PUBLIC VERSION
`
`UNITED STATES INTERNATIONAL TRADE COMMISSION
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`Washington, D.C.
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`
`
`
`In the Matter of
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`CERTAIN MOBILE DEVICES AND
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`Inv.No. 337—TA-750
`
`RELATED SOFTWARE
`
`ORDER NO. 14:
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`INITIAL DETERMINATION GRANTING APPLE’S MOTION
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`FOR SUMMARY DETERMINATION THAT IT HAS SATISFIED
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`THE ECONOMIC PRONG OF THE DOMESTIC INDUSTRY
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`REQUIREMENT
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`(September 15, 2011)
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`On July 29, 2011, complainant Apple,
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`Inc. (“Apple”) filed a motion for summary
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`determination that it has satisfied the economic prong of the domestic industry requirement.
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`(Motion Docket No. 750-014.) On August 8, 2011, the Commission Investigative Staff (“Staff”)
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`filed a response in support of the motion. On August 8, 2011, Respondents Motorola Mobility,
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`Inc. and Motorola, Inc. (“Respondents”) filed a response opposing the motion.‘
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`Apple argues that it satisfies the economic prong of the domestic industry requirement
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`based on all
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`three subsections of § 1337(a)(3). Namely, Apple argues that its significant
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`investment in plant and equipment,
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`its significant employment of labor and capital, and its
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`substantial
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`investment
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`in the exploitation of the asserted patents through engineering and
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`research and development, each independently meet
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`the economic prong of the domestic
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`industry requirement.
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`On August 16, 2011, Order No. 710 issued terminating Motorola, Inc. n/k/a Motorola
`1
`Solutions from this investigation.
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`-1-
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`
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`UNITED STATES INTERNATIONAL TRADE COMMISSION
`
`Washington, D.C.
`
`
`
`
`In the Matter of
`
`
`CERTAIN MOBILE DEVICES AND
`
`Inv.No. 337—TA-750
`
`RELATED SOFTWARE
`
`ORDER NO. 14:
`
`INITIAL DETERMINATION GRANTING APPLE’S MOTION
`
`FOR SUMMARY DETERMINATION THAT IT HAS SATISFIED
`
`THE ECONOMIC PRONG OF THE DOMESTIC INDUSTRY
`
`REQUIREMENT
`
`(September 15, 2011)
`
`On July 29, 2011, complainant Apple,
`
`Inc. (“Apple”) filed a motion for summary
`
`determination that it has satisfied the economic prong of the domestic industry requirement.
`
`(Motion Docket No. 750-014.) On August 8, 2011, the Commission Investigative Staff (“Staff”)
`
`filed a response in support of the motion. On August 8, 2011, Respondents Motorola Mobility,
`
`Inc. and Motorola, Inc. (“Respondents”) filed a response opposing the motion.‘
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`Apple argues that it satisfies the economic prong of the domestic industry requirement
`
`based on all
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`three subsections of § 1337(a)(3). Namely, Apple argues that its significant
`
`investment in plant and equipment,
`
`its significant employment of labor and capital, and its
`
`substantial
`
`investment
`
`in the exploitation of the asserted patents through engineering and
`
`research and development, each independently meet
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`the economic prong of the domestic
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`industry requirement.
`
`On August 16, 2011, Order No. 710 issued terminating Motorola, Inc. n/k/a Motorola
`1
`Solutions from this investigation.
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`-1-
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`PUBLIC VERSION
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`With respect to investments in plant and equipment, Apple points to its -building
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`corporate headquarters in Cupertino, California; its call center in Elk Grove, California; and its
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`approximately— in capital investments (from 2008 to the present) for leases and
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`equipment for its retail stores.
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`Apple also argues it has made significant labor investments including its 2 employees
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`in the United States dedicated to research and development on the iPhone 4 (- employees
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`dedicated to iPhone 4 software and - employees dedicated to iPhone 4 hardware) and Mac OS
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`X (- employees) and its significant numbers of employees who work in its retail stores selling
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`and supporting the iPhone 4 and Mac OS X.
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`Indeed, Apple argues that it has spent: (a) —
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`- on its research and development employees for iPhone 4 (for the period 2008 to the filing
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`of the complaint); (b)— on its Mac OS X research and development employees (for
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`the period from 2008 to the filing of Apple’s complaint); and (c) _ in payroll
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`expenses for its retail stores in the United States for 2009 and the first three quarters of 2010.
