• HQ H305358
• Jun 30, 2020

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

OT:RR:BSTC:IPR H305358 SEH/JW/CBC

VIA EMAIL:

Jay Reiziss
McDermott Will & Emery LLP
The McDermott Building
500 North Capitol Street, NW, Washington, DC 20001-1531
[email protected]

RE: Ruling Request, U.S. International Trade Commission; Limited Exclusion Order; Investigation No. 337-TA-1082, Certain Gas Spring Nailer Products and Components Thereof

Dear Mr. Reiziss,

Pursuant to 19 C.F.R. part 177, the Intellectual Property Rights Branch (“IPR Branch”), Regulations and Rulings, U.S. Customs and Border Protection (“CBP”) issues this ruling letter. We find that Koki has met its burden to show that its redesigned gas spring nailer products (“new products”) do not infringe any of claims 1, 10, and 16 of U.S. Patent No. 8,387,718 (“the ’718 Patent”) because they do not include a “bottom firing mode,” as construed by the U.S. International Trade Commission (“Commission” or “ITC”), which is required to practice the claimed method and that, therefore, its New Products are not subject to the limited exclusion order issued by the Commission in Investigation No. 337-TA-1082 pursuant to section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1337.

This letter is the result of a request for a ruling from CBP, which was conducted upon consent of the parties on an inter partes basis. The process involved the two parties with a direct and demonstrable interest in the question presented by the ruling request: (1) your client as named as a respondent in the underlying ITC Investigation, Hitachi Koki U.S.A., Ltd., (now known as Koki Holdings America Ltd.,) (“Koki”); and (2) Kyocera Senco Brands, Inc. (Kyocera Senco Industrial Tools, Inc.) (“Kyocera”). (See, e.g., Ruling Request at 1; Commission Opinion, dated March 5, 2020, (Kyocera Ex. C) (“Commission Opinion”) at 2.)

The limited exclusion order issued in Investigation No. 337-TA-1082 prohibits, among other things, the unlicensed entry of gas spring nailer products and components thereof that infringe one or more of claims 1, 10, and 16 of the '718 Patent. (See Inv. No. 337-TA-1082, Limited Exclusion Order, pp. 1-2, Doc ID 704131 (March 5, 2020) (“1082 LEO”); Resp. Ex. A.) A party seeking to import a product potentially covered by an exclusion order has the burden to establish noninfringement as a condition of entry. See Hyundai Elecs. Indus. Co. v. Int’l Trade Comm’n, 899 F.2d 1204, 1210 (Fed. Cir. 1990). We find that Koki has met its burden to establish that the article(s) at issue does not infringe one or more of claims 1, 10, and 16 of the ’718 patent.

The parties were asked to clearly identify confidential information, including information subject to the administrative protective order in the underlying ITC investigation, [[with red brackets]] in all of their submissions to the CBP. See CBP Email to the Parties, dated March 17, 2020. The parties have requested confidential treatment for the following documents: Koki -- Koki’s April 14, 2020, letter requesting confidential treatment for Koki’s bracketed Reply, April 14, 2020 Kyocera’s bracketed Response, April 9, 2020 Ex.’s C, G, and H (to Kyocera’s April 9, 2020, Response) “any similar material that might be included in Kyocera’s upcoming sur-reply” “any portion of the ultimate ruling that includes such information” Koki’s April 27, 2020 email requesting confidential treatment for Koki’s bracketed Oral Discussion presentation Koki’s May 1, 2020 letter requesting confidential treatment for Koki’s bracketed post Oral Discussion brief, May 1, 2020 “confidential portions of the transcript of the oral discussion,” provided as separated documents Kyocera -- Kyocera’s April 14, 2020, letter requesting confidential treatment for Kyocera’s bracketed Response, April 9, 2020 “materials designated by Koki as confidential business information” “confidential versions of decisions issued in the 1082 Investigation….to maintain the confidentiality represented to, and maintained, by, the [Commission] in the underlying 1082 Investigation.” CX-0011C (Ex. H) Remand Initial Determination (Ex. G) Commission Opinion (Ex. C) Kyocera’s April 20, 2020, letter requesting confidential treatment Kyocera’s bracketed Sur-reply, April 20, 2020 Kyocera’s May 1, letter requesting confidential treatment Kyocera’s bracketed post Oral Discussion brief, May 1, 2020 Ex. K, to Kyocera’s May 1, 2020, post Oral Discussion brief (Kyocera’s April 27, 2020 presentation) Ex. L to Kyocera’s May 1, 2020, post Oral Discussion brief (full Oral Discussion transcript designated confidential)

If there is any 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 five (5) business days of the date of this ruling letter.

As discussed in greater detail in Section III.B., a request for confidential treatment of information submitted in connection with a ruling requested under 19 C.F.R. part 177 faces a strong presumption in favor of disclosure.

I. BACKGROUND:

U.S. Patent No. 8,387,718

The ’718 Patent is titled Method for Controlling a Fastener Driving Tool Using a Gas Spring. Senco Brands, Inc. is listed as the assignee of U.S. Patent No. 8,387,718. See ‘718 Patent (Kyocera Ex. A); U.S. Patent No. 8,387,718, Recordation of Assignment, Form PTO-1595 (April 4, 2011) (Compl. Ex. 16); ID at 20 f.n.6 (Public Version) (July 1, 2019) (“Complainant owns by assignment the entire right, title, and interest in the asserted patent. (See Am. Compl. Ex. 16.)”).

Selected Technology Overview

The ’718 Patent is directed to “portable linear fastener driving tools (or nailers) that can drive staples, nails, or other linearly driven fasteners into a workpiece.” (Comm’n Op. at 6 (citing JX-4 at 1:17-19.)

The Commission noted Fig.1 (shown below) of the ’718 patent illustrates a fastener driving tool 10 which is the first embodiment of the invention. (Comm’n Op. at 7 (citing JX-4 at 7:27-32).)


“The ’718 specification discloses various types of firing (or driving) modes for using the tool 10 to drive fasteners into a workpiece [JX-4] at 14:43-61. For one driving mode, i.e., a ‘trigger fire’ mode, the user of the tool first presses the tool nose 34 against a work surface, and then depresses the trigger actuator 54 (shown in Fig. 1 above), which causes the drive stroke to occur. Id. Alternatively, for another driving mode, i.e., a ‘bottom fire’ mode, the trigger 54 is actuated first, and then user of the tool presses the tool nose 34 against a work surface, and it is the work surface contact that initiates the drive stroke. Id.” (Comm’n Op. at 13.)

Prosecution History

U.S. Patent No. 8,387,718

The ’718 Patent issued from application No. 12/913,049, a divisional of Ser. No. 12/243,693, and claims priority to provisional application Ser. No. 60/977,678 filed October 5, 2007.

Application No. 12/243,693

In a non-final office action, mail date June 18, 2010, the examiner identified Claims 1–36 as subject to a restriction and/or election requirement. (Reply, Ex. 1 (Restriction Requirement) at 1.) In particular, the examiner required restriction to one of three distinct inventions under 35 U.S.C § 121, including Invention II:

Claims 13–21, drawn to a method for controlling a fastener driving tool, comprising the step of selecting an operating mode of a driving cycle to be one of a “bottom firing mode” and a “restrictive firing mode”, classified in class 172, subclass 1.

(Reply, Ex. 1 (Restriction Requirement) at 2.) The examiner explained further, “…and the process of invention II requires the step of selecting between at least two operational modes.” (Reply, Ex. 1 (Restriction Requirement) at 3.) In addition with respect to invention III, the examiner explained, “the apparatus as claimed can be used to practice another materially different process, such as a process comprising the step of actuating a fastener driving tool in a single operating mode by pressing a safety contact element upon a workpiece and actuating a trigger.” (Reply, Ex. 1 (Restriction Requirement) at 3.)

Applicant filed a Response to Restriction and Election of Claims Requirements, submitted electronically July 14, 2010, stating therein, “[i]n order to comply with 37 C.F.R §§ 1.146, and the Examiner’s requirement, Applicants hereby elect Group I, claims 1-12 for prosecution on the merits.”

In a non-final office action, mail date August 30, 2010, the examiner identified:

“Applicant’s election of claims 1–12 in the reply filed on 7/14/10 is acknowledged. Because applicant did not distinctly and specifically point out the supposed errors in the restriction requirement, the election has been treated as an election without traverse (MPEP § 818.03(a)).” (Aug. 30, 2020 Office Action at 2.) “Claims 13–36 withdrawn from further consideration pursuant to 37 CFR 1.142(b) as being drawn to a nonelected invention, there being no allowable generic or linking claim. Election is made without traverse in the reply filed on 7/14/10.” (Aug. 30, 2020 Office Action at 2 (emphasis in original).) “Non-elected claims 13–36 should be labeled as (Withdrawn). Appropriate correction is required.” (Aug. 30, 2020 Office Action at 2.)

An amendment, submitted electronically November 26, 2010, requested, “[p]lease cancel claims 13-36, without prejudice.” As set forth in the body of the amendment, “[c]laims 13–36 are being cancelled herein, as non-elected claims in view of a previous Restriction Requirement.” (Nov. 26, 2020 Amendment at 2, 14; see also Id. at 1, 5-6.)

In a final office action, mail date January 18, 2011, “[c]laims 13–36 have been cancelled.” (Jan. 18, 2011 Office Action at 2.)

