Public Version
`
`UNITED STATES INTERNATIONAL TRADE COMMISSION
`WASHINGTON, D.C.
`
`In the Matter of
`CERTAIN NOISE CANCELLING
`HEADPHONES
`
`Investigation No. 337-TA-626
`
`t .
`
`9
`r'.
`
`1
`
`RESPONSE OF CREATIVE LABS, INC. TO COMPLAINT, SUPPLEMENTAL
`LETTER, AND NOTICE OF INVESTIGATION
`
`- *
`
`Respondent
`
`Creative Labs, Inc.
`1901 McCarthy Boulevard
`Milpitas, CA 95035
`
`-2 ;i:
`u
`
`Counsel for Respondent
`
`William B. Nash
`Daniel D. Chapman
`Mark Fassold
`JACKSON WALKER L.L.P.
`112 E. Pecan St., Suite 2400
`San Antonio, Texas 78209
`Tel: (210) 978-7700
`Fax: (210) 978-7790
`
`Alan Cope Johnston
`G. Brian Busey
`Cynthia Lopez Beverage
`MORRISON & FOERSTER LLP
`2000 Pennsylvania Ave., NW, Suite 5500
`Washington, DC 20006-1 888
`Tel: (202) 887-6950
`Fax: (202) 887-0763
`
`Page 1
`
`

`
`Public Version
`
`UNITED STATES INTERNATIONAL TRADE COMMISSION
`WASHINGTON, D.C.
`
`In the Matter of
`CERTAIN NOISE CANCELLING
`HEADPHONES
`
`Investigation No. 337-TA-626
`
`RESPONSE OF CREATIVE LABS, INC. TO COMPLAINT, SUPPLEMENTAL
`LETTER, AND NOTICE OF INVESTIGATION
`Pursuant to 19 C.F.R. 9 201.13, Respondent Creative Labs, Inc. (“Creative”) hereby
`
`responds to the Complaint of Bose Corporation (“Bose” or “Complainant”) Under Section 337 of
`
`the Tariff Act of 1930, as Amended (“Complaint”), the Supplemental Letter filed on
`
`December 20, 2007 (the “Supplemental Letter”), and to the Notice of Investigation issued by the
`
`United States International Trade Commission (“the Commission”) dated December 27, 2007.
`
`Respondent answers on personal knowledge as to its own activities and on information and belief
`
`as to the activities of others.
`
`RESPONSE TO COMPLAINT
`
`In answer to the specific allegations of the Complaint filed by Bose, Respondent Creative
`
`responds as follows:
`
`I.
`
`INTRODUCTION
`
`1.1. To the extent the allegations contained in paragraph 1.1 are not factual
`
`allegations, Respondent Creative does not need to respond. Respondent Creative denies all
`
`remaining allegations in paragraph 1.1
`
`1.2. Respondent Creative denies all allegations in paragraph 1.2.
`
`The following headings and numbered paragraphs correspond to and respond to the numbered paragraphs set forth
`I
`in the Complaint. Hereinafter, the terms “headphone(s)” and “headset(s)” will be used interchangeably.
`Page 2
`
`

