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PUBLIC VERSION

UNITED STATES INTERNATIONAL TRADE COMMISSION Washington, D.C.

In the Matter of CERTAIN ELECTRONIC DIGITAL MEDIA DEVICES AND COMPONENTS THEREOF Inv. No. 337-TA-796

BRIEF OF THE OFFICE OF UNFAIR IMPORT INVESTIGATIONS ON THE ISSUES UNDER REVIEW AND ON REMEDY, BONDING, AND PUBLIC INTEREST

Anne Goalwin, Acting Director David O. Lloyd, Supervisory Attorney Reginald D. Lucas, Investigative Attorney OFFICE OF UNFAIR IMPORT INVESTIGATIONS U.S. International Trade Commission 500 E Street SW, Suite 401 Washington, DC 20436 (202) 205-2036 (Phone) (202) 205-2158 (Facsimile)

June 11, 2013

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I.

TABLE OF CONTENTS INTRODUCTION ........................................................................................................ 1

II. BACKGROUND .......................................................................................................... 1 A. Technical Issues on Review .................................................................................. 4 1. Question 1 ........................................................................................................ 4 2. Question 2 ........................................................................................................ 7 3. Question 3 ........................................................................................................ 9 4. Question 4 ...................................................................................................... 12 5. Question 5 ...................................................................................................... 13 6. Question 6 ...................................................................................................... 14 7. Question 7 ...................................................................................................... 14 8. Question 8 17

9. Question 9 ...................................................................................................... 20 10. Question 10 .................................................................................................... 22 B. REMEDY, THE PUBLIC INTEREST, AND BONDING ................................. 24 1. Remedy .......................................................................................................... 24 a. Limited Exclusion Order .................................................................... 24 b. Cease and Desist Order ...................................................................... 26 2. The Public Interest ......................................................................................... 27 a. Question 1 ........................................................................................... 27 b. Question 2........................................................................................... 29 3. Bonding ......................................................................................................... 30

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I.

INTRODUCTION The Office of Unfair Import Investigations (OUII) respectfully submits this brief

pursuant to the Notice of Commission Decision of May 28, 2013 to Review a Remand Initial Determination; Schedule for Filing Written Submissions on Certain Issues Under Review and on Remedy, Bonding, and the Public Interest (Notice). The Commission has determined to review the Remand Initial Determination in its entirety. (See Notice at 3.) The Commission has invited the parties to brief certain issues under review pertaining to U.S. Patent Nos. 7,479,949, RE41,922, and 7,789,697. (See Notice at 3-4.) The Commission has also expressed an interest in receiving written submissions that address the public interest factors in the context of this investigation, including the effect on the public interest of remedial orders barring the entry and further distribution of the articles alleged to infringe the asserted patent claims and manners in which a remedy with respect to infringement be specifically tailored to avoid harm to the public interest. (See Notice at 4-5.) II. BACKGROUND A. Procedural History On July 5, 2011, Complainant Apple, Inc. (Apple) filed a complaint with the Commission pursuant to Section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. 1337. The complaint named Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., and Samsung Telecommunications America, LLC (collectively Samsung) as Respondents and asserted claims 1, 3-6, and 9-20 of the 949 patent; claims 29-35 of the 922 patent; claims 1-3, 11-16, and 21-27 of the 697 patent; claims 1-4 and 8 of the 501 patent; and claims 1, 4, 7, 9, 11, 12, 15-17, 19, and 20 of the 533 patent, as well as the claim of the 1 OUIIs position as to each of these issues is set forth below.

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D757 patent and the claim of the D678 patent. The Commission instituted this investigation to determine whether there has been a violation of Section 337(a)(1)(B) and whether an industry in the United States exists as required by Section 337(a)(2). See 76 Fed. Reg. 47610 (Aug. 5, 2011). On November 21, 2011, the Administrative Law Judge (ALJ) held a Markman hearing, and a Markman order issued on March 6, 2012. (See Order No. 16.) On April 17, 2012, the ALJ issued an Initial Determination terminating the investigation as to the asserted claims of the 533 patent, claims 1-3, 11, 12, 15, 16, and 21-27 of the 697 patent, and claim 3 of the 949 patent. (See Order No. 17; Commission Decision Not to Review, May 3, 2012). A pre-hearing conference was held on May 30, 2012, and the evidentiary hearing was held from May 31 June 7, 2012. The ALJ issued the Final Initial Determination on October 24, 2012, finding that a violation of Section 337 has occurred with respect to the D678 patent; claims 1, 4-6, and 10-20 of the 949 patent; claims 29, 30, and 33-35 of the 922 patent; and claims 1-4 and 8 of the 501 patent. No violation was found with respect to the D757 patent and claims 13 and 14 of the 697 patent. (ID at 1.) Both Apple and Samsung petitioned for review of the ID and filed responses to the petitions. The Office of Unfair Import Investigations also filed a response to the private parties petitions. (See OUII Pet. Resp.) On January 23, 2013, the Commission determined to review the final ID in its entirety, and remanded the investigation to the presiding ALJ to determine: (1) whether the text selection feature of the accused products infringes claims 34 and 35 of the 922 patent; and (2) whether the accused products represented by the Transform SPH-M920 product infringe claim 3 of the 501 patent. (See Order (Remand of Investigation) at 2-3.) 2

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On March 26, 2013, the ALJ issued an Initial Determination on Remand. (See Initial Determination on Remand (Remand ID).) In the Remand ID, the ALJ determined that claims 34 and 35 of the 922 patent are infringed by the text-selection feature of the accused products and that claim 3 of the 501 patent is not infringed by the accused products represented by the Transform SPH-M920. (See Remand ID at 1.) Apple and Samsung petitioned for review of the Remand ID and filed responses to the petitions. (See Apple Pet. on Rem. and Samsung Pet. on Rem.) The Office of Unfair Import Investigations filed a response to the private parties petitions for review of the Remand ID. (See OUII Pet. Resp. on Rem.) On May 28, the Commission issued a Notice of Commission Determination to Review a Remand Initial Determination; Schedule for Filing Written Submissions on Certain Issues Under Review and on Remedy, Bonding, and the Public Interest. (See Notice.) B. The Final Initial Determination As noted above, the Administrative Law Judge issued the Final Initial Determination on October 24, 2012, finding that a violation of Section 337 has occurred with respect to the D678 patent; claims 1, 4-6, and 10-20 of the 949 patent; claims 29, 30, and 33-35 of the 922 patent; and claims 1-4 and 8 of the 501 patent. No violation was found with respect to the D757 patent and claims 13 and 14 of the 697 patent. (ID at 1). Both Apple and Samsung petitioned for review of the ID. On November 7, 2012, the ALJ issued the Recommended Determination on Remedy and Bond. (Recommended Determination on Remedy and Bond.) In the RD, the ALJ recommended that the Commission issue a limited exclusion order directed to infringing electronic digital media devices. (See RD at 2.) The ALJ further recommended that the Commission issue a cease and desist order. (See RD at 3

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6.) Finally, the ALJ recommended that Samsung be required to post a bond of 88%, 32.5%, and 37.6% of the entered value for mobile phones, media players and tablet computers, respectively. (See Rec. at 10.) C. The Final Initial Determination on Remand As discussed above, on March 26, 2013, the ALJ issued an Initial Determination on Remand. (See Initial Determination on Remand (Remand ID).) In the Remand ID, the ALJ determined that claims 34 and 35 of the 922 patent are infringed by the text-selection feature of the accused products and that claim 3 of the 501 patent is not infringed by the accused products represented by the Transform SPH-M920. (See Remand ID at 1.) III. STANDARD OF REVIEW When reviewing an initial determination, the Commission may affirm, reverse, modify, set aside or remand for further proceedings, in whole or in part, the initial determination of the administrative law judge. The Commission may also make any findings or conclusions that in its judgment are proper based on the record in the proceeding. 19 C.F.R. 210.45(c). In this respect, the Commission is not an appellate court, but is the body responsible for making the final agency decision. On appeal, only the Commissions final decision is at issue. Certain Bearings and Packaging Thereof, Inv. No. 337-TA-469, Commission Opinion at 6, USITC Pub. 3736 (Dec. 2004). Commission practice in this regard is consistent with the Administrative Procedure Act. See, e.g., Certain Male Prophylactic Devices, Inv. No. 337-TA-546, Commission Opinion at 5 (Aug. 1, 2007). IV. QUESTIONS OF THE COMMISSION A. Technical Issues on Review 1. Question 1 4

