OT:RR:BSTC:EOE H326291 JW
Mr. Bas de Blank
Orrick, Herrington & Sutcliffe LLP
1000 Marsh Road
Menlo Park, CA 94025
VIA EMAIL: [email protected]
RE: Ruling Request; U.S. International Trade Commission; Limited Exclusion Order; Investigation No. 337-TA-1191; Certain Audio Players and Controllers, Components Thereof, And Products Containing the Same
Dear Mr. de Blank:
This is in response to your submission on behalf of Sonos, Inc. (“Sonos”), dated July 7, 2022, which included Exhibits A to D (collectively, “Sonos Submission”). In that submission, you “request that Customs enforce the Commission’s Limited Exclusion Order . . . and Customs’ own Part 177 determination and exclude from entry Google controllers, such as Pixel smartphones, tablets and computers.” Sonos Submission at 1. The Exclusion Order Enforcement Branch (“EOE Branch”) has construed this submission as a request for a ruling whether the action that Google LLC (“Google”) has taken with respect to the removal of its Device Utility Application (“DUA” or “application”), as described below, is sufficient to permit entry or whether, as in Sonos’s view, “Google controllers should be immediately excluded from entry until and unless Google proves they do not infringe.” Id.
Accordingly, the limited question to address in this ruling is whether Google’s undisputed removal of the DUA from its U.S. Play Store as of June 6, 2022, comports with HQ H324813 (dated June 3, 2022) to satisfy one of the options provided that would permit Google to enter future shipments of the articles at issue in that ruling. As discussed below, we find that (i) Google has removed the DUA from its U.S. Play Store as of June 6, 2022, thereby making it unavailable for U.S. consumers to download from Google as of that date, (ii) Google has complied with the option provided in HQ H324813 to disable the DUA, as it is no longer available for use with future shipments of the “relevant articles at issue,” and (iii) Google provided sufficient notice of that disabling.
BACKGROUND
The EOE Branch presumes familiarity with its prior ruling that resulted from an inter partes proceeding addressing application of this exclusion order and the facts underlying this dispute. See HQ H324813 at 3-35. As an overview, on January 6, 2022, the U.S. International Trade Commission (“ITC” or “Commission”) issued a limited exclusion order (“LEO”) in the underlying investigation. Certain Audio Players and Controllers, Components Thereof, and Products Containing Same, Inv. No. 337-TA-1191, EDIS Doc. 759897, Limited Exclusion Order (Jan. 6, 2022) (“1191 LEO”). On March 24, 2022, Sonos requested a ruling from CBP under 19 C.F.R. Part 177 “that audio players, controllers, components thereof, and products containing the same currently imported by Google, LLC [] are not the same as the redesigned products that were adjudicated as not infringing” at Commission such that they “have not been adjudicated as non-infringing [and] should be excluded until and unless Google seeks a ruling of non-infringement from the Commission or obtains a Part 177 ruling from CBP that such products are outside the scope of the Limited Exclusion Order.” HQ H324813 at 16 (citing Sonos Ruling Request at 1 (quotation omitted)). The EOE Branch handled Sonos’s ruling request on an inter partes basis with Sonos, the complainant from the underlying investigation and Google, the respondent from the same. Id. at 2 (citation omitted). On June 3, 2022, the EOE Branch issued a ruling under 19 C.F.R. Part 177 in response to Sonos’s ruling request and held, in particular, that:
CBP’s position is that the relevant articles at issue are subject to exclusion from entry for consumption on the basis of the 1191 LEO until Google either: (1) disables or renders inoperable the Device Utility app addressed in this ruling such that it can no longer be used with the relevant articles at issue and provides notice as to that disabling or inoperability; or (2) receives a non-infringement determination pursuant to an ancillary proceeding at the Commission or a ruling in an inter partes proceeding from CBP under 19 C.F.R. Part 177 that addresses operation of the Device Utility app on the articles at issue. Google may concurrently pursue options (1) and (2) above.
HQ H324813 at 2.
On July 7, 2022, Sonos submitted the request at issue in this ruling, alleging that Google had not disabled or rendered inoperable the DUA and taking the position that “Customs should immediately enforce the Commission’s exclusion of Google’s infringing controllers.” Sonos Submission at 11. On July 12, 2022, Google responded, noting that “Google has disabled all legitimate and authorized methods through which a user in the US can obtain the DUA and install it on a newly-imported Pixel device.” Google Response Submission at 3.