`
`Public Version
`
`1.3. Respondent Creative admits that documents purported to be (i) a certified copy of
`
`the ‘252 Patent, entitled “High Compliance Headphone Driving,” is attached to the Complaint as
`
`Exhibit 1; (ii) a certified copy of the recorded assignment for the ‘252 Patent is included to the
`
`Complaint as Exhibit 2; and (iii) a certified copy of U.S. Patent No. 4,922,542, entitled
`
`“Headphone Comfort,” is attached to the Complaint as Exhibit 3. Respondent Creative lacks
`
`sufficient knowledge or information to admit or deny the remaining allegations in paragraph 1.3
`
`and footnote 2, and on that basis, denies them.
`
`1.4. Respondent Creative admits that documents purported to be (i) a certified copy of
`
`the ‘792 Patent, entitled “Headset Noise Reducing,” is attached to the Complaint as Exhibit 4;
`
`and (ii) a certified copy of the recorded assignment for the ‘792 Patent is included to the
`
`Complaint as Exhibit 5. Respondent Creative lacks sufficient knowledge or information to admit
`
`or deny the remaining allegations in paragraph 1.4, and on that basis, denies them.
`
`1.5. Respondent Creative denies all allegations in paragraph 1.5.
`
`1.6. The allegations contained in paragraph 1.6 are not factual allegations that call for
`
`a response from Respondent Creative. To the extent the allegations in paragraph 1.6 require a
`
`response, Respondent Creative denies them.
`
`11.
`
`COMPLAINANT
`
`2.1. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 2.1 , and on that basis, denies them.
`
`2.2. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 2.2, and on that basis, denies them.
`
`2.3. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 2.3, and on that basis, denies them.
`
`2.4. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 2.4, and on that basis, denies them.
`
`

`
`Public Version
`
`2.5. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 2.5, and on that basis, denies them.
`
`2.6. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 2.6, and on that basis, denies them.
`
`2.7. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 2.7, and on that basis, denies them.
`
`2.8. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 2.8, and on that basis, denies them.
`
`2.9. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 2.9, and on that basis, denies them.
`
`2.10. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 2.10, and on that basis, denies them.
`
`2.1 1. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 2.1 1, and on that basis, denies them.
`
`111.
`
`PROPOSED RESPONDENTS
`
`3.1. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 3.1, and on that basis, denies them.
`
`3.2. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 3.2, and on that basis, denies them.
`
`3.3. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 3.3, and on that basis, denies them.
`
`3.4. Respondent Creative admits that it is a California corporation having a place or
`
`business at 1901 McCarthy Boulevard, Milpitas, California 95035 and that Exhibit 9 is a copy of
`
`a page from Creative’s website giving contact information including the Milpitas address.
`
`Respondent Creative admits that
`
`its Aurvana X-Fi Noise-Canceling Headphones are
`
`

`
`Public Version
`
`manufactured by Respondent Phitek Systems Limited. Respondent Creative denies that the its
`
`Aurvana X-Fi Noise-Canceling Headphones inhnge any claims of the Patents in Issue.
`
`3.5. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 3.5, and on that basis, denies them.
`
`3.6. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 3.6, and on that basis, denies them.
`
`IV.
`
`PRODUCTS AT ISSUE
`
`4.1. Respondent Creative admits that the products at issue are generally known as
`
`noise cancelling headphones and that noise cancelling headphones can be used for many
`
`functions including, without limitation, listening to music, podcasts, and other audio content. As
`
`to the remaining allegations in paragraph 4.1, Respondent Creative lacks sufficient knowledge or
`
`information to admit or deny, and on that basis, denies them.
`
`4.2. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 4.2, and on that basis, denies them.
`
`4.3. Respondent Creative admits that it currently imports, sells, and/or sells after
`
`importation the Creative Aurvana X-Fi Noise-Canceling Headphones. Respondent Creative
`
`denies that the Creative Aurvana X-Fi Noise-Canceling Headphones are covered by the asserted
`
`claims of the ‘252 and ‘792 patents. As to the remaining allegations in paragraph 4.3,
`
`Respondent Creative lacks sufficient knowledge or information to admit or deny, and on that
`
`basis, denies them.
`
`V.
`
`PATENTS AT ISSUE
`
`A.
`
`The ‘252 Patent
`
`1.
`
`Identification of the Patent and Ownership by Bose
`
`5.2.
`
`Respondent Creative admits that the face of the ‘252 Patent states that it (i) is
`
`entitled “High Compliance Headphone Driving” and issued on January 19, 1993; (ii) issued from
`
`

