• HQ H296426
• May 18, 2018

• Type : 19 U.S.C. § 1337; Unfair Competition • HTSUS :
•  Related:   H121519   

OT:RR:BSTC:IPR H296426 CBC/AAH

VIA EMAIL:

Robert C. Scheinfeld
Baker Botts LLP
30 Rockefeller Plaza
New York, NY 10112-4498
[email protected]

RE: Ruling Request; U.S. International Trade Commission; Limited Exclusion Order; Investigation No. 337-TA-1012, Certain Magnetic Data Storage Tapes and Cartridges Containing the Same

Dear Mr. Scheinfeld,

Pursuant to 19 C.F.R. part 177 the Intellectual Property Rights Branch, Regulations and Rulings, U.S. Customs and Border Protection (“CBP”) issues this ruling letter. We find that the M8 and LTO-8 magnetic data storage tapes at issue are subject to the exclusion order that was issued in Investigation No. 337-TA-1012 pursuant to section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1337.

This ruling letter is the result of an inter partes proceeding administered by CBP. The inter partes proceeding involved the two parties with a direct and demonstrable interest in the question presented by the ruling request: your clients, Fujifilm Corporation and Fujifilm Recording Media U.S.A., Inc. (collectively, “Fujifilm”) and Sony Corporation, Sony Corporation of America, Sony Electronics Inc., Sony Storage Media Solutions Corporation, Sony Storage Media Manufacturing Corporation, Sony DADC US Inc., and Sony Latin America Inc. (collectively, “Sony”).

The parties were asked to clearly identify confidential information [[with red brackets]] in all of their submissions to the IPR Branch. See CBP Email to the Parties Dated April 18, 2018. Information bracketed in red [[ ]] will be redacted from the published public version ruling. See infra Section III.B. I. BACKGROUND:

A. Rule 177 Proceeding before the IPR Branch

On March 12, 2018, Fujifilm submitted a letter requesting an administrative ruling pursuant to 19 C.F.R. part 177. The letter included exhibits 1–39 and appendices 1–6 (collectively, “Ruling Request”). The question presented in the Ruling Request was whether M8 and LTO-8 magnetic date storage tapes (“the tapes at issue”), to be manufactured abroad and imported by Sony, are subject to the limited exclusion order (“1012 LEO”) issued by the U.S. International Trade Commission (“ITC” or “Commission”) in Investigation No. 337-TA-1012 (“the underlying investigation”). See Ruling Request, at 1.

On April 13, 2018, Sony submitted a response to the Ruling Request, which included exhibits A–S and appendices A and B (collectively, “Sony Response”).

On April 17, 2018 CBP conducted a teleconference with the parties, during which the Sony Response was discussed. In an email to the parties on April 18, 2018, CBP stated that the Sony Response failed to address either the specifically described transaction or the specific set of facts set forth in Fujifilm’s Ruling Request.  Instead, the Sony Response addressed a transaction and a set of facts that are materially different from the transaction and set of facts set forth in the Fujifilm’s Ruling Request. See CBP Email to Parties dated April 18, 2018.  Accordingly, CBP determined that: (1) the questions presented in the Sony Response were properly treated as a new request for administrative ruling under 19 C.F.R. part 177; and (2) no additional briefing or oral argument was needed by CBP to reach a determination regarding the questions presented in the Fujifilm’s Ruling Request. Id. 

B. Investigation No. 337-TA-1012

The Commission instituted Investigation No. 337-TA-1012 on June 27, 2016. Fujifilm’s complaint named Sony as the respondent. 81 Fed. Reg. 43243 (July 1, 2017). The complaint alleged that Sony violated section 337 of the Tariff Act of 1930 in the importation into the United States, the sale for importation, or the sale within the United States after importation of certain magnetic data storage tapes and cartridges containing the same by reason of infringement of one or more of claims 1, 4–9, 11, and 14 of U.S. Patent No. 6,641,891 (“the ’891 patent”); claims 2, 5, and 6 of U.S. Patent No. 6,703,106 (“the ’106 patent”); claim 1 of U.S. Patent No. 6,703,101 (“the ’101 patent”); claims 1, 2, 4, 5, and 7-11 of U.S. Patent No. 6,767,612 (“the ’612 patent”); claim 1 of U.S. Patent No. 8,236,434 (“the ’434 patent”); and claims 3 and 10 of U.S. Patent No. 7,355,805 (“the ’805 patent”). Id. The Office of Unfair Import Investigations participated as a party. Id.

The ’101 patent was terminated from the investigation before trial. 83 Fed. Reg. 11245 (March 14, 2018). On September 1, 2017, the Administrative Law Judge (“ALJ”) issued his final Initial Determination (“ID”) finding a violation of section 337 with respect to all of the asserted claims of the ’891 patent and certain claims of the ’612 patent. Id. The parties appealed to the Commission, which determined to review-in-part the ID’s findings with respect to the each of the five remaining patents in suit. Id.

On March 8, 2018, the Commission affirmed the ID with modification. Id. The Commission found a violation of section 337 only with respect to the ’891 patent. Id. The Commission issued a limited exclusion order (“1012 LEO”) and cease and desist orders prohibiting, inter alia, the entry for consumption into the United States, entry for consumption from a foreign-trade zone, or withdrawal from a warehouse for consumption of magnetic data storage tapes and cartridges containing the same that infringe claims 1, 4–9, 11, and 14 of the ’891 patent that are manufactured abroad by, or on behalf of, or imported by or on behalf of Sony, or any of their affiliated companies, parents, subsidiaries, agents, or other related business entities, or their successors or assigns. Id.; 1012 LEO.

C. The ’891 Patent

The ’891 patent is titled Magnetic Recording Medium. The ’891 Patent, cover page. The ’891 patent “relates to particulate high-density magnetic recording media . . . having a magnetic layer, an essentially nonmagnetic lower layer, and an uppermost layer comprising a ferromagnetic powder in the form of a ferromagnetic metal powder, hexagonal ferrite powder, or the like.” Id. at 1:5–11. “[M]agnetic tape media . . . [are] used for back-up purposes or for long-term storage or archival of data.” Comm’n Op. at 10. Such media are valued for their capacity and reliability. The ’891 patent, at 1:20–31. Specifically, the ’891 invention has improved carrier-to-noise ratio. Id. at 3:5–28; Comm’n Op., at 22.

D. The Accused Products and Infringement Determination at the ITC

Fujifilm accused Sony’s LTO-7 tapes in the underlying investigation at the ITC. Comm’n Op. at 11, Doc ID 638337 (Mar. 2018); Initial Determination at 4, Doc ID 621961 (Sept. 2017). The only independent claim asserted in the ‘891 patent was claim 1. ID at 27–43. Claims 4–9, 11, and 14 of the ‘891 patent all depend from claim 1. Id.