ANALYSIS
The primary dispute between the parties is whether Google’s uncontested removal of the DUA from its U.S. Play Store as of June 6, 2022, complies with the option in HQ H324813 that Google “disable or render inoperable” the DUA addressed in the ruling, such that it can no longer be used with the relevant articles at issue. HQ H324813 at 2. Sonos argues that removing the DUA from Google’s U.S. Play Store did not disable or render it inoperable as envisioned in the ruling. Sonos Submission at 6. Sonos asserts two reasons for its position:
(1) the DUA remains present on any controllers imported before the date of the ruling that already downloaded the application, and
(2) the DUA may be downloaded on controllers imported after the date of the ruling using Google’s non-U.S. Play Stores or certain third-party websites.
Sonos Submission at 5-9.
In its response, Google did not address Sonos’s first point but argued, as to the second, that it does not instruct or induce anyone to access its non-U.S. Play Store to obtain an application that it removed from its U.S. Play Store and that a user in the United States would not be able to download the DUA from a non-U.S. Play Store without violating Google’s Terms of Service. Google Response Submission at 1-2.
For the reasons provided below, we find that Google has disabled the DUA such that it has complied with the option provided in the ruling to permit future entry of its controllers. Specifically, this position is consistent with the plain meaning of the key terms in HQ H324813, the context in which they appear, CBP’s authority to enforce Section 337 exclusion orders at the border, and the overarching principle against retroactivity embodied in the law generally and 19 C.F.R. Part 177 specifically. Moreover, we find that Google is not making the DUA available to U.S. customers by directing them to its non-U.S. Play Stores or inducing them or other entities to download or make available that application.
Sonos Argues That the DUA Remains Present on Controllers That Have Already Entered the United States
Sonos’s first argument focuses on controllers that were imported and that downloaded the DUA before the date of the ruling. Specifically, Sonos argues that “[i]t is undisputed that the DUA app remains fully functional and was not disabled on the devices to which it was installed” such that “Google’s representations that it disabled its Device Utility app are unambiguously false” because “Google conceded that its Device Utility app remained operable on devices to which it had been installed.” Sonos Submission at 3, 5 (emphasis in the original). Significantly, Sonos does not point to any text in the ruling that directs or otherwise requires Google to take action with respect to controllers that were imported and that downloaded the DUA before the date of the ruling.
As noted above, HQ H324813 states that “CBP’s position is that the relevant articles at issue are subject to exclusion from entry for consumption on the basis of the 1191 LEO until Google … disables or renders inoperable the Device Utility app addressed in this ruling such that it can no longer be used with the relevant articles at issue[.]” HQ H324813 at 2 (emphasis added). Surprisingly, neither party in this dispute engages with the text of the ruling or offers a proposed definition of the key terms. Instead, both seem to rely mostly on assertions that their respective reading is correct. See Sonos Submission at 6 (asserting that “Google’s decision to stop providing new copies of the DUA app through its US-based Play Store is not the same as disabling or rendering inoperable[.]”); see also Google Response Submission at 3 (asserting that “[u]ltimately, Sonos does not and cannot dispute that Google has disabled all legitimate and authorized methods through which a user in the US can obtain the DUA and install it on a newly-imported Pixel device.”).
Without the benefit of input from the parties on this point, the EOE Branch notes that Black’s Law Dictionary defines “disable” as “to deprive (someone or something) of the ability to function.” See Black’s Law Dictionary 560 (10th ed. 2014). Furthermore, the Computer Desktop Encyclopedia defines “disable” as “to turn off a function.” See Alan Freedman, Computer Desktop Encyclopedia 254 (9th ed. 2001). The evidence in the record supports a finding that once Google removed the DUA from its U.S. Play Store, which no party disputes, it turned off the application in question and thereby deprived customers of the ability to download it for future use on newly imported Google controllers. Therefore, this action conforms to the definition of the terms noted above and, in turn, is consistent with the option provided in the ruling that would permit entry of Google’s controllers.
This reading is even more clear when examining the key terms from above within the context that they appear in the ruling. Again, HQ H324813 set forth CBP’s position that:
the relevant articles at issue are subject to exclusion from entry for consumption on the basis of the 1191 LEO until Google either: (1) disables or renders inoperable the Device Utility app addressed in this ruling such that it can no longer be used with the relevant articles at issue[.]