`
`Public Version
`
`U.S. Patent Application Serial No. 07/782,874, which was filed on October 16, 1991; and (iii)
`
`claims priority to U.S. Patent Application Serial No. 07/398,133, which was filed on August 23,
`
`1989; and (iv) the inventors of the ‘252 Patent are Roman Sapiejewski and John J. Breen.
`
`Respondent Creative lacks sufficient knowledge or information to admit or deny the remaining
`
`allegations in paragraph 5.1, and on that basis, denies them.
`
`5.3. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 5.2, and on that basis, denies them.
`
`5.4.
`
`The allegations contained in paragraph 5.3 are not factual allegations that call for
`
`a response from Respondent Creative. To the extent the allegations in paragraph 5.3 require a
`
`response, Respondent Creative denies them.
`
`2.
`
`Non-Technical Description of the Patented Invention’
`
`5.5.
`
`Respondent Creative admits that the ‘252 patent relates to noise cancelling
`
`headphones. As to the remaining allegations in paragraph 5.4, Respondent Creative lacks
`
`sufficient knowledge or information to admit or deny, and on that basis, denies them.
`
`5.6. Respondent Creative admits that the ‘252 patent claims a noise cancelling
`
`headphone including a high compliance &e., low stiffness) driver (or speaker) in which “high
`
`compliance” is specifically defined as “the driver compliance is greater than the rear cavity
`
`compliance” and that the following illustration is Figure 2 from the ‘252 Patent.
`
`This section (“Non-Technical description of the Patented Invention”) does not, and is not intended to, construe
`either the specification or the claims of the patent.
`
`

`
`Public Version
`
`R
`
`Respondent Creative denies the remaining allegations in paragraph 5.5.
`
`3.
`
`Foreign Counterparts to the ‘252 Patent
`
`5.7.
`
`Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 5.6 and footnotes 4 and 5, and on that basis, denies them.
`
`5.8. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 5.7, and on that basis, denies them.
`
`4.
`
`Licenses of the ‘252 Patent
`
`5.9.
`
`Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 5.8, and on that basis, denies them.
`
`B.
`
`The ‘792 Patent
`
`1.
`
`Identification of the Patent and Ownership by Bose
`
`5.10. Respondent Creative admits that the face of the ‘792 Patent states that it (i) is
`
`entitled “Headset Noise Reducing” and issued on July 22, 2003; (ii) issued from U.S. Patent
`
`Application Serial No. 09/353,425, which was filed on July 15, 1999; and (iii) the inventors of
`
`the ‘792 Patent are Roman Sapiejewski and Michael J. Monahan. Respondent Creative denies
`
`that the ‘792 Patent is attached to the Complaint as Exhibit 3.
`
`5.1 1. Respondent Creative lacks Sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 5.10, and on that basis, denies them. Respondent Creative denies
`
`that Exhibit 4 pertains to the allegations in paragraph 5.10.
`
`

`
`Public Version
`
`5.12. The allegations contained in paragraph 5.1 1 are not factual allegations that call for
`
`a response from Respondent Creative. To the extent the allegations in paragraph 5.1 1 require a
`
`response, Respondent Creative denies them.
`
`5.13. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 5.12, and on that basis, denies them.
`
`2.
`
`Non-Technical Description of the Patented Invention3
`
`5.14.
`
`Respondent Creative agrees that the ‘792 patent relates to an ear cushion
`
`comprised of foam material which inherently increases the effective volume of the ear cup.
`
`Respondent Creative admits that the following illustration is Figure 1 B from the ‘792 Patent.
`
`FIG. 10
`
`Respondent Creative denies the remaining allegations in paragraph 5.13.
`
`3.
`
`Foreign Counterparts to the ‘792 Patent
`
`5.15.
`
`Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 5.14, and on that basis, denies them.
`
`This section (“Non-Technical description of the Patented Invention”) does not, and is not intended to, construe
`either the specification or the claims of the patent.
`
`