ITC Investigation No. 337-TA-1082

Procedural History at the ITC

As set forth in full from the Commission opinion, the procedural history of the underlying investigation is as follows:

The Commission instituted this investigation on November 20, 2017, based on a complaint filed on behalf of Kyocera Senco Brands Inc. ("Kyocera") of Cincinnati, Ohio. 82 Fed. Reg. 55118-19 (Nov. 20, 2017). The complaint, as amended and supplemented, alleges violations of section 337, based upon the importation into the United States, the sale for importation, and the sale within the United States after importation of certain gas spring nailer products and components thereof by reason of infringement of certain claims of the '718 patent and U.S. Patent Nos. 8,011,547 ("the '547 patent"); 8,267,296 ("the '296 patent"); 8,27,297 ("the '297 patent"); 8,286,722 ("the '722 patent"); and 8,602,282 ("the '282 patent"). The patents share largely identical specifications. The complaint further alleges the existence of a domestic industry. The Commission's notice of investigation names as a respondent Hitachi Koki U.S.A., Ltd. ("Hitachi") of Braselton, Georgia. The Office of Unfair Import Investigations is not participating in the investigation.

On May 3, 2018, the ALJ issued a Markman Order construing the relevant terms of the asserted patents. See Order No. 9 (May 3, 2018) (the "Markman Order"). Prior to the evidentiary hearing, the parties stipulated that the '718 patent is the only patent at issue since no violation could be shown as to the '296, '297, '722, and '282 patents.

On June 7, 2019, the ALJ issued the final ID finding no violation of section 337 as to the '718 patent. The ID finds that the accused products do not directly infringe or induce infringement of claims 1, 10, and 16 of this patent, and that Kyocera has not satisfied the technical prong of the DI requirement with respect to this patent. Specifically, the ID finds that neither the accused products nor the DI products meet the "system controller" limitation of the asserted claims. The ID also finds that Kyocera has satisfied the economic prong of the domestic industry requirement. The ID also includes a recommended determination ("RD") on remedy and bonding. The RD recommends that, to the extent that the Commission finds a violation of section 337, the Commission issue an LEO directed to gas spring nailer products and components thereof that infringe the asserted claims of the '718 patent and a CDO directed against Hitachi. The RD recommends the imposition of no bond during the period of Presidential review. On June 24, 2019, Kyocera petitioned and Hitachi contingently petitioned for review of the final ID. On July 2, 2019, Kyocera and Hitachi each filed a response in opposition to the other party's petition for review.

On August 14, 2019, the Commission determined to review the ID's findings concerning the "system controller" limitation and remanded in part for the ALJ to make further findings. See Comm'n Notice (Aug. 14, 2019). Specifically, the Commission determined to review the ID's finding that Kyocera did not establish: (1) either direct or induced infringement of the asserted claims of the '718 patent and (2) that the DI products practice the asserted claims. The Commission also determined to review the ID's finding that Kyocera has satisfied the economic prong of the DI requirement. The Commission remanded the issues of whether Kyocera has established, by a preponderance of the evidence, that: (1) the remaining limitations (irrespective of the "system controller" limitation) of the asserted claims of the '718 patent are met by the accused products; (2) the remaining limitations of the asserted claims are practiced by the DI products; and (3) Hitachi induced infringement of the asserted claims. Id

On October 28, 2019, the ALJ issued the RID finding no violation of section 337 as to the '718 patent based on non-infringement and the failure of Kyocera to establish the existence of a domestic industry that practices the '718 patent. Specifically, the RID finds that: (1) neither the accused products nor the DI products satisfy the "displacement volume" and "initiating a driving cycle" limitations of the asserted claims, and (2) Kyocera failed to establish that Hitachi possesses the requisite specific intent to induce infringement.

On November 12, 2019, Kyocera petitioned, and Hitachi contingently petitioned, for review of the RID. On November 20, 2019, Kyocera and Hitachi each filed a response in opposition to the other party's petition for review.

On December 12, 2019, the Commission determined to review the RID in part and requested written submissions from the parties on certain issues. 84 Fed. Reg. 69391-92 (Dec. 18, 2019). Specifically, the Commission determined to review the RID's finding that Kyocera did not establish: (1) direct infringement of the asserted claims with respect to the "displacement volume" and "initiating a driving cycle" limitations; (2) practice of the asserted claims by its DI products with respect to these limitations; and (3) induced infringement of the asserted claims. Id. The Commission also requested written submissions on the issues of remedy, the public interest, and bonding. Id. The Commission determined not to review the remainder of the RID. Id. On January 3 and 10, 2020, Kyocera and Hitachi each filed a brief and a reply brief, respectively, on all issues for which the Commission requested written submissions.

Having reviewed the record in this investigation, including the ID, the RID, and the parties' briefing, on review the Commission has determined, as described infra, to: (1) reverse the final ID's and RID's findings that neither the accused products nor the DI products meet the "system controller," "displacement volume," and "initiating a driving cycle" limitations of the asserted claims of the '718 patent, and accordingly, find that the accused products infringe claims 1, 10, and 16 of the '718 patent; (2) reverse the RID's finding that Hitachi does not induce infringement of the asserted claims; and (3) affirm, with modification as discussed infra, the ID's finding that Kyocera has satisfied the economic prong of the domestic industry requirement. Also, for the reasons set forth below, the Commission determines that the appropriate relief is an LEO directed to Hitachi's infringing products and a CDO directed to Hitachi.

(Inv. No. 337-TA-1082, Comm’n Op. at 2–5 (Mar. 5, 2020).)

The Claims at Issue in the ‘718 Patent

Complainant asserted independent Claims 1, 10, and 16 against Respondents. (Comm’n Op. at 1). The Commission identified asserted Claim 1 as “representative of all asserted claims.” (Comm’n Op. 7.) Claim 1 reads:

1. A method for controlling a fastener driving tool, said method comprising: (a) providing a fastener driving tool that includes: (i) a housing; (ii) a system controller; (iii) a safety contact element; (iv) a user-actuated trigger; (v) a fastener; (vi) a prime mover that moves a lifter member which moves a driver member away from an exit end of the mechanism; and (vii) a fastener driving mechanism that moves said driving member toward said exit end of the mechanism, said fastener driving mechanism including: (A) a hollow cylinder comprising a cylindrical wall with a movable piston therewithin, said hollow cylinder containing a displacement volume created by a stroke of said piston, and (B) a main storage chamber that is in fluidic communication with said displacement volume of the cylinder, wherein said main storage chamber and said displacement volume are initially charged with a pressurized gas; (b) selecting, by a user, an operating mode of said driving cycle to be one of: a “bottom firing mode,” and a “restrictive firing mode;” wherein (i) if said restrictive firing mode is selected, said tool will operate if said safety contact element has been actuated before said trigger actuator has been operated; and (ii) if said bottom firing mode is selected, said tool will operate if both: (A) said trigger actuator has been operated, and (B) said safety contact element has been actuated, in either sequence; (c) initiating a driving cycle by pressing said exit end against a workpiece and actuating said trigger, thereby causing said fastener driving mechanism to force the driver member to move toward said exit end and drive a fastener into said workpiece; and (d) actuating said prime mover, thereby moving said lifter member and causing said driver member to move away from said exit end toward a ready position. (Comm’n Op. at 7 (JX-4 at 37:52–38:25).)

Claim Construction Order at the ITC

Order No. 9

The parties agreed to the following constructions with respect to the ’718 Patent:

’718 Patent  Claim Term Relevant Claims Parties’ Agreed Construction  “charged with a pressurized gas” 8,387,718: claims 1, 10, 16 containing gas at a pressure higher than atmospheric pressure  “safety contact element” 8,387,718: claims 1, 10, 16 a device that when engaged allows operation of the fastener driving tool  “main storage chamber” 8,387,718: claims 1, 10, 16 a chamber that is distinct from the volume of the cylinder and contains part of the working air volume during operation  “system controller” 8,387,718: claims 1, 10, 16 a circuit configured to control operation based on received input signals  “bottom firing mode” 8,387,718: claims 1, 10, 16 a mode in which the tool operates if the trigger actuator is first operated and then the safety contact element is actuated and also operates if the safety contact element is first actuated and then the trigger actuator is operated  “restrictive firing mode” 8,387,718: claims 1, 10, 16 a mode in which the tool operates if the safety contact element is first actuated and then the trigger actuator is operated  “initially charged with a pressurized gas” 8,387,718: claims 1 containing gas at a pressure higher than atmospheric pressure before operation  “mechanism” 8,387,718: claims 1, 10, 16 fastener driving mechanism   (Order No. 9 at 16–18 (May 3, 2018); Id. at 18 (“The undersigned hereby adopts the parties’ proposed constructions and shall construe the terms set forth above according to their agreed-to definitions”); ID at 22–23; Comm’n Op. at 28.)

With respect to terms for which the parties disagreed on the proper claim construction, the ALJ construed the following terms with respect to the ’718 Patent:

’718 Patent  Term / Phrase ITC Construction  “ready position” at or proximal to the uppermost travel position  “lifter member” rotatable component having lifting pins on its face surface  “driver member” component having multiple teeth that is designed to drive a fastener into a workpiece   (Order No. 9 at 18-21, 33-45 (May 3, 2018); Comm’n Op. at 28.)

U.S. Patent No. 8,011,547

The specification from U.S. Patent Nos. 8,011,547 is cited by Kyocera as support for proposed claims constructions, including for “restrictive firing mode” and “bottom firing mode,” in its submission, Complainant’s Initial Claim Construction Brief, filed February 8, 2018, in the underlying investigation. (Doc ID 636061.) Kyocera notes therein that “[t]he Asserted Patents are part of the same family and thus share a common written description. Accordingly, for simplicity, all citations are to the ’547 patent unless otherwise indicated.” (Doc ID 636061 at 1 f.n.2; see also Respondent’s Opening Br. on Claim Construction, filed Feb. 8, 2018 (Doc ID 636059 at 12 f.n. 2) (“Because the specifications of the Asserted Patents is [sic] largely identical, for ease of reference, Respondent cites to the specification of the ’547 patent for claim terms that are also included in the other Asserted Patents.”).) The ’547 patent, like the ’718 Patent, claims priority from provisional patent application Ser. No. 60/977,678.

