13-09-13 u.s. government's motion to dismiss microsoft's dc complaint

7/29/2019 13-09-13 U.S. Government's Motion to Dismiss Microsoft's DC Complaint

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

MICROSOFT CORPORATION, ))

Plaintiff, )

)v. ) No. 13-1063 (RWR))

UNITED STATES,ET AL., )

)Defendants, )

)

and )

)MOTOROLA MOBILITY, INC. )

)

Defendant-intervenor. )

DEFENDANTS MOTION TO DISMISS

STUART F. DELERYAssistant Attorney General

RONALD C. MACHEN JR.United States Attorney

for the District of Columbia

BRYANT G. SNEEDeputy Director

PATRICIA M. McCARTHYAssistant Director

STEPHEN C. TOSINI(DC Bar No. 470415)

SEAN B. McNAMARA

Senior Trial Counsels

Department of JusticeCivil Division

Commercial Litigation Branch

PO Box 480, Ben Franklin Station

Washington, D.C., 20044Tel: (202) 616-5196

Email: [email protected]

September 13, 2013 Attorneys for Defendant

Case 1:13-cv-01063-RWR Document 53 Filed 09/13/13 Page 1 of 28


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TABLE OF CONTENTS

BACKGROUND .............................................................................................................................1

ARGUMENT ..................................................................................................................................4

I. Standard of Review ..............................................................................................................4

A. Rule 12(b)(1) ............................................................................................................4

B. Rule 12(b)(6) ............................................................................................................5

II. The Court Lacks Jurisdiction To Entertain Microsofts Complaint ....................................5

A. Jurisdiction Under The APA Is Unavailable Because MicrosoftPossesses An Adequate ITC Remedy ......................................................................5

1. Section 337 Remedies Preclude APA Jurisdiction ......................................6

2. The Patent Laws Preclude APA Jurisdiction .............................................13

3. Alternatively, This Case Should Be Rejected Because It

Falls Within The ITCs Primary Jurisdiction.............................................13

B. Count III Of The Complaint Is Moot .....................................................................15

III. Microsoft Fails To State A Claim For Which Relief May Be Granted .............................15

CONCLUSION ..............................................................................................................................19



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TABLE OF AUTHORITIES

CASES

Allnet Communication serv., Inc. v. Natl Exchange Carrier Assn,

965 F.2d 1118 (D.C. Cir. 1992) ....................................................................................... 14

American Road & Transp. Builders Assn v. E.P.A.,

865 F. Supp. 2d 72 (D.D.C. 2012) .................................................................................. 5, 6

Ashcroft v. Iqbal,

556 U.S. 662 (2009) ........................................................................................................ 4, 5

Barr v. Clinton,

370 F.3d 1196 (D.C. Cir. 2004) .......................................................................................... 4

Bell Atl. Corp. v. Twombly,

550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ..................................................... 5

Bowen v. Massachusetts,487 U.S. 879 (1988) .......................................................................................................... 11

Califano v. Sanders,430 U.S. 99 (1977) .............................................................................................................. 5

Camreta v. Greene,

131 S. Ct. 2020 (2011)...15

Cook v. FDA,

--- F. 3d ----, 2013 WL 3799987 (D.C. Cir. July 23, 2013) .............................................. 18

Corning Gilbert, Inc. v. United States,

896 F. Supp. 2d 1281 (Ct. Intl Trade 2013) ................................................................... 17

County of Los Angeles v. Davis,

440 U.S. 625 (1979) ......................................................................................................... 15

Enercon GmbH v. Intl Trade Commn,

151 F.3d 1376 (Fed. Cir. 1998)......................................................................................... 16

FDIC v. Meyer,510 U.S. 471 (1994) ............................................................................................................ 4

First Nat. Bank of Chicago v. Steinbrink,812 F. Supp. 849 (N.D. Ill 1993) ..................................................................................... 12



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Fornaro v. James,

416 F.3d 63 (D.C. Cir. 2005) .................................................................................... 6, 9, 10

Fuji Photo Film Co., Ltd. v. Jazz Photo Corp.,

394 F.3d 1368 (Fed. Cir. 2005)......................................................................................... 13

Funai v. Vizio,2010 ITC LEXIS 2811 (2010) ......................................................................................... 12

Funai Elec. Co., Ltd. v. United States,645 F. Supp. 2d 1351 (Ct. Intl Trade 2009) ...................................................................... 7

Harrison v. PPG Indus., Inc.,

446 U.S. 578 (1980) 19 U.S.C. 1331 .............................................................................. 6

Heckler v. Chaney,

470 U.S. 821 (1985) ................................................................................................... 17, 19

Historic Eastern Pequots v. Salazar,

--- F. Supp. 2d ----, 2013 WL 1289571 (D.D.C. Mar. 31, 2013) ....................................... 4

Jazz Photo Corp. v. United States,

439 F.3d 1344 (Fed. Cir. 2006)..................................................................................... 7, 12

Kyocera Wireless Corp. v. Intl Trade Commn,

545 F.3d 1340 (Fed. Cir. 2008)........................................................................................... 6

Lane v. Pena,518 U.S. 187 (1996) ............................................................................................................ 4

Larsen v. Navy,525 F.3d 1 (D.C. Cir. 2008) ............................................................................................. 15

Logan v. Dept of Veterans Affairs,357 F. Supp. 2d 149 (D.D.C. 2004) .................................................................................... 4

McNutt v. Gen. Motors Acceptance Corp. of Ind.,

298 U.S. 178 (1936) ............................................................................................................ 4

Microsoft v. Motorola, Inc.,,

No. 2:10-cv-1577-RSM (W.D. Wash.) ............................................................................. 13