`
`Public Version
`
`5.16. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 5.15, and on that basis, denies them.
`
`5.17. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 5.16, and on that basis, denies them,
`
`4.
`
`Licensees of the ‘792 Patent
`
`5.18.
`
`Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 5.17, and on that basis, denies them.
`
`VI. RELATED LITIGATION
`
`6.1. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 6.1, and on that basis, denies them.
`
`6.2. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 6.2, and on that basis, denies them.
`
`6.3. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 6.3, and on that basis, denies them.
`
`6.4. Respondent Creative admits that there are no other proceedings in any other court,
`
`tribunal or agency litigation, domestic or foreign, involving the alleged unfair acts by the
`
`Respondent Creative. As to the remaining allegations in paragraph 6.4, Respondent Creative
`
`lacks sufficient knowledge or information to admit or deny, and on that basis, denies them.
`
`VII. UNFAIR ACTS OF PROPOSED RESPONDENTS
`
`7.1. Respondent Creative denies the allegations in paragraph 7.1 as they relate to
`
`Creative. As to the remaining allegations in paragraph 7.1, Respondent Creative lacks sufficient
`
`knowledge or information to admit or deny, and on that basis, denies them
`
`7.2.
`
`The allegations contained in paragraph 7.2 are not factual allegations that call for
`
`a response fiom Respondent Creative.
`
`To the extent the allegations in paragraph 7.2 and
`
`footnote 7 require a response, Respondent Creative denies them.
`
`

`
`Public Version
`
`VIII. SPECIFIC INSTANCES OF UNFAIR IMPORTATION
`
`8.1. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 8.1, and on that basis, denies them.
`
`8.2. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 8.2, and on that basis, denies them.
`
`8.3. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 8.3, and on that basis, denies them.
`
`8.4. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 8.4, and on that basis, denies them.
`
`8.5.
`
`Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 8.5, and on that basis, denies them.
`
`8.6. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 8.6, and on that basis, denies them.
`
`8.7. Respondent Creative admits that Exhibit 25 is a photograph of the product
`
`packaging for and product of the Creative Aurvana X-Fi Noise-Canceling Headphones. Creative
`
`admits that Exhibit 26 appears to be a copy of email correspondence documenting Bose’s
`
`purchase of the Creative Aurvana X-Fi Noise-Canceling Headphones. Respondent Creative lacks
`
`sufficient knowledge or information to admit or deny the remaining allegations in paragraph 8.7,
`
`and on that basis, denies them.
`
`INFRINGING PRODUCTS UNDER THE
`IX. CLASSIFICATION OF THE
`HARMONIZED TARIFF SCHEDULE OF THE UNITED STATES
`
`9.1. Respondent Creative agrees the accused noise cancelling headphones fall within
`
`the following classification of the Harmonized Tariff Schedule: 8513.30 and/or 851 8.30.2000
`
`(Headphones and earphones, whether or not combined with a microphone, and sets consisting of
`
`a microphone and one or more loudspeakers).
`
`

`
`Public Version
`
`X.
`
`DOMESTIC INDUSTRY
`
`10.1. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`that an industry in the United States exists in connection with the ‘252 patent and/or the ‘792
`
`patent. Respondent Creative admits that documents purporting to be (i) photographs of the Bose
`
`headphone models listed in paragraph 10.1 are attached to the Complaint as Exhibit 27; (ii)
`
`copies of the owner guides for the Bose Consumer Headphones and Aviation Headset headphone
`
`models are attached to the Complaint as Exhibits 28 and 29; and (iii) claim charts applying
`
`representative claim 1 of the ‘252 Patent and claim 1 of the ‘792 Patent are attached to the
`
`Complaint as Exhibits 30 and 31. Respondent Creative lacks sufficient knowledge and
`
`information to admit or deny that the QuietComfort@ 2 Acoustic Noise Cancelling headphone
`
`was included with the Complaint as Physical Exhibit 1. Respondent Creative denies the
`
`remaining allegations in paragraph 10.1 and in Exhibits 30 and 31.
`
`10.2. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 10.2, and on that basis, denies them.
`
`10.3. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 10.3, and on that basis, denies them.
`
`10.4. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 10.4, and on that basis, denies them.
`
`10.5. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 10.5, and on that basis, denies them.
`
`10.6. Respondent Creative lacks sufficient knowledge or information to admit or deny
`
`the allegations in paragraph 10.6, and on that basis, denies them.
`
`

