UNITED STATES INTERNATIONAL TRADE COMMISSION
`Washington, D.C.
`
`Before Charles E. Bullock
`Administrative Law Judge
`
` In the Matter of
`
`CERTAIN NOISE CANCELLING
`HEADPHONES
`
`Inv. No. 337-TA-626
`
`COMMISSION INVESTIGATIVE STAFF'S RESPONSE
`TO RESPONDENT AUDIO-TECHNICA’S MOTION FOR SUMMARY
`DETERMINATION THAT U.S. PATENT 6,597,792 IS INVALID
`
`I.
`
`INTRODUCTION
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`On April 29, 2008, Respondent Audio-Technica U.S., Inc. (“Audio-Technica”) filed a
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`motion for summary determination in which it asserted that claim 1 of U.S. Patent 6,597,792
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`(“the ‘792 patent”) is anticipated under 35 U.S.C. § 102(b), and that asserted claim 2 is obvious
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`under 35 U.S.C. § 103. For the reasons stated herein, the Commission Investigative Staff
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`submits that neither the Staff nor Complainant Bose Corporation (“Bose”) have had sufficient
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`discovery in this investigation to adequately respond to Audio-Technica’s motion for summary
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`determination. Accordingly, briefing on this motion for summary determination should be
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`deferred under Commission Rule 210.18(d) until fact and expert discovery on the relevant issues
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`are completed.
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`III. LEGAL STANDARD FOR SUMMARY DETERMINATION
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`Under Commission Rule 210.18(b), a party is entitled to summary determination in its
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`favor on any part of the issues to be determined in the investigation “if pleadings and
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`any depositions, answers to interrogatories, and admissions on file, together with the
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`affidavits, if any, show that there is no genuine issue as to any material fact and that the
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`moving party is entitled to a summary determination as a matter of law.” 19 C.F.R.
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`§ 210.18(b). Summary determination under Rule 210.18(b) is analogous to summary judgment
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`under Federal Rule of Civil Procedure 56(c). Certain Endoscopic Probes for Use in Argon
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`Plasma Coagulation Systems, Inv. No. 337-TA-572, Order No. 20, 2007 ITC LEXIS 572, *3
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`(May 21, 2007).
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`In a motion for summary determination, the moving party bears the initial burden of
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`demonstrating the absence of any genuine issue of material fact and its entitlement to judgment
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`as a matter of law. Vivid Tech. v. American Science and Engineering, 200 F.3d 795, 806-07
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`(Fed. Cir. 1999); Continental Can Co. USA, Inc. v. Monsanto Co., 948 F.2d 1264, 1265 (Fed.
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`Cir. 1991). In determining whether there is a genuine issue of material fact, the evidence is
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`viewed in the light most favorable to the party opposing the motion, with doubts resolved in
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`favor of the opponent. Certain Condensers, Parts Thereof and Products Containing Same,
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`Including Air Conditioners For Automobiles, Inv. No. 337-TA-334 (“Condensers”), Views of the
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`Commission at 3 (Nov. 25, 1992). However, general denials of allegations by the non-movant do
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`not raise issues of material fact. Certain Battery Powered Ride-On Toy Vehicles and
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`Components Thereof, Inv. No. 337-TA-314, Initial Determination (Order No. 6) (Dec. 5, 1990).
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`Pursuant to Commission Rule 210.18(d), the Administrative Law Judge may refuse an
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`application for summary determination when discovery is necessary to establish the facts
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`essential to a party’s opposition. 19 C.F.R. § 210.18(d); Condensers, Order No. 12, 1999 ITC
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`2
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`LEXIS 363, *6 (April 27, 1999). The Judge may “order a continuance to permit affidavits to be
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`obtained or depositions to be taken or discovery to be had or may make such other order as is
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`appropriate, and a ruling to that effect shall be made a matter of record.” Id.; see also Fed. R.
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`Civ. P. 56(f).
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`III.
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`DISCUSSION
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`Audio-Technica’s motion seeks summary determination that claim 1 of the ‘792 patent is
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`invalid due to an “on-sale bar” under 35 U.S.C. § 102(b), and that claim 2 is invalid as being
`1
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`obvious under 35 U.S.C. § 103. Specifically, Audio-Technica alleges that claim 1 of ‘792 patent
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`is invalid due to the sale of Audio-Technica’s own prior art headphone models (including ATH-
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`908, ATH-909, ATH-910, ATH-910PRO, and ATH-911) as early as 1988, which is more than a
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`decade before Bose filed its application for the ‘792 patent. Audio-Technica further alleges that
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` The Staff notes that Audio-Technica’s motion appears to confuse the concept of
`1
`anticipation by “public use” with an “on-sale bar,” which are separate grounds for invalidity
`under § 102(b). “Although 35 U.S.C. § 102(b) provides that an inventor’s sales or offers of sale
`more than one year before the patent filing date may bar the grant of a valid patent, the on-sale
`bar is an independent ground of invalidity based on the inventor’s delay in entering into the
`patent system. Although the on-sale bar can arise from one’s own invention, ‘anticipation’ does
`not arise from sale of one’s own invention.” C.R. Bard, Inc. v. M3 Sys., Inc., 157 F.3d 1340,
`1350–1351 (Fed. Cir. 1998).
