U.S. International Trade Commission; General Exclusion Order; Investigation No. 337-TA-567; In the Matter of Certain Foam Footwear

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H241477 December 27, 2013 OT:RR:BSTC:IPR H241477 AAH CATEGORY: 19 U.S.C. § 1337; Unfair Competition Mr. Wesley Calhoun Shoe Corporation of Birmingham, Inc. d/b/a Shoe Corp 125 45th Place North Birmingham AL 35222 RE: U.S. International Trade Commission; General Exclusion Order; Investigation No. 337-TA-567; In the Matter of Certain Foam Footwear Dear Mr. Calhoun: This is in response to your letter dated April 23, 2013, on behalf of your company, Shoe Corporation of Birmingham, Inc., seeking a ruling whether certain foam footwear is covered by the claims of the patents included in the general exclusion order issued by the U.S. International Trade Commission (“ITC”) as a result of the above-referenced investigation. FACTS: In connection with your request, you submitted two styles of sandal for review: styles #645 plus an alternative style #507. You state that the sample you provided is of light weight ethyl vinyl acetate (EVA) construction, open heel, air cooled with a triangular venting design, and made in China. Photos of the samples you provided are included below. The Commission instituted Inv. No. 337-TA-567 on May 11, 2006, based on a complaint, as amended, filed by Crocs, Inc. (“Crocs”) of Niwot, Colorado. 71 Fed. Reg. 27514-15 (May 11, 2006). The complaint alleged violations of section 337 of the Tariff Act of 1930, as amended (19 U.S.C. § 1337), in the importation into the United States, the sale for importation, and the sale within the United States after importation, of certain foam footwear, by reason of infringement of claims 1-2 of U.S. Patent No. 6,993,858 (“the `858 patent”); U.S. Patent No. D517,789 (“the `789 patent”); and the Crocs trade dress (i.e., the image and overall appearance of Crocs-brand footwear). The complaint further alleged that an industry in the United States exists as required by subsection (a)(2) of section 337, and requested that the Commission issue a permanent general exclusion order and permanent cease and desist orders. The complaint named eleven (11) respondents that included: (1) Collective Licensing International, LLC of Englewood, Colorado; (2) Double Diamond; (3) Effervescent; (4) Gen-X Sports, Inc. of Toronto, Ontario; (5) Holey Soles; (6) Australia Unlimited, Inc. of Seattle, Washington; (7) Cheng’s Enterprises Inc. of Carlstadt, New Jersey; (8) D. Myers & Sons, Inc. of Baltimore, Maryland; (9) Inter-Pacific Trading Corp. of Los Angeles, California; (10) Pali Hawii of Honolulu, Hawaii; and (11) Shaka Shoes of Kaliua-Kona, Hawaii. The Commission terminated the investigation as to the trade dress allegation on September 11, 2006. A twelfth respondent, Old Dominion Footwear, Inc. of Madison Heights, Virginia, was added to the investigation on October 10, 2006. All but three respondents were terminated from the investigation on the basis of a consent order, settlement agreement, or undisputed Commission determination of non-infringement. The three remaining respondents were Double Diamond, Effervescent, and Holey Soles. On April 11, 2008, the presiding administrative law judge (“ALJ”) issued his final initial determination (“ID”) finding no violation of section 337. The ALJ found non-infringement and non-satisfaction of the technical prong of the domestic industry requirement with respect to the `789 patent and found that the `858 patent was invalid on obvious grounds under 35 U.S.C. § 103. However, the ALJ’s final ID also included a recommendation on remedy and bonding should the Commission find that there was a violation. On July 25, 2008, after review, the Commission affirmed the ALJ’s final ID with certain modifications and clarifications, and terminated the investigation with a finding of no violation of section 337. On February 24, 2010, the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”) issued its judgment overturning the Commission’s findings regarding invalidity of the `858 patent, and non-infringement/lack of domestic industry concerning the `789 patent. See Crocs, Inc. v. United States Int’l Trade Comm’n, 589 F.3d 1294, 1311 (Fed. Cir. 2010). The Federal Circuit also specifically “remanded the investigation for a determination of infringement of the `858 patent and any appropriate remedies.” Id. On April 25, 2011, the Commission issued a notice of its determination not to review the ALJ’s remand ID finding a violation of section 337, as amended, and requested written submissions on the issues of remedy, the public interest, and bonding from the parties and interested non-parties. See 76 Fed. Reg. 24052-53 (April 29, 2011). In doing so, the Commission’s notice also included its determination to reaffirm the ALJ’s previous ruling that claims 1 and 2 of the `858 patent are infringed by Effervescent’s