UNITED STATES INTERNATIONAL TRADE COMMISSION
`WASHINGTON, D.C.
`Before the Honorable Dee Lord
`Administrative Law Judge
`
`In the Matter of
`
`CERTAIN SEMICONDUCTOR DEVICES,
`SEMICONDUCTOR DEVICE PACKAGES,
`AND PRODUCTS CONTAINING SAME
`
`Inv. No. 337-TA-1010
`
`RESPONDENTS’ RESPONSE TO TESSERA COMPLAINANTS’
`PETITION FOR REVIEW
`
`PUBLIC VERSION
`
`

`

` 
`
`TABLE OF CONTENTS
`
`Summary of Response ........................................................................................................ 1 
`
`I. 
`
`A. 
`
`B. 
`
`C. 
`
`D. 
`
`E. 
`
`No Domestic Industry Based On Tessera’s Licensing Activities ........................... 1 
`
`The ID Properly Determined That Micron Does Not Have A Domestic Industry In
`The ‘007 Patent Under Subsections 337(a)(3)(A) And (B) .................................... 5 
`
`The ID Properly Found That GlobalFoundries Does Not Have A Domestic
`Industry in the ‘136 Patent That Tessera Can Claim As Its Own ........................... 6 
`
`Tessera Failed to Prove Infringement of the Non-tested ‘136 Accused Products .. 7 
`
`The ID Correctly Found That
`
` Holds A License To The ‘136 Patent ......... 9 
`
`II. 
`
`The ID Properly Found Tessera Did Not Establish a Substantial Investment in Licensing
`These Three Patents-in-Suit .............................................................................................. 10 
`
`A. 
`
`The ID Followed Commission Precedent and Policy In Concluding Tessera Had
`Failed to Establish Portfolio Licensing as Domestic Industry .............................. 13 
`
`1. 
`
`2. 
`
`3. 
`
`Tessera Presented Methodologies Notably Different From Those of the
`Precedents it Cites ..................................................................................... 15 
`
`Mr. Martinez’s Allocation was Criticized as Arbitrary and Rejected
`Because It Was Unreliable ........................................................................ 21 
`
`The Record Supports the ID’s Finding that Mr. Martinez’s Allocations
`were Rendered Unreliable by his EOU Methodology .............................. 22 
`
`B. 
`
`The ID Correctly Assessed the Commission’s “Nexus” Requirement ................. 25 
`
`1. 
`
`2. 
`
`3. 
`
`The Allocations were Properly Considered as to Nexus .......................... 26 
`
`Mr. Martinez’s Expert Testimony was Not Reliable ................................ 27 
`
`Tessera did Not Present Sufficient Evidence on Nexus ............................ 28 
`
`The ID Properly Found Tessera Did Not Establish Substantiality As To
`Investments in Exploitation of Each Patent Through Licensing .......................... 33 
`
`The ID Properly Addressed Valuation .................................................................. 37 
`
`The ID Correctly Found that Mr. Martinez’s Biased Survey Methodology
`Unreliably Inflated Tessera’s Domestic Industry Claims ..................................... 41 
`
`The ID Properly Found Mr. Martinez’s Allocation Was Equally Unavailing As to
`Direct Expenditures .............................................................................................. 46 
`i
`
`C. 
`
`D. 
`
`E. 
`
`F. 
`
`Respondents’ Response to Tessera’s
`Petition for Review
`
`
`
`Investigation No. 337-TA-1010
`
`