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`Apple also argues that its investment in research and development is substantial. Apple
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`argues that it has invested approximately in research
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`and development
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`in 2008, 2009, and 2010 respectively and that substantially all of that
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`investment occurred in the United States. Apple argues that it has spent— on the
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`domestic industry products it identified (iPhone 4 and Mac OS X). Apple further argues that it
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`has approximated its itemized expenditures on research and development of the technology of
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`the asserted patents at— for the ’607 patent,_ for the ’828 patent, and
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`g for the ’430 patent.
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`PUBLIC VERSION
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`Respondents oppose the motion arguing that: (1) subsections (A) and (B) are limited to
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`manufacturing activities and Apple does not manufacture the domestic industry products in the
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`United States;
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`(2) Apple has failed to link its various asserted investments in plant and
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`equipment,
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`labor, and research and development with the domestic industry products it has
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`identified; and (3) Apple has provided inaccurate and unreliable allocation data based on a
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`calculation methodology that overstates the share of the various products and unsupported
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`underlying assumptions.
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`Staff supports the motion arguing that the evidence submitted by Apple is sufficient to
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`meet the economic prong of the domestic industry requirement. Staff argues that they know of
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`no facts that call into dispute any of the material facts set forth in the declarations accompanying
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`Apple’s motion. Staff argues that the evidence submitted — specifically, the declaration of Mr.
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`Mark Buckley — demonstrates that Apple has made significant investments in plant, labor, and
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`research and development. And Staff further contends that those investments are directly related
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`to the products Apple identifies as the domestic industry products related to the asserted patents.
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`Pursuant to Commission Rule 210.18, summary determination “.
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`.
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`. shall be rendered if
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`pleadings and any depositions, answers to interrogatories, and admissions on file, together with
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`the 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. § 210.18(b);
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`see also DeMarini Sports, Inc. v. Worth, Inc., 239 F.3d 1314, 1322 (Fed. Cir. 2001); Wenger
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`Mfg., Inc. v. Coating Machinery Sys., Inc., 239 F.3d 1225, 1231 (Fed. Cir. 2001). The evidence
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`“must viewed in the light most favorable to the party opposing the motion .
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`.
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`. with doubt
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`PUBLIC VERSION
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`resolved in favor of the nonmovant.” Crown Operations Int 7, Ltd. v. Solutia, Inc., 289 F.3d
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`1367, 1375 (Fed. Cir. 2002); see also Xerox Corp. v. 3Com Corp, 267 F.3d 1361, 1364 (Fed.
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`Cir. 2001) (“When ruling on a motion for summary judgment, all of the nonmovant’s evidence is
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`to be credited, and all justifiable inferences are to be drawn in the nonmovant’s favor.”). “Issues
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`of fact are genuine only if the evidence is such that a reasonable [fact finder] could return a
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`verdict for the nonmoving party.” Id at 1375 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S.
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`242, 248 (1986)). The trier of fact should “assure itself that there is no reasonable version of the
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`facts, on the summary judgment record, whereby the nonmovant could prevail, recognizing that
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`the purpose of summary judgment is not to deprive a litigant of a fair hearing, but to avoid an
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`unnecessary trial.” EMI Group N. Am., Inc. v. Intel Corp., 157 F.3d 887, 891 (Fed. Cir. 1998).
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`“Where an issue as to a material fact cannot be resolved without observation of the demeanor of
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`witnesses in order to evaluate their credibility, summary judgment is not appropriate.” Sandt
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`Technology, Ltd. v. Resco Metal & Plastics Corp., 264 F.3d 1344, 1357 (Fed. Cir. 2001) (Dyk,
`
`J., concurring). “In other words, ‘[s]ummary judgment is authorized when it is quite clear what
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`the truth is,’ [citations omitted], and the law requires judgment in favor of the movant based
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`upon facts not in genuine dispute.” Paragon Podiatry Laboratory, Inc. v. KLM Laboratories,
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`Inc., 984 F.2d 1182, 1185 (Fed. Cir. 1993).
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`In patent based proceedings under section 337, a complainant must establish that an
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`industry “relating to the articles protected by the patent .
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`.
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`. exists or is in the process of being
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`established” in the United States.