accused products, and that claim 2 of the `858 patent is infringed by Double Diamond’s accused products. See 73 Fed. Reg. 35710-11 (June 24, 2008); Remand ID at 2 (February 9, 2011) (citing Final ID at 121 (April 11, 2008)); Comm’n Op. at 3-4, n. 1 (July 25, 2008). These actions, along with the Federal Circuit’s decision, resulted in a finding of a violation of section 337 with respect to both asserted patents by Double Diamond and Effervescent. Holey Soles was found in violation with respect to the `789 patent based on the Federal Circuit’s reversal of non-infringement and a lack of domestic industry as to this patent. See Crocs, 598 F.3d at 1311. Accordingly, the Commission determined that the appropriate form of relief is a general exclusion order. Specifically, the general exclusion order provides that foam footwear that is covered by one or more of claims 1 and 2 of the `858 patent or by the `789 patent are excluded from entry into the United States for consumption, entry for consumption for a foreign trade zone, or withdrawal from warehouse for consumption, except under license of the patent owner or as provided by law. ISSUE: The issue presented is whether the Shoe Corporation of Birmingham, Inc.’s foam footwear (designated Styles #645 and #507) is covered by the patent claims at issue in the exclusion order issued by the ITC in Investigation No. 337-TA-567. LAW AND ANALYSIS: Pursuant to the Tariff Act of 1930, the ITC has authority to conduct investigations into imported articles that allegedly infringe United States patents and impose remedies if the accused products are found to be infringing. See 19 U.S.C. § 1337(a)(1)(B), (b)(1), (d), (f). Specifically, 19 U.S.C. § 1337(d) provides the Commission authority to direct the exclusion from entry of articles found to be infringing. Moreover, when the Commission determines that there has been a violation of section 337, it may issue two types of exclusion orders: a limited exclusion order and/or 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); see also Certain Ink Cartridges and Components Thereof, Inv. No. 337-TA-565, Commission Opinion (October 19, 2007). Both types of orders direct CBP to bar the 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. Id. In contrast, a general exclusion order bars importation of the infringing products by everyone, regardless of whether they were respondents in the Commission’s investigation. Id. Patent infringement determinations for utility patents entail two steps. The first step is to interpret the meaning and scope of the asserted patent claims. The second step is to compare the properly construed claims to the accused device. See Markman v. Westview Instruments, Inc., 52 F.3d 967 (Fed. Cir. 1995) (en banc), aff’d, 517 U.S. 370 (1996). The first step is a question of law; the second step is a question of fact. See Freedman Seating Co. v. American Seating Company, 420 F.3d 1350, 1357 (Fed. Cir. 2005). In patent law, there are two types of infringement: direct and indirect infringement. Direct infringement includes two varieties: literal infringement and infringement under the doctrine of equivalents. Literal infringement is when every limitation recited in a claim is found in the accused device. See Strattec Security Corp. v. General Automotive Specialty Co., 126 F.3d 1411, 1418 (Fed. Cir. 1997); see also Digital Biometrics, Inc. v. Identix, Inc., 149 F.3d 1335, 1349 (Fed. Circ. 1998) (“An accused device cannot infringe, as a matter of law, if even a single limitation is not satisfied.”). However, a dependent claim cannot be found to infringe if the independent claim from which it depends is not found to infringe. See Becton Dickinson & Co. v. C.R. Bard Inc., 922 F.2d 792 (Fed. Cir. 1990) (“The holding of noninfringement of claim 1 applies as well to all claims dependent on claim 1.”). One may infringe an independent claim and not infringe a claim dependent on that claim. The reverse is not true. One who does not infringe an independent claim cannot infringe a claim dependent on (and thus containing all the limitations of) that claim. Wahpeton Canvas Co., Inc. v. Frontier, Inc., 870 F.2d 1546, 1552 (Fed. Cir. 1989). As for the scope of protection provided, it is a “bedrock principle” of patent law that “the claims of a patent define the invention to which the patentee is entitled the right to exclude.” Innova/Pure Water, Inc. v. Safari Water Filtration Systems, Inc., 381 F.3d 1111, 1115 (Fed. Cir. 2004); Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed. Cir. 1996) (“[W]e look to the words of the claims themselves…to define the scope of the patented invention.”). Furthermore, the Federal Circuit has made clear that claim terms are given their ordinary and customary meaning, which refers specifically to the ordinary and customary meaning that the claim term would have to a person of ordinary skill in the art at the time of the invention. See Phillips v. AWH Corp., 415 F.3d 1303, 1313 (Fed. Cir. 2005) (en banc). The inquiry into how a person of ordinary skill in the art understands a claim term provides an objective baseline from which to begin claim interpretation. See Innova 381 F.3d at 1116. That starting point is based on the well-settled understanding that inventors are typically persons skilled in the field of the invention and that patents are addressed to and intended to be read by others of skill in the pertinent art. See Verve, LLC v. Crane Cams, Inc., 311 F.3d 1116, 1119 (Fed. Cir. 2002). 