`

` 
`
`III. 
`
`The ID Properly Determined That Micron Did Not Make a Significant Investment In
`Articles Protected by the ‘007 Patent ................................................................................ 47 
`
`A. 
`
`B. 
`
`The Commission Should Decline Review Because There Can Be No Violation Of
`Section 337 With Respect To The ‘007 Patent In Light Of Tessera’s Concession
`Of Invalidity .......................................................................................................... 47 
`
`The ID Properly Applied Commission Precedent When Considering Micron’s
`Investments Relating To Articles Protected By The ‘007 Patent ......................... 48 
`
`IV. 
`
`The ID Properly Determined That Globalfoundries Did Not Have a Domestic Industry in
`the ‘136 Patent .................................................................................................................. 51 
`
`A. 
`
`The Evidence Confirms the ID’s Finding that Tessera Failed Its Burden of
`Establishing GlobalFoundries Is Licensed to the ‘136 Patent .............................. 53 
`
`1. 
`
`2. 
`
`3. 
`
`4. 
`
`Tessera Did Not
`
` .............................. 55 
`
` Does Not
`Tessera Concedes the
`Expressly Reference the ‘136 Patent or Grant a Broad License ............... 55 
`
`Tessera Failed to Prove that
`
`
` ...................................................... 56 
`
`IBM Did Not
`
`
`........................................................................................ 63 
`
`B. 
`
`The ID Properly Determined that GlobalFoundries’ Investment in Manufacturing
`Products for
` Is Insignificant ......................................................................... 64 
`
`V. 
`
`The ID Correctly Found That the Untested Accused Products do not Infringe the ‘136
`Patent................................................................................................................................. 66 
`
`A. 
`
`B. 
`
`Factual Background .............................................................................................. 67 
`
`The Tested Products Are Not Representative of The Untested Accused Products
`............................................................................................................................... 71 
`
`1. 
`
`The ID Applied the Correct Legal Framework for Representative Products
`................................................................................................................... 71 
`
`C. 
`
`There Is No Direct Evidence That The Untested Products Infringe The Asserted
`Claims ................................................................................................................... 77 
`
`1. 
`
`2. 
`
`Tessera’s Reason No. 1 Is Not Sufficient Basis To Review The ID’s
`Determination ........................................................................................... 79 
`
`Tessera’s Reason No. 2 Is Not Sufficient Basis To Review The ID’s
`
`Respondents’ Response to Tessera’s
`Petition for Review
`
`ii
`
`
`
`Investigation No. 337-TA-1010
`
`

`

` 
`
`Determination ........................................................................................... 80 
`
`Tessera’s Reason No. 3 Is Not Sufficient Basis To Review The ID’s
`Determination ........................................................................................... 80 
`
`Tessera’s Reason No. 4 Is Not Sufficient Basis To Review The ID’s
`Determination ........................................................................................... 81 
`
`Tessera’s Reason No. 5 Is Not Sufficient Basis To Review The ID’s
`Determination ........................................................................................... 81 
`
`Tessera’s Reason No. 6 Is Not Sufficient Basis To Review The ID’s
`Determination ........................................................................................... 82 
`
`3. 
`
`4. 
`
`5. 
`
`6. 
`
`D. 
`
`Other Reasons The Untested Accused Products Do Not Infringe ........................ 82 
`
`VI. 
`
`The ID Correctly Found That
`
` Holds a License to the ‘136 Patent ....................... 83 
`
`A. 
`
`B. 
`
`C. 
`
`D. 
`
` as
`Tessera Failed in Its Discovery Obligations Because It Did Not Identify
`a Licensee and Failed to Produce Documents Relating to the License ................ 85 
`
`IBM was Authorized to Grant a Broad License to
`
` ................................... 87 
`
`, and Remains in Effect
`The License Agreement Went into Effect on
`............................................................................................................................... 91 
`
`The License Agreement Authorizes
`
`
` Under the ‘136 Patent ..................... 92 
`
` 
`
`Respondents’ Response to Tessera’s
`Petition for Review
`
`iii
`
`
`
`Investigation No. 337-TA-1010
`
`