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Is the "material or apparatus" used in practicing the patented methods asserted in the '949 patent that is relevant to a substantial noninfringing use analysis the "combination of source c()de and hardware elements relied upon by Dr. Balakrishnan in his witness statement," as argued by Apple (Apple Pet. at 50-51)? To the extent that it is, what evidence in the record shows that the "combination of source code and hardware elements" is adapted for use in an infringement of the '949 patent and that it does not have any substantial noninfringing use? Regarding substantial non-infringing use analysis directed to contributory infringement of the 949 patent, Apple alleges that the material or apparatus used in practicing the 949 patented method is the combination of source code and hardware elements relied upon by Dr. Balakrishnan in his witness statement (that is, the computing device and touch screen display, etc., along with the executed software employing the heuristics). (Apple Pet. at 51; see also CX-2428C (Balakrishnan) at 54-80, Q87-115; id. at 115-72, Q182-339.) In particular, Apple appears to argue that the software portion of the material or apparatus is properly identified as the computer code implementing the alleged infringing functionality covered by claims 11-16 of the 949 patent, which employs heuristics to distinguish between finger gestures corresponding to scrolling, translation, and next-item commands. (Apple Pet. at 41-50; CIB at 115-116; CRB at 56.). In contrast, OUII submits that the software portion of the material or apparatus is properly identified as the code for the Browser application. OUII submits that the Federal Circuit precedent identified by Apple involves a software package within a software package. For example, the Federal Circuit has explained that a particular tool within a larger software package may be the relevant material or apparatus when that tool is a separate and distinct feature. See i4i Ltd. Pship v. Microsoft Corp., 598 F.3d 831, 849 (Fed. Cir. 2010) (emphasis added) (citing expert testimony that this ability to leave 5

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[the editor] out or put it in various Word products showed that the editor was a separate and distinct feature). Similarly, in Lucent Technologies, Inc. v. Gateway, Inc., 580 F.3d 1301, 1310 (Fed. Cir. 2009), the Federal Circuit held that the relevant material or apparatus was a datepicker tool within the Microsoft Outlook software package but carefully noted that the tool was a separate and distinct feature of the Outlook software in which the tool was embedded. In contrast, the instant investigation involves specific heuristics functionality of one software package the Browser software package. Unlike in Lucent and i4i Ltd., there is no convincing evidence that the 949 functionality employing heuristics is separate and distinct from the Browser application software. Rather, the evidence illustrates that the heuristics functionality is simply an intertwined part of the Browser application software. (See CX-2428C (Balakrishnan) at 66-67, Q102 (noting that the vertical screen scrolling command is a part of the source code representing the Browser application code as opposed to being a separate software package embedded within the Browser), 51-80, Q87-115 and 80-81, Q116-122; see also 6/6/12 Hearing Tr. at 1154:8-10 and 1237:3-9.) Thus, in stark contrast to the separable XML editor software package at issue in i4i, for instance, the evidence does not show that the code implementing the heuristics functionality in the accused products is a separate and distinct software package that can be omitted from the Browser software and sold separately, for example. Thus, Apples identification of the software portion of the material or apparatus under section 271(c) is incorrect. Additionally, OUII submits that, at a minimum, the software portion of the material or apparatus must also include the code on the controller chip for detecting one or more finger contacts with the touch screen display. (See CX-2428C (Balakrishnan) at 58, Q98.) Thus, Apples identification of the software portion of the material or apparatus is also improper 6

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because the infringing device must include at least this additional functionality to infringe. (See JX-3, first limitation of claim 11.) OUII further submits that the record does not include evidence supporting Apples allegation that the alleged combination of source code and hardware elements is specifically adapted for use in an infringement of the 949 patent and that it does not have any substantial non-infringing use. Apple expert witness Dr. Balakrishnan merely provided a single conclusory statement that [t]he source code . . . has no purpose other than to practice this method, and therefore has no substantial non-infringing use. (CX-2428C at 98, Q 161; see also ID at 190 (noting that Dr. Balakrishnans testimony is entirely conclusory and fails to explain in any detail how in fact the source code relied upon is adapted for use in an infringement of the 949 patent or why such source code does not have any substantial non-infringing use).) In light of the foregoing, OUII is of the view that even if Apples identification of the material or apparatus for determining substantial noninfringing use is accepted, Apple has not met its burden of proving that such material or apparatus does not have any substantial noninfringing use. (See id.) 2. Question 2 Is the material or apparatus used in practicing the patented methods asserted in the '922 patent that is relevant to a substantial noninfringing use analysis the combination of source code and hardware elements relied upon by Dr. Balakrishnan in his witness statement, as argued by Apple (Apple Pet. at 50-51)? To the extent that it is, what evidence in the record shows that the combination of source code and hardware elements is adapted for use in an infringement of the '922 patent and that it does not have any substantial noninfringing use? With respect to the substantial non-infringing use analysis relating to contributory infringement of the 922 patent, Apple alleges that the material or apparatus is properly 7

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identified as the code functionality that creates certain kinds of interactive translucent windows. (Apple Pet. at 50.) For reasons similar to those presented for the 949 patent, OUII submits that Federal Circuit precedent suggests that Apples identification of the material or apparatus is misplaced. As explained above, the Federal Circuit has held that a particular tool within a larger software package may be the relevant material or apparatus when that tool is a separate and distinct feature. See i4i Ltd. Pship v. Microsoft Corp., 598 F.3d 831, 849 (Fed. Cir. 2010) (emphasis added) (citing expert testimony that this ability to leave [the editor] out or put it in various Word products showed that the editor was a separate and distinct feature); see also Lucent Technologies, Inc. v. Gateway, Inc., 580 F.3d 1301, 1310 (Fed. Cir. 2009). Here, in contrast to evidence in Lucent and i4i Ltd. establishing that the software package-at-issue was separate and distinct, Dr. Balakrishnan acknowledged that

(CX-2428C at 115, Q183.) Thus, in OUIIs view, there is no evidence in the record establishing that the translucent zoom-in button is anything more than a part of the functionality of the Gallery software package. Additionally, Dr. Balakrishnan acknowledged that the patented features are present in the . . . photo [G]allery application. (CX-2428C at 177, Q347) (emphasis added). Further, when explaining the alleged infringing functionality, Dr. Balakrishnan repeatedly refers to the Gallery program itself. (See e.g., CX-2428C at 116, Q185.) Thus, the evidence of record supports OUIIs position that the material or apparatus identified by Apple is not separate and distinct, and should, therefore not be treated separately in analyzing contributory infringement. 8

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Finally, OUII submits that the record does not support Apples allegation that its proposed material or apparatus is adapted for use in an infringement of the 922 patent and that it does not have any substantial non-infringing use. Apple expert witness Dr. Balakrishnan merely provided a sole conclusory statement that [t]he source code . . . has no purpose other than to practice this method, and therefore has no substantial non-infringing use. (CX-2428C, pg. 176, Q 345; see also ID at 271 (noting that Dr. Balakrishnans testimony is entirely conclusory and fails to explain in any detail how in fact the source code relied upon is adapted for use in an infringement of the 922 patent or why such source code does not have any substantial non-infringing use).) In light of the foregoing, OUII is of the view that even if Apples identification of the material or apparatus is accepted, Apple has failed to show that such material or apparatus does not have any substantial noninfringing use. 3. Question 3
Please comment on the requirement, if any, that the "material or apparatus" relevant to a substantial noninfringing use analysis must be "separate and distinct" from all other functions of a larger product in view of Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301 (Fed. Cir. 2009); i4i Ltd. P 'ship v. Microsoft Corp. , 598 F.3d 831 (Fed. Cir. 2010); Fujitsu Ltd. v. Netgear Inc., 620 F.3d 1321 (Fed. Cir. 2010); and any other pertinent legal authorities. To the extent there is such a requirement, what evidence in the record shows that each "combination of source code and hardware elements relied upon by Dr. Balakrishnan in his witness statement" with respect to the '949 and the '922 patents is a "separate and distinct" feature of the Browser or Gallery application that warrants treating it separately in analyzing contributory infringement.