Accused Products at the ITC

The Commission identified Kyocera has having accused “Hitachi’s five gas spring nailers that it imports and sells within the United States: NT1850DE, NT1865DM, NT1865DMA, NR1890DC, and NR1890DR nailers (collectively, the “accused products” – see Figs. A and B below for the representative accused product). (Comm’n Op. at 13 (citing Kyocera’s Initial Post-Hearing Br. At 6; ID at 10); see also RID at 2 (citing ID at 3); see also ID at 12, 14–15 (“The evidence … is sufficient to establish that the NT1850DE product is representative of the NT1865DM, NT1865DMA, NR1980DC, and NR1890DR products ‘at least for purposes of [the] infringement analysis.’”).)





The Commission opinion notes, among other things, the Instruction and Safety Manual for the products accused in the underlying investigation “discloses two modes of operation for the Hitachi nailer, Full Sequential Actuation Mechanism and Contact Actuation Mechanism, which can be user-selected via a switch. …The Full Sequential Mechanism requires a specific sequence to be followed, e.g., pressing push lever against wood followed by pulling the trigger, to activate the nailer for driving fasteners. …The Contact Actuation Mechanism requires specific contact of the push lever with the wood (or workpiece) to activate the nailer for driving fasteners.” Id. (Comm’n Op. at 15 (internal citation to JX-19C).) The Commission notes the language therefrom “specifically discloses”:

Full Sequential Actuation Mechanism – first, press the push lever against the wood; next, pull the trigger to drive the fastener. Follow the same sequence to continue driving fasteners;

Contact Actuation Mechanism – first, press the push lever against the wood; next pull the trigger to driver the fastener. Or, first pull the trigger; next press the push lever against the wood to drive the fastener. If the trigger is held back, a fastener will be driven each time the push lever is pressed against the word.

(Comm’n Op. at 15–16.) The Commission further notes that “[t]he exit end of the mechanism, i.e., the end of the safety contact element, is pressed against the workpiece to allow a driving cycle to begin.” (Comm’n Op. at 16.)

Part 177 Process Before the IPR Branch

Procedural History of the Part 177 Process

On March 9, 2020, pursuant to 19 C.F.R. Part 177 Koki submitted a “request for a ruling by [CBP] that the new Koki nailers discussed [therein] (the ‘New Products’) that were not at issue before the [Commission] in the above-referenced ITC Investigation are not subject to exclusion from entry for consumption into the United States” (“Request”). (Request at 1.)

Koki and Kyocera consented to conducting the ruling request process on an inter partes basis and to service by email. (See, e.g., CBP Email to Parties Dated March 17, 2020.) On March 23, 2020, Koki and Kyocera entered into a nondisclosure agreement. (See Koki Email of March 23, 2020.) In addition, Koki and Kyocera reached agreement on a proposed schedule (for which the IPR Branch revised only the target dates). (See CBP Email to Parties Dated March 25, 2020.)

On April 9, 2020, Kyocera submitted a Response to the Ruling Request, which included exhibits A–J (collectively, “Response”). On April 14, 2020, Koki submitted a Reply, which included exhibits 1–2 (collectively, “Reply”). On April 20, 2020 Kyocera submitted a Sur-Reply (“Sur-Reply”). Koki and Kyocera participated in an Oral Discussion with CBP held on April 27, 2020, and submitted post-oral discussion briefs on May 1, 2020. Kyocera’s post-oral discussion submission also included exhibits K and L.

References herein to “accused products” should be differentiated from references to the products for which a Part 177 request which Koki defines as “new products.”

The New Products in the Part 177 Process

Koki submitted a request for a ruling “that the new Koki nailers discussed [in its request] (‘new products’) that were not at issue before the [Commission]…in the…ITC Investigation are not subject to exclusion from entry for consumption into the United States.” (Ruling Request at 1; see also Response at 1.) The Commission previously found a violation of Section 337 as to the ’718 Patent and issued an LEO:

prohibiting, inter alia, the entry into the United States of gas spring nailers and components thereof that infringe one or more of claims 1, 10, and 16 of the ‘718 patent that are manufactured abroad by, or on behalf of, or imported by or on behalf of Koki, or any affiliated companies, parents, subsidiaries, licensees, or other related business entities, or their successors or assigns.

(Request at 2.)

With respect to accused products from the underlying investigation, Koki notes “in the Contact Actuation Mechanism mode a user could both (1) drive several nails by first pulling the trigger and then pressing the push lever (i.e., the safety) and could also (2) drive a single nail by first pressing the push lever and then pulling the trigger.” (Request at 4.)

Koki alleges in its Request that “the new products do not have a ‘bottom firing mode’ because they do not ‘also’ operate[] if the safety contact element is first actuated.’” Request at 5. Koki alleges:

[s]pecifically, the second form of operation in the Contact Actuation Mechanism mode of the new products has been eliminated. Accordingly, when in that mode, the tool will not operate if the user first presses the push lever and then pulls the trigger. In Contact Actuation Mechanism mode, the tool will only operate if the user first pulls the trigger and then presses the push lever.

(Request at 5 (emphasis in original and emphasis omitted); (see also Koki Br. at 6 (“In Koki’s new nailers, the second form of operation in the Contact Actuation Mechanism mode of the new products has been permanently eliminated.”).)

Koki argues in connection with the referenced change, that “[b]ecause the new products do not satisfy the claimed ‘bottom firing mode,’ they do not literally infringe claims 1, 10, and 16 of the ‘718 patent…. Accordingly, the new products are not within the scope of the LEO.” (Request at 5; see also Response at 1.)

Koki’s Part 177 Request identifies the accused products from the underlying investigation by model number: “three finishing nailers (NT1850DE, NT1865DM, NT1865DMA) and two framing nailers (NR1890DC, NR1890DR) (collectively, the ‘accused products’).” (Request at 4.)

In its submissions, Koki refers to the products that are the subject of its Part 177 Request as “new products,” or new nailers, (hereinafter referred to as “new products”). A March 23, 2020, email from Koki counsel to Kyocera counsel stating “[a]ttached are the new user manuals corresponding to the samples being delivered tomorrow,” attaches files named “NT Manual” and “NR Manual” that identify products bearing model numbers with an added “(S)”: NT Manual, “Cordless Finish Nailer,” (NT1850DE(S), NT1865DM(S), NT1865DMA(S)) and NR Manual, “Cordless Strip Nailer,” (NR1890DC(S) and NR1890DR(S). (See Response, Exhibits D, E & F (Exhibits to 2020-04-09 Rigg Letter).)

Kyocera notes that “Koki has identified and provided two physical samples of the new products—a NT 1850DBSL Cordless Brad Nailer and a NR 1890DBCL Cordless Strip Nailer—along with Instructions and Safety Manuals.” (Response at 5 (citing Response, Ex. D).) Kyocera provided the following images of the two physical samples it received from Koki:





Kyocera also notes “Koki has not explained why the Instruction and Safety Manuals reference the adjudicated products and not the new products.” (Response at 6.)

II. ISSUE:

Whether Koki’s new products infringe any of claims 1, 10, and 16 of the ‘718 Patent and are subject to the LEO issued in Inv. No. 337-TA-1082. (See Request at 2, 5.)

III. LAW AND ANALYSIS:

Section 337 Exclusion Order Administration

Congress charged the Commission with investigating and making a determination whether or not there is a violation of Section 337, and on that basis, absent a finding that the public interest would be negatively affected, issuing an Order to “direct that the articles concerned, imported by any person violating the provision of this section, be excluded from entry into the United States.” See Section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1337(a)(1) (“the following are unlawful, and when found by the Commission to exist shall be dealt with, in addition to any other provision of law. …”); 19 U.S.C §§ 1337(b), (c) and (d); see also S.Rep. No. 1298, 93d Cong., 2d Sess. 196 (“the relief provided for violations of section 337 is ‘in addition to’ that granted in ‘any other provisions of law’”). “Any person adversely affected by a final determination of the Commission . . . may appeal such determination . . . to the United States Court of Appeals for the Federal Circuit for review. ” 19 U.S.C. § 1337(c).

When the Commission determines there is 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.

The “Commission has broad discretion in selecting the form, scope and extent of the remedy. Viscofan, S.A. v. United States ITC, 787 F.2d 544, 548 (Fed. Cir. 1986). The Commission has consistently issued exclusion orders coextensive with the violation of section 337 found to exist.” See Certain Erasable Programmable Read Only Memories, Inv. No. 337-TA-276, Enforcement Proceeding, Comm’n Op. at 11, Doc ID 43536 (Aug. 1991) (emphasis added).

While individual models may be evaluated to determine importation and [violation], the Commission's jurisdiction extends to all models of [violative] 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 . . . Moreover, the Commission’s long-standing practice has been to avoid using model numbers in its exclusion orders because such model numbers can be changed, and the exclusion order circumvented.

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); cf. NLRB v. Bell Aerospace Co., 416 U.S. 267, 294 (1974) (An agency “is not precluded from announcing new principles in an adjudicative proceeding and that the choice between rulemaking and adjudication lies in the first instance within the [agency’s] discretion.”) (citing SEC v. Chenery Corp., 332 U.S. 194, 203 (1947)).