`

`TABLE OF AUTHORITIES 
`
` 
`
` 
`
`Page(s) 
`
`Cases
`
`AA Sales & Assocs. v. JT&T Prods. Corp.,
`No. 98 C 7954, 2000 U.S. Dist. LEXIS 15429 (N.D. Ill. Oct. 18, 2000) ................................59
`
`Bazak Int’l Corp. v. Tarrant Apparel Grp.,
`378 F. Supp. 2d 377 (S.D.N.Y. 2005) ......................................................................................83
`
`Beloit Corp. v. Valmet Oy,
`742 F.2d 1421 (Fed. Cir. 1984)................................................................................................47
`
`Brennan v. Bally Total Fitness,
`153 F. Supp. 2d 408 (S.D.N.Y. 2001) ......................................................................................94
`
`Certain Audio Digital-to-Analog Converters,
`Inv. No. 337-TA- 499, 2004 WL 3121325 (Nov. 15, 2004)....................................................37
`
`Certain Computers & Computer Peripheral Devices, & Components Thereof, &
`Prod. Containing Same, USITC Inv. No. 337-TA-841, 2014 WL 5380098,
`Comm’n Op. (Jan. 9, 2014) .....................................................................................................53
`
`Certain Devices for Mobile Data Comm’n,
`Inv. 337-TA-809, Order No. 41, 2012 WL 4829456 (Sep. 6, 2012) .......................................53
`
`Certain Dynamic Random Access Memories,
`Inv. No. 337-TA-242 Commission Opinion on Violation, Remedy, Bonding,
`and Public Interest at 43 (Nov. 5, 1987) ..................................................................................11
`
`Certain Electronic Imaging Devices,
`Inv. No. 337-TA-850, 2013 WL 5956227 (Sept. 30, 2013), rev’d in part on
`other grounds, Comm’n Op. (Apr. 21, 2014) ..........................................................................72
`
`Certain Integrated Circuit Chips and Products Containing Same
`Inv. No. 337-TA-859, Comm’n Op. at 36 (Aug. 2014) ...........................................................50
`
`Certain Male Prophylactic Devices,
`Inv. No. 337-TA-546, USITC Pub. 4005, Comm’n Op. .........................................................50
`
`Certain Optical Waveguide Fibers,
`Inv. No. 337-TA-189, Commission Memorandum Opinion (June 19, 1985),
`USITC Pub. 1754 (Sept. 1985) ................................................................................................11
`
`Certain Optoelectronic Devices for Fiber Optic Communications,
`Inv. No. 337-TA-860, Comm’n Op. at 12-13 (May 9, 2014) ............................................10, 45
`
`Respondents’ Response to Tessera’s
`Petition for Review
`
`iv
`
`
`
`Investigation No. 337-TA-1010
`
`

`

` 
`
`Certain Printing and Imaging Devices,
`Inv. 337-TA-690, 2011 WL 1303160, Comm’n Op. (Feb. 17, 2011) .....................................65
`
`Certain Products Containing Interactive Program Guide & Parental Control
`Tech.,
`USITC Inv. No. 337-TA-845 Final ID, 2013 WL 3463385 (June 7, 2013) ......................19, 40
`
`Certain Reduced Ignition Proclivity Cigarette Paper Wrappers & Prod.
`Containing Same,
`Inv. No. 337-TA-756, 2013 ITC LEXIS 2027, Comm’n Opinion (July 2012) .......................74
`
`Certain Semiconductor Chip Packages With Minimized Chip Package Size &
`Prods. Containing The Same (II), Inv. No. 337-TA-605, ID (Dec. 1, 2008) ..........................73
`
`Certain Semiconductor Chips,
`Inv. No. 337-TA-753, Comm’n Op. (Aug. 17, 2012) ..............................................3, 10, 12, 27
`
`Certain Semiconductor Chips With Minimized Chip Package Size & Prods.
`Containing Same (III), Inv. No. 337-TA-630, ID (Aug. 28, 2009) .........................................73
`
`Certain Video Game Systems and Controllers,
`Inv. 337-TA-743, Comm’n Op., 2012 ITC LEXIS 2270 (Jan. 20, 2012) ...............................52
`
`Certain Video Game Systems and Wireless Controllers and Components Thereof
`Inv. No. 337-TA-770, Comm’n Op. (Oct. 2013) .....................................................................50
`
`Certain Wireless Devices with 3G and 4G Capabilities(“InterDigital II”),
`Inv. No. 337-TA-868, Final ID, 2014 WL 2965327 (June 13, 2014) ..............10, 11, 15, 16, 43
`
`Certain Wireless Devices with 3G Capabilities (“InterDigital I”),
`Inv. No. 337-TA-800, Final ID, 2013 WL 3961230 (June 28, 2013) ....4, 10, 15, 18, 25, 30, 34
`
`Certain Wireless Standard Compliant Electronic Devices, Including
`Communication Devices and Tablet Computers,
`Inv. No. 337-TA-953, Order No. 40, 2015 WL 9875534 (Dec. 18, 2015) ..............................37
`
`Cty. of Albany v. Albany Cty. Indus. Dev. Agency,
`638 N.Y.S.2d 973 (1996) .........................................................................................................95
`
`In re EchoStar Commc’ns Corp.,
`448 F.3d 1294 (Fed. Cir. 2006)................................................................................................73
`
`Enzo Biochem v. Gen-Probe, Inc.,
`424 F.3d 1276 (Fed. Cir. 2005)................................................................................................78
`
`Frontier Refining, Inc. v. Gorman-Rupp Co., Inc.,
`136 F.3d 695 (10th Cir. 1998) .................................................................................................73
`
`Respondents’ Response to Tessera’s
`Petition for Review
`
`v
`
`
`
`Investigation No. 337-TA-1010
`
`