(emphasis added).
Under a proper reading, the ruling provides that future shipments of “the relevant articles at issue” (i.e., Google’s controllers) are subject to exclusion from entry into the United States after the date the ruling issued unless Google disables the DUA addressed in the ruling to prevent it from being used with Google controllers imported in those future shipments. The repetition of the phrase “relevant articles at issue” within a Customs ruling (which, as noted below, are generally prospective in nature) makes clear that the ruling applies to future entries rather than representing an order that Google must perform some action with respect to articles that were imported before the ruling issued. Furthermore, Sonos has not addressed how, under its reading, the controllers previously imported before the date of the ruling and in the hands of customers could be “subject to exclusion from entry” when the DUA remains downloaded on those devices. The simple answer is that they could not and, instead, the ruling applies only to future shipments. And if Sonos’s position is that, under the ruling, the future importation of controllers should be excluded while the DUA remains on previously imported controllers, that reading is flatly contradicted, as noted above, by the repetition of the phrase “the relevant articles at issue.”
In essence, Sonos’s argument why, under its reading, Google must remove the DUA, not only from its U.S. Play Store, but also from any previously imported devices that downloaded the application, is divorced from the actual text of the ruling and focuses instead on a misplaced analogy. Sonos’s argument begins by reiterating its assertion that “removing the app from the US Play Store is in no way the same as disabling it or rendering it inoperable.” Sonos Submission at 6. Again, Sonos does not support this allegation with any analysis of the text (such as the meaning of the key terms or the context in which they appear). Instead, it compares this issue to a situation involving a defective device. Under Sonos’s comparison, “[w]hile it is the bare minimum to stop selling additional defective (or infringing) devices, that is a far cry from disabling or rendering inoperable the dangerous feature on existing devices.” Id. Sonos appears to be analogizing this issue to a product recall based on health and safety considerations. However, the analogy falls apart because Sonos cannot point to any mention in the ruling requiring that Google remove the DUA from articles imported before the date of the ruling. A reason for Sonos’s inability here is because such a command to “recall” or take other action with respect to released products misconstrues CBP’s administration of Section 337 exclusion orders and the Customs laws generally.
The EOE Branch expressly noted in HQ H324813 that “[a]n exclusion order under § 1337(d)—either limited or general—and a seizure and forfeiture order under § 1337(i) apply at the border only and are operative against articles presented for customs examination or articles conditionally released from customs custody but still subject to a timely demand for redelivery.” HQ H324813 at 36 (emphasis added). Administration of an exclusion order does not extend to articles that fall outside the bounds of these parameters. The U.S. Court of Appeals for the Federal Circuit has confirmed this understand that exclusion orders under Section 337 apply to articles at the border attempting entry. See ClearCorrect Operating, LLC v. Int’l Trade Comm’n, 810 F.3d 1283, 1289 (Fed. Cir. 2015) (“In sum, Section 337 is an enforcement statute enacted by Congress to stop at the border the entry of goods, i.e., articles, that are involved in unfair trade practices.”). Accordingly, Sonos’s position that the ruling directed Google to take action with respect to previously imported and released controllers is not only inconsistent with the text of the ruling but runs contrary to a proper understanding of CBP’s enforcement of Section 337 exclusion orders.
Finally, Sonos’s argument conflicts with the legal principle disfavoring retroactivity. For example, under the Customs laws, “a ruling letter is effective on the date it is issued and may be applied to all entries which are unliquidated, or other transactions with respect to which the Customs Service has not taken final action on that date.” 19 C.F.R. § 177.9(a). When a ruling addresses an article’s admissibility (rather than, for example, its classification or valuation), 177.9(a) must be read in conjunction with 19 C.F.R. § 113.62(d) and the understanding “that any demand for redelivery will be made no later than 30 days after the date that the merchandise was released or 30 days after the end of the conditional release period (whichever is later).” As such, ruling letters generally have a prospective effect. See also, 19 C.F.R. § 177.0 (“The rulings issued under the provisions of this part will usually be prospective in application and, consequently, will usually not relate to specific matters or situations presently or previously under consideration by any CBP field office.”). In line with the Customs regulations, the ruling at issue in this dispute used prospective language to indicate that it applied to future transactions. See HQ H324813 at 2. Thus, the ruling’s application in this case was not retroactive and did not, as Sonos suggests, require that Google “push[] an update” to controllers already in commerce or take other action with respect to these articles that Google entered for consumption into the United States before the date of the ruling.