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`19 U.S.C. § 1337(a)(2). Under Commission precedent, the
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`domestic industry requirement of Section 337 consists of a “technical prong” and an “economic
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`PUBLIC VERSION
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`prong.” The “technical prong” of the domestic industry requirement is satisfied when the
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`complainant’s activities relate to an article “protected by the patent.” The “economic prong” of
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`the domestic industry requirement
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`is satisfied when the economic activities set forth in
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`subsections (A), (B), and/or (C) of subsection 337(a)(3) have taken place or are taking place with
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`respect to the protected articles. Certain Data Storage Systems and Components Thereof, Inv.
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`No. 337-TA—471, Initial Determination Granting EMC’s Motion No. 471-8 Relating to the
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`Domestic Industry Requirement’s Economic Prong (unreviewed) at 3 (Public Version, October
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`25, 2002); see also Certain Printing and Imaging Devices and Components Thereof, Inv. No.
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`337-TA-690, Commission Op. at 25 (February 17, 2011) (“Printing and Imaging Devices”).
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`With respect to the “economic prong,” 19 U.S.C. § 1337(a)(2) and (3) provide, in full:
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`(2) Subparagraphs (B), (C), (D), and (E) of paragraph (1) apply
`only if an industry in the United States, relating to the articles
`protected by the patent, copyright, trademark, mask work, or design
`concerned, exists or is in the process of being established.
`
`(3) For purposes of paragraph (2), an industry in the United States
`shall be considered to exist if there is in the United States, with
`respect to the articles protected by the patent, copyright, trademark,
`mask work, or design concemed—
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`(A) significant investment in plant and equipment;
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`(B) significant employment of labor or capital; or
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`(C) substantial investment in its exploitation, including
`engineering, research and development, or licensing.
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`Id
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`Given that these criteria are in the disjunctive, satisfaction of any one of them will be sufficient
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`to meet the domestic industry requirement. Certain Integrated Circuit Chipsets and Products
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`PUBLIC VERSION
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`Containing Same, Inv. No. 337-TA-428, Order No 10 at 3, Initial Determination (Unreviewed)
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`(May 4, 2000), citing Certain Variable Speed Wind Turbines and Components Thereo)’, Inv. No.
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`337-TA-376, Commission Op. at 15, USITC Pub. 3003 (Nov. 1996). The Commission has
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`embraced a flexible, market-oriented approach to domestic industry, favoring case-by—case
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`determination “in light of the realities of the marketplace” that encompass “not only the
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`manufacturing operations” but may also include “distribution, research and development and
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`sales.” Certain Dynamic Random Access Memories, Inv. No. 337—TA-242, USITC Pub. 2034,
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`Commission Op. at 62 (Nov. 1987) (“DRAMS”).
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`Congress enacted 19 U.S.C. § 1337(a)(3) in 1988 as part of the Omnibus Trade and
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`Competitiveness Act. See Certain Plastic Encapsulated Integrated Circuits, Inv. No. 337-TA-
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`315, USITC Pub. No. 2574 (Nov. 1992), Initial Determination at 89 (October 16, 1991)
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`(unreviewed in relevant part). The first two sub-paragraphs codified existing Commission
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`practice. See id. at 89; see also Certain Male Prophylactic Devices, Inv. No. 337-TA-546,
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`Commission Op. at 39 (June 29, 2007). Under Commission precedent, these requirements could
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`be met by manufacturing the articles in the United States, see, e. g., DRAMS, Commission Op. at
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`61, or other related activities, see Schaper Mfg. Co. v. US. Int ’l Trade Comm ’n, 717 F.2d 1368,
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`1373 (Fed. Cir. 1983)
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`(“[I]n proper cases,
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`‘industry’ may encompass more than the
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`manufacturing of the patented item. .
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`. .”).
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`In addition to subsections (A) and (B), there is also subsection (C). “In amending section
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`337 in 1988 to include subsection (C), Congress intended to liberalize the domestic industry
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`requirenient so that it could be satisfied by all ‘holders of U.S. intellectual property rights who
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`PUBLIC VERSION
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`are engaged in activities genuinely designed to exploit their intellectual property’ in the United
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`States.” Certain Multimedia Display and Navigation Devices and Systems and Components
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`Thereof and Products Containing Same, lnv. No. 337-TA—694, Commission Op. at 7 (August 8,
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`2011)
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`(quoting Certain Digital Processors and Digital Processing Systems, Components
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`Thereof and Products Containing Same, Inv. No. 337-TA—559, Final Initial Determination at 93
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`(unreviewed in relevant part) (May 11, 2007). Thus, “[u]nlike sub-parts (A) and (B), sub-part
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`(C) of section 337(a)(3) ‘does not require actual production of the article in the United States if it
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`can be demonstrated that substantial investment and activities of the type enumerated are taking
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`place in the United States.’” Certain Personal Data and Mobile Communications Devices and
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`Related Softwares, No. 337-TA-710, Order 102: ID on Economic Prong at 4 (April 6, 2011)
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`(unreviewed in relevant part) (“Personal Data and Mobile Communications Devices”) (quoting
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`H.R. Rep. No. 100-40, pt. 1, at 157 (1987)).