`

` 
`
`Implicit Networks Inc. v. F5 Networks Inc.,
`No. C 10- 4234 SI, 2013 WL 1007250 (N.D. Cal. Mar. 13, 2013) .........................................72
`
`Integrated Circuit Chips,
`337-TA-859 Comm’n Op. (Aug. 22, 2014) .......................................................................13, 51
`
`InterDigital v. ITC,
`707 F.3d 1295 (Fed. Cir. 2013)........................................................................................ passim
`
`L & W, Inc. v. Shertech, Inc.,
`471 F.3d 1311 (Fed. Cir. 2006)..........................................................................................71, 74
`
`Law Deb. Trust Co. of N.Y. v. Maverick Tube Corp.,
`595 F.3d 458 (2d Cir.2010)......................................................................................................95
`
`LCD Devices,
`337-TA-749/741, Comm’n Op. (July 6, 2012) ................................................................ passim
`
`Lelo v. Int’l Trade Comm’n,
`786 F.3d 879 (Fed. Cir. 2015)..................................................................................................65
`
`Luitpold Pharm., Inc. v. Ed. Geistlich Sohne A.G. Fur Chemische Industrie,
`784 F.3d 78 (2d Cir. 2015).................................................................................................85, 87
`
`MobileMedia Ideas LLC v. Apple Inc.,
`780 F.3d 1159 (Fed. Cir. 2015)................................................................................................81
`
`Moshan v. PMB, LLC,
`36 N.Y.S.3d 445 (N.Y. App. Div. 2016) .................................................................................91
`
`Motiva, LLC v. ITC,
`716 F.3d 596 (Fed. Cir. 2013)..................................................................................................37
`
`Multimedia Display & Navigation Devices, and Systems, Components Thereof,
`Inv. No. 337-TA-694, Comm’n Op. (Aug. 8, 2011) ........................................................ passim
`
`Nardi v. Povich,
`12 Misc. 3d 1188(A) (N.Y. Sup. Ct. 2006) .............................................................................91
`
`People v. Stokes,
`630 N.Y.S.2d 634 (N.Y. Sup. Ct. 1995) ..................................................................................94
`
`Priceless Custom Homes, Inc. v. O’Neill,
`960 N.Y.S.2d 455 (N.Y. App. Div. 2013) ...............................................................................91
`
`Products Having Laminated Packaging, Laminated Packaging,
`Inv. No. 337-TA-874 (July 5, 2013) ..................................................................4, 36, 44, 45, 46
`
`Respondents’ Response to Tessera’s
`Petition for Review
`
`vi
`
`
`
`Investigation No. 337-TA-1010
`
`