This approach is likewise consistent with the prospective nature of Commission remedial orders under 19 U.S.C. § 1337. See e.g., Tex. Instruments, Inc. v. U.S. Int’l Trade Comm’n, 851 F.2d 342, 344 (Fed. Cir. 1988) (“The ITC can issue only an exclusion order barring future importation or a cease and desist order barring future conduct.”) (emphasis in the original). And more importantly, it recognizes that “[r]etroactivity is not favored in the law. Thus, congressional enactments and administrative rules will not be construed to have retroactive effect unless their language requires this result.” Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208 (1988) (emphasis added). As noted above, there is nothing in the ruling directing that Google take any action to remove the DUA from articles imported before the date of the ruling. As such, the ruling does not include language that “requires this result.” Id.
For the reasons above, we find that in removing the DUA from its U.S. Play Store, Google disabled the application and complied with the option provided in the ruling to permit future entry of its controllers. Sonos’s position to the contrary misreads the actual text of the ruling, including the key terms and the context in which they appear, and does not recognize CBP’s proper enforcement authority under Section 337 or that retroactivity is disfavored in the law.
Sonos Argues That Customers and Other Third Parties may Download the DUA Using a VPN
Sonos’s second argument revolves around the allegation that Google’s controllers, such as Pixel devices, imported after the date the ruling issued are still able to download a copy of Google’s DUA through Google’s non-U.S. Play Stores or certain third-party websites. See Sonos Submission at 6-7 and Exhibit A. Specifically, Sonos provides that it “simply followed instructions to download a free VPN from the Google Play Store and select any of the non-US Google Play Stores from which we were immediately able to download a new and fully operational copy of Google’s Device Utility app.” Sonos Submission at 7. Sonos further adds that “[a] simple ‘Google’ search yields multiple sites that allow users to download and install Google’s DUA app in the United States.” Id.
In response, Google counters that Sonos’s alleged method of downloading the DUA from non-U.S. Play Stores using a VPN is in violation of the Google Play Terms of Service, which state that a user may not “attempt to, or assist, authorize or encourage others to circumvent, disable or defeat any of the security features or components that protect, obfuscate or otherwise restrict access to any Content or Google Play.” See Google Play Terms of Service (dated October 12, 2020), available at https://play.google.com/about/play-terms/index.html (last accessed August 5, 2022); see also Google Response Submission at 1, n. 1. In addition to referencing its Terms of Service, Google argues that it “does not direct, endorse, encourage, or otherwise induce anyone to circumvent Google’s security measures by using a foreign Google Play Store to obtain apps that Google has removed from the US Google Play Store.” Google Response Submission at 2. Google further states that none of the third-party websites Sonos references are “owned, controlled, endorsed, or otherwise authorized by Google” and that these third-party activities are unauthorized and outside of Google’s control. Google Response Submission at 2. As discussed in greater detail below, Sonos’s second argument is similarly unavailing.
To start, we note that it is not entirely clear what Sonos is proposing as its theory of infringement or doctrinal approach to address customer use of a VPN under the facts alleged or what would be the basis to find that Google, and not a third party, has taken action that is inconsistent with the ruling or the administration of a Section 337 exclusion order. Sonos states that “Google cannot continue to import infringing controllers into the United States simply because it chooses to make its DUA app available outside the United States, particularly since Google’s customers can easily download and install the DUA app to create a fully operational infringing device.” Sonos Submission at 9.