The ID divides claim 1 into seven limitations:

[a] A magnetic recording medium, comprising:

[b] an essentially nonmagnetic lower layer; and a magnetic layer comprising a ferromagnetic powder and a binder, the magnetic layer located over the lower layer,

[c] wherein said magnetic layer has a thickness ranging from 0.01 to 0.15 µm

[d] and a coercivity equal to or higher than 159 kA/m,

[e] and the ferromagnetic particles contained in the ferromagnetic powder have a size less than 0.15 µm, and

[f] an average size of magnetic cluster at DC erase is equal to or higher than 0.5 x 104 nm2 and less than 5.5 x 104 nm2, and

[g] wherein the essentially non-magnetic lower layer has either no magnetic properties or magnetic properties to a degree not affected by recording information to the magnetic layer. Id. at 28.

With respect to element 1[a], neither party disputed that, [[ ]] tape must be “a magnetic recording medium.” Id. at 28–29 (also considering Dr. Wang’s direct witness statement CX-0004C). Nor did either party dispute that Sony’s LTO-7 tapes include element 1[b], “an essentially nonmagnetic lower layer; and a magnetic layer comprising a ferromagnetic powder and a binder, the magnetic layer located over the lower layer.” Id. at 29–31. Specifically, Fujifilm presented [[

]] testing on Sony’s LTO-7 products (the LTX6000G), and [Dr. Wang’s] expert testimony,” such as including [[ ]]

[[ ]] Id. Likewise, “Fujifilm relie[d] on [[ ]] measurements on Sony’s LTO-7 products (the LTX6000G), and [Dr. Wang’s] expert testimony” to show that the accused products satisfy element 1[c], “wherein said magnetic layer has a thickness ranging from 0.01 to 0.15µm,” which was not disputed. Id. at 31–32.

Sony did dispute whether the accused products include element 1[d], a magnetic layer with “a coercivity equal to or higher than 159 kA/m.” Id. at 32. In response to Dr. Wang’s testing, Sony’s own expert questioned whether Fujifilm “tested the leader portion of the LTO-7 tape, which differs from the normal (7th generation) portion of the tape,” and whether Fujifilm had sufficiently “saturated the sample.” Id. Nevertheless, the ALJ concluded that Fujifilm had presented sufficient evidence to show that this claim limitation is met by the accused products. Id.

Sony did not dispute that the accused products include element 1[e], “the ferromagnetic particles contained in the ferromagnetic powder have a size less than .15µm.” Id. at 33. The ALJ determined that Fujifilm provided sufficient evidence in the form of [[

]] Id.

Sony argued that the accused products do not include element 1[f], “an average size of magnetic clusters at DC erase is equal to or higher than 0.5 × 104 nm2 and less than 5.5 × 104 nm2.” The ALJ agreed with Fujifilm that the accused products meet this limitation, based on Fujifilm’s expert, Dr. Wang’s, testing of three samplings, each falling within the claimed range and taken in accordance with the protocols in the specification. Id. at 33–36 (citing the ’891 patent, at 29:35–49). To the extent that Sony questioned Dr. Wang’s choice of parameters, the ALJ noted that Sony had not demonstrated that different parameters were required. ID at 33–36.

Finally, to demonstrate that the accused products meet element 1[g], “wherein the essentially non-magnetic lower layer has either no magnetic properties or magnetic properties to a degree not affected by recording information to the magnetic layer,” Fujifilm relied on [[ ]] and expert testimony [[ ]] Id. at 37. The evidence presented by Fujifilm was undisputed. Id.

With respect to the dependent claims, the Commission held claim 4, which “requires that the ferromagnetic powder of claim 1 is a hexagonal ferrite powder,” read on the accused products. Id. at 38. It was undisputed that the accused products use hexagonal barium ferrite. Id.

Again without dispute, the accused products were found to infringe claim 5. Id. at 38–39. Claim 5 requires that such “hexagonal ferrite powder of claim 4 have a mean plate diameter of equal to or less than 42 nm.” Id. Based on Dr. Wang’s testing [[ ]] the ALJ found infringement of claim 5. Id.

For the same reasons that the accused products were found to meet the coercivity of claim element 1[d], the accused products were found to infringe claim 6, which requires that the “recording medium of claim 1 have a coercivity ranging from 159 to 318 kA/m,” and claim 7, which further specifies a coercivity range “from 159 to 279 kA/m.” Id. at 39-40.

Similarly, for the same reason that the accused products were found to meet the thickness element of claim 1[c], the accused products were found to infringe claim 8, which “requires the magnetic layer of claim 1 to have a thickness ranging from 0.01 to 0.10 µm,” and claim 9, which further specifies “a thickness ranging from 0.02 to 0.08 µm.” Id. at 40-41.

[[ ]] it was undisputed that the accused products were tapes and therefore infringed claim 11. Id. at 42.

Finally, for the same reasons the accused products were found to meet the particle-size limitation of claim 1[e], the accused products were found to infringe claim 14, which further specifies “a size of less than about 0.1 µm.” Id. at 42–43.

E. The Products at Issue

The products at issue in Fujifilm’s Ruling Request are the “new follow-on magnetic data storage products—the Sony M8 products and the Sony LTO-8 products—first imported by Sony after the evidentiary hearing in the 1012 Investigation.” Ruling Request, at 1. Fujifilm asserts that Sony’s LTO-8 and M8 tapes “infringe Fujifilm’s patent in the same way as the prior generation LTO-7 products adjudicated by the Commission” and accordingly are subject to the 1012 LEO. Ruling Request, at 1–2.

Sony notes that the Sony M8 products and the Sony LTO-8 products at issue in the FujiFilm Ruling Request are old versions of Sony’s Linear Tape Open (“LTO”) products and will no longer be imported into the United States after April 2018 except to the extent expressly authorized by the exceptions in the 1012 LEO. Sony Response, at 1–2. The Sony M8 Products

The Sony M8 product is “a new type of LTO-7 cartridge called an ‘LTO 7 initialized LTO Type M cartridge.’” Ruling Request, at 13.

Fujifilm asserts that the “Sony M8 products infringe the claims of the ‘891 patent for the same reasons as the ALJ found with respect to the Sony LTO-7 products.” Ruling Request, at 14.

In support of its contentions, Fujifilm provided and cited to Sony’s product description, Ex. 18 (Sony LTO8 M8 Ultrium8 Pre-Barcoded Data Cartridge), as well as descriptions from its partners IBM, Ex. 13 (IBM Knowledge Center – LTO Type M Cartridge (M8)), Ex. 14 (IBM United States Hardware Announcement), and Hewlett-Packard Enterprise (“HPE”), Ex. 31 (HPE LTO-8 Type M 22.5 TB LTO-7 initialized data cartridges). Ruling Request, at 17.