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`In Printing and Imaging Devices, the Commission held that “under the statute, whether
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`the complainant's investment and/or employment activities are ‘significant’ is not measured in
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`the abstract or absolute sense, but rather is assessed with respect to the nature of the activities
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`and how they are ‘significant’ to the articles protected by the intellectual property right.”
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`Printing and Imaging Devices, Commission Op. at 26. The Commission further stated that:
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`the magnitude of the investment cannot be assessed without
`consideration of
`the nature
`and importance of
`the
`complainant's activities to the patented products in the
`context of the marketplace or industry in question .
`.
`whether an investment is ‘substantial’ or ‘significant’ is
`context dependent. (Id at 31.)
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`PUBLIC VERSION
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`Indeed,
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`the Commission has emphasized that “there is no minimum monetary
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`expenditure that a complainant must demonstrate to qualify as a domestic industry under the
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`‘substantial
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`investment’
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`requirement” of section 337(a)(3)(C).
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`Certain Stringed Musical
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`Instruments and Components Thereofi Inv. No. 337-TA-586, Commission Op. at 25 (May 16,
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`2008). Moreover, the Commission has stated that a the complainant need not “define or quantify
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`the industry itself in absolute mathematical terms.” Id. at 26.
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`Viewing the evidence in a light most favorable to Respondents, the ALJ finds that at the
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`very least, Apple has satisfied the economic prong of the domestic industry requirement under
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`19 U.S.C. § l337(a)(3)(C). Respondents have presented no genuine issues of disputed fact.
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`Rather, Respondents dispute without offering any evidence Apple’s research spending on its
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`domestic industry products.
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`Contrary to Respondents’ unsupported arguments,
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`the evidence shows that Apple’s
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`domestic research and development activities related to its domestic industry products (iPhone 4
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`and Mac OS X) include:
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`0 Apple has invested a total of in research and
`development
`in fiscal years 2008, 2009, and 2010, respectively.
`(Confidential
`Declaration of Mark Buckley 1] 19, dated July 28, 2011 (“Confidential Buckley
`Decl.”)). Substantially all of that spending was in the United States. (M)
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`0 Apple has spent a combined investment in research and development for the domestic
`industry products of_ from the second fiscal quarter of 2008 through
`fiscal year 2010.
`(Id.
`11 20 & Confidential Exhibit D.) This includes—
`for iPhone hardware and software and— for Mac OS X.
`(Id.) These costs
`reflect Apple’s investments in the development, design, engineering, and testing of
`Apple’s Mac OS X operating system and iPhone hardware and software products
`performed by Apple engineering personnel in the United States. (Id)
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`PUBLIC VERSION
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`0 As of the time of Apple’s complaint, Apple employed in the United States -
`employees exclusively dedicated to research and development activities related to the
`iPhone iOS 4 software, and - employees dedicated to the iPhone hardware.
`(Id. 1]
`14 & Confidential Exhibit D.)
`In addition, as of the date of Apple’s complaint,
`Apple employed in the United States - employees dedicated to the research and
`development of Mac OS X software. (Id.)
`
`0 From the second fiscal quarter of 2008 to the end of fiscal year 2010, the total costs
`that these teams of employees incurred for research and development for the iPhone
`iOS 4 software, iPhone 4 hardware, and Mac OS X software were—,
`—, and —, respectively, all of which was incurred in the
`United States. (Id. $1 15.)
`
`0 This labor investment represents— respectively, of Apple’s total
`worldwide investments in research and development for the iPhone iOS4 software,
`iPhone 4 hardware, and Mac OS X software. (Id. 11 16.)