`

` 
`
`Scalabrini v. Scalabrini,
`662 N.Y.S.2d 581 (N.Y. App. Div. 1997) ...............................................................................94
`
`Shah v. Monpat Const., Inc.,
`884 N.Y.S.2d 116 (N.Y. App. Div. 2009) ...............................................................................91
`
`Spansion, Inc. v. ITC,
`629 F.3d 1331 (Fed. Cir. 2010)..........................................................................................71, 72
`
`Tech. Licensing Corp. v. Videotek, Inc.,
`545 F.3d 1316 (Fed. Cir. 2008)................................................................................................74
`
`TechSearch, L.L.C. v. Intel Corp.,
`286 F.3d 1360 (Fed. Cir. 2002)................................................................................................81
`
`Town of Union v. Time Warner Entm’t-Advance/Newhouse P’ship,
`30 N.Y.S.3d 811 (N.Y. Sup. Ct. 2016) ....................................................................................93
`
`In re UBS Ag. Sec. Litig.,
`2012 U.S. Dist. LEXIS 141449 (S.D.N.Y. Sept. 28, 2012) .....................................................58
`
`Vision-Based Driver Assistance Sys. Cameras and Components Thereof,
`Inv. No. 337-TA-899, Order No. 17 (Jan. 20, 2015) .........................................................58, 65
`
`Winkler v. Battery Trading, Inc.,
`89 A.D.3d 1016 (N.Y. App. Div. 2d Dep’t 2011) ...................................................................57
`
`Statutes
`
`19 U.S.C. Section 337(a) ...................................................................................................... passim
`
`Other Authorities
`
`19 C.F.R. § 210.43 .....................................................................................................................1, 47
`
`19 C.F.R § 210.43(b)(1) .................................................................................................................52
`
`https://www.sec.gov/Archives/edgar/data/51143/000104746916010329/a2226548
`z10 ............................................................................................................................................59
`
` 
`
` 
`
`Respondents’ Response to Tessera’s
`Petition for Review
`
`vii
`
`
`
`Investigation No. 337-TA-1010
`
`

`

` 
`
`Abbreviation
`ID
`ALJ
`Tr.
`CX
`CDX
`JX
`RX
`RDX
`TP
`TPoTB
`TPoTRB
`RP
`RPoTB
`RPoTRB
`
`TABLE OF ABBREVIATIONS 
`
`Full Name
`Initial Determination (June 30, 2017)
`Administrative Law Judge
`Hearing Transcript
`Complainants’ Exhibit
`Complainants’ Demonstrative Exhibit
`Joint Exhibit
`Respondents’ Exhibit
`Respondents’ Demonstrative Exhibit
`Tessera Complainants’ Petition for Review
`Tessera Complainants’ Post Trial Brief
`Tessera Complainants’ Post Trial Reply Brief
`Respondents’ Petition for Review
`Respondents’ Post Trial Brief
`Respondents’ Post Trial Reply Brief
`
` 
`
` 
`
` 
`
` 
`
` 
`
`Respondents’ Response to Tessera’s
`Petition for Review
`
`viii
`
`
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`Investigation No. 337-TA-1010
`
`

`

` 
`
`I.
`
`SUMMARY OF RESPONSE
`
`The Commission should decline to review all five of the ID findings identified by
`
`Tessera in its Petition for Review, i.e., that Tessera did not establish (1) a domestic industry in
`
`each of the patents-in-suit through licensing, (2) a domestic industry of Micron with respect to
`
`the ‘007 patent, (3) a domestic industry of GlobalFoundries with respect to the ‘136 patent, and
`
`(4) infringement of the ‘136 patent by accused products that Tessera did not test, and (5) that
`
`Respondents did establish
`
`received a license to the ‘136 Patent that covers the
`
`manufacture of products for Broadcom. Commission Rule 43 provides for review only of
`
`clearly erroneous findings of material fact, erroneous legal conclusions, or determinations that
`
`affect Commission policy. 19 C.F.R. § 210.43. None of these grounds applies to any of the five
`
`findings identified by Tessera.
`
`A.
`
`No Domestic Industry Based On Tessera’s Licensing Activities
`
`In its petition, Tessera puts forth numerous theories as to how the ID misapplies the law,
`
`weighs credibility incorrectly, demands reliable evidence inappropriately, or otherwise fails to
`
`show deference to Tessera’s legal theories. All of Tessera’s arguments should be rejected.
`
`First, the ID carefully followed Commission precedent and policy as to portfolio
`
`licensing as domestic industry, and Tessera fell short of that precedent.
`
`To support its position that it satisfied the nexus requirement, Tessera seeks to align itself
`
`with the facts of three investigations (InterDigital I, InterDigital II, and LCD Devices) where “a
`
`complainant who licenses asserted patents as part of a larger portfolio had satisfied the domestic
`
`industry requirement.” Petition at 11. Tessera’s reliance on these investigations is misplaced.
`
`These decisions were considered by the ID (at 212-213) and distinguished both directly (see ID
`
`at 216, n.57 (distinguishing InterDigital I and II based on the “insufficient evidence in this
`
`record”)) and based on the many difference in facts and methodologies. See ID at 214-224.
`1
`
`Respondents’ Response to Tessera’s
`Petition for Review
`
`
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`Investigation No. 337-TA-1010
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`