Fujifilm points out that “the Sony M8 products are identical in all relevant respects to the Sony LTO-7 products.” Id. at 14. In fact, Fujifilm notes that “[t]he Sony M8 products are distinguished from the Sony LTO-7 products only by a ‘new barcode label ending with the last two characters M8.’” Ruling Request, at 14 (citing Ex. 14, IBM United States Hardware Announcement 117-107 at 2 (Dec. 19, 2017)). This “new barcode simply allows an LTO-7 product to be used with an LTO-8 tape drive” and “has no impact on the infringing features of the Sony products.” Id. at 14, 17 (citations omitted). Accordingly, Fujifilm’s expert Dr. Wang opines that the M8 products infringe the asserted ’891 patent claims for the same reason as the LTO-7 products. Ex. 19 (Wang Dec.) ¶ 4.

[[ ]]

The Sony LTO-8 Products

The Sony LTO-8 products are Sony’s new eighth-generation LTO products. Ruling Request, at 15. Fujifilm contends that the “Sony LTO-8 products practice each and every parameter of the asserted claims of the ’891 patent.” Ruling Request, at 16.

In support, Fujifilm provided and cited to marketing materials describing the product as a recording medium satisfying element 1[a]. Ruling Request, at 18 (citing Ex. 28). Regarding element 1[b], Fujifilm also produced transmission electron microscopy (TEM) and energy dispersive x-ray spectroscopy (EDS) images and expert analysis showing that the product’s layered structure and elemental composition, respectively, and pictured, respectively, below. Ruling Request, at 18–20 (citing Wang Dec. ¶¶ 31–33).





To show element 1[c], that the “magnetic layer has a thickness ranging from .01 to 0.15 µm,” Dr. Wang took measurements of TEM images, like the one pictured below, showing a mean width of 76.9 nm with a 1% standard error thereof. Ruling Request, at 20–21 (citing Wang Dec. ¶¶ 35–38).




With respect to element 1[d], coercivity claimed at “equal to or higher than 159 kA/m,” Dr. Wang used a vibrating sample magnetometer (VSM) to generate the following hysteresis loop, showing a coercivity of 209 kA/m. Ruling Request, at 21–22 (citing Wang Dec. ¶¶ 43–50).


Dr. Wang also observes that HPE’s product specification lists a coercivity of 2300 Oe (183 kA/m). Wang Dec. ¶ 46 (citing Ex. 29 (HPE L TO Ultrium Cartridges - Specifications)).

To find element 1[e], ferromagnetic particle size “less than 0.15 µm,” Dr. Wang measured 200 particles across several TEM samples (App’x 6) to find an average of 26.7 nm. Wang Dec. ¶¶ 49–51; see Ruling Request, at 22–23. Such a sample is pictured below:




Dr. Wang measured “the average size of magnetic cluster at DC erase [which must be] equal to or higher than 0.5 × 104 nm2 and less than 5.5 × 104 nm2” to satisfy element 1[f], by repeating his method accepted by the ALJ in the underlying investigation. Ruling Request, at 23–24 (citing Wang Dec. ¶¶ 53–58; ID at 36). Specifically, Dr. Wang performed DC erase on three samples with a VSM and then analyzed a binarized magnetic force microscopic (MFM) image, such as pictured below:




Wang Dec. ¶¶ 53–58.

Finally, for evidence that “the essentially non-magnetic lower layer has either no magnetic properties or magnetic properties to a degree not affected by recording information to the magnetic layer,” as required by element 1[g], Fujifilm relies on its expert’s conclusion, based on the above TEM and EDS analysis, that the layers are similar to those found in the LTO-7. Ruling Request, at 24 (citing Wang Dec. ¶ 59).

In addition to asserting that the LTO-8 infringes claim 1 of the ‘891 patent, based on the evidence already discussed, Fujifilm argues that the LTO-8 infringes dependent claims 4 (hexagonal ferrite, based on the element 1[b] analysis), 8 (magnetic layer thickness between 0.01 and 0.10 µm, based on the element 1[c] analysis), and 11 (tape, based on the element 1[a] analysis). Ruling Request, at 24–25; see Wang Dec. ¶¶ 60–62.

“Sony disputes both the merits of Fujifilm’s positions and its characterizations of many of the facts articulated in the Fujifilm Ruling Request [and] will vigorously pursue its rights on appeal” from the Commission. Sony Response, at 4. However, Sony’s response does not directly address the evidence or arguments provided by Fujifilm, does not critique Fujifilm’s testing, or provide any evidence in rebuttal.

II. ISSUE:

Whether M8 and LTO-8 magnetic data storage tapes imported by or on behalf of Sony (“the tapes at issue”) are subject to the 1012 LEO because they infringe one or more of claims 1, 4, 8, or 11 of the ’891 patent. See Ruling Request, at 1.

III. LAW AND ANALYSIS:

A. Authority to Issue a Ruling

A preliminary issue is whether CBP should deny Fujifilm’s request because it is based on “old versions of LTO-8 and M8 (LTO-7) products that Sony will no longer import after this month (except possibly pursuant to certain express exceptions to the LEO).” Sony Response, at 4. A Sony section manager of magnetic tape product design, Eiji Nakashio, declares that Sony will not import any of the tapes at issue except pursuant to such exceptions to the 1012 LEO as importation by or for the use of the United States, importation for repair or replacement under warranty or service contracts, or importation for compliance and verification testing (the last of which Sony argues is not “entry for consumption” anyway). Id. at 4–5 (citing Ex. B (Nakashio Dec.)). On this basis, Sony requests that CBP deny Fujifilm’s Ruling Request as moot. Id.

We do not find that Sony’s representations as to their importation plans render Fujifilm’s Ruling Request moot.

The relevant paragraphs of the 1012 LEO are quoted below:

Magnet data storage tapes . . . are excluded from entry for consumption . . . except: . . . 2) articles imported for use in repairing or replacing magnetic data storage tapes and cartridges containing the same under warranty or service contracts, for identical articles, that were sold in the United States as of the date of this Order; and 3) articles imported for use for the purposes of compliance verification testing.

At the discretion of U.S. Customs and Border Protection (“CBP”) and pursuant to the procedures it establishes, persons seeking to import magnetic data storage tapes and cartridges containing the same 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 this certification.

In accordance with 19 U.S.C. § 1337(1), the provisions of this Order shall not apply to magnetic data storage tapes and cartridges containing the same that are imported by or 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.

The Commission may modify this Order in accordance with the procedures described in Rule 210.76 of the Commission’s Rules of Practice and Procedure (19 C.F.R. § 210.76).

1012 LEO.

Foremost, 19 C.F.R. part 177 authorizes CBP to issue “prospective” rulings requested by “any person who . . . has a direct and demonstrable interest in the question or questions presented in the ruling request.” 19 C.F.R. § 177.1. Thus, every ruling under part 177 concerns a transaction that may or may not be consummated, and a ruling may issue unless the question presented is “essentially hypothetical in nature.” 19 C.F.R. § 177.7.