Natl Treasury Employees Union v. Whipple,

636 F. Supp. 2d 63 (D.D.C. 2009) .................................................................................... 10



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Natl Wrestling Coaches Assn v. Dept of Educ.,

366 F. 3d 930 (D.C. Cir. 2004) ........................................................................................... 6

Ninestar v. Intl Trade Commn,

667 F.3d 1373 (Fed. Cir. 2012) ....................................................................................... 12

Norton v. Southern Utah Wilderness Alliance,542 U.S. 55 (2004) ........................................................................................................... 16

Plaut v. Spendthrift Farm, Inc.,514 U.S. 211 (1995)...15

Powell v. McCormack,

395 U.S. 486 (1969) ......................................................................................................... 15

Reiter v. Cooper,

507 U.S. 258 (1993) ......................................................................................................... 14

Salmon Spawning Recovery Alliance v. United States,

532 F.3d 1338 (Fed. Cir. 2008) ........................................................................................ 17

Sierra Club v. Jackson,

648 F.3d 848 (D.C. Cir. 2011) .......................................................................................... 16

Steel Co. v. Citizens for a Better Envt,

523 U.S. 83 (1998) .............................................................................................................. 4

Swan v. Clinton,100 F.3d 973 (D.C. Cir. 1996) ............................................................................................ 5

Town of Sanford v. United States,140 F.3d 20 (1st Cir. 1998) ............................................................................................... 11

United States v. Western Pac. R. Co.,352 U.S. 59 (1956) ........................................................................................................... 13

VastFame Camera, Ltd. v. Intl Trade Commn,

386 F.3d 1108 (Fed. Cir. 2004)....................................................................................... 8, 9

Washington Legal Found. v. Alexander,

984 F.2d 483 (D.C. Cir. 1993) ............................................................................................ 6

World Wide Volkswagen v. Intl Trade Commn,

414 F. Supp. 713 (D.D.C. 1976) ......................................................................................... 8



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STATUTES

5 U.S.C. 701(a)(2) ................................................................................................................. 6, 17

5 U.S.C. 702 .............................................................................................................................. 16

5 U.S.C. 704 .......................................................................................................................... 5, 11

5 U.S.C. 706(a)(A) ................................................................................................................... 16

5 U.S.C. 706(1) .................................................................................................................. 15, 16

5 U.S.C. 706(2)(A) ................................................................................................................... 16

19 U.S.C. 1337 ................................................................................................................... passim

19 U.S.C. 1337(a)(1)(B) .............................................................................................................. 6

19 U.S.C. 1337(a)(1)(B)(i)........................................................................................................... 1

19 U.S.C. 1337(b) ...................................................................................................................... 14

19 U.S.C. 1337(c) ........................................................................................................................ 7

19 U.S.C. 1337(d)-(f) ................................................................................................................. 14

19 U.S.C. 1337(d)(1) ............................................................................................................... 2, 7

19 U.S.C. 1337(d)(2) ................................................................................................................... 7

19 U.S.C. 1337(f)(1) .................................................................................................................... 8

19 U.S.C. 1337(f)(2) .................................................................................................................... 8

19 U.S.C. 1514(a) ........................................................................................................................ 6

19 U.S.C. 1514(c)(2) .................................................................................................................... 7

21 U.S.C. 352(o) ........................................................................................................................ 18

21 U.S.C. 381(a) ........................................................................................................................ 18

28 U.S.C. 1295(a)(1) .................................................................................................................... 6

28 U.S.C. 1295(a)(6) ................................................................................................................ 6, 7



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28 U.S.C. 1331 ............................................................................................................................. 5

28 U.S.C. 1581(a) ........................................................................................................................ 7

28 U.S.C. 2631(a) ........................................................................................................................ 7

28 U.S.C. 2631(h) ........................................................................................................................ 7

35 U.S.C. 281 et seq................................................................................................................... 13

35 U.S.C. 284 ............................................................................................................................. 13

REGULATIONS

19 C.F.R. 177 ............................................................................................................................... 2

19 C.F.R. 210.75 .......................................................................................................................... 8

19 C.F.R. 210.75(a)...................................................................................................................... 8

19 C.F.R. 210.75(b)(1) ................................................................................................................. 8

19 C.F.R. 210.75(c)...................................................................................................................... 8

19 C.F.R. 210.76 .......................................................................................................................... 9

19 C.F.R. 210.77(a)...................................................................................................................... 9

19 C.F.R. 210.79 .......................................................................................................................... 9

FEDERAL RULES

Fed. R. Civ. P. 12(b)(1)................................................................................................................... 4

Fed. R. Civ. P. 12(b)(6) ........................................................................................................ 2, 4, 15

ADMINISTRATIVE DECISIONS

Certain Mobile Devices, Associated Software, and Components Thereof,Inv. No. 337-TA-944, Limited Exclusion Order (May 18, 2012) ..................................... 2

In the Matter of Certain Digital Television Products,Inv. No. 337-TA-617 ........................................................................................................ 12



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In the Matter of Certain Personal Data and Mobile Communications Devices

and Related Software,

Inv. No. 337-TA-710 ........................................................................................................ 12



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MICROSOFT CORPORATION, ))

Plaintiff, )

)v. ) No. 13-1063 (RWR))


)Defendants, )

)

and )


)


DEFENDANTS MOTION TO DISMISS

The governmental defendants (collectively United States) respectfully request that the

Court dismiss the complaint filed by plaintiff, Microsoft Corporation (Microsoft), pursuant to

Fed. R. Civ. P. 12(b)(1), because the Court lacks jurisdiction to entertain this case. In the

alternative, we respectfully request that the Court dismiss this action for failure to state a claim

for which relief may be granted pursuant to Fed. R. Civ. P. 12(b)(6).