`

` 
`
`For example, the corporate witnesses in all three investigations were far more thorough
`
`than Tessera’s expert Mr. Martinez, who utilized a survey questionnaire and refused to verify his
`
`results. Compare LCD Devices at 120 (corporate witness “verified with the relevant employees
`
`whether or not [their] expenditures related to licensing the asserted patents”); with Tr.
`
`(Martinez) at 173:24-174:2
`
` Tessera’s Mr. Martinez also exaggerated his
`
`allocations using a faux-survey methodology found unreliable by the ID (at 214-224) as well as
`
`an idiosyncratic methodology using EOU counts that had no basis in precedent and was found to
`
`be “flawed and biased.” See ID at 217-18; 224.
`
`Tessera argues that the ID’s rejection of Mr. Martinez’s allocations was arbitrary. See
`
`Petition 17-18. Because the ID discredited both of Mr. Martinez’s underlying methodologies,
`
`the determination that the allocations were unreliable was correct. See ID at 215 (explaining the
`
`allocations using the Questionnaire Apportionment Factors are “exaggerated and cannot be
`
`relied upon.”); see also ID at 217 (explaining that the estimated costs utilizing the EOU
`
`Apportionment Factors are also “unreliable.”)
`
`Tessera argues that the ID’s rejection of the EOU methodology was based on (1) false
`
`assumptions about the effect of using the EOU-base that should have been used rather than the
`
`one that was; and (2) a misimpression about how EOUs were selected by Mr. Martinez. See
`
`Petition at 18-19. The ID, however, was correct in finding that Mr. Martinez did not select the
`
`base of EOUs for his calculations that would provide reliable evidence as to the amount of work
`
`done, and that his EOU approach, therefore, “distorts the amount of work done on EOUs related
`
`to the patent” and renders his allocations unreliable. See ID at 217.
`
`Second, the ID properly assessed the Commission’s “nexus” requirement. Tessera failed
`
`to meet its burden of proving nexus by, at least, failing to provide reliable estimates of the
`
`Respondents’ Response to Tessera’s
`Petition for Review
`
`2
`
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`Investigation No. 337-TA-1010
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`