The questions presented in the Ruling Request are not essentially hypothetical. The Ruling Request includes a complete statement of all relevant facts relating to a transaction that is described in sufficient detail to permit the proper application of relevant laws. See 19 C.F.R. §§ 177.1(b)(1) and (b)(2)(i). Nor does Sony’s representations as to their importation plans render Fujifilm’s Ruling Request moot or recast the questions presented in the Ruling Request as merely hypothetical. Paragraph 3 of the 1012 LEO authorizes CBP, in its discretion, to require persons seeking to import magnetic data storage tapes pursuant to the exceptions in paragraph 1 (such as warranty contracts or compliance testing) to certify that the relevant exception applies. Additionally, paragraph 3 of the 1012 LEO authorizes CBP, in its discretion, to require “such records or analyses as are necessary to substantiate the certification.” Should CBP permit certification, it may require it to be made under penalty of perjury and pursuant to the laws of the United States, including 18 U.S.C. § 1001 and 18 U.S.C. § 542, and subject to fine, penalty, seizure, and/or forfeiture under any applicable provision of law, including 19 U.S.C. § 1592, where found to be materially false. In its response, Sony indicates that it “may seek to import pursuant to [the] exception[s].” Sony Response, at 5. Rather than rendering the Ruling Request moot, this representation highlights at least one way in which answering the questions presented in the Ruling Request, whether the tapes at issue infringe the ’891 patent, potentially impacts the administrative requirements for Sony with respect to future importations.

Finally, since Fujifilm’s letter of March 12, 2018, the ITC has not modified its order and Fujifilm has not withdrawn its request. “For this reason, [CBP] will give full and careful consideration to [the] written request[].” 19 C.F.R. § 177.1; see id. at § 177.6 (withdrawal of ruling requests).

B. Treatment of Confidential Business Information Submitted under 19 C.F.R. pt. 177

As a preliminary matter, Fujifilm has requested confidential treatment in connection with this ruling request for certain information from its submissions, claiming that the disclosure of such information would likely cause substantial harm to its competitive position and, on this basis, seeks to have the information in question redacted from any ruling that is published in accordance with 19 U.S.C. § 1625(a). Disclosure of information related to administrative rulings under 19 C.F.R. § 177 is governed by 31 C.F.R. § 1, 19 C.F.R. § 103, and 19 C.F.R. § 177.8(a)(3). See 19 C.F.R. § 177.10(a). Moreover, the determination whether to include or redact information within a published ruling is guided by various federal laws—and the relevant standards for their application—that involve confidentiality and disclosure, to include the Freedom of Information Act (“FOIA”) (5 U.S.C. § 552), the Trade Secrets Act (18 U.S.C.§ 1905), and the Privacy Act of 1974 (5 U.S.C. § 552a). See CBP HQ Ruling H121519 at 1 (dated February 8, 2011).

Congress enacted FOIA to overhaul the earlier public-disclosure section of the Administrative Procedure Act that gradually became more “a withholding statute than a disclosure statute.” Milner v. Dep't of the Navy, 562 U.S. 562, 565 (quoting EPA v. Mink, 410 U.S. 73, 79 (1973)). Accordingly, there is a strong presumption in favor of disclosure, which is consistent with the purpose as well as the plain language of the Act. United States Dep't of State v. Ray, 502 U.S. 164, 173 (1991). Thus, FOIA mandates that an agency disclose certain information unless it falls within one of nine exemptions. Milner, 562 U.S. at 565. These exemptions are “explicitly made exclusive,” EPA, 410 U.S. at 79, and must be “narrowly construed,” FBI v. Abramson, 456 U.S. 615, 630 (1982).

Exemption 4 of FOIA, which is especially relevant here, provides that FOIA does not apply to matters that are “trade secrets and commercial or financial information obtained from a person and privileged or confidential.” 5 U.S.C. § 552 (b)(4); see Chrysler Corp. v. Brown, 441 U.S. 281, 291 (1979). Furthermore, it is worth noting that, as a general matter, the proscriptions of the Trade Secrets Act are “at least co-extensive with Exemption 4 of FOIA . . . [such that], unless another statute or a regulation authorizes disclosure of the information, the Trade Secrets Act requires each agency to withhold any information it may withhold under Exemption 4 of the FOIA.” Venetian Casino Resort, LLC v. EEOC, 530 F.3d 925, 932 (D.C. Cir. 2008) (quoting Canadian Comm. Corp. v. Air Force, 514 F.3d 37, 39 (D.C. Cir. 2008)) (emphasis added); see also Dow Chem. Co. v. United States, 476 U.S. 227, 234 n.2 (1986) (“Dow's fear that EPA might disclose trade secrets revealed in these photographs appears adequately addressed by federal law prohibiting such disclosure generally under the Trade Secrets Act, 18 U.S.C. § 1905, and the Freedom of Information Act, 5 U.S.C. § 552(b)(4).”).

That said, “Congress did not design the Freedom of Information Act exemptions to be mandatory bars to disclosure.” Chrysler Corp., 441 U.S. at 293, 294 (“We therefore conclude that Congress did not limit an agency's discretion to disclose information when it enacted the FOIA.”); see GTE Sylvania v. Consumers Union of United States, 445 U.S. 375, 378, n. 2 (1980) (“The theory of the so-called ‘reverse Freedom of Information Act’ suit, that the exemptions to the Act were mandatory bars to disclosure and that therefore submitters of information could sue an agency under the Act in order to enjoin release of material, was squarely rejected in Chrysler Corp.”).

The test, for administrative rulings under 19 C.F.R pt. 177, to determine whether certain information is confidential (and therefore properly redacted from any published ruling) is identical to the federal government-wide standard for disclosure under FOIA Exemption 4 as it relates to the likelihood of substantial harm to the competitive position of the person submitting the information and requesting that it be withheld from publication. As with FOIA, the basic objective of administrative rulings under 19 C.F.R. § 177 favors disclosure to provide notice to interested persons of the reasons for the agency’s position and its decision-making process. See Chrysler Corp., 441 U.S. at 290 n. 10 (“We observed in Department of Air Force v. Rose that ‘disclosure, not secrecy, is the dominant objective of the Act.’ The legislative history is replete with references to Congress' desire to loosen the agency's grip on the data underlying governmental decision making.”) (internal citation omitted). Notably, under 19 C.F.R. § 177.8(a)(3) referenced above, there is a general presumption that “[n]o part of the ruling letter, including names, addresses, or information relating to the business transactions of private parties, shall be deemed to constitute privileged or confidential commercial or financial information or trade secrets exempt from disclosure pursuant to the Freedom of Information Act, as amended (5 U.S.C. 552), unless, as provided in §?177.2(b)(7), the information claimed to be exempt from disclosure is clearly identified and the reasons for the exemption are set forth.”

In turn, 19 C.F.R. § 177.2(b)(7) provides that “[i]nformation which is claimed to constitute trade secrets or privileged or confidential commercial or financial information regarding the business transactions of private parties the disclosure of which would cause substantial harm to the competitive position of the person making the request (or of another interested party), must be identified clearly and the reasons such information should not be disclosed, including, where applicable, the reasons the disclosure of the information would prejudice the competitive position of the person making the request (or of another interested party) must be set forth.”

