UNITED STATES INTERNATIONAL TRADE COMMISSION
`Washington, D.C.
`Before the Honorable 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 JOINT MOTION TO
`TERMINATE THE INVESTIGATION AS TO RESPONDENT GN US, INC. BASED ON
`ENTRY OF A CONSENT ORDER
`
`I.
`
`INTRODUCTION
`
`On June 1, 2008, Complainant Bose Corporation (“Bose”) and Respondent GN US, Inc.
`
`(“GN”) filed a joint motion seeking termination of this investigation as to GN on the basis of a
`
`Consent Order Stipulation and a proposed Consent Order (“Motion”). Copies of the Consent
`
`Order Stipulation and proposed Consent Order are attached to the Motion. As discussed herein,
`
`the Commission Investigative Staff (“Staff”) supports the Motion. Specifically, the Bose and GN
`
`have complied with the Commission’s requirements under 19 C.F.R. §210.21(c) relating to
`
`motions to terminate based upon a consent order. Moreover, the terms of the Consent Order
`
`Stipulation and proposed Consent Order do not appear to be contrary to the public interest.
`
`
`Washington, D.C.
`Before the Honorable 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 JOINT MOTION TO
`TERMINATE THE INVESTIGATION AS TO RESPONDENT GN US, INC. BASED ON
`ENTRY OF A CONSENT ORDER
`
`I.
`
`INTRODUCTION
`
`On June 1, 2008, Complainant Bose Corporation (“Bose”) and Respondent GN US, Inc.
`
`(“GN”) filed a joint motion seeking termination of this investigation as to GN on the basis of a
`
`Consent Order Stipulation and a proposed Consent Order (“Motion”). Copies of the Consent
`
`Order Stipulation and proposed Consent Order are attached to the Motion. As discussed herein,
`
`the Commission Investigative Staff (“Staff”) supports the Motion. Specifically, the Bose and GN
`
`have complied with the Commission’s requirements under 19 C.F.R. §210.21(c) relating to
`
`motions to terminate based upon a consent order. Moreover, the terms of the Consent Order
`
`Stipulation and proposed Consent Order do not appear to be contrary to the public interest.
`
`
`
`II.
`
`BACKGROUND
`
`2
`
`On November 29, 2007, Bose filed a Complaint with the Commission alleging violations
`
`of Section 337 by seven respondents, including GN, by reason of infringement of certain claims
`
`of U.S. Patent Nos. 5,181,252 (“the ‘252 patent”) and 6,957,792 (“the ‘792 patent”). On
`
`December 26, 2007, the Commission voted to institute the investigation, and the Notice of
`
`Investigation was subsequently published in the Federal Register. 73 Fed. Reg. 882 (January 4,
`
`2008). In the Complaint, Bose alleged that GN imports and distributes certain noise cancelling
`
`headphones that infringe claims 1, 2, and 5 of the ‘252 patent and claims 1 and 2 of the ‘792
`
`patent.
`
`III.
`
`COMPLIANCE WITH RULE GOVERNING TERMINATION BY ENTRY OF
`CONSENT ORDER
`
`Commission Rule 210.21(c)(l)(ii) provides that a request to terminate an investigation as
`
`to a respondent by consent order shall be submitted as a motion to the Judge with a consent order
`
`stipulation that incorporates a proposed consent order. 19 C.F.R. § 210.21(c)(l)(ii). In
`
`accordance with this rule, the movants have attached a Consent Order Stipulation and an
`
`accompanying proposed Consent Order. The Consent Order Stipulation has been signed by
`
`representatives for Bose and GN.