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. See Phillips, 415 F.3d at 1313. Often, this requires an examination of terms that have a particular meaning in a field of art. Id. Since the meaning of a claim term, as understood by persons of skill in the art, is often not immediately apparent, and since patentees frequently act as their own lexicographers, a court or administrative body responsible for making patent infringement determinations should look to sources available to the public that show what a person of skill in the art would have understood a disputed claim term to mean. Id. These sources include, for example, the words of the claims themselves, the remainder of the specification, and the prosecution history, along with certain extrinsic evidence in appropriate circumstances. Id. Importantly, as stated by the Federal Circuit in Vitronics and reaffirmed in Phillips, claims must be read in light of the specification, of which they are a part, since 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, 415 F.3d at 1315 (citing Vitronics, 90 F.3d at 1582); see also Standard Oil Co. v. Am. Cyanamid Co., 774 F.2d 448, 452 (Fed. Cir. 1985) (“The specification is, thus, the primary basis for construing the claims.”). Accordingly, the Federal Circuit has provided the framework above for interpreting patent claims and reading those claims, as properly construed in light of the relevant evidence, onto an accused device. As a general matter, the ITC directs its exclusion orders to articles “covered by” the infringed claims of the relevant patents. See Certain Hardware Logic Emulation Systems and Components Thereof, Inv. No. 337-TA-383, Commission Opinion at 16 (Publication 3089, dated March 1998) (“[T]he Commission’s long-standing practice is to direct its remedial orders to all products covered by the patent claims as to which a violation has been found, rather than limiting its orders to only those specific models selected for the infringement analysis.”). CLAIM 1 and 2 OF U.S. PATENT NO. 6,993,858 The `858 patent is entitled “Breathable Footwear Pieces.” The `858 patent discloses a firm foam strap on footwear that acts as a passive restraint to the Achilles portion of the foot and can be set in various fixed position because of the friction created by the direct contact between the upper portion of the base of the footwear and strap. See Initial Determination at 62. Two claims from the `858 patent were asserted in the investigation: independent claims 1 and 2. Id. at 40. Claim 1 and 2 of the `858 patent, the asserted independent claims, read as follows: A footwear piece comprising: A base section including an upper and a sole formed as a single part manufactured from a moldable foam material; and A strap section formed of moldable material that is attached at opposite ends thereof to the upper of the base section with plastic connectors such that the moldable foam material of the strap section is in direct contact with the moldable material of the base section and pivots relative to the base section at the connectors; Wherein the upper includes an open rear region defined by an upper opening parameter, and wherein frictional forces developed by the contact between the strap section and the base section at the plastic connectors are sufficient to maintain the strap section in place in an intermediary position after pivoting, whereby the strap section lends support to the Achilles portion of the human foot inserted into the open rear region; and Wherein the upper includes a substantially horizontal portion and a substantially vertical portion forming a toe region that generally follows the contour of a human foot, wherein the toe region tapers from an inner area of the base section where the larger toes exist to an outer area of the base section where the smaller toes exist; and Wherein the sole includes a bottom surface having front and rear tread patterns longitudinally connected by a flat section. A footwear piece comprising: A base section including an upper and a sole formed as a single part manufactured from a moldable foam material; and A strap section formed of molded foam material attached at opposite ends thereof to the base section such that the strap section is in direct contact with the base section and pivots relative to the base section; and Wherein