Significantly, § 177.2(b)(7) was added to this section through rulemaking (T.D. 75-186, 40 Fed. Reg. 31929, July 30, 1975) that promulgated a final rule based on a previous notice of proposed rulemaking (40 Fed. Reg. 2437, January 13, 1975) where the text as proposed did not contain (b)(7) or any other provision addressing the treatment of putative confidential business information. The “substantial harm to a competitive position” standard adopted in § 177.2(b)(7) to handle confidentiality issues is identical to that standard for FOIA Exemption (b)(4) contemporaneously established by the U.S. Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) in National Parks & Conservation Asso. v. Morton, 498 F.2d 765 (D.C. Cir. 1974). See N.H. Right to Life v. HHS, 136 S. Ct. 383; 193 L. Ed. 2d 412; 2015 U.S. LEXIS 7169 (2015) (Thomas, J., dissenting from denial of the petition for writ of certiorari). In 1974, a year before the promulgation of the Customs final rule, the D.C. Circuit construed the word “confidential” in Exemption 4 and determined that commercial information is “confidential” if disclosure would “cause substantial harm to the competitive position of the person from whom the information was obtained.” National Parks, 498 F.2d at 770; see also N.H. Right to Life, 136 S. Ct. at 384. The D.C. Circuit later elaborated that, when applying this test, there was no need to show actual competitive harm and that actual competition and the likelihood of substantial competitive injury sufficed. See Public Citizen Health Research Group v. FDA, 704 F.2d 1280, 1291 (D.C. Cir. 1983); see also N.H. Right to Life, 136 S. Ct. at 384. Accordingly, to overcome the strong presumption in favor of disclosure, ruling requesters seeking confidential treatment must prove (1) they actually face competition, and that (2) substantial competitive injury would likely result from disclosure. See Gov't Accountability Project v. FDA, 2016 U.S. Dist. LEXIS 114927, at *15 (D.C. Cir. 2016). Conclusory and generalized allegations of substantial competitive harm are unacceptable and will not support a ruling requester’s efforts to withhold certain information from publication. See Public Citizen Health Research Group, 704 F.2d at 1291.

There is no dispute that Fujifilm faces actual competition and therefore the relevant analysis will focus on the second prong above. See Comm’n Op. at 137–40.

As suggested above, the relevant Customs regulations not only mirror the general presumption in favor of disclosure but also place the burden on the person requesting confidentiality to demonstrate that such information qualifies. See generally FCC v. Schreiber, 381 U.S. 279 (1965) (upholding a rule requiring public disclosure except where the proponents of a request for confidential treatment have established their burden to justify that such information should not be disclosed). Moreover, the provisions of the Customs regulations that place the burden on the ruling requester to establish, during the administrative proceeding, that the information at issue constitutes confidential business information is consistent with the burden the government must satisfy in an action brought against it under FOIA challenging the position an agency has taken not to disclose information pursuant to one or more of the exemptions. See 5 U.S.C. § 552(a)(4)(B); see also United States Department of Justice v. Landano, 508 U.S. 165, 171 (1993) (“The Government bears the burden of establishing that the exemption applies.”).

This line of inquiry is further illuminated by the “general right to inspect and copy public records and documents” that courts have historically recognized, including in patent cases involving highly sensitive information. Apple Inc. v. Samsung Elecs. Co., 727 F.3d 1214, 1221 (Fed. Cir. 2013) (quoting Nixon v. Warner Commc’ns, Inc., 435 U.S. 589 (1978)). The nature of this right, rooted in the common law, is not conditioned on a proprietary interest in the information, see Nixon, 435 U.S. at 597, although certainly there are instances where an interest in the information may rise to or approach such a level. Instead, the only interest necessary to compel access to such information is found in the “citizen's desire to keep a watchful eye on the workings of public agencies.” Nixon, 435 U.S. at 597-98.

Therefore, a determination whether to grant a request for confidential treatment must balance the likelihood of substantial harm to a competitive position against the need to provide the greatest amount of transparency possible to the agency’s decision- making process. In light of the above, a request for confidential treatment of information submitted in connection with a ruling requested under 19 C.F.R. pt. 177 faces a strong presumption in favor of disclosure. The person seeking this treatment must overcome that presumption with a request that is narrowly tailored and supported by evidence establishing a likelihood of substantial harm to a competitive position that outweighs the general history and public policy—embedded in FOIA, the common law, and the relevant Customs regulations—favoring transparency and disclosure. To that end, any request for confidential treatment must provide a particularized showing of the specific harm that will result if certain information is disclosed. Broad, unsubstantiated allegations of harm without specific examples articulating reasons for the harm will not suffice.

Therefore, as noted above, requests for confidential treatment in the context of section 337 exclusion order-based rulings under 19 C.F.R. pt. 177 must be narrowly tailored, fully supported by evidence showing a likelihood of substantial harm to a competitive position, and still permit a description of the device’s operation.

Based on the framework above, the information for which Fujifilm has established a likelihood of substantial harm to its competitive position if disclosed (or consists of information that was redacted from the public version of the agency record at the Commission) has been bracketed in red [[ ]] for redaction from the published ruling. The evidence has otherwise been described or identified to the greatest extent allowed throughout this ruling (including, whenever possible, with citations referencing the confidential agency record at the Commission from Inv. No. 337-TA-1012).

C. Law of Patent Infringement

Under section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1337, the Commission has authority to conduct investigations into imported articles that allegedly infringe United States patents and impose remedies if the accused articles are found to be infringing. See 19 U.S.C. § 1337(a)(1)(B), (b)(1), (d), (f), (i). 19 U.S.C. § 1337(d), in particular, empowers the Commission to direct the exclusion from entry of articles found to infringe the asserted patents. When the Commission determines there is infringement and thus a violation of section 337, it generally issues one of two types of exclusion orders: (1) a limited exclusion order or (2) a general exclusion order. See Fuji Photo Film Co., Ltd. v. U.S. Int’l Trade Comm’n, 474 F.3d 1281, 1286 (Fed. Cir. 2007).

Both types of orders direct CBP to bar infringing products from entering the country. See Yingbin-Nature (Guangdong) Wood Indus. Co. v. U.S. Int’l Trade Comm’n, 535 F.3d 1322, 1330 (Fed Cir. 2008). “A limited exclusion order is ‘limited’ in that it only applies to the specific parties before the Commission in the investigation. In contrast, a general exclusion order bars the importation of infringing products by everyone, regardless of whether they were respondents in the Commission's investigation.” Id. A general exclusion order is appropriate only if two exceptional circumstances apply. See Kyocera Wireless Corp. v. U.S. Int’l Trade Comm’n, 545 F.3d 1340, 1356. A general exclusion order may only be issued if (1) “necessary to prevent circumvention of a limited exclusion order,” or (2) “there is a pattern of violation of this section and it is difficult to identify the source of infringing products.” 19 U.S.C. § 1337(d)(2); see Kyocera, 545 F.3d at 1356 (“If a complainant wishes to obtain an exclusion order operative against articles of non-respondents, it must seek a GEO [general exclusion order] by satisfying the heightened burdens of §§ 1337(d)(2)(A) and (B).”).