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`Respondents raise two main arguments in opposition to Apple’s showing for summary
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`determination with respect to 1337(a)(3)(C): (1) that Apple has failed to demonstrate that its
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`investment is “substantial” as required by 1337(a)(3)(C) and (2) that Apple has failed to establish
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`that its investments in research and development are connected to features or technology covered
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`by the asserted patents.
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`With respect
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`to the first argument,
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`the question of whether App1e’s investment
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`in
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`research and development is substantial, Respondents raise a number of prongs of attack. First,
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`Respondents argue that because Apple has not said that the iPhone 4 hardware employees and
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`Mac OS X software employees were “exclusively” dedicated to working on those products and
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`Apple has not apportioned those groups’ time, Apple cannot rely on those investments without
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`providing breakdowns of exactly on what these employees worked. Second, Respondents argue
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`that because Apple has not presented evidence regarding its employees and investments
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`PUBLIC VERSION
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`worldwide, Apple cannot show that these domestic investments are substantial relative to their
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`investments abroad.
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`Contrary to Respondents’ assertions, Apple has established that its iPhone 4 hardware
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`and Mac OS X employee investments should be considered in establishing that its investment in
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`research and development related to the domestic industry products is substantial. Apple’s
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`evidence states that the iPhone 4 hardware employees and Mac OS X employees are “dedicated”
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`to their respective domestic industry products — this is sufficient
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`to establish that
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`these
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`investments should be credited to these domestic industry products. Respondents’ only response
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`is an effort to parse the language of the Buckley declaration. But Respondents have failed to
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`point to any record evidence that would call this declaration with regard to the work these
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`employees did and Apple’s research and development investments into these domestic industry
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`products into dispute. See Creative Compounds, LLC v. Starmark Laboratories, --- F.3d ---,
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`2011 WL 2519513, at *7 (Fed. Cir. June 24, 2011) (noting “evidentiary shortcomings are not
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`overcome by attorney argument”).
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`As for Respondents’ argument that Apple has failed to provide evidence regarding the
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`number of employees that it employs abroad, this is also insufficient to create a disputed issue of
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`material fact. Apple has presented evidence that its domestic expenditures on iPhone 4 software,
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`iPhone 4 hardware, and Mac OS X software represent well over - percent of its investment
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`in research and development for those products. While Respondents complain that these
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`percentages are based on Mr. Buckley’s statement alone, they point to no evidence that would
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`call Mr. Buckley’s sworn statement into question.
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`PUBLIC VERSION
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`As for Respondents’ other argument that Apple has not adequately linked the investments
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`to the particular asserted patents or patented technology, the precision Respondents seek is
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`unnecessary. The relevant inquiry is whether Apple has made a substantial investment with
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`respect to the articles protected by the patent, and not whether the investment relates to the
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`specific features that contain the patented technology. Certain Unified Communications
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`Systems, Products Used With Such Systems, & Components Thereo)’, Inv. No. 337-TA-598,
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`Order No. 9 (Sept. 5, 2007) (“As stated in the clear language of the statute and in Commission
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`precedent, a complainant must establish that it has made a substantial investment with respect to
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`the articles protected by the patent; not the specific elements of said articles that are patented”)
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`(“Unified Communications”).
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`In Unified Communications, the ALJ found that the nexus was
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`established when the domestic investment made by the complainant was devoted to the products
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`that allegedly practiced the asserted patents.
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`Id.
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`(granting summary determination that the
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`economic prong was met under 19 U.S.C. § l337(a)(3)(A), (B), and (C)). Here, Apple has
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`shown that the domestic investments it made are devoted to the domestic industry products and
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`Respondents have offered no evidence to create a disputed issue of material fact.
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`Turning to the context dependent analysis required under Printing and Imaging Devices,
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`the ALJ finds that the undisputed facts demonstrate that Apple has made a substantial investment
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`in research and development related to the domestic industry products as required under §
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`l337(a)(3)(C).
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`The evidence shows that Apple conducts nearly all of its research and
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`development
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`in the United States and has invested over — in research and
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`development related to the domestic industry products. And that thisi is about -
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`-11-
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`PUBLIC VERSION
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`percent of Apple’s total research and development investment of
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`Moreover,‘ the
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`evidence establishes that the products that Apple is relying on in this investigation, unlike the
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`products in Printing and Imaging Devices, have been and continue to be widely sold in the
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`United States. Thus, Apple has shown that its investment in research and development for the
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`domestic industry products is substantial. Accordingly, the ALJ finds that Apple is entitled to
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`summary determination that it has met the economic prong of the domestic industry requirement
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`under § 1337(a)(3)(C). See Certain Digital Imaging Devices and Related Software, Inv. No.