BACKGROUND

This case arises from a patent dispute before the United States International Trade

Commission (ITC). Microsoft filed a complaint pursuant to 19 U.S.C. 1337 (section 337) at

the ITC alleging that Motorola Mobility, Inc. (Motorola) Android smartphones had infringed

U.S. Patent No. 6,370,566 (the 566 patent), among others, owned by Microsoft. Under section

337, the ITC possesses authority to bar imports of merchandise that infringe a valid and

enforceable United States patent. 19 U.S.C. 1337(a)(1)(B)(i). The ITC issued a limited

exclusion order with respect to the 566 patent only, which, according to Microsoft, claims a



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mobile device . . . that allows a user (1) to schedule an event in his or her calendar (such as a

teleconference), (2) synchronize that device with another device (such as a desktop computer),

and (3) to generate scheduling requests (such as an email request to schedule a meeting on

another persons calendar). Cmpl. at 33. The ITC ordered that unlicensed mobile devices,

associated software, and components covered by claims 1, 2, 5, or 6 ofthe 566 patent and

manufactured abroad or imported by or on behalf of Motorola were, with limited exception,

excluded from entry for consumption into the United States. Cmpl. at 1, 3, 38-57; Certain

Mobile Devices, Associated Software, and Components Thereof, Inv. No. 337-TA-944, Limited

Exclusion Order, 1 (May 18, 2012). Attachment A. Pursuant to 19 U.S.C. 1337(d)(1), U.S.

Customs and Border Protection (CBP) administers ITC exclusion orders at the border.

On May 25, 2012, Motorola requested that CBP allow it to import certain redesigned

mobile devices that Motorola asserted were not coveredby the ITCs exclusion order.

Headquarters Ruling (HQ) H226615 (April 25, 2013), Attachment B; Cmpl. at 67. In

particular, Motorola requested that CBP issue an administrative ruling pursuant to 19 C.F.R. Part

177. Motorolas request informed CBP that it had redesigned certain devices to remove the

ability to generate meeting requests when using Microsoft Exchange ActiveSync protocols and

described the features that were removed in the modified devices. HQ H226615 at 6-10.

Although the redesigned smartphones lacked the ability to generate meeting request emails

through Microsoft Exchange, the redesigned devices still could generate email meeting requests

through Google servers. Cmpl. at 69. According to Motorola, the devices did not infringe.

Cmpl. at 67. CBP issued HQ H226615 in response to Motorolas request, finding that

Motorola had removed the ability to edit meeting requests when using the Exchange

ActiveSync protocols on the redesigned products. Cmpl. at 67 (quoting HQ H226615 at 7).



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Microsoft requested revocation of HQ H226615 on two grounds. First, Microsoft

contended that the ITC had found the Google functionality present on the legacy devices to

infringe. Cmpl. at 69-70; HQ H242025, 1 (Jun. 24, 2013) (Attachment C). Second, even

absent consideration of Google functionality, Microsoft contended that the redesigned devices do

not successfully avoid infringement. Cmpl. at 69-70; HQ H242026 (Jun. 24, 2013). CBP

subsequently issued HQ H242025 and HQ H242026 in which it found that the record did not

support Microsofts allegations regarding Google functionality and the redesigned Motorola

devices. Cmpl. at 71-78.1

Microsoft contends that CBPs decision not to exclude Motorolas phones pursuant to the

ITC exclusion order was arbitrary and capricious. Cmpl. at 2, 86. In particular, Microsoft

asserts that CBP erred by concluding that Microsoft abandoned its claim before the ITC that

Motorolas Google functionality infringed its patent. Cmpl. at 8. Microsoft further alleges that

CBP failed to provide Microsoft with proper notice before issuing its decision, and that CBP

inappropriately shifted the burden to Microsoft to prove that Motorolas phones should be

excluded. Cmpl. at 9-10. Microsoft seeks injunctive and declaratory relief compelling CBP

to exclude certain redesigned smartphones from the United States and to order redelivery of

certain merchandise already imported. Cmpl. at 15-16.

1Microsoft does not challenge HQ H242026.



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ARGUMENT

I. Standard Of Review

A. Rule 12(b)(1)

This Court must consider jurisdiction as a threshold matter. Steel Co. v. Citizens for a

Better Envt, 523 U.S. 83, 94 (1998). There is a presumption against federal court jurisdiction

and the burden is on the party asserting the jurisdiction, the plaintiff in this case, to establish that

the Court has subject matter jurisdiction over the action. Logan v. Dep't of Veterans Affairs,

357 F. Supp. 2d 149, 153 (D.D.C. 2004) (citingMcNutt v. Gen. Motors Acceptance Corp. of

Ind., 298 U.S. 178, 182-83 (1936)). If Microsoft cannot meet its burden, the Court must dismiss.

Steel Co., 523 U.S. at 94.

Moreover, the Court lacks jurisdiction to entertain a matter absent a statutory waiver of

sovereign immunity. Sovereign immunity is jurisdictional in nature,FDIC v. Meyer, 510 U.S.

471, 475 (1994), and any waiver must be express[ed] in statutory text. Lane v. Pena, 518 U.S.

187, 192 (1996).

In deciding a Fed. R. Civ. P. 12(b)(1) motion to dismiss, the Court accepts as true the

allegations of the complaint . . . and liberally construes the pleadings such that the plaintiff

benefits from all inferences derived from the facts alleged. Historic Eastern Pequots v. Salazar,

--- F. Supp. 2d ----, 2013 WL 1289571, *2 (D.D.C. Mar. 31, 2013) (citingAshcroft v. Iqbal, 556

U.S. 662, 678 (2009);Barr v. Clinton, 370 F.3d 1196, 1199 (D.C. Cir. 2004)). Nevertheless,

[w]hen the inquiry focuses on the Courts power to hear the claim, the Court may give the

plaintiffs factual allegations closer scrutiny and may consider materials outside the pleadings.