`
`Public Version
`
`XI. REQUESTED RELIEF
`
`The allegations contained in the section entitled “Requested Relief’ are not factual
`
`allegations that call for a response from Respondent Creative. To the extent the allegations call
`
`for a response, Respondent Creative denies them.
`
`To the extent any allegation of the Complaint or Supplemental Letter is not specifically
`
`admitted in the numbered paragraphs above, Respondent Creative denies such allegations.
`
`The following headings and numbered paragraphs do not directly correspond to
`
`numbered paragraphs set forth in the Complaint.
`
`AFFIRMATIVE DEFENSES
`
`11.1. Respondent Creative incorporates by reference, in their entirety, all of
`
`the
`
`affirmative and other defenses asserted by Phitek Systems Limited in Response Of Phitek
`
`Systems Limited To Complaint, Supplemental Letter, And Notice Of In~estigation.~ Discovery is
`
`ongoing at the time of this Response, and therefore, Respondent Creative has not yet had
`
`sufficient time and opportunity to collect and review all the information that may be relevant to
`the matters and issues raised herein. Respondent Creative, therefore, under 19 C.F.R. $8
`
`210.14(b) and 210.14(c), reserve the right to seek amendment of, modify, and/or expand these
`
`defenses and to take further positions as discovery proceeds in this Investigation, and under 19
`C.F.R. 0 210.14(d) to provide supplemental submissions, and 19 C.F.R. $ 210.14(e) to file a
`
`counterclaim.
`
`FIRST DEFENSE
`(Non-Infringement)
`
`For ease of reading and simplicity, Creative is not including all of the text of the defenses incorporated by
`reference of Phitek. If additional specificity is required, it can be found in Response Of Phitek Systems Limited To
`Complaint, Supplemental Letter, And Notice Of Investigation.
`
`

`
`Public Version
`
`A.
`
`Non-Infringement: The ‘252 Patent
`
`1 1.2. Respondent Creative’s Aurvana X-Fi Noise-Canceling Headphones do not
`
`infringe, and have not infringed, Claim 1, Claim 2, or Claim 5 of the ‘252 Patent, either literally
`
`or under the Doctrine of Equivalents.
`
`B.
`
`Non-Infringement: The ‘792 Patent
`
`1 1.3. Respondent Creative’s Aurvana X-Fi Noise-Canceling Headphones do not
`
`inhnge, and have not infnnged, Claim 1 or Claim 2 of the ‘792 Patent, either literally or under
`
`the Doctrine of Equivalents.
`
`SECOND DEFENSE
`/Patent Invaliditv Based on Prior Art)
`
`A.
`
`The ‘252 Patent Is Invalid Over Prior Art
`
`1 1.4.
`
`The asserted claims of the ‘252 Patent, to the extent the claims can be understood
`
`and are properly construed, are invalid as anticipated and/or obvious to one of ordinary skill in
`
`the art.
`
`11.5. The ‘252 Patent, Claims 1, 2 and 5, are invalid under 35 U.S.C. 0 102 as
`
`anticipated and/or 6 103 as obvious, based in whole or in part, on one or more of the following
`
`patents: U.S. Patent Nos. 4,742,887 (Yamagashi, 1988, 7/1-38 esp. 32-33, 4/13-24, 2/14-18,
`
`1/18-30); 2,714,134 (Touger, et al, 1955, 2/15-28, 4/33-60, 8/4-18); 3,727,004 (Bose patent
`
`Abstract, high compliance woofer); 4,646,872 (1/24-29); 3,403,235 (2/43-56); 2,848,560 (4/64-
`
`75); 2,761,912 (1/55-58, 5/30-35); 2,490,466 (Olson 1949, Figure 17, 7/45-59); GB A 2,187,361
`
`(see 4,742,887 above for US case); see also US Patent Nos. 3,997,739 (4/45-end, also to Claim
`
`2); 4,670,733 (1125-30, also to Claim 2); 2,346,395 (Pg. 2, Col. 2, lines 40-end, also to Claim 2);
`
`4,297,537 (1/39-45); and 3,496,307 (2/35-70, also to Claim 2); 4,399,334 (also to Claim 2); and
`
`1,807,225 (also to Claim 5).
`
`11.6. Respondent Creative is in the process of obtaining further relevant prior art,
`
`including through discovery, which discovery is in its early stages at the time of this Response.
`
`