OUII submits that regardless of whether the proposed material or apparatus relevant to a substantial use analysis must be separate and distinct, Apples reliance on the cited Federal Circuit precedent is misplaced because the situation in this investigation is not even generally analogous to the situation in the cited cases. As discussed above, the Federal Circuit has limited 9

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the material or apparatus to a particular software package or tool (e.g., the XML editor at issue in i4i) within a larger software package (e.g., the Microsoft Word application software in i4i) in particular instances, that is, when [the] tool [within a larger software package] is a separate and distinct feature [of the software package ]. See Lucent Technologies, Inc. v. Gateway, Inc., 580 F.3d 1301, 1320-1321 (Fed. Cir. 2009); see also i4i Ltd. Pship v. Microsoft Corp., 598 F.3d 831, 849 (Fed. Cir. 2010) (noting that [a]s we explained in Lucent, a particular tool within a larger software package may be the relevant material or apparatus under section 271(c) when that tool is a separate and distinct feature) (emphasis added)). In i4i, Microsoft argued that for purposes of determining infringement, the relevant material or apparatus was the Microsoft Word software application, not the separable XML editor embedded within the Word application. In holding that the jury had sufficient evidence to conclude that the relevant material or apparatus was the XML editor, the Federal Circuit noted that the XML editor software package could be removed or omitted from the Microsoft Word software package and, therefore, was a separate and distinct feature. See i4i Ltd. Pship, 598 F.3d at 849 (citing expert testimony that this ability to leave [the editor] out or put it in various Word products showed that the editor was a separate and distinct feature) (emphasis added). Similarly, in Lucent, the Federal Circuit held that the relevant material or apparatus was a date-picker tool within the Microsoft Outlook software package but carefully noted that the tool was a separate and distinct feature of the Outlook software in which the tool was embedded. See Lucent, 580 F.3d at 1320-1321. Further, in Fujitsu Ltd. v. Netgear, Inc., Phillips argued that the component at issue for determining substantial non-infringing use was the specific hardware and software that performs fragmentation. Although the Federal Circuit agreed with Phillips, the Court noted that, the fragmentation functions of the accused products in this case are separate 10

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and distinct features [that must be treated] separately in analyzing contributory infringement. See Fujitsu Ltd. v. Netgear, Inc., 620 F.3d 1321, 1331 (Fed. Cir. 2010) (emphasis added). Thus, the Courts conclusion that the fragmentation tool was the relevant material or apparatus under section 271(c) was based on the fact that the tool was separate and distinct. In contrast to the Federal Circuit precedent identified above involving a separate and distinct software package within a larger software package, OUII submits that this investigation involves one software package (i.e., the Browser package). In this respect, the record does not show that the functionality alleged by Apple to employ heuristics to distinguish between finger gestures corresponding to scrolling, translation, and next-item commands is distinct or separate from the Browser application. Indeed, the record not only weights against treating the heuristics functionality separately in analyzing contributory infringement, it includes ample evidence that the vertical screen scrolling command, the two-dimensional screen translation heuristic, and the next item heuristic are merely rules implemented into the functionality of the Browser code for determining execution of the particular type of scroll command. (See CX-2428C, pg. 67 of 201, Q&A 102 (noting that [i]n the Browser application a user can scroll or translate the content, depending on the angle of initial movement of their finger contact. If the angle of initial movement is roughly vertical, then a vertical screen scrolling command is executed; see also CX-2428C, pg. 77-83 of 201, Q&A 115-120.) Thus, in contrast to the XML editor the software package embedded in Microsoft Word at issue in i4i Ltd. Pship, the heuristics in the present investigation represent code of the Browser. See i4i Ltd. Pship, 598 F.3d at 849 (citing expert testimony that this ability to leave [the editor] out or put it in various Word products showed that the editor was a separate and distinct feature) (emphasis added).

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Similarly, OUII submits that the record does not support the proposition that the 922 functionality directed to creating certain types of interactive translucent windows is a separate and distinct part of the Gallery application warranting treating it separately in analyzing contributory infringement. To the contrary, as previously explained in response to Questions 1 and 2, supra, the record suggests that the functionality directed to creating certain types of interactive translucent windows is an inseparable part of the Gallery package. 4. Question 4
Please discuss and cite the evidence of record, if any, that shows a third party performed each and every step of asserted claims 29-35 of the '922 patent.

OUII submits that the evidence of record showing that a third party performed each and every step of asserted claims 29-35 of the 922 patent is circumstantial but, nonetheless, sufficient to support a finding of indirect infringement. In particular, Apple alleges that the [t]he likelihood that at least one end user has performed the infringing functions at least once is overwhelming, particularly in light of the explicit instructions to use these features which Samsung has provided and [t]he vast number of Samsung devices sold during the relevant period. (CpostBr. at 157; see also CX-348 at 85 (instructing users how to perform the zooming functionality); CX-411 at 57 (instructing users on how to perform the crop functionality); and CX-411 at 41 (instructing users on how to perform the text selection functionality); and CDX183C & CDX-184C (showing net sales of almost six million Samsung devices from October and December 2011).) In light of the evidence regarding Samsungs instructions to end-users and the overwhelming number of relevant products sold, OUII believes that Apple has proven by a preponderance of the evidence that at least one person in the United States has performed the 12

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claimed method of the 922 patent. See Lucent Techs., 580 F.3d at 1318; see also Certain Semiconductor Chips, Inv. No. 337-TA-661, ID at 43 (Evidence of extensive sales in the United States has been found sufficient to show direct infringement by end users that perform a claimed method when operating an accused product as the manufacturer intended.) 5. Question 5
Please discuss and cite the evidence of record, if any, that shows Samsung actively and knowingly aided and abetted another's direct infringement of claims 29-35 of the '922 patent.

OUII submits that the evidence of record shows that Samsung actively and knowingly aided and abetted end-user direct infringement of claims 29-35 of the 922 patent. For example, as noted above, Samsung provides instructions to its end-users in the form of user manuals. (See CX-348 at 85, CX-411 at 41, 57, CX-336-53, CX-356-59, CX-361-62, CX-375-400, CX-41631.) The evidence of record further shows that Samsung knew or should have known about the 922 patent family and knew or should have known that the infringing acts would induce infringement of the 922 claims at . (See CX-406C; see also CX-2511C (Lee Dep.) at 119:22-121:2; CX-0406C.) See Akamai Techs., Inc. v. Limelight Networks, Inc., 692 F.3d 1301, 1308 (Fed. Cir. 2012) (noting that [i]t is enough that the inducer cause[s], urge[s], encourage[s], or aid[s] the infringing conduct and that the induced conduct is carried out); see also Natl Presto Indus., Inc. v. West Bend Co., 76 F.3d 1185, 1196 (Fed. Cir. 1996) (analogizing inducement to aiding and abetting violations of criminal laws). Considering the above-identified evidence of record regarding Samsungs instructions to end-users in conjunction with the evidence of record showing Samsungs knowledge of the claimed infringement, OUII submits that there is ample evidence of record allowing Apple to meet its burden of establishing that 13

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Samsung actively and knowingly aided and abetted infringement of the asserted 922 patent claims by end-users. 6. Question 6
Please discuss and cite the evidence of record, if any, that shows Samsung actively and knowingly aided and abetted another's direct infringement of claims 11-16 of the '949 patent.

The evidence of record shows that Samsung actively and knowingly aided and abetted end user direct infringement of claims 11-16 of the 949 patent. For example, as noted above, Samsung provides instructions to its end-users in the form of user manuals. (See CX-2428C at 97-98, Q160; CX-341 at 126, 167; CX-336-53, CX-356-62; CX-375-400, CX416-31.) The evidence of record further shows that Samsung knew or should have known about the 949 patent and knew or should have known that the infringing acts would induce infringement of the 949 claims, . (See CX-406C at 1.) Considering this, OUII submits

that Apple has met its burden of establishing that Samsung actively and knowingly aided and abetted infringement of the asserted 949 patent claims by end-users. 7. Question 7 Does the intrinsic evidence mandate a narrow construction of the "feature of interest" limitation in claims 31 and 32 of the '922 patent that excludes control elements in the translucent image? What impact, if any, do the additions in the specification made by reissue have on the construction of the claims added during reissue? In particular, please comment on the applicability of the embodiment disclosing a translucent keyboard to the construction of the "feature of interest" limitation. See JX-0004 at 3:12-22 and FIGS. 19-21c. What evidence in the record, if any, supports construing control characters or functional buttons on a keyboard as a "feature of interest" in the context of the '922 patent? Regarding claims 31 and 32 of the 922 patent, the intrinsic evidence mandates a construction of the claim term feature of interest that excludes control elements in the 14

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translucent image. (See e.g., JX-0004 at 9:1-10:50; RX-3636C at 74, Q616.) OUII submits that it is axiomatic that the claim term feature of interest must be construed in light of the specification. (CX-2352C (Order No. 16 (Construing Terms of the Asserted Patents)).) OUII further submits that the evidence shows that in the context of the 922 patent, the term feature of interest is a feature on which the user is interested in conducting an image operation. (JX0004 at 9:1-10:50; RX-3636C at 65-71, Q 610-612, at 74, Q 616.)1 For example, in the section of the specification corresponding to Fig. 3a-3e, the circle feature of interest is copied onto the base image. (JX-0004 at 9:1-10:50, Fig. 3a-3e.).2 Thus, OUII submits that the intrinsic record mandates exclusion of control elements from the construction of the term feature of interest. Otherwise, the scope of the claimed invention would be improperly expanded. See Autogiro Co. of Am. v. United States , 384 F.2d 391, 393 (U.S. Ct. Cl. 1967) (noting that the specification aids in ascertaining the scope and meaning of the language employed in the claims).3 OUII further submits that the control buttons, for example, in the Gallery application are analogous to the wand control icon in the 922 patent, and Apple expert Dr. Balakrishnan has acknowledged that the 922 patent does not describe the wand icon as a feature of interest. (Tr. 1197:24-1198:2; 1198:21-1199:3.) Additionally, the Federal Circuit has frequently alluded to the familiar axiom that claims should be so construed, if possible, so as to sustain their validity. Liebel-Flarsheim Co. v. Medrad, Inc., 358 F.3d 898, 911 (Fed. Cir. 2004) (quoting Rhine v. Casio, Inc., 183 F.3d 1342,