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`337-TA-717, Final Initial Determination, at 306-13 (May 12, 2011) (unreviewed); Personal Data
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`and Mobile Communications Devices, Order 102: ID at 7-12.
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`As for whether Apple has similarly shown it can also meet the economic prong under
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`subsections (A) and (B) of § l337(a)(3), the ALJ finds that there are disputed issues of material
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`fact that prevent a finding that Apple has met the economic prong under those subsections.
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`As an initial matter, Respondents argue that Apple cannot rely on subsections (A) and (B)
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`of § l337(a)(3) because Apple does not manufacture any of the domestic industry products in the
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`United States. However, a close reading of Commission precedent shows that Respondents’
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`contention is incorrect. Commission precedent has taken a broader view than Respondents argue
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`of the activities that can meet subsections (A) and (B). The Commission had also found the
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`“industry” requirement met by activities including quality control, repair and packaging of
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`imported products, domestic repair and installation activities, and domestic product servicing of
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`imported products.
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`See, e.g., Schaper Mfg., 717 F.2d at 1373 (collecting cases); see also
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`Printing and Imaging Devices, Commission Op. at 29-30 (collecting cases); Certain Diltiazem
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`-12-
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`PUBLIC VERSION
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`Hydrochloride and Diltiazem Preparations, Inv. No. 337-TA-349, USITC Pub. No. 2902, Initial
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`Determination (unreviewed in relevant part) at 138-39 (February 1, 1995).
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`Apple has put forward a number of investments in plant and equipment that it claims
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`meet the requirements of § 1337(a)(3)(A). Apple argues that these investments include: (1) its
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`-building headquarters (and undeveloped land) in Cupertino, California (Confidential Buckley
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`Decl. 111] 7-8); (2) its various investments in its -retail stores located in the United States (Id
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`1111 8-11); (3) its investment in its Elk Grove facility that provides warehousing and distribution
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`operations and a customer support call center (Id); and (4) its network of authorized service
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`centers. Apple argues that because iPhones and products operating on the Mac OS X operating
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`system constitute a majority of the products Apple sells, a majority of the expenditures should be
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`allocated directly to these products. (Id 11 12.)
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`Respondents argue that these investments relate to all of Apple’s products and Apple has
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`failed to accurately apportion those investments to the products Apple contends are the domestic
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`industry products that practice the alleged inventions of the asserted patents.
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`Staff agrees with Apple that its investments in plant and capital are significant and argues
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`that they are not aware of any facts that would create a material dispute.
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`The ALJ agrees with Respondents that disputed issues of material fact remain regarding
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`Apple’s allocation of these investments to the domestic industry products. As Respondents
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`correctly note, Apple’s headquarters,
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`its retail stores,
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`its Elk Grove facility, and its service
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`centers relate to all of Apple’s products. Respondents have disputed Apple’s allocation in the
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`Buckley Confidential Declaration by noting that some of the domestic industry products — e. g.,
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`PUBLIC VERSION
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`the iPhone 4 — were not on sale for the entire period that these investments were made.
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`(See
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`Respondents Opposition Brief at 15-20.) Accordingly, Apple has not carried its burden of
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`proving that no genuine issue of material fact exists and that it is entitled to judgment as a matter
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`of law with respect to its investments in plant and equipment under § 1337(a)(3)(A). See
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`Personal Data and Mobile Communications Devices, Order 102: ID, at 14 (denying Apple’s
`
`motion for summary determination under 1337(a)(3)(A)).
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`As for §
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`l337(a)(3)(B), Apple submits that
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`it employs in the United States -
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`employees exclusively dedicated to research and development activities related to the iPhone
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`iOS 4 software, - employees dedicated to the iPhone hardware, and - employees dedicated
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`to Mac OS X software. Apple also argues that it employs - people at its Cupertino,
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`California headquarters and - people at its domestic retail stores. Apple also argues that it
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`has invested— in its AppleCare training program.
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`Respondents argue that with respect
`
`to Apple’s total number of employees, retail
`
`employees, and AppleCare training program that Apple has failed to allocate those employees to
`
`the domestic industry products and that its attempts to allocate those employees are inaccurate
`
`and incorrect. As for the employees in research and development, Respondents argue that
`
`because Apple has not said that the iPhone 4 hardware employees and Mac OS X employees
`
`were “exclusively” dedicated to working on those products and Apple has not apportioned those
`
`groups’ time, Apple cannot rely on those employees to establish its investment in labor is
`
`significant.