`
`Public Version
`
`Respondent Creative will set forth further invalidity allegations upon obtaining additional
`
`relevant prior art.
`
`11.7. Respondent Creative reserves the right to supplement this defense as new
`
`information becomes available.
`
`B.
`
`The ‘792 Patent Is Invalid Over Prior Art.
`
`1 1.8.
`
`The asserted claims of the ‘792 Patent, to the extent the claims can be understood
`
`and are properly construed, are invalid as anticipated and/or obvious to one of ordinary skill in
`
`the art.
`
`11.9. The ‘792 Patent, Claims 1 and 2, are invalid also under 35 U.S.C. 5 102 as
`anticipated and/or 0 103 as obvious, based in whole or in part, on one or more of the following
`
`patents: U.S. Patent Nos. 4,572,324 (4/21-27); 4,005,267 (7/36-37, 9/27-33); 4,455,675 (3/2-5);
`
`4,644,581 (2/65-66); 2,714,134; 4,669,129; 1,498,727; 2,622,159 (1/49-53, 3/20-38); 4,529,058;
`
`1,514,152; 4,893,695 (3/42-46; 5/38-49); 5,134,659 (6121, 6/36, 10/2-4); 4,027,117 (2/2-6);
`
`3,644,939 (1165-72,2/42-59); and 4,809,811 (2/34-41,4/65).
`
`11.10. Respondent Creative is in the process of obtaining further relevant prior art,
`
`including through discovery, which discovery is in its early stages at the time of this Response.
`
`Respondent Creative will set forth further invalidity allegations upon obtaining additional
`
`relevant prior art.
`
`11.11. Respondent Creative reserves the right to supplement this defense as new
`
`information becomes available.
`
`THIRD DEFENSE
`(Patent Invalidity Based on Other than Prior Art)
`
`A.
`
`The ‘252 Patent Is Invalid
`
`11.12. All asserted claims of the ‘252 Patent are invalid for failure to comply with the
`
`requirements of 35 U.S.C. 3 112, due to lack of written description, failure of claims to find
`
`

`
`Public Version
`
`support in the specification, failure to particularly point out and distinctly claim the subject
`
`matter that is regarded as the alleged invention, failure to set forth the best mode contemplated
`
`by the inventors for carrying out the allegations and/or failure to set forth a written description
`
`sufficient to enable a person of ordinary skill in the art to make and use the alleged invention.
`
`11.13. The disclosures in the specification of the ‘252 Patent fail to disclose the best
`
`mode or are insufficient and non-enabling in, for instance, not adequately disclosing the method
`
`for determining compliance of the front, driver and rear cavity and assumptions made in arriving
`
`at these determinations.
`
`1 1.14. Respondent Creative reserves the right to supplement this defense as new
`
`information becomes available.
`
`B.
`
`The ‘792 Patent Is Invalid
`
`11.15. All the asserted claims of the ‘792 Patent are invalid for failure to comply with
`the requirements of 35 U.S.C. 5 112 due to lack of written description, failure to particularly
`
`point out and distinctly claim the subject matter that is regarded as the alleged invention, failure
`
`to set forth the best mode contemplated by the inventors for carrying out the alleged invention,
`
`failure of claims to find support in the specification, and/or failure to set forth a written
`
`description sufficient to enable any person skilled in the art to make and use the invention.
`
`11.16. Respondent Creative reserves the right to supplement this defense as new
`
`information becomes available.
`
`FOURTH DEFENSE
`JUnenforceability of Asserted Patents)
`
`11.17. On information and belief, the Asserted Patents are unenforceable under the
`doctrine of inequitable conduct due to breaches of 37 C.F.R. 0 1.56 and/or the duty of good faith,
`
`by one or more of the named inventors of the Asserted Patents and others substantively involved
`
`in the prosecution of the applications leading to the Asserted Patents.
`
`