The patent indicates that the interest of the user is in the sense of the feature on which the user is interested in operating, i.e., on which the user is interested in performing the function. The user is not interested in operating on the control elements. 15

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1345 (Fed. Cir. 1999)); see also Harari v. Lee, 656 F.3d 1331, 1340 (Fed. Cir. 2011) (noting that to be valid, claims must be supported by the specification to satisfy the written description requirement). Claims must be read in light of the specification and although it may be appropriate to read a claim in a broad manner, such a broad reading is, nonetheless, limited by the context of the specification, as claims must be read in light of the specification, not in a vacuum. See Harari v. Lee, 656 F.3d 1331, 1340 (Fed. Cir. 2011) (we give the claim its broadest reasonable construction in light of the Lee patent specification) (emphasis added); see also Agilent Techs., Inc. v. Affymetrix, Inc., 567 F.3d 1366, 1375 (Fed. Cir. 2009). Here, unless the claim term feature of interest is interpreted to exclude control elements, the claims in which the term is utilized are invalid, as the specification does not provide written description for such an interpretation.4 Out of the plethora of embodiments identified in the specification, not one single embodiment convincingly supports construing the term to include control elements. (See JX-0004 AT 9:1-10:50; RX-3636C at 65-71, Q&A 610612, p. 74, Q&A 616; JX-0004 at 10:47-48; Figs. 3a-3e). In addition to the support in the specification for interpreting the term feature of interest as a feature on which the user is interested in conducting an image operation, the prosecution history of the 922 patent also

Although the claim term feature of interest does not appear in the specification, the term image of interest does appear. For instance, the specification states [t]his circle is considered to represent an arbitrary image of interest to the user. (JX-0004 at 9:7-9 (emphasis added); Figs. 3a-3e.) It must be conceded that the claim term feature of interest and the specification term image of interest are one in the same. Otherwise, the claimed feature of interest would not be supported by the written description of the specification. Moreover, the 922 prosecution history indicates that the terms are the same. (JX-0010 at 767 (indicating that application claim 90, a previous version of patent claim 31 reciting feature of interest, was supported by a portion of the specification referencing image of interest.).) 16

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supports such an interpretation. For example, in regard to application claim 90 (a previous version of 922 patent claim 31, which recited feature of interest), the applicant stated, [application] [c]laim 90 requires that image operations are conducted with respect to the first selected image (conducted on the base window) based upon features of interest in the translucent overlaid window. (JX-0010 at 765 (emphasis added).) For the foregoing reasons, the Staff believes that the only interpretation of the term feature of interest supported by both the specification and the prosecution history is a feature on which a user is interested in conducting an image operation. As such, a control element (such as the zoom button in the Samsung accused devices) is not a feature of interest, as it is not a feature on which the user is interested in conducting an image operation. In response to the portion of the Commissions question regarding the impact of the reissue application additions on the construction of the term, OUII submits that the additions to the specification made by reissue, for example, the virtual keyboard image 1064 depicted in Fig. 19, serve to buttress OUIIs construction of the term feature of interest as not encompassing control elements. (See JX-0004, Fig. 19; see also JX-0004, Col. 20:3-45.) In the case of the virtual keyboard, when a user depresses the transparency icon 1069 depicted on the keyboard image 1064 with the stylus 38, the keyboard 1064 becomes partially transparent or translucent. Thus, as with the wand element, the transparency icon 1069 is used as a control element to perform a certain function and is not of interest to the user. (See JX-0004, Fig. 19; see also JX0004, Col. 20:3-45 and JX-0004, Col. 5:1-8; Tr. 1197:24-1198:2; 1198:21-1199:3.) Thus, the record does not support construing the control characters or functional buttons on the keyboard as features of interest. 8. Question 8 17

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What evidence in the record supports or does not support whether a person of ordinary skill in the art would understand from the '697 patent disclosure that a "signal path" exists even in the absence of a plug in the receptacle? To the extent the "signal path" exists even in the absence of a plug in the receptacle, what record evidence shows that the detection circuitry is "coupled to the detect contact and the first receptacle contact" as recited in claim 12 of the '697 patent when the claimed detection circuitry detects that "the signal path is a low or a high impedance path"?

In relevant part, claim 12 of the 697 patent, from which claim 13 depends, recites a detect contact disposed in the receptacle relative to the first receptacle contact so that the presence of the plug within the receptacle creates a plug signal path through the plug and between the detect contact and the first receptacle contact. (JX-005, claim 12.) Claim 12 further recites detection circuitry coupled to the detect contact and the first receptacle contact to detect that the signal path is a low or a high impedance path. (JX-0005, claim 12.) Thus, Claim 12 explicitly defines the signal path as not being in existence until the plug is inserted into the receptacle. (See id.) In other words, when the plug is not within the receptacle, there is no signal path. Indeed, Apple expert witness Dr. Phinney has acknowledged that the claimed invention only identifies one signal path. In particular, Dr. Phinney provided the following testimony: 25 In your expert opinion sitting here p1 today as you understand the claimed invention, 2 how many signal paths are identified? 3 A. One. 4 Q. Just one path? 5 A. Yes. (Tr. 987:25-988:5.) As the sole signal path does not exist when the plug is absent from the receptacle, the detection circuitry cannot detect whether there is a high impedance path when the plug is absent from the receptacle because the path does not exist at this time.

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OUII further submits that the record does not support a finding that one of ordinary skill in the art would believe that a signal path exists even in the absence of a plug in the receptacle. In fact, Samsung expert Dr. Samuel Russ testified that it is clear that this path does not exist until the plug is present. (RX-3450C, p. 29, Q&A 96 (emphasis added).) This is confirmed by Dr. Russ analysis applying the 697 claim limitation reciting the detection circuitry coupled to the detect contact and the first receptacle contact to detect that the signal path is a low or high impedance path to the accused products utilizing L-detection, as he opined that the L-detection products have an open air gap in the signal path between the detection circuitry and the first receptacle contact during high impedance (i.e., the signal path does not exist in the absence of a plug in the receptacle). (CX-3637C, Q&A 728 at 25-26.) Further, Dr. Phinneys testimony confirms that one of ordinary skill in the art would understand that when the plug is absent from the receptacle, there is no plug signal path5: 7 Q. And if we go back to SGH-I800, which 8 is RDX-51C-2, when the plug is withdrawn from 9 the receptacle, again, there is no plug signal 10 path, correct? 11 A. Yeah, that's a fair statement. (Phinney Tr. 918:7-11.) Thus, in OUIIs view, the record establishes that one of ordinary skill in the art would understand that a signal path does not exist when no plug is in the receptacle. (See Phinney Tr. 906:22-907:19, 914:4-14, 917:8-918:11; 1111:13-24; RX-3637C, Q 717 at 22-

Although Dr. Phinneys answer was directed to the term plug signal path as opposed to signal path, the claim drafting doctrine of antecedent basis indicates that the two terms refer to the same path. See NTP, Inc. v. Research In Motion, Ltd., 418 F.3d 1282, 1306 (Fed. Cir. 2005) (construing claim term employing definite article the as requiring an antecedent basis). Moreover, Dr. Phinney acknowledges that the claimed invention only identified one path. (See Tr. 987:25-988:5.) 19

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24, Q&A 725 at 25, Q&A 728 at 25-26, Q&A 730 at 26; RX-3450, Q&A 99; CX-2429C, Q&A 22, 77, 90; CX-2445C, Yoon Dep. 112:9-14; CX-2495C, Won Dep. 129:20-130:5.) Similarly, OUII submits that one of ordinary skill in the art would not believe that the claimed detection circuitry is coupled to the detect contact and the first receptacle contact as recited in claim 12 of the 697 patent when the claimed detection circuitry detects that the signal path is a low or high impedance path. In fact, Dr. Phinney testified that the current between the detect contact and the first receptacle contact is considered zero during high impedance, thereby confirming that the contacts are not coupled during high impedance (i.e., not coupled when the plug is absent from the receptacle)6: 12 "QUESTION: Is it a measurable amount 13 of current? 14 "ANSWER: Oh, sure, but it's not the 15 kind of thing that -- it's something that an 16 engineer rounds off. It's called zero." (Phinney Tr. 921:12-16.) Additionally, as Samsung expert witness Dr. Russ has confirmed, there is an open air gap between the first receptacle contact and the detection circuitry when no plug is present in the receptacle. (See 3637C at 11-12, Q689.) In light of the foregoing, the evidence of record shows that one of ordinary skill in the art would understand that the claimed detection circuitry is not coupled to the first receptacle contact during high impedance. 9. Question 9
Please comment on Samsung's argument that Apple's Petition as to the '697 patent relies on a newly proffered claim construction argument

The claimed limitation detection circuitry . . . to detect that the signal path is a low or a high impedance path is properly interpreted as a circuitry capable (i.e., to detect) of detecting high and low impedance, although only high impedance or low impedance is detected at one time. Thus, circuitry detecting only low impedance is not tantamount to circuitry to detect high or low impedance. 20

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that construes the claim limitation "to detect that the signal path is a low or a high impedance path" in claim 12 to require "circuitry that detects that the signal path is a low impedance path only." See Samsung Resp. at 83-84.