However, as Google clarified, there is no legitimate and authorized method for Google controllers entering the United States, after the date the DUA was removed from the U.S. Play Store, to download the DUA. Google Response Submission at 1. Moreover, Sonos has not pointed to any instruction or guidance that Google has provided to its customers directing them to use a VPN for the purpose described in Sonos’s submissions. Additionally, there does not appear to be a material dispute that when used only in the manner authorized by Google, the Google controllers that will be imported for use in the United States cannot download the DUA. Thus, to the extent Sonos is arguing that Google is inducing its U.S. customers or end users to take action that may result in infringement of the relevant patent claims, we note that induced infringement requires a finding that the infringer possessed a specific intent to encourage another’s infringement. See Commil USA, LLC v. Cisco Sys., Inc., 575 U.S. 632, 638-39 (2015); see also Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754, 760 (2011) (“The addition of the adverb ‘actively’ [in 35 U.S.C. § 271(b)] suggests that the inducement must involve the taking of affirmative steps to bring about the desired result[.]”) (emphasis added). However, Google’s Terms of Service and security measures underscore that the administrative record for this ruling does not support a finding that such encouragement exists. See, e.g., Google Response Submission at 1-2. Whether a device has the potential to indirectly infringe if used in an unauthorized manner is not an issue either party fully or clearly addressed in their respective submissions and, without detailed analysis or cited case law indicating otherwise, the EOE Branch considers active inducement under 271(b) to be the appropriate framework to evaluate Sonos’s submission. As noted above, however, the record does not include sufficient evidence to establish the specific intent or affirmative steps required under such a theory.
Moreover, we point out that HQ H324813 expressly states that the application in question was the “Device Utility app addressed in this ruling.” Id. (emphasis added). None of the facts or arguments regarding the DUA at issue involved or related to Google’s non-U.S. Play Store or third-party websites, as neither party raised this aspect during the inter partes proceeding leading to the issuance of HQ H324813. Consequently, the DUA addressed in HQ H324813 was the DUA referenced in the submissions, which exclusively referred to Google’s U.S. Play Store and not any other. Accordingly, the “relevant articles at issue” were those Google controllers imported into the United States and capable of downloading the DUA from Google’s U.S. Play Store. See generally HQ H324813 at 20-33.
HQ H324813 at 24 (citing Sonos Reply at 42 (annotation in original) and Ex. 4 at 1:15). As shown in the image depicted in the ruling, and reproduced above, the DUA in question was available for download from the Google U.S. Play Store. Id. Had the DUA addressed in the ruling encompassed other applications from a non-U.S. Play Store, additional steps – such as the need to first download a VPN – would be required but there is no mention of such steps in the administrative record for HQ H324813. Compare e.g., Sonos Submission at 7 (“In this example, we simply followed instructions to download a free VPN from the Google Play Store and select any of the non-US Google Play Stores from which we were immediately able to download a new and fully operational copy of Google’s Device Utility app.”); see also, Google Response Submission at 1 (“In other words, Sonos admits that were it not for . . . misrepresenting his true location using third party software [e.g., a VPN service], in violation of Google’s Terms of Service, he would not have been able to download the DUA from the Google Play Store while in the United States.”). Accordingly, in HQ H324813, the question presented involved the DUA available on Google’s U.S. Play Store and not any other.
For the reasons above, and taking into consideration that Google disabled the DUA by removing the application from its U.S. Play Store, we determine that Sonos’s second argument, under the facts presented, does not constitute a basis to refuse entry of the articles at issue.
HOLDING
We find that (i) Google disabled the DUA when it removed the application from the U.S. Play Store as of June 6, 2022, making it unavailable to U.S. consumers; (ii) Google has met the option provided in HQ H324813 that the DUA addressed in the ruling can no longer be used with the “relevant articles at issue,” and (iii) Google has provided sufficient notice. Accordingly, it is CBP’s position that Google has complied with HQ H324813 and that the articles at issue are not subject to exclusion from entry on this basis as long as Google continues to refrain from making the DUA available, consistent with this ruling, or until the DUA is determined not to infringe the relevant claims of the asserted patents.
The decision is limited to the specific facts set forth herein. If articles differ in any material way from the articles at issue described above, or if future importations vary from the facts stipulated to herein, this decision shall not be binding on CBP as provided for in 19 C.F.R. §§ 177.2(b)(1), (2), (4), and 177.9(b)(1) and (2).
If there is information in this ruling letter not currently bracketed in red [[ ]] that either party believes constitutes confidential information, and should be redacted from the published ruling, then the parties are asked to contact CBP within ten (10) working days of the date of this ruling letter to indicate this. See, e.g., 19 C.F.R. § 177.8(a)(3).
Sincerely,
Dax Terrill
Chief, Exclusion Order Enforcement Branch
CC: Mr. Kevin Chu
Quinn Emanuel Urquhart & Sullivan, LLP
1300 I Street NW
Suite 900
Washington, D.C. 20005
[email protected]