[Federal Register Volume 62, Number 109 (Friday, June 6, 1997)]
[Notices]
[Pages 31153-31154]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 97-14838]


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INTERNATIONAL TRADE COMMISSION

[Investigation No. 337-TA-382]


Certain Flash Memory Circuits and Products Containing Same; 
Notice of Issuance of Limited Exclusion Order and Cease and Desist 
Order

AGENCY: U.S. International Trade Commission.

ACTION: Notice.

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SUMMARY: Notice is hereby given that the U.S. International Trade 
Commission has issued a limited exclusion order and cease and desist 
order in the above-captioned investigation.

FOR FURTHER INFORMATION CONTACT: Carl P. Bretscher, Esq., Office of the 
General

[[Page 31154]]

Counsel, U.S. International Trade Commission, 500 E Street, S.W., 
Washington, D.C. 20436, telephone (202) 205-3107.

SUPPLEMENTARY INFORMATION: The authority for the Commission's 
determination is contained in section 337 of the Tariff Act of 1930, as 
amended (19 U.S.C. Sec. 137), and in sections 210.45 and 210.50 of the 
Commission's Rules of Practice and Procedure (19 CFR Secs. 210.45 and 
210.50).
    The Commission instituted this patent-based section 337 
investigation based on a complaint filed by complainant SanDisk 
Corporation (``SanDisk''). Complainant alleged that respondents Samsung 
Electric Company, Ltd. and Samsung Semiconductor, Inc. (collectively, 
``Samsung'') had violated section 337 of the Tariff Act of 1930, as 
amended (19 CFR Sec. 1337), in the importation, sale for importation, 
and/or sale after importation of certain flash memory circuits by 
reason of infringement of claim 1, 2, or 4 of complainant's U.S. 
Letters Patent 5,418,752 (the '752 patent'') and/or claim 27 of 
complainant's U.S. Letters Patent 5,172,338 (the '338 patent'').
    The administrative law judge (``ALJ'') assigned to this 
investigation held an evidentiary hearing in September and October 
1996. On February 26, 1997, the presiding ALJ issued an initial 
determination (``ID''), in which he found a violation of section 337. 
Specifically, the ALJ found that Samsung's so-called ``original'' 
design products directly infringe the '752 patent, and both Samsung's 
original and ``new'' design products directly infringe the '338 patent. 
The ALJ also found that Samsung could be held liable for contributory 
and/or induced infringement of the '752 patent under an alternate 
construction of certain patent claims in issue advocated by Samsung. 
However, the ALJ declined to make a determination as to whether 
Samsung's new design products infringe the '752 patent, citing 
inadequate document production by Samsung.
    On March 5, 1997, the ALJ issued his recommended determination 
(``RD'') on remedy and bonding. The ALJ recommended that the Commission 
issue a limited exclusion order directed toward Samsung's infringing 
flash memory circuits as well as to downstream products that 
incorporate such circuits. The ALJ also recommended that the Commission 
issue a cease and desist order prohibiting Samsung from selling any 
flash memory devices in the United States that infringe the patent 
claims at issue. Finally, the ALJ recommended that the Commission 
require Samsung to post a bond in the amount of 100 percent of the 
entered value of the infringing articles during the Presidential review 
period.
    On March 10, 1997, Samsung petitioned for review of nearly all of 
the ALJ's major findings, while the Commission investigative attorneys 
(``IAs'') filed a more limited petition for review of certain findings 
regarding the '752 patent. SanDisk and the IAs filed responses to 
Samsung's petition on March 18, 1997.
    On April 15, 1997, the Commission notified the parties that it had 
determined to review two issues raised by Samsung's petition for 
review: (1) Whether the ALJ erred in finding that Samsung could be held 
liable for contributory and/or induced infringement of the `752 patent; 
and (2) whether the ALJ erred in declining to make a determination as 
to whether Samsung's new design products infringe the `752 patent. The 
Commission requested that the parties brief a series of questions 
regarding these two issues. The Commission also asked the parties to 
provide written submissions on the proposed remedy, the public 
interest, and bonding. In accordance with the Commission's directions, 
the parties filed their initial briefs on April 28, 1997, and their 
reply briefs on May 5, 1997.
    The target date for completion of this investigation was May 27, 
1997. However, on May 23, 1997, the parties jointly requested that the 
Commission extend the target date to June 2, 1997, in order to give the 
parties time to finalize a settlement agreement and to file a joint 
motion to terminate the investigation on the basis of the settlement. 
The Commission granted the motion, with the stipulation that the 
deadline for submission of the motion to terminate was May 30, 1997. 
The parties, however, were unable to reach a settlement agreement and 
no motion to terminate was filed, with the result that the Commission 
is issuing its final determinations on the violation issues under 
review and on remedy, the public interest, and bonding on June 2, 1997.
    Having reviewed the record in this investigation, including the 
parties' written submissions, the Commission determined: (1) To reverse 
the ALJ and find that Samsung is not liable for contributory 
infringement; (2) to reverse the ALJ and find that Samsung is not 
liable for induced infringement; and (3) to find that Samsung's new 
design products do not infringe the `752 patent due to a failure of 
proof.
    The Commission has further determined that the appropriate form of 
relief is a limited exclusion order prohibiting the unlicensed entry of 
infringing flash memory circuits, and carriers and circuit boards 
containing such circuits, that are manufactured by or on behalf of 
Samsung. The limited exclusion order does not cover any other products 
that may contain the infringing circuits, whether manufactured by 
Samsung or a third party. The Commission has further determined to 
issue a cease and desist order to domestic respondent Samsung 
Semiconductor, Inc. prohibiting the importation, selling, marketing, 
distributing, or advertising of infringing flash memory circuits and 
carriers and circuit boards containing such circuits.
    Finally, the Commission has determined that the public interest 
factors enumerated in subsections 1337 (d) and (f) do not preclude 
issuance of the limited exclusion order and cease and desist order, and 
that the bond during the Presidential review period shall be in the 
amount of one hundred (100) percent of the entered value of the 
articles in question.
    Copies of the Commission's order, the public version of the 
Commission's opinion in support thereof, and all other nonconfidential 
documents filed in connection with this investigation are or will be 
available for inspection during official business hours (8:45 a.m. to 
5:15 p.m.) in the Office of the Secretary, U.S. International Trade 
Commission 500 E Street, S.W., Washington, D.C. 20436, telephone (202) 
205-2000. Hearing impaired persons are advised that information on this 
matter can be obtained by contacting the Commission's TDD terminal at 
(202) 205-1810.

    Issued: June 2, 1997.

    By order of the Commission.

Donna R. Koehnke,

Secretary.
[FR Doc. 97-14838 Filed 6-5-97; 8:45 am]
BILLING CODE 7020-01-P