Samsung argues that Apples Petition as to the 697 patent relies on a newly proffered claim construction argument, unsupported by any evidence in the record, and should not be considered. (Samsung Pet. Res. at 83.) OUII agrees that Apple appears to have first presented in its Petition for Review its argument that the 697 claim limitation detection circuitry . . . to detect that the signal path is a low or a high impedance path should be interpreted to encompass accused circuitry that solely detects that the signal path is a low impedance path. Thus, Apples new argument should not be considered, as it appears to have been presented for the first time in its Petition for Review. See Certain Ground Fault Circuit Interrupters and Products Containing Same, Inv. 337-TA-739, Commn Op. at 18-19 (June 8, 2012); see also Samsung Pet. Res. at 84. Regardless, however, as OUII has previously explained, the evidence of record illustrated that (prior to Apples Petition for Review) the parties [did] not appear to dispute that [the above-identified 697 claim limitation] requires that the signal path also exist when the plug is absent (i.e., during high impedance ) from the receptacle. (Samsung Pet. Res. at 85.) In fact, Apple expert witness Dr. Phinney testified that the 697 claimed invention must be capable of detecting low impedance and high impedance: 18 Q. So it must be coupled to both, in 19 order to detect a high impedance path, and it 20 must be coupled to both to detect a low 21 impedance path, correct? 22 A. Yeah. (Phinney Tr. 910:18-22.) 25 Q. Do you understand that Claim 12 1 requires the detection circuitry to be coupled 21

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2 to the detect contact to detect the high 3 impedance path? 4 A. That's one thing it requires, but it 5 also requires that it be coupled to the first 6 receptacle contact. 7 Q. Yes or no, sir. 8 A. That's one thing that it requires, but 9 it also requires that it be coupled to the 10 first receptacle contact, the element requires 11 that it be coupled to both. 12 Q. Do you understand that the -- there's 13 a requirement in Claim 12 that the detection 14 circuitry be coupled to the first receptacle 15 contact to detect the high impedance path? 16 JUDGE PENDER: He just said that, 17 Counsel. (Phinney Tr. 909:25-910:17.) Therefore, Apples new argument directly contradicts the testimony of its expert. Further, OUII submits that Apples new argument is without merit. In particular, the claim limitation detection circuitry . . . to detect that the signal path is a low or a high impedance path is properly interpreted as circuitry capable (i.e., to detect) of detecting high and low impedance, although only high impedance or low impedance may be detected at a particular time.7 10. Question 10
Assuming arguendo that Apple's proposed construction of the claimed detection circuitry limitation is adopted (see Apple Pet. at 69-76), what record evidence shows that this limitation is disclosed or suggested in the prior art of record, including in the JP published unexamined

Apple argues that the impedance of the claims is binary (low/high) and that the ability to detect even one state (e.g., low impedance) necessarily permits implicit detection of the other. But even Apple acknowledges that it is the state (i.e., high or low) of the impedance that is binary, not necessarily the detection thereof. (Apple Pet. at 72 (stating that is, when the circuitry does not detect low impedance, impedance must be high, even if not directly detected as such) (emphasis added).) 22

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application HII-288766 ("Kawano") and the YP-T7J portable media player?

Assuming arguendo that Apples proposed construction of the claimed detection circuitry limitation is adopted, the evidence of record shows that the limitation is disclosed or suggested in the Kawano reference. For example, Samsung expert Dr. Russ has explained that Kawano discloses a detection circuitry to detect high impedance when no plug is presence because the first receptacle contact is always coupled to ground, including when no plug is present in the receptacle. (See RX-3637C, Q&A 156 at 59, Q&A 158, 60.) Dr. Russ also opined that the detect contact and first receptacle contact of Kawano are coupled through the plug when the plug is inserted, and therefore Kawano detects a low impedance path when the plug is inserted in the receptacle. (See RX-3637C, Q&A 160 at 61.) Hence, under Apples construction, this element is explicitly disclosed in Kawano.8 Similarly, under Apples construction, this limitation is present in the YP-T7J reference; Dr. Russ has opined that, in relevant part, the circuit arrangement in the YP-T7J is the same as the circuit arrangement in accused devices that Apple alleges infringe. (See RX-3637C, Q&A 187 at 72-73.) The Staff also notes that Apple did not contest that this claim term is present in the YP-T7J reference under any partys construction of the term. (See CPost at 228-230.) Other prior art devices appear to operate in a manner similar to the YP-T7J, in relevant part. For example, Dr. Russ opined that the YP-K3 teaches the limitation based on its pull-up resistor

The Staff notes that none of the bases that Apple provides in an attempt to distinguish Kawano relate to this claim element. Although Apple argued in its post-hearing brief that Kawano failed to meet the limitations of detection circuitry and control circuitry coupled to the detect contact, because a user must assemble the terminal adapter and video camera in order for the circuitry to be connected to the detect contact, Apple does not appear to have presented this argument in its pre-hearing brief. (See CPost at 228; CPre. at 140-41; see also Ground Rule 9.2.). Therefore, the argument was waived. 23

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functionality. (See RX-3637C, Q&A 254 at 97.) Thus, the prior art of record discloses the detection circuitry limitation, as the phrase is construed by Apple. B. REMEDY, THE PUBLIC INTEREST, AND BONDING

In addition to requesting briefing on the questions discussed above, the Commission also requested written submissions concerning remedy, the public interest, and bonding, and posed two specific questions concerning the public interest. (Notice at 5-6). Each of these issues is discussed below. 1. Remedy The Commission has broad discretion in selecting the form, scope and extent of the remedy. Viscofan, S.A. v. United States Intl Trade Commn, 787 F.2d 544, 548 (Fed. Cir. 1986). For the reasons set forth herein, OUII is of the view that the appropriate remedy in this investigation will be a limited exclusion order, as well as cease and desist orders directed at the domestic Respondents.9 a. Limited Exclusion Order

If a violation of Section 337 is found, the Commission may issue a limited exclusion order, directed at the infringing products of the named respondents, or a general exclusion order, directed against all infringing products. 19 U.S.C. 1337(d)(1), (2). Here, the Judge recommended entry of a limited exclusion order. (RD at 1-3). OUII concurs in this recommendation.

OUIIs proposed limited exclusion order and proposed cease and desist order are annexed hereto as Attachments A and B. OUII has provided a copy of its proposed exclusion order to the Intellectual Property Rights Branch of U.S. Customs and Border Protection (Customs). Customs has not yet provided any comments, but if it does so, OUII will convey the comments in its reply submission. 24

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Samsung does not appear to contest that a limited exclusion order is warranted if a violation is found, but has instead requested that any exclusion order be directed solely at those product categories for which Apple has shown a violation. (RPostBr. at 274). The Judge rejected this argument. (RD at 2). OUII agrees with the Judge such a restriction would not be consistent with Commission precedent. See, e.g., Certain Erasable Programmable Read-Only Memories, Inv. No. 337-TA-276 (Enforcement), Commission Opinion at 10-11 (Public Version Aug. 1, 1991) (The Commission has always issued its orders in terms of infringing products, and has always intended them, as in this case, to prohibit to [sic] future importation or sale of products which were not specifically judged infringing in the violation proceeding, but do in fact infringe. . . . It is an unusual case where the Commission makes specific determinations of infringement for all products which could be covered its exclusion order.) (footnote omitted). Samsung has also requested that the Commission issue guidance to Customs in connection with the asserted design patents. (RPostBr. at 277). This argument was rejected by the Judge because Samsung did not provide any its proposed guidance for consideration. (RD at 3). OUII agrees and further notes that the ID itself provide extensive guidance on what products infringe the design patent at issue. (ID at 95-139). Finally, Samsung requested in its post-hearing reply brief that any remedial order include an exemption for service and repair. (RPostReplyBr. at 112-13). The Judge rejected this argument because it was not timely raised. (RD at 3). In addition, OUII notes that because Apple has not requested that any exclusion order cover components (see RD at 2), Samsung will be able to import spare parts and repair phones already in the United States without need for a specific exemption.

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b.