In addition to the action taken above, the Commission may issue an order under 19 U.S.C. § 1337(i) directing CBP to seize and forfeit articles attempting entry in violation of an exclusion order if their owner, importer, or consignee previously had articles denied entry on the basis of that exclusion order and received notice that seizure and forfeiture would result from any future attempt to enter articles subject to the same. An 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. See 19 U.S.C. §§ 1337(d)(1) (“The Commission shall notify the Secretary of the Treasury of its action under this subsection directing such exclusion from entry, and upon receipt of such notice, the Secretary shall, through the proper officers, refuse such entry.”); id. at (i)(3) (“Upon the attempted entry of articles subject to an order issued under this subsection, the Secretary of the Treasury shall immediately notify all ports of entry of the attempted importation and shall identify the persons notified under paragraph (1)(C).”) (emphasis added); see also ClearCorrect Operating, LLC v. U.S. Int’l Trade Comm’n, 810 F.3d 1283, 1295 (Fed. Cir. 2015) (“This section [1337(i)] permits the Commission to exclude ‘articles’ from importation into the United States; however, it is difficult to see how one could physically stop electronic transmissions at the borders under the current statutory scheme…. A construction of the term ‘articles’ that includes electronically transmitted digital data is also not reasonable when applied to Section 337(i)(3). This section reads, ‘[u]pon the attempted entry of articles subject to an order issued under this subsection, the Secretary of the Treasury shall immediately notify all ports of entry of the attempted importation and shall identify the persons notified under paragraph (1)(C).’ Not only can an electronic transmission not be subject to an ‘attempted entry’ through a ‘port of entry,’ it also cannot be intercepted at a ‘port of entry’ as contemplated in the statute.”) (emphasis added), reh’ng en banc denied by Clearcorrect Operating v. U.S. Int’l Trade Comm’n, 819 F.3d 1334 (Fed. Cir. 2016).

Significantly, unlike district court injunctions, the Commission can issue a general exclusion order that broadly prohibits entry of articles that infringe the relevant claims of an asserted patent without regard to whether the persons importing such articles were parties to, or were related to parties to, the investigation that led to issuance of the general exclusion order. See Vastfame Camera, Ltd. v. U.S. Int’l Trade Comm’n, 386 F.3d 1108, 1114 (Fed. Cir. 2004). The Commission also has recognized that even limited exclusion orders have broader applicability beyond just the parties found to infringe during an investigation. See Certain GPS Devices and Products Containing Same, Inv. No. 337-TA-602, Comm’n Op. at 17, n. 6, Doc ID 317981 (Jan. 2009) (“We do not view the Court’s opinion in Kyocera as affecting the issuance of LEOs [limited exclusion orders] that exclude infringing products made by respondents found to be violating Section 337, but imported by another entity. The exclusionary language in this regard that is traditionally included in LEOs is consistent with 19 U.S.C. § 1337(a)(1)(B)–(D) and 19 U.S.C. § 1337(d)(1).”).

However, this is not the only difference between district court injunctions under section 283 of the Patent Act and Commission exclusion orders under section 337 of the Tariff Act. For example, the traditional test for injunctive relief, used by district courts in accordance with the Supreme Court’s eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006), opinion “does not apply to Commission remedy determinations under Section 337.” Spansion, Inc. v. U.S. Int’l Trade Comm’n, 629 F.3d 1331, 1359 (Fed. Cir. 2010). This difference between exclusion orders under Section 337 and injunctions under the Patent Act follows “the long-standing principle that importation is treated differently than domestic activity.” Id. at 1360 (citing United States v. 12 200-Ft. Reels of Super 8mm Film, 413 U.S. 123 (1973) (“Import restrictions and searches of persons or packages at the national borders rest on different considerations and different rules of constitutional law from domestic regulations. The Constitution gives Congress broad, comprehensive powers ‘to regulate Commerce with foreign Nations.’ Art. I, § 8, cl. 3.”); see Buttfield v. Stranahan, 192 U.S. 470 (1904) (“As a result of the complete power of Congress over foreign commerce, it necessarily follows that no individual has a vested right to trade with foreign nations, which is so broad in character as to limit and restrict the power of Congress to determine what articles of merchandise may be imported into this country and the terms upon which a right to import may be exercised. This being true, it results that a statute which restrains the introduction of particular goods into the United States from considerations of public policy does not violate the due process clause of the Constitution.”) (emphasis added).

Moreover, in the district courts, the criteria for adjudicating a violation of an injunction against future infringement by a party whose legacy products have already been adjudged to infringe requires application of the colorable differences test. TiVo Inc. v. Echostar Corp., 646 F.3d 869, 876 (Fed. Cir. 2011) (en banc). Under this test, if new or redesigned products are so different from the product previously found to infringe (focusing not on differences randomly chosen between the two but on the specific features of the product found to infringe in the earlier infringement trial), such that they raise a fair ground of doubt as to the wrongfulness of the defendant's conduct, the new or redesigned products are deemed to be more than colorably different from the legacy one adjudged to be infringing and violation of the injunction at this point would not be the appropriate consideration. Instead, a new trial would be required to litigate the infringement question. Id. at 881-83. The initial inquiry under the colorable differences test, therefore, focuses on whether the modification in question is significant. Id.

Exclusion orders, however, apply to any articles—new, modified, or otherwise— that are “covered by” the patent claims included in the exclusion order. See Certain Optical Disk Controller Chips and Chipsets, Inv. No. 337-TA-506, Comm’n Op. at 56-57, USITC Pub. 3935, Doc ID 287263 (July 2007) (“The Commission's long-standing practice is to direct its remedial orders to all products covered by the patent claims as to which a violation has been found, rather than limiting its orders only to those specific models selected for the infringement analysis...[W]hile individual models may be evaluated to determine importation and infringement, the Commission's jurisdiction extends to all models of infringing products that are imported at the time of the Commission's determination and to all such products that will be imported during the life of the remedial orders.”). The Commission has confirmed that this requires CBP to employ the traditional two-step test for patent infringement, and not the colorable differences test from TiVo, when administering a Commission exclusion order under section 337 to determine whether an imported article, or one at issue in a ruling request, is within the scope of that exclusion order. See Certain Sleep-Disordered Breathing Treatment Systems and Components Thereof, Inv. No. 337-TA-879, Advisory Opinion at 10, n. 2, Doc ID 539875 (Aug. 2014); see also Certain Erasable Programmable Read Only Memories, Inv. No. 337-TA-276, Enforcement Proceeding, Comm’n Op. at 11, Doc ID 43536 (Aug. 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 future importation or sale of products which were not specifically adjudged infringing in the violation proceeding, but do in fact infringe. The Commission has consistently issued exclusion orders coextensive with the violation of section 337 found to exist. Thus, in cases where the violation found involves infringement of patent claims, the Commission has consistently ordered the exclusion of articles which infringe the relevant patent claims.”) (emphasis added).