`Because the allegedly invalidating activities come from the sale of Audio-Technica’s own
`headphone products, the proper analysis is to determine whether those prior art headphones
`anticipate claim 1 of the ‘792 patent rather than whether an on-sale bar was triggered.
`“Determining whether a patent claim is invalid for prior public use under section 102(b) requires
`comparing the claim to the alleged public use. Section 102(b) may bar patentability by
`anticipation if the device used in public includes every limitation of the later claimed invention.”
`Zenith Electronics Corp. v. PDI Communications Sys., Inc., 2008 U.S. App. LEXIS 8129, *15
`(Apr. 16, 2008) (internal citations omitted). However, regardless of the particular grounds for
`invalidity asserted by Audio-Technica, the Staff believes that additional discovery is needed so as
`to preclude a grant of summary determination at this stage of the investigation.
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`3
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`claim 2 of the ‘792 patent is obvious in view of those headphones combined with the disclosures
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`of Bose’s own prior art patents disclosing noise-cancelling technology. In support of its motion,
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`Audio-Technica cites to the attached declaration of Jackie Green, its Vice-President of Research
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`and Development/Engineering, who asserts that Audio-Technical began selling the headphone
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`models designated ATH-909, ATH-910, and ATH-911 in the United States in 1988, and that it
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`began selling headphone model ATH-908 as early as 1990. Green Decl. ¶ 7.
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`The Staff believes that additional discovery is needed to determine whether Audio-
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`Technica’s prior art headphones anticipate or render obvious the asserted claims of the ‘792
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`patent. Although the photographs included with Audio-Technica’s motion appear to show
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`headsets with an earcup having a front opening, a driver inside the earcup, and a cushion around
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`the periphery of the front opening that is formed with a plurality of openings, Audio-Technica
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`has not pointed to any undisputed evidence that the “plurality of openings” in the prior art
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`headsets are “arranged to acoustically add the volume of said cushion to the volume of said
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`earcup and enhance passive attenuation.” See ‘792 patent, claim 1. Audio-Technica asserts that
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`this claim limitation is inherently found in its headphones based on the statement in the ‘792
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`patent that “[b]y forming openings in annular ridge 16 of cushion 15 to expose foam material
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`15B, the effective volume of the earcup is significantly increased to embrace the volume
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`occupied by cushion 15 and thereby increase passive attenuation . . . .” See ‘792 patent at 3:20-
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`26. Audio-Technica, however, has not pointed to any actual testing or other evidence to
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`demonstrate that the Audio-Technica headsets “necessarily function” in a manner that enhances
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`passive attenuation, or that enhanced passive attenuation is the “natural result flowing from” the
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`prior art headsets. See MEHL/Biophile Int’l Corp. v. Milgraum, 192 F.3d 1362, 1365 (Fed. Cir.
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`4
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`1999); Schering Corp. v. Geneva Pharm., Inc., 339 F.3d 1373, 1379 (Fed. Cir. 2003). Therefore,
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`additional fact and expert discovery is necessary in order to determine whether any arrangement
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`of a plurality of openings in a headset’s cushion will necessarily result in enhanced passive
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`attenuation, and specifically whether the arrangement in Audio-Technica’s prior art headsets
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`results in enhanced passive attenuation as required by claim 1.
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`The Staff also believes that further discovery is necessary to determine whether one of
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`ordinary skill in the art would have found claim 2 of the ‘792 patent obvious in view of Audio-
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`Technica’s prior art headphones in combination with Bose’s prior art patents teaching noise-
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`cancelling technology. Contrary to the argument made by Audio-Technica in its motion, the
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`Supreme Court in KSR Int’l, Co. v. Teleflex, Inc. did not dispose of the motivation requirement to
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`establish invalidity under § 103, but only called for an “expansive and flexible approach” in
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`determining whether a claimed invention is obvious. 127 S. Ct. 1727, 1739-42 (2007). The
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`Court held that, although there “is no necessary inconsistency between the idea underlying the
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`TSM [teaching-suggestion-motivation] test and the Graham analysis,” the Federal Circuit had
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`erred by “transform[ing that] general principle into a rigid rule that limits the obviousness
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`inquiry.” KSR, 550 U.S. at __, 127 S. Ct. at 1741. Since KSR was decided, the Federal Circuit
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`has announced that, where a patent challenger contends that a patent is invalid for obviousness
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`based on a combination of prior art references, “the burden falls on the patent challenger to show
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`by clear and convincing evidence that a person of ordinary skill in the art would have had reason
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`to attempt to make the composition or device, . . . . and would have had a reasonable expectation
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`of success in doing so.” PharmaStem Therapeutics, Inc. v. Viacell, Inc., 491 F.3d 1342, 1360
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`(Fed. Cir. 2007). Accordingly, the Staff believes that additional fact and expert discovery is
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`5
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`needed to determine whether one of ordinary skill in the art would have found a reason or
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`motivation to incorporate Bose’s prior art noise-cancelling technology into Audi-Technica’s prior
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`art headsets.