After the Commission finds a violation of section 337 and remedial orders issue, the burden shifts to the adjudged infringer (i.e., the respondent) to demonstrate that similar articles, such as redesigned articles, do not infringe. See, e.g., Hyundai Elecs. Indus. Co. v. USITC, 899 F.2d 1204, 1210 (Fed. Cir. 1990) (stating that the issuance of an exclusion order “effectively shifts to would- be importers of potentially infringing articles, as a condition of entry, the burden of establishing noninfringement.”); see also Sealed Air Corp. v. ITC, 645 F.2d 976, 985–89 (C.C.P.A. 1981). In doing so, the Commission is permitted to place the risk of unfairness on importers, rather than domestic industries. Id.

Pursuant to title 19 U.S.C. § 1337(d), and the delegated authority from the Secretary of the Treasury, the Commission directs CBP to exclude from entry into the United States, merchandise that is subject to a section 337 exclusion order. See 19 U.S.C. § 1337(d) (“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.”); 19 U.S.C § 1401(i); 6 U.S.C §§ 212 & 215; see 6 U.S.C. § 212; 19 C.F.R. pt. 0; Customs Directive No. 2310-006A (Dec. 16, 1999). Further, except as provided in 337(f) and (j), “any exclusion from entry or order under [Section 337] shall continue in effect until the Commission finds, and in the case of exclusion from entry notifies the Secretary of the Treasury, that the conditions which led to such exclusion from entry no longer exist.” 19 U.S.C § 1337(k). Accordingly, action by CBP with respect to exclusion under Section 337 is dependent on an Order from another agency.

In addition, 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.

Section 337 of the Tariff Act of 1930, as amended, 19 U.S.C § 1337, is a trade statute. See e.g., Ninestar v. International Trade Commission, 667 F.3d 1373, 1384 (Fed. Cir. 2012) (quoting Akzo N.V. v. U.S. Int’l Trade Comm’n, 808 F.2d 1471, 1488 (Fed. Cir. 1986) (“[a]lthough it is true that private rights may be affected by section 337 determinations, the thrust of the statute is directed toward the protection of the public interest from unfair trade practices in international commerce.”); see also, Suprema, Inc. v. Int’l Trade Comm’n, 796 F.3d 1338, 1350 (Fed. Cir. 2015) (en banc) (“[t]he legislative history consistently evidences Congressional intent to vest the Commission with broad enforcement authority to remedy unfair trade acts.”).

The source of Section 337’s authority is different from that underlying patent law. Section 337 and its predecessor provisions are a delegation of Congress’s “plenary constitutional power to regulate foreign commerce” under Article I, Sealed Air Corp. v. ITC, 645 F.2d 976, 985–87 (C.C.P.A. 1981)), for the purpose of providing an adequate remedy for domestic industries against unfair practices undertaken abroad. Id. at 985; In re Orion Co., 71 F.2d at 467 (C.C.P.A. 1934). The Commission considers, among other bases, allegations of patent infringement in order to determine whether there has been a violation of Section 337. See S.Rep. No. 1298, 93d Cong., 2d Sess. 196 (“[I]n patent-based cases, the Commission considers, for its own purposes under section 337, the status of imports with respect to the claims of U.S. patents.”); Corning Glass Works v. ITC, 799 F.2d 1559, 1565 & n.5 (Fed. Cir. 1986).

Unlike in district court, the Commission’s primary remedy is an exclusion order (and, as appropriate, a cease and desist order): “[t]he legislative history…indicates that Congress intended injunctive relief to be the normal remedy for a Section 337 violation and that a showing of irreparable harm is not required to receive such injunctive relief.” 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 (quoting In the Matter of Certain Baseband Processor Chips and Chipsets, Transmitter and Receiver (Radio) Chips, Power Control Chips, and Products Containing Same, Including Cellular Telephone Handsets, Inv. No. 337-TA-543, 2007 ITC LEXIS 621 *102 n.230 (U.S.I.T.C. June 19, 2007)(citing United States v.12-200-ft. Reels of Film, 413 U.S. 123,125 (1973))).

Treatment of Confidential Information Submitted under 19 C.F.R. Part 177

The parties have requested confidential treatment in connection with this part 177 request for the information bracketed in red in their submissions and thereby seek to have the bracketed information 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. part 177 is governed by 6 C.F.R. part 5, 31 C.F.R. part 1, 19 C.F.R. part 103, and 19 C.F.R. § 177.8(a)(3). See e.g., 19 C.F.R. § 177.10(a). In addition, 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 e.g., 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.”). As with FOIA, the basic objective of administrative rulings under 19 C.F.R. part 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). 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 process, 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.”).

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.” 19 C.F.R. § 177.2(b)(7) in turn provides, “[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.”

Thus, the test, for administrative rulings under 19 C.F.R part 177, to determine whether certain information is confidential (and therefore properly redacted from any published ruling) was articulated 19 C.F.R. § 177.2(b)(7). The “substantial harm to a competitive position” standard adopted in 19 C.F.R. § 177.2(b)(7) to handle confidentiality issues was 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) (overturned by Food Marketing Institute v. Argus Leader Media, 139 S. Ct. 2356 (2019)). 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 v. HHS, 136 S. Ct. 383, 384 (2015).

However, the Supreme Court’s recent decision in Food Marketing Institute v. Argus Leader Media, 139 S. Ct. 2356 (2019) overturned National Parks upon which the test in 19 C.F.R. § 177.2(b)(7) is based. Food Marketing Institute v. Argus Leader Media, 139 S. Ct. 2356 (2019) addressed the meaning of the word “confidential” in Exemption 4; specifically “when does information provided to a federal agency qualify as ‘confidential’” under Exemption 4. 139 S. Ct. at 2360. The Court noted that as “FOIA nowhere defines the term ‘confidential” . . . we ask what that term’s ‘ordinary, contemporary, common meaning’ was when Congress enacted FOIA in 1966.” Id. at 2362 (citations omitted). The Court found that “[t]he term ‘confidential’ means then, as it does now, ‘private’ or ‘secret.’” Id. at 2363 (citation omitted). And, “[n]otably lacking from dictionary definitions, early case law, or any other usual source that might shed light on the statute’s ordinary meaning is any mention of the ‘substantial competitive harm’ requirement” articulated in National Parks. Id. at 2363-65.

The Court further found that “[c]ontemporary dictionaries suggest two conditions that might be required for information communicated to another to be considered confidential.” Id. at 2363. The first condition is “information communicated to another remains confidential whenever it is customarily kept private, or at least closely held, by the person imparting it.” Id. (citation omitted). The second condition is “information might be considered confidential only if the party receiving it provides some assurance that it will remain secret.” Id. (citation omitted).

The Court held that for information to be considered confidential under Exemption 4, the first condition must be met as “it is hard to see how information could be deemed confidential if its owner shares it freely.” Id. With respect to whether the second condition had to be met as well, the Court found that “there’s no need to resolve that question in this case” as it was clearly satisfied in the case before it. Id. Thus, the Court concluded “[a]t least where commercial or financial information is both customarily and actually treated as private by its owner and provided to the government under an assurance of privacy, the information is ‘confidential’ within the meaning of Exemption 4.” Id. at 2366.

In light of the above, a request for confidential treatment of information submitted in connection with a ruling requested under 19 C.F.R. part 177 faces a strong presumption in favor of disclosure. See e.g., 19 C.F.R. § 177.8(a)(3). The person seeking this treatment must overcome that presumption with a request that is narrowly tailored and supported by evidence establishing at least that: (1) it is information that is customarily kept private or closely; and either (a) the government provided an express or implied assurance of confidentiality when the information was shared with the government; or (b) there were no express or implied indications at the time the information was submitted that the government would publicly disclose the information. See e.g., OIP Guidance: Step-by-Step Guide for Determining if Commercial or Financial Information Obtained from a Person is Confidential Under Exemption 4 of the FOIA (posted 10/3/2019).

Based on the framework above, any information meeting the criteria discussed above (or information that was redacted from the public version of the agency record at the Commission) will be bracketed in red [[ ]] for redaction from the published ruling.

Law of Patent Infringement

Determining patent infringement requires two steps. Advanced Steel Recovery, LLC v. X-Body Equip., Inc., 808 F.3d 1313, 1316 (2015). The first is to construe the limitations of the asserted claims and the second is to compare the properly construed claims to the accused product. Id. To establish literal infringement, every limitation recited in a claim must be found in the accused product whereas, under the doctrine of equivalents, infringement occurs when there is equivalence between the elements of the accused product and the claimed elements of the patented invention. Microsoft Corp. v. GeoTag, Inc., 817 F.3d 1305, 1313 (Fed. Cir. 2016). One way to establish equivalence is by showing, on an element-by-element basis, that the accused product performs substantially the same function in substantially the same way with substantially the same result as each claim limitation of the patented invention, which is often referred to as the function-way-result test. See Intendis GmbH v. Glenmark Pharms., Inc., 822 F.3d 1355, 1361 (Fed. Cir. 2016).

As for the first step above, “the proper construction of a patent's claims is an issue of Federal Circuit law[.]” Comcast IP Holdings I LLC v. Sprint Communs. Co., 2017 U.S. App. LEXIS 3981, at *11 (Fed. Cir. 2017). Moreover, the ultimate construction of a claim limitation is a legal conclusion, as are interpretations of the patent’s intrinsic evidence (the patent claims, specifications, and prosecution history). UltimatePointer, L.L.C. v. Nintendo Co., 816 F.3d 816, 822 (Fed. Cir. 2016) (citing Teva Pharms. USA, Inc. v. Sandoz, Inc., 135 S. Ct. 831, 841, 190 L. Ed. 2d 719 (2015); see also Multilayer Stretch Cling Film Holdings, Inc. v. Berry Plastics Corp., 831 F.3d 1350, 1357 (Fed. Cir. 2016) (“Claim construction is a question of law, reviewed de novo, but any extrinsic fact-finding by the district court in the course of claim construction is reviewed for clear error.”). The second step to establish infringement involves the comparison of the claims to the accused product, which is a question of fact. Apple Inc. v. Samsung Elecs. Co., Ltd., 839 F.3d 1034, 1040 (Fed. Cir. 2016) (en banc).