`
`-14-
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`
`
`PUBLIC VERSION
`
`Staff agrees with Apple that its investments in labor are significant and argues that they
`
`know of no facts that create a material dispute.
`
`The ALJ agrees with Respondents that disputed issues of material fact remain regarding
`
`Apple’s allocation of its overall domestic employment to the domestic industry products. As
`
`Respondents correctly note, Apple’s headcount of employees at its Cupertino headquarters and
`
`retail stores relate to all of Apple’s products. Respondents have disputed Apple’s allocation by
`
`noting that some of the domestic industry products — e.g., the iPhone 4 — were not on sale for the
`
`entire period that these investments were made. (See Respondents Opposition Brief at 21-22, 24-
`
`25.) Apple has shown that there is no dispute that it does have K employees devoted to
`
`research and development. But given the disputes regarding how to allocate Apple’s overall
`
`employee figures, it would be premature at this time to grant summary determination. Therefore,
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`Apple has not carried its burden of proving that no genuine issue of material fact exists and that
`
`it
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`is entitled to judgment as a matter of law with respect to plant and equipment under §
`
`1337(a)(3)(B).
`
`Accordingly, as set forth above, it is the INITIAL DETERMINATION of the ALJ that
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`Motion No. 750-014 is GRANTED. The ALJ finds that under Apple has satisfied the economic
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`prong of the domestic industry requirement section l337(a)(3)(C). 19 U.S.C. § l337(a)(3).
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`Pursuant
`
`to 19 C.F.R.
`
`§ 2l0.42(h),
`
`this initial determination shall become the
`
`determination of the Commission unless a party files a petition for review of the initial
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`determination pursuant to 19 C.F.R. § 2l0.43(a), or the Commission, pursuant to 19 C.F.R. §
`
`-15-
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`
`
`PUBLIC VERSION
`
`210.44, orders on its own motion a review of the initial determination or certain issues contained
`
`herein.
`
`Within seven days of the date of this document, each party shall submit to the Office of
`
`the Administrative Law Judges a statement as to whether or not it seeks to have any portion of
`
`this document deleted from the public version. Any party seeking to have any portion of this
`
`document deleted from the public Version thereof shall also submit to this office a copy of this
`
`document with red brackets indicating any portion asserted to contain confidential business
`
`information. The parties’ submissions may be made by facsimile and/or hard copy by the
`
`aforementioned date. The parties’ submissions concerning the public Version of this document
`
`need not be filed with the Commission Secretary.
`
`' so ORDERED.
`
`-
`
`- '
`
`.
`
`'
`
`\
`
`‘
`
`eo_cIoreR_ Essex
`Administrative Law Judge -
`
`.
`
`I
`
`-16..
`
`
`
`IN THE MATTER OF CERTAIN MOBILE DEVICES,
`AND RELATED SOFTWARE THEREOF
`
`Inv. N0. 337-TA-750
`
`PUBLIC CERTIFICATE OF SERVICE
`
`1, James R. Holbein, hereby certify that the attached Order No. 14 has been served by hand upon, the
`Commission Investigative Attorney, Lisa A. Kattan, Esq. and the following parties as indicated on
`
`March 6, 2014.
`
`
`
`Lisa R. Barton, Acting Secretary
`U.S. International Trade Commission
`
`500 E Street, SW, Room 112A
`
`Washington, D.C. 20436
`
`ON BEHALF OF COMPLAINANT APPLE INC.:
`
`Brian E. Ferguson, Esq.
`WEIL, GOTSHAL & MANGES LLP
`1300 Eye Street, NW, Suite 900
`Washington, DC 20005
`
`(
`(
`(
`(
`
`) V'a Hand Delivery
`ia Overnight Mail
`) Via First Class Mail
`) Other:
`
`ON BEHALF OF RESPONDENT MOTOROLA MOBILITY INC.:
`
`Charles F. Schill, Esq.
`STEPTOE & JOHNSON LLP
`1330 Connecticut Avenue, NW
`Washington, DC 20036
`
`(
`(
`(
`(
`
`)
`
`1a Hand Delivery
`Via Overnight Mail
`) Via First Class Mail
`) Other:
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