`
`The Consent Order Stipulation substantially complies with the requirements of
`
`Commission Rule 210.21(c)(3). In accordance with Rule 210.21(c)(3)(i)(A)(l), the Consent
`
`Order Stipulation states that the parties admit that the Commission has in rem jurisdiction over
`
`the accused products that are the subject of this investigation and in personam jurisdiction over
`
`
`
`3
`
`GN. Consent Order Stipulation, at ¶ B. The Consent Order Stipulation also contains an express
`
`waiver of all rights to seek judicial review or otherwise challenge or contest the validity of the
`
`Consent Order as required by Rule 210.21(c)(3)(i)(A)(2). Id., at ¶ C. Further, the Consent Order
`
`Stipulation contains a statement that GN will not seek to impede by litigation or other means the
`
`Commission’s efforts to gather information under Subpart I of Part 210 of the Commission’s
`
`Rules of Practice and Procedure, and a statement that enforcement, modification, and revocation
`
`of the Consent Order will be carried out pursuant to Subpart I of Part 210, in compliance with
`
`Rule 210.21(c)(3)(i)(A)(3) and (4). Id., at ¶¶ D-E. In accordance with Rule 210.21(c)(3)(i)(B)(l),
`
`the Consent Order Stipulation contains a statement that the proposed Consent Order shall not
`
`apply with respect to any claim of any intellectual property right that has expired or been found
`
`or adjudicated invalid or unenforceable by the Commission or a court or agency of competent
`
`jurisdiction. Id., at ¶ F. In addition, in accordance with Rule 210.21(c)(3)(i)(B)(2), the Consent
`
`Order Stipulation contains a statement that GN will not seek to challenge the validity of the
`
`patent claims at issue in any proceeding to enforce the Consent Order. Id., at ¶ G. As permitted
`
`by Rule 210.21(c)(3)(i)(C), the Consent Order Stipulation contains a statement that the signing
`
`thereof by GN does not constitute an admission that the ‘252 or ‘792 patents are valid,
`
`enforceable or infringed, or that an unfair act has been committed. Id., at ¶ J.
`
`IV.
`
`SUBSTANTIVE TERMS OF THE PROPOSED CONSENT ORDER
`
`In addition to the stipulations cited above, the Consent Order orders provides that GN
`
`shall not import into the United States or sell in the United States after importation noise
`
`cancelling headphones that infringe claims 1, 2, or 5 of the ‘252 patent; or claims 1 or 2 of the
`
`
`
`4
`
`‘792 patent. Consent Order ¶ 2.
`
`V.
`
`PUBLIC INTEREST
`
`Pursuant to Commission Rule 210.20(c)(2)(ii), the Commission, in ruling on a proposed
`
`consent order, shall consider the effect of the consent order “upon the public health and welfare,
`
`competitive conditions in the U.S. economy, the products of like or directly competitive articles
`
`in the United states, and U.S. consumers.” 19 C.F.R. § 210.20(c)(ii). The Staff is not aware of
`
`any information that would indicate that termination of this investigation on the basis of the
`
`proposed Consent Order described herein would be contrary to the public health and welfare,
`
`competitive conditions in the U.S. economy, the production of like or directly competitive
`
`articles in the United States, or U.S. consumers. See 19 U.S.C. § 1337(d).
`
`The Administrative Procedure Act indicates that agencies should consider termination of
`
`disputes by the involved parties where “the public interest permit[s].” 5 U.S.C. § 554(c)(1).
`
`There is no indication that the noise cancelling headphones that are the subject of this
`
`investigation have any particular significance for the public interest. The public interest
`
`generally favors settlement to avoid needless litigation and to conserve public and private
`
`resources. See, e.g., Certain Compact Disc and DVD Holders, Inv. No. 337-TA-482, Order No.
`
`11, Initial Determination Terminating the Investigation as to Respondents Finest and Ponica, at 3
`
`(March 7, 2003); Certain Gel-Filled Wrist Rests and Products Containing Same, Inv. No.
`
`337-TA-456, Order No. 16, Initial Determination Terminating the Investigation as to Respondent
`
`Allsop on the Basis of a Consent Order, at 5 (May 21, 2002). Finally, the public interest favors
`
`the recognition of presumptively valid patents and their exclusive rights. Certain Recombinantly
`
`
`
`5
`
`Produced Hepatitis B Vaccines and Products Containing Same, Inv. No. 337-TA-408, Order No.
`
`7, Initial Determination Terminating the Investigation Based on Settlement (August 17, 1998).
`
`VI.
`
`CONCLUSION
`
`For the reasons stated above, this investigation should be terminated as to GN on the
`
`basis of the proposed Consent Order.
`
`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) 205-2575
`(202) 205-2158 (Facsimile)
`
`July 11, 2008
`
`
`
`Certain Noise Cancelling Headphones
`
`Investigation No. 337-TA-626
`
`CERTIFICATE OF SERVICE
`
`The undersigned certifies that on July 11, 2008, he caused the foregoing COMMISSION INVESTIGATIVE
`STAFF’S RESPONSE TO JOINT MOTION TO TERMINATE THE INVESTIGATION AS TO
`RESPONDENT GN US, INC., BASED ON ENTRY OF A CONSENT ORDER 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
`
`
`
`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-
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