The scope and meaning of the asserted claims is determined by looking to the words of the claims themselves, the specification, the prosecution history, and if necessary, any relevant extrinsic evidence. Advanced Steel Recovery, 808 F.3d at 1315–17. Moreover, claim terms are generally given their ordinary and customary meaning, which is the meaning they would have to a person of ordinary skill in the art at the time of the invention. Poly-America, L.P. v. API Indus., Inc., 839 F.3d 1131, 1136 (Fed. Cir. 2016) (citing Phillips v. AWH Corp., 415 F.3d 1303, 1312–13 (Fed. Cir. 2005) (en banc)). “Importantly, the person of ordinary skill in the art is deemed to read the claim term not only in the context of the particular claim in which the disputed term appears, but in the context of the entire patent, including the specification.” UltimatePointer, 816 F.3d at 822 (quoting Phillips, 415 F.3d at 1313); see also Retractable Techs., Inc. v. Becton, 653 F.3d 1296, 1305 (Fed. Cir. 2011) (“It is axiomatic that the claim construction process entails more than viewing the claim language in isolation.”). In particular, “the specification ‘is always highly relevant to the claim construction analysis. Usually, it is dispositive; it is the single best guide to the meaning of a disputed term.’” Phillips, at 1313 (quoting Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed. Cir. 1996)). However, while claims are read in view of the specification for which they are a part, it is improper to read limitations from the embodiments in the specification into the claims. Hill-Rom Servs. v. Stryker Corp., 755 F.3d 1367, 1371 (Fed. Cir. 2014).

Accordingly, the ordinary and customary meaning of the claim language generally controls unless the patentee acts as his own lexicographer and provides a special definition for a particular claim term or the patentee disavows the ordinary scope of a claim term either in the specification or during prosecution. InterDigital Communs., LLC v. U.S. Int’l Trade Comm’n, 690 F.3d 1318, 1324 (Fed. Cir. 2012); see also Hill-Rom Servs., 755 F.3d at 1371 (“There are only two exceptions to this general rule: 1) when a patentee sets out a definition and acts as his own lexicographer, or 2) when the patentee disavows the full scope of the claim term either in the specification or during prosecution.”) (quoting Thorner v. Sony Computer Entm't Am. LLC, 669 F.3d 1362, 1365 (Fed. Cir. 2012)).

The standards for finding lexicography and disavowal are “exacting.” Pacing Techs., LLC v. Garmin Int’l, Inc., 778 F.3d 1021, 1024 (Fed. Cir. 2015). “To act as a lexicographer, a patentee must ‘clearly set forth a definition of the disputed claim term’ and ‘clearly express an intent to define the term.’” Id. (quoting Thorner, 669 F.3d at 1365. “Similarly, disavowal requires that ‘the specification [or prosecution history] make[] clear that the invention does not include a particular feature.’” Id. (quoting SciMed Life Sys. Inc. v. Advanced Cardiovascular Sys., Inc., 242 F.3d 1337, 1341 (Fed. Cir. 2001). For example, disavowal or disclaimer has been found based on “clear and unmistakable statements by the patentee that limit the claims, such as ‘the present invention includes . . .’ or ‘the present invention is . . .’ or ‘all embodiments of the present invention are . . . .’” Id. (citing Regents of Univ. of Minn. v. AGA Med. Corp., 717 F.3d 929, 936 (Fed. Cir. 2013); Honeywell Int'l, Inc. v. ITT Indus., Inc., 452 F.3d 1312, 1316–19 (Fed. Cir. 2006); SciMed Life Sys., Inc., 242 F.3d at 1343–44).

Ultimately, “[t]he only meaning that matters in claim construction is the meaning in the context of the patent,” Trs. of Columbia Univ. v. Symantec Corp., 811 F.3d 1359, 1363 (Fed. Cir. 2016), and “[l]egal error arises when a court relies on extrinsic evidence that contradicts the intrinsic record.” Ruckus Wireless, Inc. v. Innovative Wireless Solutions, LLC, 824 F.3d 999, 1003 (Fed. Cir. 2016) (citing Lighting Ballast Control LLC v. Philips Elecs. N. Am. Corp., 790 F.3d 1329, 1338 (Fed. Cir. 2015), cert. denied by Universal Lighting Techs., Inc. v. Lighting Ballast Control, LLC, 136 S. Ct. 1226; 194 L. Ed. 2d 185; 2016 U.S. LEXIS 1155 (2016). Therefore, “[t]he construction that stays true to the claim language and most naturally aligns with the patent's description of the invention will be, in the end, the correct construction.” Papst Licensing GmbH & Co. KG v. Fujifilm Corp., 778 F.3d 1255, 1261 (Fed. Cir. 2015) (quoting Renishaw PLC v. Marposs Societa' per Azioni, 158 F.3d 1243, 1250 (Fed. Cir. 1998), adopted by Phillips, 415 F.3d at 1316).

Lastly, only those claim terms that are disputed must be construed and only to the extent necessary to resolve the dispute. See O2 Micro Int’l Ltd. v. Beyond Innovation Tech. Co., 521 F.3d 1351, 1362 (2008) (“We, however, recognize that district courts are not (and should not be) required to construe every limitation present in a patent's asserted claims”). Rather, “[c]laim construction is a matter of resolution of disputed meanings and technical scope, to clarify and when necessary to explain what the patentee covered by the claims, for use in the determination of infringement.” Id. (quoting U.S. Surgical Corp. v. Ethicon, Inc., 103 F.3d 1554, 1568 (Fed. Cir. 1997); see also Vanderlande Indus. Nederland BV v. U.S. Int’l Trade Comm’n, 366 F.3d 1311, 1323 (Fed. Cir. 2004).

In addition, with respect to infringement by inducement at issue in the underlying investigation, Section 271(b) of the Patent Act provides: “Whoever actively induces infringement of a patent shall be liable as an infringer.” 35 U.S.C. §271(b) (2008). To establish liability, it must be proven that "once the defendants knew of the patent, they 'actively and knowingly aid[ed] and abett[ed] another's direct infringement." DSU Med. Corp. v. JMS Co., Ltd. 471 F.3d 1293, 1305 (Fed. Cir. 2006) (en banc). A finding of induced infringement requires “evidence of culpable conduct, directed to encouraging another’s infringement, not merely that the inducer had knowledge of the direct infringer's activities.” Id. at 1306. The burden is on the complainant to prove that the respondent had the specific intent and took action to induce infringement, and intent may be proven by circumstantial evidence. Id. at 1305-06; Lucent Tech., Inc. v. Gateway, Inc., 580 F.3d 1301, 1322 (Fed. Cir. 2009). (See Comm’n Op. at 29-30.)

Analysis

As a result of Investigation No. 337-TA-1082, the Commission determined there was a violation of Section 337 based in part on finding that the accused products directly infringed the asserted claims, 1, 10, and 16 of the ’718 Patent, and respondent Koki induced infringement of the asserted claims. (Resp. Ex. C, Comm’n at 1, 84; see also Comm’n Op. at 13 (identifying the accused NT1850DE, NT1865DM, NT1865DMA, NR1890DC, and NR1890DR nailers.))

As a general matter, we treat all determinations of the Commission, including any conclusion of law or finding of fact, that arise from an investigation or related proceeding, as binding authority, and we apply these determinations with preclusive effect. See, e.g., Eaton Corp. v. United States, 29 C.I.T. 1149, 1164–65 (“[The court] recognizes, as it must, that the Commission has paramount authority and responsibility under section 337 of the Tariff Act. Its opinion and resultant orders have set the substantive law of this case, and its post-hearing submission quoted above has added to that law.”). A party seeking to import a product potentially covered by an exclusion order has the burden to establish noninfringement as a condition of entry. See Hyundai Elecs. Indus. Co. v. Int’l Trade Comm’n, 899 F.2d 1204, 1210 (Fed. Cir. 1990). Accordingly, the burden is on Koki to establish that the new products do not infringe the asserted claims of the ‘718 Patent.

The central issue in this Part 177 process is the applicability of the Commission’s construction of “bottom firing mode” in the underlying investigation with respect to the parties’ current arguments regarding an alleged re-design.

The term “bottom firing mode” was construed to mean “mode in which the tool operates if the trigger actuator is first operated and then the safety contact element is actuated and also operates if the safety contact element is first actuated and then the trigger actuator is operated.” (Order No. 9 at 17–18 (May 3, 2018); RID at 18; Comm’n Op. at 28 (“The Commission adopts and affirms the portions of the ID and RID that are not inconsistent with this opinion.”))

Requestor, Koki, alleges that its “new products do not have a ‘bottom firing mode’ because they do not ‘also operate[] if the safety contact actuation is first fired.’” (Request at 5.) Koki argues “[b]ecause the new products do not satisfy the claimed ‘bottom firing mode,’ they do not literally infringe claims 10, 10, and 16 of the ’718 patent.” (Request at 5.)

Patent owner, Kyocera asserts that Koki failed to sustain its burden to prove its new products do not infringe the asserted claims, arguing in the alternative with respect to “bottom firing mode” that: the new products still have a “bottom firing mode” in the [[ ]] of operation; Koki’s new products have a “bottom” firing mode when claims 10 and 16 are afforded their correct claim scope; and the operation of the “bottom firing mode” is irrelevant as the new products still have a “restrictive firing mode.” (Resp. at 8, 11, 13.)

As set forth below, it is the IPR Branch’s position that Koki has met its burden to demonstrate that its new products do not infringe any of asserted claims 1, 10, and 16 of the ‘718 Patent and, accordingly, are not covered by the LEO issued in Inv. No. 337-TA-1082.