Cease and Desist Order

The Judge also recommended that any remedy include a cease and desist order. (RD at 5-6). Section 337 provides that in addition to or in lieu of an exclusion order, the Commission may issue cease and desist orders to respondents found in violation. See 19 U.S.C. 1337(f)(1). Under Commission precedent, such orders are warranted with respect to domestic respondents that maintain commercially significant U.S. inventories of infringing products. See, e.g., Certain Semiconductor Chips with Minimized Chip Package Size and Products Containing Same, Inv. No. 337-TA-605, Commission Opinion at 73 (June 3, 2009); Certain Laser Bar Code Scanners and Scan Engines, Components Thereof, and Products Containing Same, Inv. No. 337-TA-551, Commission Opinion at 22-23, USITC Pub. 4006 (May 2008). Here, the Judge found that Samsungs U.S. distribution centers maintain commercially significant U.S. inventories, including, for example, (RD at 5-6). OUII therefore agrees that if a violation of Section 337 is found, cease and desist orders should be issued to the domestic Samsung Respondents. At the hearing, Samsung presented two arguments in opposition to a cease and desist order: that Apple had allegedly failed to adequately quantify the amount of Samsungs inventory and that Samsungs just-in-time manufacturing philosophy means that Samsung has no inventory. But with respect to the first point, OUII notes that Commission precedent does not require a precise accounting of inventories to justify issuance of a cease and desist order. See, e.g., Certain Erasable Programmable Read-Only Memories, Inv. No. 337-TA-276, Commission Opinion at 130-31, USITC Pub. 2196 (May 1989). And with respect to the second point, while Samsung may attempt to move its products out of inventory as quickly as possible, the record nonetheless shows that even those inventories on hand are so large in absolute terms as to be 26

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commercially significant. See, e.g., Certain Flash Memory Circuits and Products Containing Same, Inv. No. 337-TA-382, Commission Opinion at 25, USITC Pub. 3046 (July 1997). 2. The Public Interest Sections 337(d) and (f) of the Tariff Act of 1930, as amended, direct the Commission to consider certain public interest factors before issuing a remedy. These public interest factors include the effect of any remedial order on the public health and welfare, competitive conditions in the United States economy, the production of like or directly competitive articles in the United States, and United States consumers. 19 U.S.C. 1337(d), (f). The Judge did not issue a recommended determination concerning the public interest in this investigation. See 19 C.F.R. 210.50(b)(1). However, in conformance with its current practice, the Commission requested submissions concerning the public interest after the issuance of the ID. Samsung, Apple, and non-party Google Inc. each submitted comments (Apple Comments; Samsung Comments; Google Comments). The Commission also posed two questions concerns the public interest in its notice of review. See Notice at 5. OUII addresses each of the Commissions questions below. a. Question 1 How would remedial orders barring the entry and further distribution of the Samsung articles alleged to infringe the asserted claims of the Asserted Patents affect the public interest as identified in 19 U.S.C. 1337(d)(1) and (f)(1)? The Commission first asks how any remedial orders would affect the statutory public interest factors. Complainant argues that issuing relief will serve the public interest. (Apple Comments at 1-4). Respondents argue that issuing relief would be contrary to each of the public interest factors. (Samsung Comments at 3-5). Non-party Google argues that any remedy would serve only Apples private interest, not the public interest, and that it would give Apples iOS an 27

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unfair advantage. (Google Comments at 1-4). For the reasons set forth below, OUII does not believe that the statutory public interest factors preclude entry of relief in this investigation. First, each of Samsungs public interest arguments appears to be based on the assumption that excluding certain Samsung smartphones and tablets would reduce the supply of products available and hurt consumer choice. (Samsung Comments at 3-5). However, it is very clear, even from publicly-available information, that the smartphone and tablet markets are highly competitive, with numerous alternate manufacturers (including Apple itself) serving the United States.10 With respect to portable media players, the publicly-available information is not as current or as reliable, but it appears that Apple already has a dominant share of the market11 and, in any event, these are not the types of products that raise significant public interest concerns. In addition, OUII notes that although Samsung manufactures some inexpensive products, this does not indicate that relief would be contrary to the public interest. See, e.g., Certain Integrated Circuit Telecommunication Chips and Products Containing Same, Including Dialing Apparatus, Inv. 337-TA-337, Commission Opinion at 40, USITC Pub. 2760 (Aug. 1993) (finding that lowend telephones are not the types of products that raise public interest concerns). With respect to non-party Googles arguments, OUII first notes that the question is not whether an exclusion order would advance the public interest (see Google Comments at 1); rather, the statute states that the Commission shall issue an exclusion order unless the public interest dictates otherwise. 19 U.S.C. 1337(d)(1). Moreover, Googles contention that the

10

See http://www.comscore.com/Insights/Press_Releases/2013/5/comScore_Reports_ March_2013_U.S._Smartphone_Subscriber_Market_Share; http://www.forbes.com/sites/larrymagid/2013/05/01/apples-tablet-market-share-slips-andsamsung-grows/ See http://www.imore.com/apple-announces-q1-2013-results. 28

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patents are not inventive and are easily designed around, even if true, actually shows the lack of impact on the public interest once Samsung designs around the patents, then its products will no longer be subject to exclusion. Finally, Googles arguments concerning the lack of competition in the marketplace (see Google Comments at 3-4) are contradicted by both the publicly-available information cited above and the Commissions findings in other recent investigations involving similar products. Thus, OUII does not believe that the public interest precludes issuance of its proposed remedies in this investigation. b. Question 2 In what ways, if any, should a remedy with respect to infringement of one or more of the Asserted Patents be specifically tailored to avoid harm to the public interest, as identified in 19 U.S.C. 1337(d)(1) and (f)(1)? The Commission also asks whether and how any remedy in this investigation should be tailored to avoid harm to the public interest. Samsung has not argued that the public interest requires a tailored remedy although, as noted above, its reply post-hearing brief requested an exemption for repair. (RPostReply at 112-13). Non-party Google, in contrast, requests that any exclusion order contain a six-month grace period to allow for redesigns. (Google Comments at 4-5). OUIIs proposed exclusion order is limited to electronic digital media devices (not including components) and contains a Customs certification provision (allowing an importer to certify to Customs that its products are not infringing). (See Attachment A hereto). Based on the information available at this point in time, OUII does not believe that the public interest requires any other tailoring of the remedy. Samsungs request for a repair exemption is discussed in the context of the appropriate remedy. This request does not appear to be based on the statutory public interest factors and, in

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any event, as noted above, will be moot if the exclusion order does not cover components, because Samsung will be able to import spare parts and repair its products in the United States. Googles request for a grace period is more problematic. Such a provision would not be inconsistent with Commission precedent. See Certain Personal Data and Mobile Communication Devices and Related Software, Inv. No. 337-TA-710, Commission Opinion at 81, USITC Pub. 4331 (June 2012). Here, however, neither Samsung itself nor any wireless carrier has requested a grace period, and Google has not adequately explained how a grace period would benefit Google (or, indeed, any other entity). Thus, OUII does not support Googles request at the present time. 3. Bonding If the Commission determines to enter an exclusion order and/or a cease and desist order in this investigation, then affected articles will still be entitled to entry or sale under bond during the 60-day Presidential review period. The amount of such a bond must be sufficient to protect the complainant from any injury. 19 U.S.C. 1337(j)(3); see also 19 C.F.R. 210.50(a)(3). The Commission typically sets the Presidential review period bond based on the price differential between the domestic and the infringing products or based on a reasonable royalty. See, e.g., Certain Microsphere Adhesives, Processes for Making Same, and Products Containing Same, Including Self-Stick Repositionable Notes, Inv. No. 337-TA-366, Commission Opinion at 24, USITC Pub. 2949 (Jan. 1996) (setting bond based on price differentials); Certain Digital Televisions and Certain Products Containing Same and Methods of Using Same, Inv. No. 337TA-617, Commission Opinion at 17-19 (April 23, 2009) (setting bond based on a reasonable royalty). Here, the Judge recommended that the Presidential review period bond be set at 88% of entered value for mobile phones, 32.5% of entered value for media players, and 37.6% of entered 30