Id. (quoting Logan v. Dept of Veterans Affairs, 357 F. Supp. 2d 149, 153 (D.D.C. 2004)).



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B. Rule 12(b)(6)

A complaint must contain a short and plain statement of the claim showing that the

pleader is entitled to relief, in order to give the defendant fair notice of what the . . . claim is and

the grounds upon which it rests. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal

quotation marks and citations omitted). Plaintiffs must plead enough facts to raise a right to

relief above the speculative level. Id. Accordingly, only a complaint that states a plausible

claim for relief survives a motion to dismiss. Iqbal, 556 U.S. at 679.

II. The Court Lacks Jurisdiction To Entertain Microsofts Complaint

The Court lacks jurisdiction to entertain this matter because, although the Administrative

Procedure Act (APA) provides a limited waiver of sovereign immunity in cases in which there is

no other adequate legal remedy, Microsoft possesses an adequate remedy before the ITC for its

complaints regarding Motorolas redesigned smartphones. Moreover, count III of the complaint

is moot because the transition period about which Microsoft complains has passed. Similarly,

Microsoft can obtain redress in its pending patent action against Motorola before the Western

District of Washington.

A. Jurisdiction Under The APA Is Unavailable Because Microsoft Possesses An

Adequate ITC Remedy

Microsoft attempts to invoke the Courts jurisdiction pursuant to 28 U.S.C. 1331 and

1337. Alone, neither statute can waive sovereign immunity. Swan v. Clinton, 100 F.3d 973, 981

(D.C. Cir. 1996). But the APA, when it provides a cause of action, can both waive sovereign

immunity and form a basis for jurisdiction in tandem with section 1331. Califano v. Sanders,

430 U.S. 99, 107 (1977);American Road & Transp. BuildersAssn v. E.P.A., 865 F. Supp. 2d

72, 81 (D.D.C. 2012). Nevertheless, ifanother statute provides an adequate remedy in a court,

5 U.S.C. 704, then the APA neither provides a cause of action nor waives sovereign



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immunity. Id. (citing Washington Legal Found. v. Alexander, 984 F.2d 483, 486 (D.C. Cir.

1993);Fornaro v. James, 416 F.3d 63, 66 (D.C. Cir. 2005);Natl Wrestling Coaches Assn v.

Dept of Educ., 366 F. 3d 930, 947 (D.C. Cir. 2004)). Likewise, section 702 of the APA bars

claims seeking relief expressly or impliedly forbidden by another statute. Fornaro, 416 F.3d

at 66. And if the statute providing the adequate remedy channels review to the courts of

appeals, it eliminates the federal question jurisdiction that the district courts would otherwise

enjoy. American Road, 865 F. Supp. 2d at 81 (citingHarrison v. PPG Indus., Inc., 446 U.S.

578, 584 (1980)).

Two statutory schemes provide remedies sufficient to bar any claim by Microsoft that the

APA provides a waiver of sovereign immunity. The first is section 337 itself. The second is the

patent laws. In both schemes, Congress, through 28 U.S.C. 1295(a)(1) and (6), has channeled

review of these remedies by vesting the United States Court of Appeals for the Federal Circuit

with exclusive jurisdiction to entertain challenges to Government action. In sum, there is no

supportable basis to open yet another judicial front in the smartphone wars.

1. Section 337 Remedies Preclude APA Jurisdiction

Microsoft possesses a host of remedies under section 337 and the ITCs implementing

regulations, which preclude APA jurisdiction.

Among its duties related to international trade, the ITC investigates and adjudicates

claims that a party is importing or has imported items that infringe a valid United States patent.

19 U.S.C. 1337(a)(1)(B). If the ITC determines that an importer is infringing a patent, the ITC

will issue a limited exclusion order, which governs the parties before the ITC, orit may issue a

general exclusion order, covering a broader range of circumstances. Kyocera Wireless Corp.

v. Intl Trade Commn, 545 F.3d 1340, 1356 (Fed. Cir. 2008). The purpose of both types of



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orders is to exclude infringing goods from entering the United States. 19 U.S.C. 1337(d)(2).

The ITC does not, however, directly implement its orders at the border. Rather, the statute

entrusts the Treasury Department (currently through CBP) with that responsibility. 19 U.S.C.

1337(d)(1). Accordingly, after the ITC issues an exclusion order, the ITC notifies CBP of the

order, and CPB shall, through the proper officers, refuse entry to subject goods. Id.

Parties may obtain judicial review of the ITCs and CBPs actions in section 337 cases in

two ways.

Most directly, after the ITC makes a final determination under section 337, an adversely

affected party may appeal within 60 days to the Federal Circuit. 19 U.S.C. 1337(c); 28 U.S.C.

1295(a)(6). This direct review is happening in this caseboth Microsoft and Motorola

appealed from the ITCs order to the Federal Circuit, which heard argument on August 6, 2013.

Fed. Cir. Docket Nos. 12-1445 and 12-1535.

The other avenue of judicial review, though more limited, is through the United States

Court of International Trade. Pursuant to 19 U.S.C. 1514(a), an importer may protest a

decision by CBP to exclude entry pursuant to an ITC exclusion order. See, e.g.,Jazz Photo

Corp. v. United States, 439 F.3d 1344, 1347-48 (Fed. Cir. 2006). If CBP denies an importers

protest, the importer may challenge that denial in the Court of International Trade. 28 U.S.C.