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`IV.
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`CONCLUSION
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`For the reasons stated herein, the Staff submits that additional discovery is needed in to
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`respond to Audio-Technica’s motion to compel. The Staff therefore requests a continuance of
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`the present motion until fact and expert discovery has been completed.
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`Respectfully submitted,
`
` /s/Christopher G. Paulraj
`Lynn I. Levine, Director
`T. Spence Chubb, Supervisory Attorney
`Christopher G. Paulraj, Investigative Attorney
`OFFICE OF UNFAIR IMPORT INVESTIGATIONS
`U.S. International Trade Commission
`500 E Street, S.W., Suite 401
`Washington, D.C. 20436
`(202) 205-3052
`(202) 205-2158 (Facsimile)
`
`May 9, 2008
`
`6
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`Certain Noise Cancelling Headphones
`
`Investigation No. 337-TA-626
`
`CERTIFICATE OF SERVICE
`
`The undersigned certifies that on May 9, 2008, he caused the foregoing COMMISSION INVESTIGATIVE
`STAFF'S RESPONSE TO RESPONDENT AUDIO-TECHNICA’S MOTION FOR SUMMARY
`DETERMINATION THAT U.S. PATENT 6,597,792 IS INVALID to be filed with the Secretary, served by hand
`upon Administrative Law Judge Charles E. Bullock (2 copies), and served upon the parties (1 copy each) in the
`manner indicated below:
`
`Counsel for Complainant Bose Corporation
`
`Ruffin B. Cordell
`Andrew R. Kopsidas
`Jeffrey R. Whieldon
`Autumn J. Hwang, Esq.
`FISH & RICHARDSON P.C .
`1425 K Street, N.W., Suite 1100
`Washington, DC 20005
`Telephone: 202-783-5070
`Facsimile: 202-783-2331
`
`Jordan Fowles
`FISH & RICHARDSON P.C .
`717 Main Street, Suite 5000
`Dallas, TX 75201
`Telephone: 214-747-5070
`Facsimile: 202-747-2091
`
`BY EMAIL AND FIRST CLASS MAIL
`
`BY EMAIL AND FIRST CLASS MAIL
`
`Counsel for Respondents Creative Labs, Inc., Phitek
`Systems Limited, GN Netcom, Inc., and Logitech Inc.
`
`BY EMAIL AND FIRST CLASS MAIL
`
`BY EMAIL AND FIRST CLASS MAIL
`
`William B. Nash
`Dan Chapman
`Mark Fassold
`JACKSON WALKER L.L.P.
`112 E. Pecan Street, Suite 2400
`San Antonio, Texas 78205
`Telephone: 210-978-7700
`Facsimile: 210-242-4620
`
`Alan Cope Johnson
`G. Brian Busey
`Cynthia Lopez
`MORRISON & FOERSTER LLP
`2000 Pennsylvania Ave, N. W.
`Washington, DC 20006
`Telephone: 202-887-1500
`Facsimile: 202-887-0168
`
`-i-
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`Counsel for Respondent Audio Technica U.S., Inc.
`
`BY EMAIL AND FIRST CLASS MAIL
`
`Arthur Wineburg
`Daniel E. Yonan
`AKIN GUMP STRAUSS HAUER & FELD LLP
`1333 New Hampshire Avenue, N.W.
`Washington, DC 20036
`Telephone: 202-887-4000
`Facsimile: 202-887-4288
`
`BY EMAIL AND FIRST CLASS MAIL
`
`James P. White
`Gerald T. Shekleton
`J. Aron Carnanhan
`WELSH & KATZ, LTD.
`120 South Riverside Plaza, 22”d Floor
`Chicago, IL 60606
`Telephone: 312-655-1500
`Facsimile: 312-655-1501
`
`Counsel for Respondent Panasonic Corporation of North America
`
`BY EMAIL AND FIRST CLASS MAIL
`
`Tom M. Schaumberg
`Jamie D. Underwood
`ADDUCI, MASTRIANI & SCHAUMBERG, LLP
`1200 Seventeenth Street, N.W., Fifth Floor
`Washington, DC 20036
`Telephone: 202-467-6300
`Facsimile: 202-466-2006
`
`BY EMAIL AND FIRST CLASS MAIL
`
`Daniel S. Ebenstein
`Abraham Kasdan
`Joseph M. Casino
`David A. Boag
`AMSTER, ROTHSTEIN & EBENSTEIN LLP
`90 Park Avenue
`New York, NY 10016
`Telephone: 212-336-8000
`Facsimile: 212-336-8001
`
` /s/ Christopher G. Paulraj
`Christopher G. Paulraj
`Investigative Attorney
`
`OFFICE OF UNFAIR IMPORT INVESTIGATIONS
`U.S. International Trade Commission
`500 E Street, S.W., Suite 401
`Washington, D.C. 20436
`(202) 205-2575
`(202) 205-2158 (fax)
`
`-ii-