Lastly, despite the well-established principle that “the burden of proving infringement generally rests upon the patentee,” Medtronic, Inc. v. Mirowski Family Ventures, LLC, 134 S. Ct. 843; 187 L. Ed. 2d 703; 2014 U.S. LEXIS 788 (2014), the Commission has held that Medtronic is not controlling precedent and does not overturn its longstanding practice of placing the burden of proof on the party who, in light of the issued exclusion order, is seeking to have an article entered for consumption. See Certain Sleep- Disordered Breathing Treatment Systems and Components Thereof, Inv. No. 337-TA- 879, Advisory Opinion at 6-11. In particular, the Commission has noted that “[t]he Federal Circuit has upheld a Commission remedy which effectively shifted the burden of proof on infringement issues to require a company seeking to import goods to prove that its product does not infringe, despite the fact that, in general, the burden of proof is on the patent to prove, by a preponderance of the evidence, that a given article does infringe the patent in question.” Certain Integrated Circuit Telecommunication Chips, Inv. No. 337-TA-337, Comm’n Op. at 21, n.14, USITC Pub. 2670, Doc ID 217024 (Aug. 1993), (emphasis in original) (citing Sealed Air Corp. v. U.S. Int’l Trade Comm’n, 645 F.2d 976, 988–89 (C.C.P.A. 1981)).

This approach is supported by Federal Circuit precedent. See Hyundai Elecs. Indus. Co. v. U.S. Int'l Trade Comm'n, 899 F.2d 1204, 1210 (Fed. Cir. 1990) (“Indeed, we have recognized, and Hyundai does not dispute, that in an appropriate case the Commission can impose a general exclusion order that binds parties and non-parties alike and effectively shifts to would-be importers of potentially infringing articles, as a condition of entry, the burden of establishing noninfringement. The rationale underlying the issuance of general exclusion orders—placing the risk of unfairness associated with a prophylactic order upon potential importers rather than American manufacturers that, vis-a-vis at least some foreign manufacturers and importers, have demonstrated their entitlement to protection from unfair trade practices—applies here [in regard to a limited exclusion order] with increased force.”) (emphasis added) (internal citation omitted).

In the underlying investigation, the ITC determined that Sony infringed the ’891 patent through importation of the LTO-7 tapes. ID at 27–43. Accordingly, the burden is on Sony to establish that the tapes at issue do not infringe claims 1, 4–9, 11, or 14 of the ’891 patent.

D. Infringement Analysis

The claims at issue are claims 1, 4, 8, and 11 of the ’891 patent. Claim 1 is an independent claim. The ID broke claim 1 into the following elements:

[a] 1. A magnetic recording medium, comprising:

[b] an essentially nonmagnetic lower layer; and a magnetic layer comprising a ferromagnetic powder and a binder, the magnetic layer located over the lower layer,

[c] wherein said magnetic layer has a thickness ranging from 0.01 to 0.15 µm

[d] and a coercivity equal to or higher than 159 kA/m,

[e] and the ferromagnetic particles contained in the ferromagnetic powder have a size less than 0.15 µm, and

[f] an average size of magnetic cluster at DC erase is equal to or higher than 0.5 x 104 nm2 and less than 5.5 x 104 nm2, and

[g] wherein the essentially non-magnetic lower layer has either no magnetic properties or magnetic properties to a degree not affected by recording information to the magnetic layer. ID at 28.

In the underlying investigation, the ITC construed the claims of the ’891 patent as follows:

’891 Patent  Term / Phrase ITC Construction  Magnetic recording medium No construction necessary. However, if construed: “medium on which information may be magnetically recorded.”  Magnetic Cluster “aggregate of magnetic particles that behave like a single magnetic member”  Coercivity “the demagnetizing field strength required at saturation remanence to reduce magnetic flux density to zero.”  Average size of magnetic cluster at DC erase No construction necessary   See ID at 23–27.

Accordingly, a medium on which information may be magnetically recorded that has the recited physical properties will infringe claim 1.

1. M8

[[ ]] see also Ex. 8; cf. ID at 27–43 [[ ]] “The [addition of a] barcode has no impact on or relevance to the infringing features of the Sony products.” Wang Dec. ¶ 4; see Ruling Request, at 17. Accordingly, we hold Sony has not met its burden to show that the M8 is not covered by the 1012 LEO.  2. LTO-8

As discussed in further detail below, Fujifilm has shown in their Ruling Request that Sony’s LTO-8 product is potentially subject to the exclusion order. As the party seeking to import a product that is potentially subject to the exclusion order, Sony has the burden of establishing noninfringement. See Hyundai Elecs. Indus. Co. v. Int'l Trade Comm’n, 899 F.2d 1204, 1210 (Fed. Cir. 1990). Fujifilm provided an expert declaration and documentary evidence that the LTO-8 infringes each element of claims 1, 4, 8, and 11. Sony, who has the burden of proof, has not provided evidence to the contrary. Expert testing can provide sufficient evidence of infringement, notwithstanding the legal validity of alternative tests. Union Carbide Chems. & Plastics Tech. Corp. v. Shell Oil Co., 425 F.3d 1366, 1375–1376 (Fed. Cir. 2005), overruled on other grounds, Cardiac Pacemakers, Inc. v. St. Jude Med., Inc., 576 F.3d 1348, 1365 (Fed. Cir. 2009) (en banc).

1[a] A magnetic recording medium, comprising:

The ITC relied on (Dr. Wang’s reading of) the [[ ]] to reach the undisputed conclusion that the LTO-7 was an article of the kind contemplated by the preamble. ID at 28–29. [[ ]] Fujifilm has produced Sony marketing materials showing the LTO-8 to be highly capable of recording. Ruling Request, at 18 (citing Ex. 28); Wang Dec. ¶ 30. The Sony Response fails to directly address the arguments and evidence presented by Fujifilm, and provides no evidence or argument whatsoever regarding whether Sony’s LTO-8 meets this claim limitation. After weighing the evidence in the record, we find that Sony’s LTO-8 meets this claim limitation.

1[b] an essentially nonmagnetic lower layer; and a magnetic layer comprising a ferromagnetic powder and a binder, the magnetic layer located over the lower layer,

This element was not disputed in the underlying investigation, and among the evidence cited by the ALJ was an SEM cross section. ID at 29–31. In the Ruling Request, Fujifilm provides a TEM cross section and used EDS to infer the magnetic properties of the layers. Ruling Request, at 18–20 (citing Wang Dec. ¶¶ 31–33). We find Fulifilm’s expert’s analysis persuasive. The Sony Response fails to directly address the arguments and evidence presented by Fujifilm, and provides no evidence or argument whatsoever regarding whether Sony’s LTO-8 meets this claim limitation. After weighing the evidence in the record, we find that Sony’s LTO-8 meets this claim limitation.