1581(a);Jazz Photo Corp., 439 F.3d at 1347. As Microsoft notes, however, only importers

may challenge CBPs exclusions in the Court of International Trade because of that courts

jurisdictional limitations. Funai Elec. Co., Ltd. v. United States, 645 F. Supp. 2d 1351 (Ct. Intl

Trade 2009);see 28 U.S.C. 2631(h) & (a) (standing to challenge pre-importation rulings and

CBP protest decisions); 19 U.S.C. 1514(c)(2) (enumerating parties with standing to file

protests with CBP).



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Despite these statutory limitations, patent holders still possess further administrative and

judicial remedies. The Federal Circuit has held that the ITC possesses statutory authority to

enforce its own orders. VastFame Camera, Ltd. v. Intl Trade Commn, 386 F.3d 1108, 1113

(Fed. Cir. 2004) (appeal from ITC enforcement proceeding);see also World Wide Volkswagen v.

Intl Trade Commn, 414 F. Supp. 713 (D.D.C. 1976) (holding that Court lacked jurisdiction to

entertain APA challenge to ITCs interlocutory dismissal of parties from section 337 proceeding

because the Court of Customs and Patent Appeals, the Federal Circuits predecessor, possessed

jurisdiction to entertain challenges to final ITC decision).

The ITCs regulations provide a road map for complainants like Microsoft to pursue their

rights before the ITC, and, if necessary, the Federal Circuit. As discussed in detail below,

Microsoft can: (1) seek either formal or informal enforcement proceedings; (2) ask the ITC to

issue a cease and desist order; (3) ask the ITC to provide emergency relief; (4) ask the ITC for an

advisory opinion; or (5) ask the ITC to amend the exclusion order to include allegedly infringing

redesigned devises.

First, the ITCs enforcement regulations offer both informal and formal proceedings.

19 C.F.R. 210.75. Informal enforcement proceedings may be conducted by the [ITC] with

respect to any act or omission by any person in possible violation of any provision of an

exclusion order . . . . 19 C.F.R. 210.75(a). The ITC then may issue such orders as it deems

appropriate to implement and insure compliance with the terms of an exclusion order. Id. The

regulation governing formal proceedings allows a complainant in the original investigation,

such as Microsoft, to file a complaint setting forth alleged violations of any exclusion order

. . . . 19 C.F.R. 210.75(b)(1). Second, ITC enforcement proceedings may also result in the

cease and desist orders, which carry substantial civil penalties. Id.;see also 19 U.S.C.



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1337(f)(1) (entitled [c]ease and desist orders; civil penalty for violation of orders). The ITC

may also bring suit in district court to enforce cease and desist orders against importers. 19

U.S.C. 1337(f)(2); 19 C.F.R. 210.75(c). Third, if Microsoft believed that Motorolas imports

were as flagrant and obvious a violation of the exclusion order as it purports, Microsoft could

also seek temporary emergency relief before the ITC. This relief would function almost exactly

like a preliminary injunction pending formal proceedings. 19 C.F.R. 210.77(a). Moreover, as

it did with respect to the ITCs initial exclusion order in this case, Microsoft could appeal to the

Federal Circuit a decision by the ITC concerning enforcement. See, e.g., VastFame, 386 F.3d at

1110 (noting that Fuji filed a complaint with the [ITC] requesting enforcement and advisory

proceedings to determine whether VastFame and others had violated the general exclusion

order). Fourth, Microsoft may seek an advisory opinion from the ITC concerning the exclusion

orders scope. 19 C.F.R. 210.79. Fifth, and in addition to seeking enforcement of the existing

order, Microsoft could seek modification of the order expressly to include the redesigned

products it claims are infringing. 19 C.F.R. 210.76. This may be the best route for Microsoft

to vindicate its purported rights given that it has identified no portion of the ITC record

indicating that the ITC found that retention of Google functionality infringes the 566 patent.

The above remedies under section 337 and the ITCs implementing regulations provide

Microsoft with more than adequate redress for all claims raised in its complaint. These

alternative remedies deprive this Court of jurisdiction to entertain this case. Indeed, this case is

strikingly similar toFornaro, in which the District of Columbia Circuit held that the APA did

not waive sovereign immunity to allow a district court challenge to an Office of Personnel

Management (OPM) decision when review was available at the Federal Circuit. Fornaro, 416

F.3d at 64-66. In that case, law enforcement officers challenged OPMs decision not to notify



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members of a prospective class of claimants and provide enhanced retirement benefits resulting

from earlier Federal Circuit case law. Id.at 65. OPMs ruling was appealable to the Merit

Systems Protection Board (MSPB) and ultimately to the Federal Circuit. Id. at 66. The Court

held that allowing plaintiffs to challenge OPMs action in district court would plainly

undermine the whole point of channeling review of benefits determinations to the MSPB and

from there to the Federal Circuit. Id. at 68. This approach, the Court explained, would also: (a)

reintroduce the haphazard arrangements for administrative and judicial review of personnel

action, involving resort to the district courts through various forms of action, including suits for

mandamus, injunction, and declaratory judgment, that Congress sought to replace in the CSRA

[Civil Service Retirement Act]; (b) erode the primacy of the MSPB for administrative

resolution of disputes and the primacy of the Federal Circuit for judicial review; and (c)

impermissibly create a right of access to the courts more immediate and direct than the CSRA

provides, thus fracturing the unifying authority of the MSPB, and undermining the consistency

of interpretation by the Federal Circuit envisioned by the Act. Id. at 68-69 (internal quotations,

brackets, ellipses, and citations omitted). Not all APA district court actions involving the CSRA

are prohibited, but those that are allowed involve limited challenges, for example, to system-

wide rulemaking. See, e.g.,Natl Treasury Employees Union v. Whipple, 636 F. Supp. 2d 63, 69

(D.D.C. 2009).

