of section 337. When the ID issued, 
Gigastorage, Linberg, and Princo (collectively, ``respondents'') were 
the only remaining active respondents in the investigation. See ALJ 
Order No. 6 (an unreviewed initial determination terminating eight 
respondents on the basis of a consent order); ALJ Order No. 17 (an 
unreviewed initial determination terminating each of three respondents 
on the basis of a consent order and settlement agreement); ALJ Order 
No. 18 (an unreviewed initial determination terminating one respondent 
on the basis of a consent order and settlement agreement); and ALJ 
Order No. 21 (an unreviewed initial determination finding four 
respondents, including DiscsDirect.Com, in default). In his final ID, 
the ALJ found that none of the asserted claims are invalid, that the 
accused products infringe the asserted patent claims,\1\ and that the 
domestic industry requirement of section 337 had been satisfied. 
Nonetheless, the ALJ found no violation of section 337 because he 
concluded that all of the asserted patents were unenforceable by reason 
of patent misuse by Philips.
---------------------------------------------------------------------------

    \1\ In his final ID, the ALJ identified claims 1, 2, 4, 5, and 6 
of U.S. Patent No. 4,999,825 as asserted by Philips. ID at 111-116.
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    On November 5, 2003, complainant Philips petitioned for review of 
the portion of the final ID that found the asserted patents 
unenforceable due to patent misuse. On the same day, respondents filed 
a paper entitled ``Statement of Respondents Princo Corp., Princo 
America Corp., Gigastorage Corp. Taiwan, Gigastorage Corp. USA, and 
Linberg Enterprises, Inc. Regarding the Initial Determination,'' in 
which respondents urged the Commission to adopt the ID in its entirety. 
Respondents and the Commission investigative attorney (``IA'') filed 
responses to Philips' petition for review.
    On December 8, 2003, the ALJ issued his recommended determination 
on remedy and bonding.
    On December 10, 2003, the Commission determined to review all of 
the ID's findings of fact and conclusions of law concerning patent 
misuse. The Commission determined not to review the remainder of the 
ID, thereby adopting the unreviewed portions. The Commission issued a 
notice dated December 10, 2003, in which it requested briefing on the 
issues under review, and invited interested persons to file written 
submissions on the issues of remedy, the public interest, and bonding. 
68 FR 70036 (2003). In accordance with that notice, all parties to the 
investigation filed timely written submissions, and timely reply 
submissions, regarding the issues under review.
    In the final ID, the ALJ found the asserted patents to be 
unenforceable for patent misuse per se, and he also found patent misuse 
under a ``rule of reason'' standard. On review, the Commission affirmed 
the ALJ's conclusion that the asserted patents are unenforceable for 
patent misuse per se, but on the ground that Philips' practice of 
mandatory package licensing constituted patent misuse per se as a tying 
arrangement between (1) licenses to patents that are essential to 
manufacture CD-Rs or CD-RWs according to Orange Book standards and (2) 
licenses to four other patents that are not essential to that activity, 
viz., U.S. Patent No. 5,001,692 (``the Farla '692 patent''), U.S. 
Patent No. 5,060,219 (``the Lockhoff '219 patent''), U.S. Patent No. 
5,740,149 (``the Iwasaki '149 patent''), and U.S. Patent No. Re. 34,719 
(``the Yamamoto '719 patent''). 69 FR 12711, 12712 (March 17, 2004); 
Commission opinion at 23-25 (issued March 25, 2004).\2\ The Commission 
took no position on the ALJ's conclusion that the asserted patents are 
unenforceable for patent misuse per se based on theories of price 
fixing and price discrimination. 69 FR at 12712 n.1; Commission opinion 
at 5 n.3.
---------------------------------------------------------------------------

    \2\ The ALJ identified twelve patents included in the CD-R or 
CD-RW package licenses as non-essential to manufacture CD-Rs or CD-
RWs according to Orange Book standards. ID at 196-213. The 
Commission took no position on the ALJ's analysis of eight of those 
patents, viz., U.S. Patent Nos. 4,962,493 (``the Kramer '493 
patent''); 4,807,209 (``the Kramer '209 patent''); 4,942,565 (``the 
Lagadec '565 patent''); 5,126,994 (``the Ogawa '994 patent''); 
5,978,351 (``the Spruit '351 patent''); 5,835,462 (``the Mimnagh 
'462 patent''); 4,990,388 (``the Hamada '388 patent''); and 
5,090,009 (``the Hamada '009 patent''). Commission opinion at 43 
n.28, 50-51 (March 25, 2005).
---------------------------------------------------------------------------