Bottom Firing Mode

Each of the asserted claims 1, 10, and 16 of the ’718 Patent recite a bottom firing mode. During the investigation, the ALJ adopted the parties’ agreed upon construction for the term “bottom firing mode” in claims 1, 10, and 16. (Order No. 9 at 17.) The Commission did not disturb this claim construction and thereby adopted it. (Comm’n Op. at 28.)

In Either Sequence

Koki’s Part 177 Request is based on its new products that it alleges have been modified such that they no longer satisfy the Commission’s construction of the term “bottom firing mode” and on that basis no longer infringe any of claims 1, 10, and 16 of the ‘718 Patent. (See Request at 5.) There is no factual dispute as to how the new products operate. (Response at 11 (“In the new products, the re-designed Contact Actuation Mechanism mode functions as described in the Koki Request.”).)

Rather, Kyocera disputes “Koki’s interpretation of the scope of ‘bottom firing mode’ with respect to claims 10 and 16 of the ‘718.” (Response at 1 (“these claims do not include the critical ‘in either sequence’ language”).) Kyocera asserts that although most of the limitations of claims 1, 10, and 16 are largely identical, these claims “have some crucial differences.” (Response at 3.) Relevant to Koki’s ruling request, Kyocera identifies with respect to the description of the “bottom firing mode,” that the phrase “in either sequence” appears in claim 1 but does not in claims 10 and 16. (Response at 5, 13).

The Commission identified asserted claim 1 of the ‘718 Patent, as “representative of all asserted claims,” wherein claim 1 reads with respect to operation of the bottom firing mode: “(ii) if said bottom firing mode is selected, said tool will operation if both: (A) said trigger actuator has been operated, and (B) said safety contact element has been actuated, in either sequence. …” (Comm’n Op. at 7.)

During the underlying investigation the ALJ issued a Markman Order adopting the “parties’ agreed construction,” of the claim term “bottom firing mode” for “relevant claims” 1, 10, 17:

a mode in which the tool operates if the trigger actuator is first operated and then the safety contact element is actuated and also operates if the safety contact element is first actuated and then the trigger actuator is operated.

(Order No. 9 at 17-18 (May 3, 2018); Comm’n Op. at 28 (“The Commission adopts and affirms the portions of the ID and RID that are not inconsistent with this opinion.”); see also Request at 3-4.) Koki argues the adopted construction confirms that the “claim requirement that the ‘tool will operate…in either sequence’ means the tool must operate in both sequences to qualify as the claimed ‘bottom firing mode.’” (Request at 4 (emphasis original).)

The ALJ determined in the underlying investigation that “the ‘bottom firing mode’ was met by the ‘Contact Actuation Mechanism’ of the accused products.” (Request at 4 (emphasis original); see RID at 18). With reference to the user manual for the accused finishing nailers, Koki notes in the Contact Actuation Mechanism mode, “a user could both (1) drive several nails by first pulling the trigger and then pressing the lever (i.e., the safety) and could also (2) drive a single nail by first pressing the push lever and then pulling the triggers.” (Request at 4 (emphasis in original and emphasis omitted).)

Koki argues that its new products do not have a “bottom firing mode” because they do not “also operate[] if the safety contact element is first actuated.” (Request at 5.) Koki alleges that it has eliminated the “second form of operation in the Contact Actuation Mechanism mode of the new products,” such that “when in that mode, …the tool will only operate if the user pulls the trigger and then presses the push lever,” (Request at 5 (emphasis original) (as set forth using the terminology from the included product instructions). Accordingly, Koki argues because its new products do not satisfy the “claimed ‘bottom firing mode’” they do not literally infringe any of claims 1, 10, and 16 of the ’718 Patent. (Request at 5.)

Kyocera takes that position that Koki’s “entire non-infringement theory is predicated on the assertion that the adopted claim construction of ‘bottom firing mode’ ‘confirms that the claim construction requirement that the tool will operate…in either sequence’ means the tool must operate in both sequences to qualify as the claimed ‘bottom firing mode.’” (Response at 5). Kyocera, argues that Koki’s non-infringement argument is not applicable to claims 10 and 16 of the ’718 Patent because they do not contain the “in either sequence language” (Response at 13.) Kyocera asserts, at a minimum, that Koki failed to provide evidence of how its new products do not infringe claims 10 and 16. (Response at 13.)

In addition, Kyocera argues that the absence of the “in either sequence” language from claims 10 and 16 means “the scope of those claims is necessarily broader than the scope of claim 1.” (Response at 13.) Kyocera argues the doctrine of claim differentiation creates a presumption that each claim in a patent has a different scope. (Response at 13; see also Sur-reply at 8.) Drawing a parallel to Koki’s argument that “the claim requirement that the ‘tool will operate…in either sequence’ means that the tool must operate in both sequences to qualify as the claimed ‘bottom firing mode,’” Kyocera argues that “[i]t logically follows, then, that the absence of the ‘in either sequence’ language in claims 10 and 16 of the ‘718 Patent means that the tool need not operate in both sequences and instead need only operate in one of the two sequences to qualify as the recited ‘bottom firing mode.” (Response at 13–14 (emphasis in original).) Koki responds that the language of claims 10 and 16 support the construction adopted at the ITC. (Reply at 8–9). Koki observes that claims 10 and 16 specify that the tool “will” operate in the “bottom firing mode” if the trigger “and” the safety are both actuated. Thus Koki characterizes the bottom firing element of claims 10 and 16 the same way as claim 1, i.e., as a mode in which the tool “must” operate if the two conditions are met “in either sequence.” (Id. at 8.) Kyocera would limit Koki’s argument in relation to the parties agreed claim construction of “bottom firing mode” to claim 1 alone. (Response at 14; Sur-reply at 9 (“While Koki is correct that the parties agreed on a construction for ‘bottom firing mode,’ that does not mean that the parties agreed that the scope of the ‘bottom firing mode’ would be the same across all claims.”).) Kyocera argues instead that “claims 10 and 16 broaden and redefine the agreed-upon construction of ‘bottom firing mode’ in claim 1.” (Response at 14; Sur-reply at 8; see also Kyocera Br. at 11.)

Kyocera dismisses Koki’s argument regarding the Commission determination that Claim 1 is representative of all of the asserted claims, arguing that “representative” does not mean identical in nature or scope; it simply allows the parties and Commission to avoid redundancy in analyzing claims individually. (Sur-reply at 9; see Comm’n Op. at 7.) Kyocera distinguishes the underlying investigation by reference to the then accused products:

There was no dispute before the Commission whether the adjudicated products included a ‘bottom firing mode’ and thus there was no reason for the Commission to point out the critical ‘in either sequence’ language that is lacking from claims 10 and 16 but present in claim 1. However, as Koki now disputes the presence of a ‘bottom firing mode’ in its new products, the issue of claim differentiation and its impact on Koki’s non-infringement arguments must be considered by the IPR Branch.

(Sur-reply at 9.) CBP is bound by the reasoning on which the Commission based its finding of a violation of Section 337. (See Eaton Corp. v. US, 395 F.Supp.2d 1314, 1327 (Ct. Int’l Trade 2005) (holding that the ITC’s “opinion and resultant orders have set the substantive law of this case.”)) Where, as here, the Commission made a determination that Claim 1 is representative, and established a construction for “bottom firing mode,” the IPR Branch cannot take a contrary position. Moreover, infringement analysis is a two-step process:  first construe the limitations of the asserted claims; and second, compare the properly construed claims to the accused products.  See e.g., Advanced Steel Recovery, LLC v. X-Body Equip., Inc., 808 F.3d 1313, 1316 (2015). By Kyocera’s logic, the first step would change depending on the identity of the product in the second step.

Kyocera did not distinguish among the asserted claims with respect to the “in either sequence” language in the underlying investigation. Indeed, Kyocera’s new argument that the “bottom firing mode” in claims 10 and 16 is different in scope from the “bottom firing mode” in claim 1 is inconsistent with the agreed upon construction thereof as proposed to the ALJ. Kyocera did not limit its application to claim 1. Instead, in Complainant’s Initial Claim Construction Brief, Kyocera identifies each of 1, 10, 16 under the heading “relevant claims” with respect to the agreed construction. (Complainant’s Initial Claim Construction Brief at 5 (Feb. 8, 2018).) In addition, the construction of the term “bottom firing mode,” including the “and also” language, was the result of an agreement, “[a]fter several meet and confers.” (Complainant’s Initial Claim Construction Brief at 4 (Feb. 8, 2018).)