the upper includes an open rear region defined by an upper opening perimeter; and wherein the sole includes a rear perimeter; and wherein the strap section pivots between a first contact point on the upper opening perimeter and a second contact point on the rear perimeter, and wherein frictional forces developed by the contact between the strap section and the base section at the points of attachment are sufficient to maintain the strap section in place in an intermediary position after pivoting whereby the strap section lends support to the Achilles portion of a human foot inserted into the open rear region; and Wherein the upper includes a substantially horizontal portion and a substantially vertical portion forming a toe region that generally follows the contour of a human foot, wherein the toe region tapers from the inner area of the base section where the larger toes exist to the outer area of the base section where the smaller toes exist; and Wherein a decorative pattern of raised bumps is molded or otherwise created in the upper near to and extending the length of the upper opening perimeter; and Wherein a plurality of ventilators are formed in both the substantially vertical portion and the substantially horizontal portion, and wherein the ventilators extend up a majority of the height of the vertical portion; Wherein the vertical portion of the upper includes an upper strip, wherein the ventilators, wherein the ventilators are formed in the upper strip, and wherein the upper strip extends from the toe region to the points of attachment for the strap section, and wherein the sole includes a lower strip that parallels the upper strip and is separated by a line the extends from the toe region to a heel of the footwear piece, and wherein the lower strip vertically rises in a direction toward the heel; and Wherein the sole includes a bottom surface having front and rear tread patterns longitudinally connected by a flat section without tread patterns bounded by raised side portions; and Wherein the sole further includes a top surface having a support base including a raised pattern where a foot contacts the support base. The Commission’s Claim Construction The Commission construed the terms “moldable foam material”/”moldable material”/ “molded foam material”, “strap section lends support to the Achilles portion of the human foot”, “second contact point on the rear perimeter”, “wherein the upper strip extends from the toe region to the point of attachment for the strap execution”, “at the connectors” / “at the plastic connectors” /”at the points of attachment”, “direct contact”, “a decorative pattern of raised bumps is molded or otherwise created in the upper near to and extending length of the upper opening perimeter”, “substantially horizontal portion and a substantially vertical portion”, “taper”, “ends”, “open near region”, “flat section”, and “plastic connectors”. “moldable foam material” / “moldable material” / “molded foam material” The Commission construed these terms to mean a “foam material capable of being manufactured, using a mold, into a three dimensional shape.” “strap section lends support to the Achilles portion of the human foot” The Commission construed this phrase to mean “the strap may simply be present in an intermediary position ready to ‘lend support’ to the Achilles portion of the foot should there be any contact with the Achilles portion of the foot.” “second contact point on the rear perimeter” The Commission construed this term to mean any point on the rear perimeter. “wherein the upper strip extends from the toe region to the point of attachment for the strap region” The Commission construed this term to mean that the strip may extend to and beyond the points of attachment for the strap section. “at the connectors” / “at the plastic connectors” / “at the points of attachment,” and “direct contact” The Commission construed these terms to mean that there must be some contact directly between the strap section and base section that occurs somewhere in the area where the base and strap sections are connected. “a decorative pattern of raised bumps is molded or otherwise created in the upper near to and extending the length of the upper opening perimeter” The Commission construed this term to cover shoes, subject to the other claims of this term, which have decorative patterns of raised bumps on either the inside or outside surface of the shoes. “substantially horizontal portion and a substantially vertical portion” The Commission construed this clause to not require precise “horizontal” or “vertical” surfaces but instead allow for some measure of variance from strictly “horizontal” or “vertical.” “taper” The Commission construed this term to mean following the general outline of the human foot. “ends” The Commission construed the term “ends” not to require the strap to be attached to the base at its “extreme distal terminus” or “extreme edge.” “open rear region” The Commission construed this term to mean “the cavity into which the foot is inserted.” “flat section” The Commission construed the term “flat section” to not require the entire middle section of the bottom surface of the sole to be flat, but rather that the middle section of the surface of the sole contains a flat surface. Shoe Corporation of Birmingham, Inc.’s Product Shoe Corporation has submitted two styles that it seeks to import: style #645 and style #507. Photographs of each style are provided below. Style #645 Top 