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value for tablet computers. (RD at 9-10). OUII generally agrees with this recommendation, although the bond for mobile phones should be set at 58% (rather than 88%) of entered value. First, OUII believes that the Commission should accept the Judges recommended bond rates of 32.5% and 37.6% of entered value for media players and tablets respectively. (RD at 9). These figures are supported by the analysis of Complainants expert. (CX-2434C at 27, Q&A 96; CDX-0182C CDX-0185C). Samsungs argument that the price comparison is unreliable should be rejected because a reasonable approximation is sufficient (and is preferable to an arbitrary figure).12 Certain Curable Fluoroelastomer Compositions and Precursors Thereof, Inv. No. 337-TA-364, Commission Opinion at 7, USITC Pub. 2890 (May 1995). On the other hand, OUII believes that the bond for mobile phones should be set at 58% of entered value, rather than the 88% proposed by the Judge. There is, of course, no question that Apple and Samsung are direct competitors. (RD at 9). However, this does not mean that all Samsung products compete with Apple products. For example, Samsung has several mobile phones that sell for under $200, while Apple has no phones that sell in this range. (See, e.g., CDX-0182C CDX-0184C). OUII is therefore of the view that the bonding rate should be set at 58%, which results from the exclusion of data for mobile phones selling for $200 or less from the price comparison. (RX-3638C at 17, Q&A 55; CX-2434C at 27, Q&A 96; CDX-1083C; CDX0184C). Finally, OUII notes that Apple has requested a bond only for mobile phones, portable media players, and tablet computers. (CPostBr. at 280). Apple did not request a bond as to any

Similarly, Samsungs proposed bond is arbitrarily based on royalty rates in the telecom industry as a whole and appears to have no relation to the specific products or technologies at issue here. (RX-3638C, QQ 62-68). 31

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other electronic digital media devices, and to the extent that any other devices would be covered by the remedial orders in this investigation, they should therefore be permitted to enter without bond. See Certain Coaxial Cable Connectors and Components Thereof and Products Containing Same, Inv. No. 337-TA-650, Commission Opinion at 63, USITC Pub. 4283 (Nov. 2011) (setting bond for certain products based on estimated price differential and setting no bond for other products). Respectfully submitted,

/s/ Reginald Lucas Lynn I. Levine, Director David O. Lloyd, Supervisory Attorney Reginald D. Lucas, Investigative Attorney OFFICE OF UNFAIR IMPORT INVESTIGATIONS U.S. International Trade Commission 500 E Street SW, Suite 401 Washington, DC 20436 (202) 205-2221 (Phone) (202) 205-2158 (Facsimile) June 11, 2013

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Exhibit A

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UNITED STATES INTERNATIONAL TRADE COMMISSION Washington, D.C.

In the Matter of CERTAIN ELECTRONIC DIGITAL MEDIA DEVICES AND COMPONENTS THEREOF Investigation No. 337-TA-796

(PROPOSED) CEASE AND DESIST ORDER IT IS HEREBY ORDERED THAT [RESPONDENT] cease and desist from conducting any of the following activities in the United States: importing, selling, marketing, advertising, distributing, transferring (except for exportation), and soliciting U.S. agents or distributors for, electronic digital media devices covered by one or more of (1) the claim of U.S. Patent No. D618,678 (the 678 patent); (2) claims 1, 4-6, and 10-20 of U.S. Patent No. 7,479,949 (the 949 patent); (3) claims 29, 30, and 33-35 of U.S. Patent No. RE 41,922 (the 922 patent); and (4) claims 1-4 and 8 of U.S. Patent No. 7,912,501 (the 501 patent), in violation of Section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337). I. Definitions As used in this order: (A) (B) (C) Commission shall mean the United States International Trade Commission. Complainant shall mean Apple, Inc., 1 Infinite Loop, Cupertino, CA 95014. Respondent shall mean [RESPONDENT].

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(D)

Person shall mean an individual, or any non-governmental partnership, firm, association, corporation, or other legal or business entity other than Respondent or its majority-owned or controlled subsidiaries, successors, or assigns.

(E)

United States shall mean the fifty States, the District of Columbia, and Puerto Rico.

(F)

The terms import and importation refer to importation for entry for consumption under the Customs laws of the United States.

(G)

The term covered products shall mean electronic digital media devices covered by one or more of: (1) the claim of the 678 patent; (2) claims 1, 4-6, and 10-20 of the 949 patent; (3) claims 29, 30, and 33-35 of the 922 patent; and (4) claims 1-4 and 8 of the 501 patent. Covered products shall not include articles for which a provision of law or license avoids liability for the infringement of the claims listed above. II. Applicability

The provisions of this Cease and Desist Order shall apply to Respondent and to any of its principals, stockholders, officers, directors, employees, agents, licensees, distributors, controlled (whether by stock ownership or otherwise) and majority-owned business entities, successors, and assigns, and to each of them, insofar as they are engaging in conduct prohibited by section III, infra, for, with, or otherwise on behalf of, Respondent.

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III. Conduct Prohibited The following conduct of Respondent in the United States is prohibited by this Order. For the remaining term of the relevant 678, 949, 922, or 501 patent, Respondent shall not: (A) (B) import or sell for importation into the United States covered products; market, distribute, sell, or otherwise transfer (except for exportation), in the United States imported covered products; (C) (D) (E) advertise imported covered products; solicit U.S. agents or distributors for imported covered products; or aid or abet other entities in the importation, sale for importation, sale after importation, transfer, or distribution of covered products. IV. Conduct Permitted Notwithstanding any other provision of this Order, specific conduct otherwise prohibited by the terms of this Order shall be permitted if, in a written instrument, the owner of the 678, 949, 922, and 501 patents licenses or authorizes such specific conduct, or such specific conduct is related to the importation or sale of covered products by or for the United States. V. Reporting For purposes of this requirement, the reporting periods shall commence on February 1 of each year and shall end on the subsequent January 31. The first report required under this section shall cover the period from the date of issuance of this order through January 31, 2014. This reporting requirement shall continue in force until such time as Respondent has truthfully

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reported, in two consecutive timely filed reports, that it has no inventory of covered products in the United States. Within thirty (30) days of the last day of the reporting period, Respondent shall report to the Commission: (a) the quantity in units and the value in dollars of covered products that it has (i) imported and/or (ii) sold in the United States after importation during the reporting period, and (b) the quantity in units and value in dollars of reported covered products that remain in inventory in the United States at the end of the reporting period. When filing written submissions, Respondent must file the original document electronically on or before the deadlines stated above and submit eight (8) true paper copies to the Office of the Secretary by noon the next day pursuant to section 210.4(f) of the Commissions Rules of Practice and Procedure (19 C.F.R. 210.4(f)). Submissions should refer to the investigation number (Inv. No. 337-TA-796) in a prominent place on the cover pages and/or the first page. (See Handbook for Electronic Filing Procedures, http://www.usitc.gov/secretary/fed_reg_notices/rules/ handbook_on_electronic_filing.pdf). Persons with questions regarding filing should contact the Secretary (202-205-2000). If Respondent desires to submit a document to the Commission in confidence, it must file the original and a public version of the original with the Office of the Secretary and must serve a copy of the confidential version on Complainants counsel.13 Any failure to make the required report or the filing of any false or inaccurate report shall constitute a violation of this Order, and the submission of a false or inaccurate report may be referred to the U.S. Department of Justice as a possible criminal violation of 18 U.S.C. 1001.

13

Complainant must file a letter with the Secretary identifying the attorney to receive reports and bond information associated with this Order. The designated attorney must be on the protective order entered in the investigation. 4

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VI. Record-Keeping and Inspection (A) For the purpose of securing compliance with this Order, Respondent shall retain any and all records relating to the sale, offer for sale, marketing, or distribution in the United States of covered products, made and received in the usual and ordinary course of business, whether in detail or in summary form, for a period of three (3) years from the close of the fiscal year to which they pertain. (B) For the purposes of determining or securing compliance with this Order and for no other purpose, subject to any privilege recognized by the federal courts of the United States, and upon reasonable written notice by the Commission or its staff, duly authorized representatives of the Commission shall be permitted access and the right to inspect and copy, in Respondents principal offices during office hours, and in the presence of counsel or other representatives if Respondent so chooses, all books, ledgers, accounts, correspondence, memoranda, and other records and documents, in detail and in summary form, that must be retained under subparagraph VI(A) of this Order. VII. Service of Cease and Desist Order Respondent is ordered and directed to: (A) Serve, within fifteen days after the effective date of this Order, a copy of this Order upon each of its respective officers, directors, managing agents, agents, and employees who have any responsibility for the importation, marketing, distribution, or sale of imported covered products in the United States;

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(B)

Serve, within fifteen days after the succession of any persons referred to in subparagraph VII(A) of this order, a copy of the Order upon each successor; and

(C)

Maintain such records as will show the name, title, and address of each person upon whom the Order has been served, as described in subparagraphs VII( A) and VII(B) of this order, together with the date on which service was made.

The obligations set forth in subparagraphs VII(B) and VII(C) shall remain in effect until the expiration dates of the 678, 949, 922, and 501 patents. VIII. Confidentiality Any request for confidential treatment of information obtained by the Commission pursuant to section VI of this order should be made in accordance with section 201.6 of the Commissions Rules of Practice and Procedure (19 C.F.R. 201.6). For all reports for which confidential treatment is sought, Respondent must provide a public version of such report with confidential information redacted. IX. Enforcement Violation of this order may result in any of the actions specified in section 210.75 of the Commissions Rules of Practice and Procedure (19 C.F.R. 210.75), including an action for civil penalties under section 337(f) of the Tariff Act of 1930 (19 U.S.C. 1337(f)), as well as any other action that the Commission deems appropriate. In determining whether Respondent is in violation of this order, the Commission may infer facts adverse to Respondent if it fails to provide adequate or timely information.