The agreed construction was submitted by both parties to the ALJ, thereby adopted, and unreviewed by the Commission. (Order No. 9 at 17-18; Comm’n Op. at 28.) In addition, interpreting the construction of “bottom firing mode” as applicable to all asserted claims is not inconsistent with portions of the specification Kyocera cited in support of the proposed construction. (Complainant’s Initial Claim Construction Brief at 5 f.n. 10 (Feb. 8, 2018); see also Koki Br. at 4.) As included therein, the specification describes a “‘bottom fire’ capability” of the illustrated first embodiment for which “[this] type of mode of operation will be discussed in greater detail…in connection with the logic flow chart starting at FIG. 13, with respect to the control system of the fastener driving tool”: “As can be seen by reviewing the flow chart of FIG. 13, unless the tool 10 is in the restrictive fire mode (at step 242), the tool can be actuated with either one of the two important triggering steps occurring first: i.e., the trigger could be pulled before the safety is actuated or, or vice versa.” (U.S. Pat No. 8,011,547 (Compl. Ex. 1) 15:35-60, 19:63-67; see also Response, Ex. A 13:18-30; 17:32-36; see also 29:50-30:8, 36:28 (providing identical description for the “’bottom fire’ capability” of the illustrated second embodiment 401 in connection with the logic flow chart starting at FIG. 35); see also Response, Ex. A 27: 39-47; 33:65-34:2)

Koki points to Kyocera’s infringement contentions to demonstrate that Kyocera agreed during the investigation that “bottom firing mode” has the same construction in claims 1, 10, and 16 of the ’718 Patent. (Koki Br. at 15 (citing Reply, Ex. 2.) In addition, Kyocera relied on Respondent’s Instruction and Safety Manuals to establish direct infringement. (ID at 25 f.n.12; RID at 6, 16, 18-19, 24; Comm’n Det. at 28; see also Koki Br. at 14 f.n.7.). Specifically, with respect to the limitation reciting the term “bottom firing mode,” as set forth by the ALJ, “Complainant argues that Respondent’s Instruction and Safety Manuals direct end users to use the Accused Products to practice this limitation,” without any indication of differentiating among claims 1, 10, and 16 of the ‘718 Patent. (RID at 19.) Again with respect to establishing inducement, Complainants referred to those Instruction and Safety Manuals: “Complainant also asserts that based on the way the instructions are written, Respondent clearly intends for the end user to operate the Accused products in a manner that directly infringes claims 1, 10, and 16 of the ‘718 patent.” (RID at 24-25 (citing Complainant’s Initial Post-Hearing Brief at 15.) With respect to its claim differentiation argument, Kyocera acknowledges the doctrine creates a rebuttable presumption. (Sur-reply at 8, 10.) Koki argues that Kyocera selectively invokes claim differentiation. (Koki Br. at 12.) Koki further provides legal support for why the doctrine alone is not dispositive, particularly where, as here, it is addressed to independent claims. (Koki Br. at 17.) It is the position of the IPR Branch that Koki has rebutted the presumption. While the plain language of claims 10 and 16 differs from claim 1 in that they do not include the language in “either sequence,” Koki has established the claim construction of “bottom firing” from the underlying investigation confirms that the “claim requirement that the ‘tool will operate…in either sequence’ means the tool must operate in both sequences to qualify as the claimed ‘bottom firing mode,’” for each of claims 1, 10, and 16 of the ’718 Patent.

To the extent Kyocera seeks a different construction of bottom firing mode, or a different interpretation of the scope of its application with respect to claims 1, 10, and 16, from that applied by the Commission in the underlying investigation, it is more appropriate to take up that question with the Commission which has the authority to provide an advisory opinion and/or to modify the LEO enforced by CBP.

CBP is bound by the Commission’s construction of “bottom firing mode.” The Commission’s construction of “bottom firing mode”, as used in claims 1, 10 and 16 of the ‘718 Patent, states that it is “a mode in which the tool . . . also operates if the safety contact element is first actuated and then the trigger actuator is operated.” (Order No. 9 at 17-18 (May 3, 2018); Comm’n Op. at 28). Koki’s new products do not “also operate[] if the safety contact element is first actuated . . .” thus, we find that Koki has met its burden to show that the “bottom firing mode” limitation in claims 1, 10 and 16 of the ‘718 Patent is not met. [[ ]]

Kyocera’s response raises a novel argument based on [[ ]]. (Response at 1, 8, 11.) Kyocera asserts that [[ ]], “the new products still practice the ‘bottom firing mode’ limitation found in claim 1 of the ‘718 Patent.” (Response at 11.) With reference to the claim construction for bottom firing mode, Kyocera asserts that [[ ]], the new products ‘operate[] if the trigger actuator is first operated and then the safety contact is actuated,’ ‘and also operate if the safety contact element is first actuated and then the trigger is operated.’” (Response at 11.)

In the underlying investigation, Kyocera relied on Respondent’s Instruction and Safety Manuals to establish direct infringement. (ID at 25 f.n.12; RID at 16, 19; Comm’n Op. at 28; see also Koki Br. at 14 f.n.7.). Here with respect to [[ ]] Kyocera refers to [[ ]] produced in the underlying investigation (Response at 6 (citing Resp. Ex. G [sic], but which appears should be Ex. H thereto [[ ]]).) Kyocera states that Koki’s new products and the products from the underlying investigation [[ ]] (Response at 6.)

Arguing that the claims of the ‘718 Patent do not provide a specific requirement to satisfy the “operate” limitation, and noting it was not construed in Inv. No. 337-TA-1082, Kyocera argues “at its simplest form, ‘operate’ refers to some form of output in response to one or more inputs.” (Response at 12.) With respect to [[

]] (Response at 8, 12 ([[ ]]).)

Kyocera argues, because the new products satisfy its description of “operate” “when trigger actuator and safety contact element are actuated in either sequence” [[ ]], the new products still meet the agreed upon claim construction for “bottom firing mode.” (Response at 12.) Kyocera further argues [[ ]] (Response at 12.)

Koki disputes Kyocera’s description of operate—that underpins Kyocera’s “bottom firing mode” argument—wherein Koki argues [[ ]].” (Reply at 4.) Indeed, the [[ ]] on which Kyocera relies [[ ]] (Resp. Ex. H.) Essentially, Koki’s argument is that Kyocera’s position is inconsistent with “an operating mode of said driving cycle.” (Reply at 4-5; Koki Br. at 12-13.) Koki refers to the “initiating” step as the basis for the “said driving cycle” where it recites “a driving cycle” “causing said fastener driving mechanism to force the driver member to move toward said exit end and drive a fastener into said workpiece.” (Reply at 4 (emphasis in original); Koki Br. at 13; see also Koki Br. at 13 (“That cycle is completed in the ‘actuating’ step (d) with the driver member returning to its original ‘ready position.’”).) Koki notes in this regard [[

]] (Reply at 4; Koki Br. at 13; see also Resp. Ex. H.)

With respect to the description [[ ]] from Kyocera’s Response, Koki notes [[

]] (Reply at 5; Koki Br. at 13; see also Koki Br. at ([[

]]); see Response at 8.) Moreover, Koki notes [[

]] (Reply at 5.) Thus, Koki argues, [[

]] (Reply at 5 (emphasis in original); see also Koki Br. at 13 ([[ ]]).)

Koki notes [[ ]] the claimed combination of a “fastener driving tool,” requires “(v) a fastener.” (Reply at 5-6; Koki Br. at 14; Koki Br. at 12; Koki Br. at 14 ([[ ]]); see also Koki Br. at 14 f.n.7.) Koki notes in further support of this position that Kyocera argued before the Commission that fasteners are required. (Reply at 6; Koki Br. at 14.) With respect to claiming expenses to manufacture its fasteners in arguing it had a domestic industry, Kyocera stated “the asserted claims clearly include the term ‘fasteners.’” (Comm’n Op. at 78; Reply at 6; Koki Br. at 14; see also RID at 6-7 (“Complainant argues that Respondent’s Instruction and Safety Manuals direct end users to use the Accused Products with fasteners.”).)

In addition, without conceding direct infringement, Koki argues the other requirements of inducement are not met. Koki argues because [[

]] (Reply at 5-6; Koki Br. at 12, 13; 14.) Thus, Koki argues as a result, there is no inducement of infringement with respect to the asserted claims, which include the steps, “(a) providing a fastener driving tool that includes:…(v) a fastener” or “(c) initiating a driving cycle by pressing said exit end against a workpiece and actuating said trigger, thereby causing said fastener driving mechanism to force the driver member to move toward said exit end and drive a fastener into said workpiece.” (Reply at 6-7.) Moreover, Koki argues, [[

]] (Reply at 7.) Indeed, Koki notes [[ ]] (Koki Br. at 15.)

With respect to direct infringement, it is the position of the IPR Branch that Koki has met its burden to demonstrate non-infringement [[ ]], by demonstrating that [[

]]

With respect to infringement by inducement, it is position of the IPR Branch that Koki has met its burden demonstrate non-infringement as the scenarios illustrated do not include all the elements necessary for induced infringement. Selecting, by a User…

Each of the asserted claims found to be infringed in Inv. No. 337-TA-1082, recite a “selecting” step that includes “(b) selecting, by a user, an operating mode of said driving cycle to be one of: a ‘bottom firing mode,’ and a ‘restrictive firing mode; wherein:’” (Resp., Ex. A (‘718 patent) at Claims 1, 10 and 16; Response at 8; RID at 16.)

Kyocera asserts with regard to this language that infringement can be demonstrated by selecting a single operating mode, rendering the changes Koki made to the “operation of a bottom firing mode” irrelevant. (See Resp. at 4, 8, 10; Sur-reply at 3; Kyocera Br. at 3.) Indeed Kyocera characterizes the “bottom firing mode” as “optional.” (See Sur-Reply at 1, 2; Kyocera Br. at 3, 8.) On the other hand, Koki takes the position that the “selecting step” requires both claimed modes to be available for selection such that the changes it made to the contact actuation mode in its new products to eliminate the claimed bottom firing mode render the new products non-infringing. (Request at 3; Reply at 1; Koki Br. at 8.)

Koki and Kyocera vigorously oppose each other on several alternate theories regarding the meaning of the selecting step with respect to Koki’s new products. CBP is bound by a final determination by the Commission in evaluating whether new designs are subject to an exclusion order issued by the Commission upon a finding of violation of Section 337. The Commission found a violation in Inv. No. 337-TA-1082, in part, “because the accused products directly infringe the asserted claims.” (RID at 1.) Where, as here, the meaning of the claim language can be found in the Commission’ final determination, CBP must follow it. While “selecting” was not among the terms for which the parties requested construction via a Markman ruling in the underlying investigation, the ALJ necessarily considered its meaning in determining that the relevant limitation was met. The Commission did not disturb the ALJ’s findings with regard to this limitation and thereby adopted them. (Comm’n, Op. at 28.)