Like the challenge to OPMs actions under the CSRA inFornaro, allowing Microsofts

challenge to proceed would upset a carefully crafted statutory mechanism that provides an

adequate and exclusive remedy for parties like Microsoft. Such a result is impermissible. As

demonstrated above, all questions related to the implementation and scope of ITC exclusion

orders are ultimately reviewable by the Federal Circuit alone. If the Court considers Microsofts



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challenge, the Court wouldbe forced to review CBPs interpretation of the ITCs exclusion order

and to construe what that order means, even though the ITC already has a process in place for

such determinations. Review of this Court would be in the District of Columbia Circuit, when it

would otherwise occur in the Federal Circuit, which, as noted above, is vested by Congress with

exclusive jurisdiction over appeals involving ITC final determinations under section 337 and

appeals of all civil actions arising under any Act of Congress relating to patents. Such a splitting

of review between the regional circuits and the Federal Circuit similarly ignores the Supreme

Courts teaching regarding the APA. See Bowen v. Massachusetts, 487 U.S. 879, 908 (1988)

(declining to split the review of 5 U.S.C. 704 final agency actions regarding Medicaid between

the courts).

Microsoft cannot involve this Court and suddenly create a right of access to judicial

review where none before existed. Allowing Microsoft to do so would circumvent the

longstanding process by which parties return to the ITC and seek clarification, modification, and

enforcement of exclusion orders. This right of access would mean a right to injunctive relief and

declaratory judgments that before were the sole province of the ITC and CBP. The ITC can

clarify and enforce its own rulings, and that power, coupled with available review in the Federal

Circuit, deprives this Court of jurisdiction. In contrast, Microsoft has elected to ignore the

readily available procedures at the appropriate forum of the ITC in favor of its contrived effort to

obtain relief here. Moreover, even if Microsoft believes that a remedy before the ITC might

inconvenience it because it might obtain injunctive relief more quickly here (which is

questionable in light of the ITCs ability to grant emergency relief), this concern is of no

moment. See Town of Sanford v. United States, 140 F.3d 20, 23 (1st Cir. 1998) (explaining that

[a] legal remedy is not inadequate for purposes of the APA because it is procedurally



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inconvenient for a given plaintiff, or because plaintiffs have inadvertently deprived themselves

of the opportunity to pursue that remedy.);First Nat. Bank of Chicago v. Steinbrink, 812 F.

Supp. 849, 854 (N.D. Ill. 1993) (Not only is an administrative proceeding pending which

addresses the very same issues . . . , but a viable opportunity for review exists in the appellate

courts once a final enforcement order is issued. The only inadequacy with this remedy is that the

Bank must endure the added expense and inconvenience of final adjudication in the

administrative proceedings and subsequent review in the Seventh Circuit.).

Nor is pursuit of the correct judicial remedy merely theoretical. Indeed, Fuji pursued

Microsofts correct judicial remedy in the disposable camera cases. Fuji, like Microsoft, filed a

complaint at the ITC against importers (including Jazz Photo) that Fuji claimed were infringing

its patents. Jazz Photo, 439 F.3d at 1346-47. Just as the ITC did here for Microsoft, the ITC

agreed with Fuji and issued an exclusion order. Id. at 1347. Two years later, Fuji returned to the

ITC seeking institution of a formal enforcement proceeding to enforce the Exclusion Order

against Jazz Photo and others. Id. The ITC agreed with Fuji that Jazz Photo had violated the

exclusion order. Id.;see also VastFame, 386 F.3d at 1110 (discussing ITC post-exclusion order

proceedings). Many other complainants have resorted to this well-known mechanism for

enforcement of ITC exclusion orders. See, e.g.,Ninestar v. IntlTrade Commn, 667 F.3d 1373

(Fed. Cir. 2012);Funai v. Vizio, 2010 ITC LEXIS 2811 (2010) (In the Matter of Certain Digital

Television Products, Inv. No. 337-TA-617, Enforcement Proceeding);Apple v. HTC, 2013 ITC

LEXIS 19 (2013) (In the Matter of Certain Personal Data and Mobile Communications Devices

and Related Software, Inv. No. 337-TA-710, Enforcement Proceeding).



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In sum, Microsofts remedies before the ITC and the Court of Appeals for the Federal

Circuit are adequate and have been pursued before. This Court accordingly lacks jurisdiction to

entertain this case pursuant to the APA.

2. The Patent Laws Preclude APA Jurisdiction

The patent laws also provide Microsoft with an adequate remedyone that Microsoft is

already pursuing in its lawsuit against Motorola. 35 U.S.C. 281 et seq. As a result, section 702

precludes jurisdiction under the APA. Patent holders may initiate infringement actions for which

they are entitled to seek damages. 35 U.S.C. 284;Fuji Photo Film Co., Ltd. v. Jazz Photo

Corp., 394 F.3d 1368 (Fed. Cir. 2005) (patent remedies sought concurrently with section 337

ITC proceeding). Microsoft already sued Motorola in the United States District Court for the

Western District of Washington, alleging that Motorola was infringing the 566 patent by,

among other things, making, using, offering to sell or selling in the United States, orimporting

into the United States, products and/or services that are covered by one or more claims of the

566 patent. . . Microsoft v. Motorola, No. 2:10-cv-1577-RSM (W.D. Wash.), Dckt. No. 18

(Am. Cmpl. at 36) (emphasis added), Attachment D. Like Microsofts available remedies

before the ITC and the Federal Circuit, Microsofts pursuit in district court of a case for patent

infringement concerning the very devices at issue here demonstrates that Microsoft possesses

adequate remedies sufficient to deprive this Court of jurisdiction.