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X. Modification The Commission may amend this order on its own motion or in accordance with the procedure described in section 210.76 of the Commissions Rules of Practice and Procedure (19 C.F.R. 210.76). XI. Bonding The conduct prohibited by section III of this order may be continued during the sixty-day period in which this Order is under review by the United States Trade Representative, as delegated by the President (70 Fed. Reg. 43,251 (Jul. 21, 2005)), subject to Respondent posting a bond in the amount of 58% of entered value for covered mobile phones, the amount of 32.5% of entered value for covered media players, the amount of 37.6% of entered value for covered tablet computers, and without bond for any other covered products. This bond provision does not apply to conduct that is otherwise permitted by Section IV of this Order. Covered products imported on or after the date of issuance of this order are subject to the entry bond as set forth in the limited exclusion order issued by the Commission, and are not subject to this bond provision. The bond is to be posted in accordance with the procedures established by the Commission for the posting of bonds by complainants in connection with the issuance of temporary exclusion orders. (See 19 C.F.R. 210.68.) The bond and any accompanying documentation is to be provided to and approved by the Commission prior to the commencement of conduct which is otherwise prohibited by Section III of this Order. Upon acceptance of the bond by the Secretary, (a) the Secretary will serve an acceptance letter on all parties and (b)

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Respondent must serve a copy of the bond and any accompanying documentation on Complainants counsel.14 The bond is to be forfeited in the event that the United States Trade Representative approves, or does not disapprove within the review period, this Order, unless the U.S. Court of Appeals for the Federal Circuit, in a final judgment, reverses any Commission final determination and order as to a Respondent on appeal, or unless Respondent exports or destroys the products subject to this bond and provides certification to that effect satisfactory to the Commission. The bond is to be released in the event the United States Trade Representative disapproves this Order and no subsequent order is issued by the Commission and approved, or not disapproved, by the United States Trade Representative, upon service on Respondent of an order issued by the Commission based upon application therefore made by Respondent to the Commission. By order of the Commission.

14

See Footnote 1.

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Lisa R. Barton Acting Secretary to the Commission

Issued: ___________, 2013

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Exhibit B

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UNITED STATES INTERNATIONAL TRADE COMMISSION Washington, D.C.

In the Matter of CERTAIN ELECTRONIC DIGITAL MEDIA DEVICES AND COMPONENTS THEREOF Investigation No. 337-TA-796

(PROPOSED) LIMITED EXCLUSION ORDER The Commission has determined that there is a violation of Section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), in the unlawful importation, sale for importation, and sale after importation by Respondents Samsung Electronics Co., Ltd., Samsung Electronics America, Inc. and Samsung Telecommunications America, LLC, of certain electronic digital media devices covered by one or more of: (1) the claim of U.S. Patent No. D618,678 (the 678 patent); (2) claims 1, 4-6, and 10-20 of U.S. Patent No. 7,479,949 (the 949 patent); (3) claims 29, 30, and 33-35 of U.S. Patent No. RE 41,922 (the 922 patent); and (4) claims 1-4 and 8 of U.S. Patent No. 7,912,501 (the 501 patent). Having reviewed the record of this investigation, including the written submissions of the parties and the public, the Commission has made its determination on the issues of remedy, the public interest, and bonding. The Commission has determined that the appropriate form of relief is a limited exclusion order prohibiting the unlicensed entry of covered electronic digital media devices manufactured for or on behalf of Respondents or any of their affiliated companies, parents, subsidiaries, licensees, or other related business entities, or their successors or assigns.

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The Commission has also determined that the public interest factors enumerated in 19 U.S.C. 1337(d) do not preclude the issuance of the limited exclusion order, and that the bond during the Presidential review period shall be in the amounts of 58% of entered value for covered mobile phones, 32.5% of entered value for covered media players, and 37.6% of entered value for covered tablet computers, and without bond for any other covered products. Accordingly, the Commission hereby ORDERS that: 1. Electronic digital media devices covered by one or more of (1) the claim of the 678 patent; (2) claims 1, 4-6, and 10-20 of the 949 patent; (3) claims 29, 30, and 33-35 of the 922 patent; and (4) claims 1-4 and 8 of the 501 patent, and that are manufactured abroad by or on behalf of, or imported by or on behalf of, Respondents or any of their affiliated companies, parents, subsidiaries, or other related business entities, or their successors or assigns, are excluded from entry for consumption into the United States, entry for consumption from a foreign trade zone, or withdrawal from a warehouse for consumption, for the remaining terms of the patents, except under license of the patent owner or as provided by law. 2. Notwithstanding paragraph 1 of this Order, the aforesaid electronic digital media devices are entitled to entry into the United States for consumption, entry for consumption from a foreign-trade zone, or withdrawal from a warehouse for consumption under bond in the amount of 58% of entered value for covered mobile phones, in the amount of 32.5% of the entered value for covered media players, in the amount of 37.6% of entered value for covered tablet computers, and without bond for any other covered products, pursuant to subsection (j) of 2

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Section 337 (19 U.S.C. 1337(j)) and the Presidential Memorandum for the United States Trade Representative of July 21, 2005 (70 Fed. Reg. 43,251), from the day after this Order is received by the United States Trade Representative until such time as the United States Trade Representative notifies the Commission that this Order is approved or disapproved but, in any event, not later than sixty days after the date of receipt of this Order. 3. At the discretion of U.S. Customs and Border Protection (CBP) and pursuant to procedures that it establishes, persons seeking to import electronic digital media devices that are potentially subject to this Order may be required to certify that they are familiar with the terms of this Order, that they have made appropriate inquiry, and thereupon state that, to the best of their knowledge and belief, the products being imported are not excluded from entry under paragraph 1 of this Order. At its discretion, CBP may require persons who have provided the certification described in this paragraph to furnish such records or analyses as are necessary to substantiate the certification. 4. In accordance with 19 U.S.C. 1337(l), the provisions of this Order shall not apply to electronic digital media devices imported by and for the use of the United States, or imported for, and to be used for, the United States with the authorization or consent of the Government. 5. The Commission may modify this Order in accordance with the procedures described in section 210.76 of the Commissions Rules of Practice and Procedure (19 C.F.R. 210.76).

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6.

The Secretary shall serve copies of this Order upon each party of record in this investigation and upon the Department of Health and Human Services, the Department of Justice, the Federal Trade Commission, and CBP.

7.

Notice of this Order shall be published in the Federal Register.

By order of the Commission.

Lisa R. Barton Acting Secretary to the Commission

Issued: ___________, 2013

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CERTAIN ELECTRONIC DIGITAL MEDIA DEVICES AND COMPONENTS THEREOF Investigation No. 337-TA-796 CERTIFICATE OF SERVICE The undersigned certifies that on June 11, 2013, he caused the foregoing BRIEF OF THE OFFICE OF UNFAIR IMPORT INVESTIGATIONS ON THE ISSUES UNDER REVIEW AND ON REMEDY, BONDING, AND THE PUBLIC INTEREST to be filed with the Secretary (in electronic format) and served upon the parties (1 copy each) in the manner indicated below: Counsel for Complainant Apple, Inc. by Email Alexander J. Hadjis, Esq. G. Brian Busey, Esq. Kristin L. Yohannan, Esq. MORRISON & FOERSTER LLP 2000 Pennsylvania Avenue NW, Suite 6000 Washington, DC 20006 Telephone: (202) 887-1500 Facsimile: (202) 887-0763 Email: ahadjis@mofo.com Email: gbusey@mofo.com Email: kyohannan@mofo.com

Counsel for Respondents Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., and Samsung Telecommunications America, LLC by Email Eric Huang, Esq. Quinn Emanuel Urquhart & Sullivan, LLP 51 Madison Ave., 22nd Floor New York, NY 10010 Telephone: 212-849-7000 Facsimile: 212-849-7100 Email: erichuang@quinnemanuel.com Alex Lasher, Esq. Quinn Emanuel Urquhart & Sullivan, LLP 1299 Pennsylvania Ave., NW, Suite 825 Washington, D.C. 20004 Telephone: 202-538-8000 Facsimile: 202-538-8100 Email: alexlasher@quinnemanuel.com

/s/ Reginald D. Lucas Reginald D. Lucas Investigative Attorney OFFICE OF UNFAIR IMPORT INVESTIGATIONS U.S. International Trade Commission 500 E Street, S.W., Suite 401

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Washington, D.C. 20436 Telephone: 202.205.2036 Facsimile: 202.205.2158

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