Where a claim is not in dispute, there is no need for the ALJ to set out a formal construction. (Vanderlande Indus. Nederland BV v. Int’l Trade Comm’n (Vanderlande), 366 F.3d 1311, 1323 (Fed. Cir. 2004); see also Inv. No. 337-TA-1082, Order No. 9 at 1-2 (May 3, 2018).) Moreover, where an ALJ undertakes a Markman ruling, which is not required by Commission rule, the Commission has taken the position that it be issued in the form of an Order, not as a non-final initial determination. (See Inv. No. 337-TA-703, ID (Public Version) (Jul. 15, 2010) (ID on the claim construction issued under 19 C.F.R. § 210.42(c)); Inv. No. 337-TA-703, Notice of Comm’n Det. that June 22, 2010, ID is an Order Rather than and ID (Oct. 20, 2010).) This has the effect of delaying review thereof by the Commission until the ALJ issues a final initial determination pursuant to Rule 201.42(a) on the merits relying on those constructions as a part of the infringement analysis. (19 C.F.R. § 210.42(a); see also 19 C.F.R § 210.45 (c) (“On review, the Commission may affirm, reverse, modify, set aside or remand for further proceedings, in whole or in part, the initial determination of the administrative law judge.”).)

Pursuant to 19 C.F.R. § 210.42(a), an ALJ is required to include in the final initial determination on violation “an opinion stating findings … and conclusions and the reasons or bases therefor necessary for the disposition of all material issues of fact, law, or discretion presented in the record.” 19 C.F.R § 210.42 (d). An ALJ will necessarily consider both elements of the two-step analysis of infringement where infringement is alleged as an unfair act in violation of Section 337. (See Vanderlande at 366 F.3d at 1323 (“In short, we find no error in the ITC’s implicit claim construction.”).) With respect to “(b) selecting by a user, an operating mode of said driving cycle to be one of: a ‘bottom firing mode,’ and a ‘restrictive firing mode;’ wherein:” the ALJ stated on remand that “for these reasons, the undersigned finds that Complainant has provided sufficient circumstantial evidence to prove direct infringement of this limitation.” (RID at 16, 19; see also RID at 6-7 (quoting Toshiba Corp., 681 F.3d at 1364, with respect to relying on product design and the Instruction and Safety Manual, “[d]irect infringement can be proven by circumstantial evidence”) (internal citation omitted)); Comm’n Det. at 28.)

“With specific page references to principal supporting items of evidence of record,” the ALJ identified the bases on which Complainant relied to assert direct infringement by Koki’s accused products along with the reasoning for finding in Complainant’s favor. (RID at 16-19; see also 19 C.F.R § 210.42 (d).) Kyocera relied on Respondent’s Instruction and Safety Manuals “direct[ing] end users to practice this limitation” to establish direct infringement. (RID at 16; ID at 25 f.n.12; Comm’n Det. at 28). The ALJ noted, “[T]o show infringement of claim 1, Senco must prove that a user actually performed the step of ‘selecting…an operating mode,” for which, “as previously explained, direct infringement can be proven by circumstantial evidence.” (RID at 17; see also Comm’n Op. at 7 (identifying asserted claim 1 of the ‘718 Patent, representative of all asserted claims).)

The ALJ began the analysis with the prior agreed and adopted constructions of both operating modes identified in the claims. (RID at 18.) Specifically, the ALJ noted that the term “bottom firing mode” has been determined to mean “mode in which the tool operated if the trigger actuator is first operated and then the safety contact element is actuated and also operates if the safety contact element is first actuated and then the trigger actuator is operated” and the term “restrictive firing mode” had been determined to mean “the mode in which the tool operates if the safety contact element is first actuated and then the trigger actuator is operated.” (RID at 18 (quoting Order No. 9).) Turning to the Instruction and Safety Manual to which Kyocera had pointed, the ALJ correlated the claimed operating modes with the operating modes in the accused products, noting that Respondent’s Instruction and Safety Manuals “describe two operating modes: (i) ‘contact actuation mechanism,’ which is the ‘bottom firing mode’ and (ii) ‘full sequential actuation mechanism,’ which is ‘restrictive firing mode.’” (RID at 18.)

The ALJ noted the Instruction and Safety Manuals “specifically instruct users to ‘[set] the nailing operation switch’ to either mode,” and identified passages relevant to setting the nailing operation in reference to using the tool in “restrictive mode” and “bottom firing mode,” the latter passage including “otherwise, it will not operate properly” (RID at 18-19.) The ALJ found “[t]hus, upon turning on the tool, it will be set to either ‘restrictive firing,’ ‘bottom firing mode,’ or will not operate properly.” (RID at 19.) The ALJ elaborated, “[if] a user turns on a tool and the tool operates properly, the tool will have been set to either ‘restrictive firing mode’ or ‘bottom firing mode,’ and the user will have necessarily selected either ‘restrictive firing mode’ or ‘bottom firing mode.’” (RID at 19; see Vanderlande at 366 F.3d at 1323 (“the ALJ was plainly attentive to the critical words…”).)

Both parties find support for their respective positions regarding the new products in this aspect of the RID, in turn adopted by the Commission, (Response at 6, 9; Reply at 2; Sur-Reply at 4-5; Koki Br. at 5, 9; Kyocera Br. at 7-8.) However, Koki’s position that “the ‘selecting’ step requires both claimed modes to be available for there to be a ‘selection,’” is more logical in light the ALJ’s analysis of the selecting step being based from the outset on both claimed operating modes as they were construed in the investigation. (See e.g., Koki Br. at 8; RID at 16-19.) Having determined that the “selecting” step is met based on this analysis, the ALJ implicitly construed the “selecting” step as requiring both claimed operating modes to demonstrate direct infringement. Moreover, as a tool can operate in only one operating mode at a time, Kyocera places too great a reliance on use of the word “either” in the RID to argue in favor of its own interpretation that “bottom firing,” as construed by the ALJ, is optional. (Kyocera Br. at 7.) The ALJ makes no reference to infringement lying alternatively in either the contact or full sequential actuation mechanisms.

While not raised before the Commission, this understanding finds further support in Koki’s argument regarding a restriction requirement by the USPTO in the prior application, Ser. No. 12/243,69, giving rise to the ‘718 patent via a divisional application thereof. (Koki Br. at 4, 8-9; see Resp. Ex. A at Col. 1, lines 6–10.) Koki argued “the USPTO “considered the exact same ‘selecting’ step now recited in claims 1, 10, and 16 of the ‘718 patent.” (Koki Br. at 8.) Koki argued further that the USPTO “concluded that the ‘selecting’ was ‘between at least two modes’ and was ‘materially different’ from another set of claims that Kyocera was pursuing that could be met with just a ‘single operating mode.’” (Koki Br. at 8.)

Indeed, the ‘718 specification states: “It is a yet further advantage of the present invention to provide a fastener driving tool that operates on a gas spring principle which includes a system controller that allows operation in either a ‘bottom firing mode’ or a ‘trigger firing mode.’” (Resp. Ex. A at Col. 2:48-52.); see also Verizon Services Corp. v. Vonage Holdings Corp., 503 F.3d 1295, 1308 (2007) (“When a patent thus describes the features of the ‘present invention’ as a whole, this description limits the scope of the invention.”); see also Scimed Life Sys., Inc. v. Advanced Cardiovascular Sys., Inc., 242 F.3d 1337, 1343 (Fed. Cir. 2001) ("[T]he characterization of the coaxial configuration as part of the 'present invention' is strong evidence that the claims should not be read to encompass the opposite structure.").

Kyocera states that “[a]s Kyocera Senco chose to pursue Invention I, it never ‘acquiesced.’” (Kyocera Br. at 6.) Kyocera sought to cancel non-elected claims 13-36 (encompassing inventions II and III) without prejudice after a non-final office action, in which the examiner provided the detailed action: “Claims 13-36 withdrawn from further consideration pursuant to 37 CFR 1.142(b) as being drawn to a nonelected invention, there being no allowable generic or linking claim. Election is made without traverse in the reply filed on 7/14/10.” (Aug. 30, 2020 Office Action at 2 (emphasis in original); see also Nov. 26, 2020 Amendment at 2; see also Reply, Ex. 1 (Restriction Requirement) at 2.) In a final office actions notes: “[c]laims 13-36 have been cancelled.” (Jan. 18, 2011 Office Action at 2.)

Accordingly, it is the position of the IPR Branch, based on the Commission determination, as adopted, that the asserted claims require that both the “bottom firing mode” and “restrictive firing mode” as construed in the underlying investigation be available in order to satisfy the “selecting’ step.” Thus, as discussed supra, in the new products the “bottom firing mode” limitation is not met. Accordingly, it is the position of the IPR Branch that the new products do not infringe claims 1, 10, or 16 of the ’718 Patent and are therefore outside the scope of the LEO.

IV. HOLDING:

We find that Koki has met its burden to establish that its redesigned gas spring nailer products do not infringe any of claims 1, 10, and 16 of U.S. Patent No. 8,387,718. Specifically, the new products do not include a “bottom firing mode,” as construed by the Commission, which is required to practice the claimed method. Accordingly, we find that the new products are not subject to the LEO issued as result of Inv. No. 337-TA-1082.

Accordingly, the new products are permitted 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 the new products 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. Part 177.2(b)(1), (2), and (4), Part 177.9(b)(1) and (2).


Sincerely,

Alaina van Horn
Chief, Intellectual Property Rights Branch


cc. Robert S. Rigg
Vedder Price
222 North LaSalle Street
Chicago, IL 60601
[email protected]