3. Alternatively, This Case Should Be Rejected Because It Falls Within

The ITCs Primary Jurisdiction_______________________________

The Court should also decline to exercisejurisdiction because the cases subject matter

falls within the ITCsprimary jurisdiction. The primary jurisdiction doctrine promotes proper

relationships between the courts and administrative agencies charged with particular regulatory

duties. United States v. Western Pac. R. Co., 352 U.S. 59, 63-64 (1956). No fixed formula



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14

exists for applying the doctrine. Id.at 64. Instead, the doctrine rests both on a concern for

uniform outcomes (which may be defeated if disparate courts resolve regulatory issues

inconsistently) . . . and on the advantages of allowing an agency to apply its expert judgment.

Allnet Communication Serv., Inc. v. Natl Exchange Carrier Assn, 965 F.2d 1118, 1120 (D.C.

Cir. 1992). Although the doctrine of primary jurisdiction need not deprive the Court of

jurisdiction, this Court may, if the parties would not be unfairly disadvantaged, dismiss a case

without prejudice pursuant to the doctrine. Reiter v. Cooper, 507 U.S. 258, 268-69 (1993).

As explained above, the ITC is charged in section 337 with directing exclusion of articles

that infringe valid patents. The ITC, therefore, has exclusive jurisdiction, subject only to Federal

Circuit review, to determine whether a violation of section 337 has occurred, including

infringement of asserted patents, and to issue exclusion orders upon finding a violation of section

337. Under both section 337 and its implementing regulations, the ITC also has jurisdiction to

enforce compliance with its orders. 19 U.S.C. 1337(b), (d)-(f); 19 C.F.R. 210.75 et seq.

Moreover, the Federal Circuit has recognized the ITCs technical expertise. See, e.g.,Enercon

GmbH v. Intl Trade Commn, 151 F.3d 1376, 1382 (Fed. Cir. 1998).

Given the clear route of review before the ITC that Microsoft resisted by filing suit here,

the Court should decline to entertain this suit and instead allow the ITC to interpret and enforce

its own order. If the Court creates an avenue for review of CBP rulings on ITC matters, a split of

authoritywith no uniform mechanism for review in a single court of appealswill emerge,

depending on where a party elects to seek relief.

Further, and as inAllnet, the posture ofMicrosofts suit as a declaratory judgment action

strengthens the case for primary jurisdiction because Federal declaratory judgments are

available as a matter of judicial discretion, not as of right . . . and are not to be used to pre-empt



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and prejudge issues that are committed for initial decision to an administrative body or special

tribunal. 965 F. 2d at 1121 (internal citations omitted).

B. Count III Of The Complaint Is Moot

In addition to the other bases for dismissal, count III of the complaint should be

dismissed as moot. Microsoft contends that CBP violated the exclusion order by granting

Motorolas request for a transition periodbefore ceasing importation of certain smartphones

that had previously been imported under license. Cmpl. at 5. That period ended June 1, 2013,

id., and thus, the parties all agree no such smartphones may be imported by Motorola today.

[A] case is moot when the issues presented are no longer live or the parties lack a legally

cognizable interest in the outcome.Larsen v. Navy, 525 F.3d 1, 3-4 (D.C. Cir. 2008) (quoting

County of Los Angeles v. Davis, 440 U.S. 625, 631 (1979);Powell v. McCormack, 395 U.S. 486,

496 (1969)). In this case, any outcome regarding the transition period will not affect any

interest of any party because the transition period is over and Motorola may not import any

additional smartphones under the now-revoked license. The judicial Power is one to render

dispositive judgments, not advisory opinions,Camreta v. Greene, 131 S. Ct. 2020, 2037 (2011)

(quotingPlaut v. Spendthrift Farm, Inc., 514 U.S. 211, 219 (1995)), and thus, no justiciable

controversy remains.

Moreover, Microsoft can obtain redress for all infringing imports at the Western District

of Washington, where it has sought damages from Motorola stemming from imports of allegedly

infringing smartphones.

II. Microsoft Fails To State A Claim For Which Relief May Be Granted

Even assuming that the Court possesses jurisdiction to entertain Microsofts complaint,

Microsoft fails to state a claim for which relief may be granted because CBPs decision to



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decline to deny entry to certain post-exclusion order redesigned Motorola smartphones was

committed to agency discretion.

Microsoft misstates the governing standard in its complaint by attempting to apply the

standard of review forfinal agency actions to what is in fact an attempt to compel agency action

[allegedly] unlawfully withheld. 5 U.S.C. 706(1). Microsoft thus fails to state a claim

pursuant to Fed. R. Civ. P. 12(b)(6),because CBPs decision not to exclude redesigned

smartphones was discretionary and cannot be compelled pursuant to section 706(1). Sierra Club

v. Jackson, 648 F.3d 848, 853-55 (D.C. Cir. 2011) (citing 5 U.S.C. 701(a)(2) committed to

agency discretion exemption from APA review). Because CBP was required to exercise

judgment to determine whether the redesigned smartphones fell within the scope of the exclusion

order, CBPs ruling falls outside the limited class of ministerial actions that can be compelled

pursuant to APA sections 701(a)(2) and 706(1).

Microsoft seeks injunctive and declaratory relief requiring [CBP] to comply with a

mandatoryLimited Exclusion Order. Cmpl. at 2 (emphasis added). Microsoft then treats

CBPs purported non-enforcement of the ITCs exclusion order as a final agency action under

the APA, 5 U.S.C. 702. Microsoft asserts that it may seek to compel enforcement by way of a

Court decision holding CBPs alleged non-enforcement arbitrary and capricious under

5 U.S.C. 706(2)(A),see Cmpl. at 71-78 (argument pursuant to section 706(a)(A)), instead of

the correct provision, under which Courts may compel agency action unlawfully withheld only

under very limited circumstances. 5 U.S.C. 706(1).

