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

 HQ H305358 June 30, 2020 OT:RR:BSTC:IPR H305358 SEH/JW/CBC CATEGORY: 19 U.S.C. § 1337; Unfair Competition VIA EMAIL: Jay Reiziss McDermott Will & Emery LLP The McDermott Building 500 North Capitol Street, NW, Washington, DC 20001-1531 jreiziss@mwe.com 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 1