 Style #645 Bottom 
 Style #645 Inner Side 
 Style #645 Outer Side 
  Style #507 Top 
 Style #507 Bottom 
 Style #507 Inner Side 
 Style #507 Outer Side 
  Shoe Corporation’s submission does not contain any legal arguments why the product does not infringe or put any limitations at issue. Therefore, the claim chart below is provided comparing the limitations of claim 1 from the ‘858 patent first with depictions of style #645: Claim 1 Element Photo  A base section including an upper and a sole formed as a single part manufactured from a moldable foam material; 
 A strap section formed of moldable material that is attached at opposite ends thereof to the upper of the base section with plastic connectors such that the moldable foam material of the strap section is in direct contact with the moldable material of the base section and pivots relative to the base section at the connectors; 
 Wherein the upper includes an open rear region defined by an upper opening parameter, and wherein frictional forces developed by the contact between the strap section and the base section at the plastic connectors are sufficient to maintain the strap section in place in an intermediary position after pivoting, whereby the strap section lends support to the Achilles portion of the human foot inserted into the open rear region; and 
 Wherein the upper includes a substantially horizontal portion and a substantially vertical portion forming a toe region that generally follows the contour of a human foot, 
 wherein the toe region tapers from an inner area of the base section where the larger toes exist to an outer area of the base section where the smaller toes exist; and 
 Wherein the sole includes a bottom surface having front and rear tread patterns longitudinally connected by a flat section. 
  Turning to the second style, as mentioned above, the submission does not contain any legal arguments why this product does not infringe or put any limitations at issue. Accordingly, the claim chart below is provided comparing the limitations of claim 1 from the ‘858 patent with depictions of style #507: Claim 1 Element Photograph  A base section including an upper and a sole formed as a single part manufactured from a moldable foam material; 
 A strap section formed of moldable material that is attached at opposite ends thereof to the upper of the base section with plastic connectors such that the moldable foam material of the strap section is in direct contact with the moldable material of the base section and pivots relative to the base section at the connectors; 
 Wherein the upper includes an open rear region defined by an upper opening parameter, and wherein frictional forces developed by the contact between the strap section and the base section at the plastic connectors are sufficient to maintain the strap section in place in an intermediary position after pivoting, whereby the strap section lends support to the Achilles portion of the human foot inserted into the open rear region; and 
 Wherein the upper includes a substantially horizontal portion and a substantially vertical portion forming a toe region that generally follows the contour of a human foot, 
 wherein the toe region tapers from an inner area of the base section where the larger toes exist to an outer area of the base section where the smaller toes exist; and 
 Wherein the sole includes a bottom surface having front and rear tread patterns longitudinally connected by a flat section. 
  Based on our examination, styles 507 and 645 meet all of the limitations of claim 1 of the `858 patent. Accordingly, both styles of footwear are covered by the claims of the `858 patent such that they are subject to the general exclusion order issued by the ITC in Investigation No. 337-TA-567. Because both styles 507 and 645 are subject to the exclusion order based on the `858 utility patent, there was no need to analyze the `789 design patent. Accordingly, we take no position with respect to whether styles 507 and 645 are covered by the `789 design patent. HOLDING: In conformity with the foregoing, styles 501 and 605 are subject to exclusion from entry into the U.S. for consumption, entry for consumption from a foreign trade zone or withdrawal from a warehouse for consumption. Sincerely, Charles R. Steuart Chief, Intellectual Property Rights Branch