`

` 
`
`portion of its licensing expenditures with nexus to the asserted patents. See ID at 224. In
`
`Semiconductor Chips, the Commission—just as the ID did here—found that the complainant
`
`“has not come forth with sufficient evidence for us to identify or reasonably estimate the portion
`
`of its overall investments in licensing that have a nexus to the asserted patents, and, accordingly
`
`[found] that there is also insufficient evidence for the Commission to determine whether
`
`Rambus’s relevant licensing investments are ‘substantial.’” Id. at 46 (emphasis added). The ID
`
`performed the same analysis and reached the same conclusion: Tessera did not present licensing
`
`expenditure amounts “based on reliable calculations,” so “the nexus requirement under section
`
`337(a)(3)(C) has not been satisfied.” ID at 224.
`
`Tessera argues that the ID nevertheless erred by rejecting Mr. Martinez’s allocations
`
`without “any adverse credibility findings against him.” See Petition at 23. To the contrary, the
`
`ID makes clear that Mr. Martinez’s expert testimony was found unreliable: it found that he
`
`“manipulated” the results of his survey. ID at 215; see also ID at 217 (finding Martinez’s expert
`
`testimony “flawed” and “biased” and his conclusions “unreliable.”); see also ID at 220 n. 60
`
`(finding his testimony “inconsistent”).
`
`Tessera’s evidence also failed to show that the asserted patents were “very significant” to
`
`the portfolio. See Petition at 21. The ID found that there was no evidence that any specific
`
`patent was
`
`
`
`. See e.g., ID at 220, n.59; see also ID at 219 (noting that
`
`“Tessera could have presented more information” to prove
`
` “but Tessera
`
`has not done so.”) Tessera also argues that the ’946 patent
`
`
`
`
`
` Petition at 22. The ID, however, found that “[t]he amounts allocated to the ’946 patent
`
`Respondents’ Response to Tessera’s
`Petition for Review
`
`3
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`Investigation No. 337-TA-1010
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`