`
`Public Version
`
`FIFTH DEFENSE
`(No Domestic Industry)
`
`11 .I 8. Complainant has not adequately alleged and cannot prove the existence of a
`
`domestic industry, as required under Section 1337(a)(2) and defined under Section 1337(a)(3), in
`
`connection with any of the Asserted Patents, or such that a domestic industry is in the process of
`
`being established.
`
`1 1.19. Complainant has not adequately alleged and proven that one or more of the Bose
`
`products practices one or more of Claims 1,2, and 5 of the '252 Patent.
`
`SIXTH DEFENSE
`(Prosecution Laches)
`
`11.20. Complainant's claims are barred in whole or in part by delay in prosecuting the
`
`patent applications that matured into the '252 Patent.
`
`1 1.21. Complainant, based on its representations that the '252 Patent claims benefit
`
`under 35 U.S.C. $120 to a series of continuation applications, could have claimed the subject
`
`matter not recited in the asserted claims of the '252 Patent at any time from the purported
`
`effective filing date of the '252 application or at least as early as December 28, 1987. As such,
`
`the patent term of the asserted patent will now be at or near the end.
`
`SEVENTH DEFENSE
`fProsecution History Estoppel)
`
`11.22. By reasons of acts, admissions and statements before the USPTO made by or on
`
`behalf of Complainant's Asserted Patents during prosecution of the patent applications that
`
`matured into the Asserted Patents, Complainant is estopped from claiming inhngement by
`
`Respondent Creative of one or more claims in the Asserted Patents.
`
`RESPONSE TO NOTICE OF INVESTIGATION
`
`Pursuant to ITC Rule 210.13(b), Respondent Creative hereby responds to the Notice of
`
`Investigation (the "Noticel') issued by the International Trade Commission (the "Commission")
`
`on December 27,2007, and published in the Federal Register on January 4, 2008.
`
`

`
`Public Version
`
`Without admitting any of the specific or general allegations set forth in Bose’s Complaint
`
`as referenced in the Notice, Respondent Creative provides the following response: Respondent
`
`Creative admits that a Complaint was filed on behalf of Bose with the Commission on November
`
`29, 2007, pursuant to the Tariff Act of 1930, as amended, (the “Tariff Act”), 19 U.S.C. $1337 et
`
`seq., and a supplemental letter was filed on December 3,2007. Respondent Creative also admits
`
`that the complaint alleges certain violations of section 337 of the Tariff Act in the importation
`
`into the United States, the sale for importation, and the sale within the United States after
`
`importation of certain noise cancelling headphones, components thereof and products containing
`
`same by reason of inhngement of U.S. Patent Nos. 5,181,252 and 6,597,792. Respondent
`
`Creative also admits that the complaint alleges that an industry in the United States exists as
`
`required by subsection (a)(2) of section 337, but Respondent Creative lacks sufficient
`
`information and knowledge to form a belief as to the truth of Bose’s allegation that it meets the
`
`domestic industry requirement and denies such allegation on that basis. Respondent Creative
`
`further admits that Bose requested that the Commission institute an investigation and, after the
`
`investigation, issue a permanent exclusion order, and permanent cease and desist orders, as set
`
`forth in the Summary of Notice, but denies that that Bose is entitled to such relief.
`
`Furthermore, as set forth in the “Scope of Investigation” section of the Notice,
`
`Respondent Creative admits that the Commission ordered that an investigation be instituted
`
`pursuant to subsection (b) of section 337 of the Tariff Act. The “Scope of Investigation” section
`
`of the Notice speaks for itself. Respondent Creative denies that it has violated section 337 of the
`
`Tariff Act for any reason, including: (i) importation into the United States, (ii) sale for
`
`importation into the United States, or (iii) sale within the United States following importation of
`
`certain noise cancelling headphones, components thereof, or products containing the same by
`
`reason of inhngement of one or more of claims 1,2, and 5 of the ‘252 patent, and claims 1 and 2
`
`of the ‘792 patent. Respondent Creative further admits that the Commission ordered that an
`
`