    The Commission also adopted the ALJ's conclusion that the asserted 
patents are unenforceable for patent misuse under a rule of reason 
standard based on the ALJ's analysis of and findings as to the tying 
arrangement. 69 FR at 12712; Commission opinion at 50-52. The 
Commission took no position on the ALJ's conclusion that the royalty 
rate structure of the CD-R/RW patent pools is an unreasonable restraint 
of trade. 69 FR at 12712 n.2; Commission opinion at 5, 51. The 
Commission also affirmed the ALJ's conclusion that the patent misuse 
has not been shown to have been purged. 69 FR at 12712; Commission 
opinion at 63. Based on these determinations, the Commission found no 
violation of section 337 in this investigation. Id.
    Philips appealed the Commission's final determination to the United 
States Court of Appeals for the Federal Circuit (``the Federal 
Circuit''), and respondents intervened. On September 21, 2005, the 
Federal Circuit reversed the Commission's final determination of no 
violation of section 337 in this investigation, and remanded the case 
for further proceedings consistent with the Court's opinion. U.S. 
Philips Corp. v. Int'l Trade Comm'n, 424 F.3d 1179 (Fed. Cir. 2005). 
The Court issued its mandate on December 27, 2005, returning 
jurisdiction over this investigation to the Commission. The Supreme 
Court denied respondents' petition for a writ of certiorari on June 19, 
2006.
    On January 17, 2006, the Commission issued an order seeking 
comments from the parties as to how to proceed on remand. The 
Commission specifically

[[Page 6288]]

requested comments as to how it should proceed with those portions of 
the October 24, 2003, final ID upon which the Commission did not take a 
position.
    On February 21, 2006, Philips filed comments pursuant to the 
Commission's January 17, 2006, order. On the same day, respondents 
jointly filed comments. On February 23, 2006, the IA filed his 
comments, in which he requested, inter alia, that all parties be given 
the opportunity to respond to the comments filed by the private 
parties. On March 10, 2006, Philips filed a memorandum in reply to 
respondents' February 21, 2006, comments.
    On March 21, 2006, the Commission issued an order directing the 
parties to file responses to the comments of the private parties filed 
on February 21, 2006. The Commission also denied Philips' motion to 
file its March 10, 2006, reply memorandum without prejudice to its re-
submission as part of Philips' response. On April 18, 2006, all parties 
filed response comments pursuant to the Commission's March 21, 2006, 
order.
    On April 25, 2006, Philips filed a motion for leave to reply, with 
attached reply, to the response comments filed by the IA on April 18, 
2006. On May 2, 2006, respondents filed an opposition to Philips's 
motion for leave to reply to the IA's response comments. In its 
discretion, the Commission has determined to grant Philips' motion for 
leave to reply and to deny respondents' request to reopen the record 
for further discovery.
    Having reviewed the record in this investigation, including the 
parties' written submissions, the Commission has determined to reverse 
the ALJ's findings of patent misuse per se on theories of price fixing 
and price discrimination, has determined to reverse the ALJ's findings 
of patent misuse under the rule of reason standard, and has found a 
violation of section 337 of the Tariff Act of 1930, 19 U.S.C. 1337. The 
Commission has further determined that the appropriate form of relief 
is a general exclusion order prohibiting the unlicensed entry for 
consumption of recordable and rewritable compact discs that infringe 
the claims in issue of the six patents asserted by Philips in this 
investigation. The Commission has also determined to issue four cease 
and desist orders directed to domestic respondents Princo America 
Corporation; Gigastorage Corporation USA; Linberg; and DiscsDirect.Com.
    The Commission has also determined that the public interest factors 
enumerated in subsections (d), (f), and (g) of section 337 of the 
Tariff Act of 1930 (19 U.S.C. 1337(d), (f), and (g)) do not preclude 
the issuance of the aforementioned general exclusion order and cease 
and desist orders, and that the recordable and rewritable compact discs 
in question may be imported into the United States during the period of 
Presidential review under bond in the amount of US$0.06 per such 
article. The general exclusion order, cease and desist orders, and 
Commission opinion supporting its determination were delivered to the 
United States Trade Representative on the date of issuance.
    This action is taken under the authority of section 337 of the 
Tariff Act of 1930, as amended (19 U.S.C. 1337), the Administrative 
Procedure Act, 5 U.S.C. 551 et seq., and sections 210.45-210.51 of the 
Commission's Rules of Practice and Procedure (19 CFR 210.45-210.51).

    By order of the Commission.

    Issued: February 5, 2007.
Marilyn R. Abbott,
Secretary to the Commission.
 [FR Doc. E7-2196 Filed 2-8-07; 8:45 am]
BILLING CODE 7020-02-P
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