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 PHITEK SYSTEM
`LIMITED’S (NZ) AND CREATIVE LABS, INC.’S MOTION FOR LEAVE TO AMEND
`RESPONSES TO COMPLAINT
`
`I.
`
`INTRODUCTION
`
`On July 7, 2008, Respondents Phitek System Limited (NZ) (“Phitek”) and Creative Labs,
`
`Inc. (“Creative”) (collectively, “Respondents”) filed a motion for leave to amend their Responses
`
`to the Complaint, Supplemental Letter and Notice of Investigation (Motion Docket No. 626-033).
`
`With their motion, Respondents provided confidential and public versions of their proposed
`
`Amended Response. See Respondents’ Ex. A and B. Respondents seek to amend their responses
`
`in order to provide additional facts obtained through discovery to support their affirmative
`
`defenses that asserted U.S. Patent 5,181,252 (“the ‘252 patent”) is invalid and/or unenforceable
`
`due to a misrepresentation of its true inventorship, and that asserted U.S. Patent 6,957,792 (“the
`
`‘792 patent”) is invalid and/or unenforceable due to a failure to disclose the best mode and lack
`
`of enablement.
`
`For the reasons set forth below, the Commission Investigative Staff (“Staff”) supports
`
`Respondents’ motion for leave to amend because they have satisfied the “good cause”
`
`
`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 PHITEK SYSTEM
`LIMITED’S (NZ) AND CREATIVE LABS, INC.’S MOTION FOR LEAVE TO AMEND
`RESPONSES TO COMPLAINT
`
`I.
`
`INTRODUCTION
`
`On July 7, 2008, Respondents Phitek System Limited (NZ) (“Phitek”) and Creative Labs,
`
`Inc. (“Creative”) (collectively, “Respondents”) filed a motion for leave to amend their Responses
`
`to the Complaint, Supplemental Letter and Notice of Investigation (Motion Docket No. 626-033).
`
`With their motion, Respondents provided confidential and public versions of their proposed
`
`Amended Response. See Respondents’ Ex. A and B. Respondents seek to amend their responses
`
`in order to provide additional facts obtained through discovery to support their affirmative
`
`defenses that asserted U.S. Patent 5,181,252 (“the ‘252 patent”) is invalid and/or unenforceable
`
`due to a misrepresentation of its true inventorship, and that asserted U.S. Patent 6,957,792 (“the
`
`‘792 patent”) is invalid and/or unenforceable due to a failure to disclose the best mode and lack
`
`of enablement.
`
`For the reasons set forth below, the Commission Investigative Staff (“Staff”) supports
`
`Respondents’ motion for leave to amend because they have satisfied the “good cause”
`
`
`
`2
`
`requirement for post-institution amendments as required under Commission Rule 210.14(b)(2)
`
`and there is no significant prejudice to Complainant Bose Corporation (“Bose”).1
`
`II.
`
`DISCUSSION
`
`Motions to amend the response to a complaint in order to assert new affirmative defenses
`
`or to add factual allegations to the response are governed by Commission Rule 210.14(b)(2), 19
`
`C.F.R. § 210.14(b)(2). This Rule states that amendments to pleadings shall be permitted “[i]f
`
`disposition of the issues on the merits will be facilitated, or for other good cause shown.” Id.
`
`The Judge may allow such amendments “upon such conditions as are necessary to avoid
`
`prejudicing the public interest and the rights of the parties to the investigation.” Id.
`
`Respondents assert that they have good cause to seek permission to amend their responses
`
`because it would have been impossible to discover the facts that they seek to include in their
`
`Amended Responses until after taking the depositions of Bose employees. Specifically,
`
`Respondents cite the recently obtained deposition testimony of inventors Roman Sapiejewski and
`
`John Breen and Bose’s corporate representative John Martin in support of their allegation that
`
`Bose materially misrepresented the inventorship of the ‘252 patent in order to claim an earlier
`
`priority date and overcome certain prior art rejections. Respondents further cite the deposition
`
`testimony of Mr. Sapiejewski as supporting their allegation that the ‘792 patent is invalid for
`
`failure to disclose the best mode and lack of enablement.
`
`The Staff submits that good cause exists for Respondents to amend their Responses to the
`
`Complaint and Notice of Investigation. As Respondents point out, the evidence necessary to
`
` On July 16, 2008, Complainant Bose Corporation (“Bose”) filed an unopposed
`1
`motion for an extension to file its response to Phitek’s motion for leave to amend on July 24,
`2008. The Staff informed the parties that it will file its response on the same date.
`
`
`
`3
`
`support their new allegations was not discovered until the depositions of certain individuals were
`
`taken during the month of June. In the Staff’s view, Respondents have promptly moved to
`
`amend their Responses after obtaining this testimony. In past investigations, recently obtained
`
`facts obtained from deposition testimony have provided the requisite good cause to support an
`
`Amended Response that pleads new affirmative defenses. See Certain Personal Computers,
`
`Server Computers, and Components Thereof, Inv. No. 337-TA-509, Order No. 17, 2005 ITC
`
`LEXIS 240, *8 (Feb. 9, 2005) (granting motion for leave to amend response based on
`
`information obtained during depositions).
`
`Moreover, any prejudice to the other parties and to the public interest will be minimal if
`
`Respondents are permitted to file their amended response. The scheduled hearing date for this
`
`investigation has been postponed by four months, thus giving Bose adequate time to address any
`
`newly pled facts in the proposed amendment. See Order No. 11 (July 7, 2008) (extending the
`
`target date and resetting the hearing date to December 4-12, 2008). To the extent that
`
`supplemental expert reports and depositions are necessary to address any of Respondents’ newly
`
`pled allegations, there is sufficient time to do so under the current schedule.
`
`
`
`III.
`
`CONCLUSION
`
`4
`
`For the reasons set forth herein, the Staff supports Respondents’ motion for leave to file
`
`Amended Responses to the Complaint.
`
`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)
`
`July 24, 2008
`
`
`
`Certain Noise Cancelling Headphones
`
`Investigation No. 337-TA-626
`
`CERTIFICATE OF SERVICE
`
`The undersigned certifies that on July 24, 2008, he caused the foregoing COMMISSION INVESTIGATIVE
`STAFF’S RESPONSE TO PHITEK SYSTEM LIMITED’S (NZ) AND CREATIVE LABS, INC.’S MOTION
`FOR LEAVE TO AMEND RESPONSES TO COMPLAINT 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 FEDEX
`
`BY FEDEX
`
`Counsel for Respondents Creative Labs, Inc., Phitek
`Systems Limited, GN Netcom, Inc., and Logitech Inc.
`
`BY FEDEX
`
`BY FEDEX
`
`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 FEDEX
`
`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 FEDEX
`
`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 FEDEX
`
`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 FEDEX
`
`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) 205-3052
`(202) 205-2158 (fax)
`
`-ii-
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