1[c] wherein said magnetic layer has a thickness ranging from 0.01 to 0.15 µm

Among other sources, Fujifilm presented expert testing to show infringement of this undisputed element at the ITC. ID at 31–32. Before CBP, Fujifilm presents its expert’s TEM images and analysis showing infringement with near statistical certainty. Ruling Request, at 20–21 (citing Wang Dec. ¶¶ 36–38); cf. Eastman Kodak Co. v. Agfa-Gevaert N.V., 560 F. Supp. 2d 227, 274–275 (W.D.N.Y. 2007) (finding a 95% confidence interval based on TEM analysis “persuasive and largely unrebutted” evidence of infringement). The Sony Response fails to directly address the arguments and evidence presented by Fujifilm, and provides no evidence or argument whatsoever regarding whether Sony’s LTO-8 meets this claim limitation. After weighing the evidence in the record, we find that Sony’s LTO-8 meets this claim limitation.

1[d] and a coercivity equal to or higher than 159 kA/m,

Despite some dispute, the ITC found Dr. Wang’s analysis persuasive on this point. ID at 32. Based on similar analysis presented in the Ruling Request, undisputed by Sony, CBP hereby makes a similar finding. See Ruling Request, at 21–22 (citing Wang Dec. ¶¶ 43–50). After weighing the evidence in the record, we find that Sony’s LTO-8 meets this claim limitation.

1[e] and the ferromagnetic particles contained in the ferromagnetic powder have a size less than 0.15 µm, and

[[ ]] See ID at 33. Fujifilm has provided TEM slides of such particles and its measurements and its methodology therefore. See Ruling Request, at 22–23 (citing Wang Dec. ¶¶ 49–51). The Sony Response fails to directly address the arguments and evidence presented by Fujifilm, and provides no evidence or argument whatsoever regarding whether Sony’s LTO-8 meets this claim limitation. After weighing the evidence in the record, we find that Sony’s LTO-8 meets this claim limitation.

1[f] an average size of magnetic cluster at DC erase is equal to or higher than 0.5 x 104 nm2 and less than 5.5 x 104 nm2, and

Over Sony’s objections, the ITC found satisfactory Fujifilm’s testing of three samples based on the procedure and binarization threshold in the ’891 patent. ID at 33–36. Once again, Fujifilm has provided testing identical in all material respects (notwithstanding different makes of equipment) and with results within the claimed range. Ruling Request, at 23–24; Wang Dec. ¶¶ 53–58. The Sony Response fails to directly address the arguments and evidence presented by Fujifilm, and provides no evidence or argument whatsoever regarding whether Sony’s LTO-8 meets this claim limitation. After weighing the evidence in the record, we find that Sony’s LTO-8 meets this claim limitation.

1[g] wherein the essentially non-magnetic lower layer has either no magnetic properties or magnetic properties to a degree not affected by recording information to the magnetic layer.

[[ ]] See ID at 37. To prove this element is met, Fujifilm’s expert harkens back to his analysis of the layers required by element 1[b], which he finds materially (namely in chemical composition) similar to the layers of the LTO-7. Wang Dec. ¶ 59. He thus infers that the LTO-8’s layers must be magnetically independent as well. Id. CBP has been presented with no reason to doubt his logic. The Sony Response fails to directly address the arguments and evidence presented by Fujifilm, and provides no evidence or argument whatsoever regarding whether Sony’s LTO-8 meets this claim limitation. After weighing the evidence in the record, we find that Sony’s LTO-8 meets this claim limitation.

4. The magnetic recording medium of claim 1, wherein said ferromagnetic powder is a hexagonal ferrite powder.

This claim was not independently disputed at the ITC. ID at 38. Dr. Wang’s EDS analysis suggests that the ferromagnetic powder of the LTO-8 has not been chemically altered from its predecessor, see Ruling Request, at 24 (citing Wang Dec. ¶ 60), and LTO-8 marketing materials extoll the virtues of Barium Ferrite, which the ’891 patent describes as hexagonal. See Ex. 27; the ’891 patent at 7:1–7. The Sony Response fails to directly address the arguments and evidence presented by Fujifilm, and provides no evidence or argument whatsoever regarding whether Sony’s LTO-8 meets this claim limitation. After weighing the evidence in the record, we find that Sony’s LTO-8 meets this claim limitation.

8. The magnetic recording medium of claim 1, wherein said magnetic layer has a thickness ranging from 0.01 to 0.10 µm.

Just as the ITC found that evidence of infringement of element 1[c] could be equally persuasive as evidence of infringement of claim 8, ID at 40–41, CBP accepts Fujifilm’s allegation that 76.9 nm is both between 0.01 and 0.15 µm as well as 0.01 and 0.10 µm. See Ruling Request, at 24 (citing Wang Dec. ¶ 61). The Sony Response fails to directly address the arguments and evidence presented by Fujifilm, and provides no evidence or argument whatsoever regarding whether Sony’s LTO-8 meets this claim limitation. After weighing the evidence in the record, we find that Sony’s LTO-8 meets this claim limitation.

11. The magnetic recording medium of claim 1, wherein said magnetic recording medium is a tape.

The ITC accepted [[ ]] ID at 42. Again, Fujifilm and Dr. Wang cite marketing materials and expert judgment, respectively, to so persuade. See Ruling Request, at 25 (citing Wang Dec. ¶ 62; Ex. 28). The Sony Response fails to directly address the arguments and evidence presented by Fujifilm, and provides no evidence or argument whatsoever regarding whether Sony’s LTO-8 meets this claim limitation. After weighing the evidence in the record, we find that Sony’s LTO-8 meets this claim limitation.

Sony bears the burden to establish that the tapes at issue do not infringe any of claims 1, 4–9, 11, and 14 of the ’891 patent. The Sony Response failed to rebut or directly address any of the evidence set forth in Fujifilm’s Ruling Request.  After weighing the evidence in the record, we find that Sony has not met that burden and that the evidence shows that the M8 product infringes all of the claims in suit and that the LTO-8 infringes claims 1, 4, 8 and 11.

IV. HOLDING:

We find that Sony has not met its burden to establish that the tapes at issue do not infringe the intellectual property at issue in the 1012 LEO (i.e., claims 1, 4–9, 11, and 14 of U.S. Patent No. 6,641,891 (“the ’891 patent”)). Accordingly, we hold that the tapes at issue are subject to the 1012 LEO.

Accordingly, they 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 except as provided by law.

The decision is limited to the specific facts set forth herein. If M8 or LTO-8 tapes differ from the tapes 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. Part 177.2(b)(1), (2), and (4), Part 177.9(b)(1) and (2).

Sincerely,

Charles R. Steuart
Chief, Intellectual Property Rights Branch

cc: Gregory Corbett
Wolf Greenfield & Sacks, P.C.
600 Atlantic Avenue
Boston, MA 02210

[email protected]