`
`Public Version
`
`investigation be instituted to determine whether an industry in the United States exists as
`
`required by subsection (a)(2) of section 337 of the Tariff Act, as set forth in the “Scope of
`
`Investigation” section of the Notice. Respondent Creative lacks sufficient knowledge and
`
`information regarding Bose’s allegation that it meets the domestic industry requirement and
`
`denies this allegation on that basis.
`
`To the extent the Notice of Investigation contains any allegations separate and apart from
`
`those contained in the Complaint and Supplemental Letter, Respondent Creative denies such
`
`allegations.
`
`ADDITIONAL INFORMATION REQUIRED BY 19 C.F.R. 6 210.13
`
`By providing the following information, Respondent Creative intends to supply only
`
`statistical and other data required or requested under Rule 21 0.13. Respondent Creative
`
`specifically denies that any of the supplied data refers or relates to any unlawful act under
`
`Section 337 or otherwise, and Respondent Creative specifically denies that its Aurvana X-Fi
`
`Noise-Canceling Headphones infringe any asserted claims of U.S. Patent Nos. 5,181,252 (“the
`
`‘252 Patent”) or 6,597,792 (“the ‘792 Patent”).
`
`In accordance with the requirements of Rule 210.13(b), without admitting any of the
`
`specific or general allegations set forth in Bose’s Complaint as referenced in the Notice,
`
`Respondent Creative states as follows:
`
`(1)
`
`Statistical data on the quantity and value of accused products sold in the
`
`United States: Respondent Creative’s statistical data on the quantity and value of its Aurvana
`
`X-Fi Noise-Canceling Headphones sold in the United States is attached as Confidential Exhibit
`
`1,
`
`(2)
`
`Statement concerning capacity to produce the accused products and/or
`
`suppliers of the accused products: Phitek is the manufacturer of the Creative Aurvana X-Fi
`
`Noise-Canceling Headphones. Respondent Creative has not manufactured the Creative Aurvana
`
`

`
`Public Version
`
`X-Fi Noise-Canceling Headphones and does not have the capacity to produce the accused
`
`products and/or supply the accused products.
`
`(3) Harmonized tariff schedule item numbers for the accused products: Creative
`
`believes the accused noise cancelling headphones fall within the following classification of the
`
`Harmonized Tariff Schedule: 85 13.30 and/or 85 18.30.2000 (Headphones and earphones,
`
`whether or not combined with a microphone, and sets consisting of a microphone and one or
`
`more loudspeakers).
`
`CONCLUSION
`
`Respondent Creative respectfully requests that the Commission determine and direct that:
`
`Respondent Creative has not violated Section 337 of the Tariff Act of 1930, as
`
`0)
`
`amended;
`
`(ii)
`
`Respondent Creative has not infringed any claim of the Asserted Patents;
`
`(iii)
`
`Deny all relief requested by Bose;
`
`(iv)
`
`(VI
`
`( 4