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` 
`
`seem more closely linked to the idiosyncratic methodology employed by Mr. Martinez than with
`
`the actual licensing efforts made by Tessera.” ID at 221. Indeed, as described above, Mr.
`
`Martinez’s decision to credit redundant EOUs within a single negotiation is not in line with the
`
`methodologies considered in other investigations. See InterDigital I, at *224 (considering the
`
`fact that 71 of 145 prospective licensees were shown an asserted patent); compare CX-0011C
`
`(Mitchell) at Q196-Q200 (showing that only 7 licensees were shown an asserted patent or
`
`related family member).
`
`Third, the ID properly found Tessera did not establish substantiality as to investments in
`
`exploitation of each patent-in-suit through its portfolio licensing activities. The Petition attacks
`
`the ID’s use of Tessera’s “active portfolio”—(i.e.,
`
`
`
`)—as the context for considering whether the asserted patents were
`
`treated “significantly differently” than the other patents in Tessera’s portfolio. See Petition at
`
`27-28. But placing the focus on actively asserted patents is in line with prior investigations. See
`
`InterDigital I at *217-18 (assessing “the ratio of asserted and related patents to the total number
`
`of patents that were disclosed to each InterDigital licensee or prospective licensee.”)
`
`Further, Tessera “failed to provide any context or benchmark” beyond its own licensing
`
`for assessing whether its expenses were substantial and “[s]uch a showing is insufficient.” See
`
`Laminated Packaging, Comm’n Op. at 19.
`
`Fourth, the ID properly addressed valuation in accordance with Commission precedent
`
`and did not impose a “separate valuation test” as alleged by Tessera. See Petition at 35-36. It
`
`was not error for the ID (at 222) to cite Mr. Bakewell’s expert testimony regarding valuation as a
`
`counterpoint to the speculation by Mr. Mitchell’s—a fact witness—as to the value of the patents.
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`Fifth, as discussed above, the ID found correctly that Mr. Martinez’s biased survey
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`methodology was not reliable, and thus could not be used to assess the domestic industry.
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`And sixth, the ID properly found Mr. Martinez’ allocations were equally unavailing as to
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`direct expenditures. Tessera argues that even if the ID’s concerns about Mr. Martinez’s EOU
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`Apportionment Factors were legitimate, the ID erred by not considering the substantiality of
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`Tessera’s direct licensing investments. See Petition at 39. As discussed above, however, the ID
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`discredited both the Questionnaire Apportionment Factors and the EOU Apportionment Factors.
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`It was not error by the ALJ to not assess substantiality for an unreliable allocation.
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`B.
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`The ID Properly Determined That Micron Does Not Have A Domestic
`Industry In The ‘007 Patent Under Subsections 337(a)(3)(A) And (B)
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`The Commission should decline to review the ID’s determination that Micron does not
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`have a domestic industry in the ‘007 patent, because the ID contained no clearly erroneous
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`factual findings or legal error. Additionally, Tessera has not challenged the ID’s ruling that the
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`‘007 patent is invalid, and therefore there can be no determination of violation with respect to
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`that patent.
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`Tessera challenges the determination on one ground – that the ID improperly required a
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`nexus under subsections 337(a)(3)(A) and (B) between the investments of Micron and the
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`patent, but Tessera manufactures this argument of legal error. The ID did not require a nexus
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`under subsections (A) and (B). Rather, the ID relied on Commission precedent to properly find
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`that the component within a solid state drive (“SSD”) that Tessera alleged practiced the patent
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`(the LTC4280 chip bonded to the circuit board) is a completely separate component of the SSD
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`from the component (
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`) that constituted the investments
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`proffered by Tessera. The ID applied well-established Commission precedent to properly find
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`that any weight afforded to the investments for the
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` should be discounted
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`because of the complete disconnect between those investments and the patented feature.
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`Accordingly, the ID properly found under Commission precedent that Tessera failed to establish
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`a domestic industry of Micron under subsections (A) and (B) with respect to the ‘007 patent.
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`C.
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`The ID Properly Found That GlobalFoundries Does Not Have A Domestic
`Industry in the ‘136 Patent That Tessera Can Claim As Its Own
`
`The Commission should decline to review the ID’s determination that GlobalFoundries
`
`is not licensed to the ‘136 patent. Tessera challenges the determination as clearly erroneous, but
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`it is overwhelmingly supported by the facts and law. It is undisputed that IBM, the original
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`patent owner, assigned the ‘136 patent to Tessera
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`and that Tessera
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`. It is also undisputed that the
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` does not reference the ‘136 patent, and that
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`any such license grant would be subject to the limitations
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`
`
`
`
`
`
`. The ID properly found Tessera failed to produce facts to overcome this limitation.
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`Tessera attempted to bootstrap
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` license to GlobalFoundries under three
`
`theories that were nowhere mentioned in its complaint, but the ID properly found these untimely
`
`theories all failed for insufficient evidence. Tessera’s first theory claims that GlobalFoundries
`
`received a license
`
`evidence show that
`
`, but the record
`
`
`
`. Tessera’s
`
`second theory is that GlobalFoundries is a
`
` but Tessera presented no evidence to support this theory.
`
`Indeed, there is a dearth of evidence as to what even constituted
`
`, and thus Tessera necessarily failed to show that
`
`
`
`. Additionally, the ALJ’s finding that the
`
` is not satisfied, and thus GlobalFoundries did not receive a license
`
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`claims that
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`, is not clearly erroneous. Tessera’s third theory
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` 
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`
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`theories, the ALJ’s conclusion that GlobalFoundries is not licensed to the ‘136 patent is not
`
`. Given the failure of all Tessera’s license
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`clearly erroneous.
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`Furthermore, the ALJ’s finding that GlobalFoundries’ investment of
`
` under
`
`sections 337(a)(3)(A) and (B) in products
`
`insignificant also is not clearly erroneous.
`
`
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`, is
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`D.
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`Tessera Failed to Prove Infringement of the Non-tested ‘136 Accused
`Products
`
`Tessera’s request to review the ID’s determination that Tessera failed to satisfy its
`
`burden of showing that the more than 800 untested products infringe the asserted claims of the
`
`’136 patent should be denied. Tessera has not identified a single error of law or clearly
`
`erroneous finding of fact that warrants the Commission’s review of this determination.
`
`To the contrary, the ID properly weighed all the evidence in view of controlling
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`precedent, and found that Tessera failed to prove that the untested accused products infringe the
`
`asserted claims of the ’136 patent. The ALJ considered Tessera’s initial assertion that the tested
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`products are representative of the untested products, (CX-0002C at 56 [Q168]), and rejected this
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`claim because, despite its expert’s (Dr. Bravman) admission that he is relying on representative
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`products, (CX-0002C at 63 [Q186]; 211 [Q519], 232-33 [Q547], 256 [Q578], 277 [Q605]),
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`Tessera conceded, at least facially, that it was not pursuing a representative products theory of
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`infringement. ID at 93; Tessera Post Trial Brief (“TPoTB”) at 107. Indeed, the ID