Contrary to the premise of Microsofts suit, and as the unanimous Supreme Court

recognized, the only agency action that can be compelled underthe APA is action legally

required. This limitation appears in 706(1)s authorization for courts to compel agency action



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unlawfullywithheld. Norton v. Southern Utah Wilderness Alliance, 542 U.S. 55, 63 (2004)

(SUWA) (quoting 5 U.S.C. 706(1)) (emphasis by Court). A claim under 706(1) can proceed

only where a plaintiff asserts that an agency failed to take a discrete agency action that it is

required to take.Id. (emphasis by Court). Indeed, section 706(1) empowers a court only to

compel an agency to perform a ministerial or non-discretionary act, or to take action upon a

matter, without directing howit shall act. Id. (quoting Attorney Generals Manual on the

Administrative Procedure Act 108 (1947) (emphasis by Court);see also Heckler v. Chaney, 470

U.S. 821, 831 (1985) (decisions not to enforce are unreviewable under APA because they are

committed to agency discretionby law under 5 U.S.C. 701(a)(2)); Salmon Spawning

Recovery Alliance v. United States, 532 F. 3d 1338, 1345 (Fed. Cir. 2008) (rejecting attempt to

compel CBP to enforce Endangered Species Act (ESA) against alleged importers of ESA-listed

salmon).

To be sure, we do not contend that CBP possesses unbounded discretion to ignore ITC

exclusion orders. Rather, when faced with containers of redesigned merchandise at the border,

some level of discretion necessarily inures to CBP regarding whether to deny entry by

determining whether those imports fall within oroutside the scope of the ITCs exclusion. CBP

necessarily must go beyond the mechanical application of [an exclusion order]. Corning

Gilbert Inc. v. United States, 896 F. Supp. 2d 1281, 1289 (Ct. Intl Trade 2013) (asserting

jurisdiction for protest by importer of merchandise denied entry by CBP). That is all that

happened here. Microsoft implicitly recognizes this practical reality by not contending that

exclusion of redesigned products is a ministerial or discrete agency action that [CBP] is

required to take, SUWA, 542 U.S. at 63 (emphasis by Court), whenever CBP implements an

exclusion order. Nor can it, because this is not the case in which an importer attempts to enter



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the same product subject to an ITC exclusion order. Rather, Motorola redesigned its

smartphones, creating a new class of product that did not exist at the time of the ITCs decision.

CBP thus had no choice but to exercise discretion at the border. Accordingly, Microsofts claim

fails to state a claim for which relief may be granted for that reason alone.

Finally, the recent decision in Cook v. FDA, --- F. 3d ----, 2013 WL 3799987 (D.C. Cir.

July 23, 2013) does not compel the outcome that Microsoft seeks. In that case, death row

inmates sued the Food and Drug Administration (FDA) contending that it must detain and

inspect a drug used for lethal injections (thiopental) because it was manufactured, prepared,

propagated, compounded, or processed in an establishment not duly registered with the FDA.

Cook, 2013 WL 3799987 at *1 (quoting 21 U.S.C. 352(o)). The FDAs statute further

mandated that such article [as described in section 352(o)] shall be refused admission. Id.

(quoting 21 U.S.C. 381(a)). Despite its statutes mandatory nature, FDA elected not to inspect

and instead to allow admission of imported thiopental destined for correctional facilities

regardless of whether it originated from an establishment not duly registered, 21 U.S.C.

352(o), with the FDA. Cook, 2013 WL 3799987 at *4. FDA explained that its decision was

in deference to law enforcement. Id. at *2. In granting an affirmative injunction compelling

examination and denial of entry, the Court reasoned that these statutes were mandatory and

unambiguous and, thus, there was no discretion committed to the FDA under the APA:

The FDA must request samples of all drugs offered for import that

have been made in an unregistered establishment, must examinethose samples for a violation of the FDCA, and must refuse

admission to any drug that appears, through the sampling process

or otherwise, to violate the FDCA.

Id. at *5.



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In contrast to Cook, in which the statute unambiguously impose[d] mandatory duties

upon the FDA, id. at *3, CBP was faced with importations of new merchandise that did not

exist at the time of the ITCs exclusion order. As a result, CBP was required to exercise its

discretion to determine whether it should deny entry to redesigned smartphones. And unlike

Cook, this case lacks the legislative direction in the statutory scheme necessary to rebut the

presumption of unreviewability of enforcement decisions inHeckler v. Chaney. Cook, 2013 WL

3799987 at *5 (quotingHeckler v. Chaney, 470 U.S. at 833). In sum, this matter stands far

outside the extremely limited class of mandatory agency action that the Courts may compel.

CONCLUSION

For these reasons, we respectfully request that the Court dismiss this action for lack of

jurisdiction or in the alternative, because Microsoft failed to state a claim for which relief may be

granted.

Respectfully submitted,

STUART F. DELERY

Assistant Attorney General

RONALD C. MACHEN JR.

United States Attorneyfor the District of Columbia

BRYANT G. SNEEDeputy Director

/s/ Claudia Burke for

PATRICIA M. McCARTHYAssistant Director



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/s/ STEPHEN C. TOSINI

(DC Bar No. 470415)

SEAN B. McNAMARASenior Trial Counsels

Department of Justice

Civil DivisionCommercial Litigation BranchPO Box 480, Ben Franklin Station

Washington, D.C., 20044

Tel: (202) 616-5196Email: [email protected]

September 13, 2013 Attorneys for Defendant



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MICROSOFT CORPORATION, )

)Plaintiff, )

)v. ) No. 13-1063 (RWR))


)Defendants, )

)

and )


)


ORDER

On consideration of the motion to dismiss filed by the United States, and all other

pertinent papers, it is hereby

ORDERED that the motion is granted, and it is further

ORDERED that this action is dismissed pursuant to Red. R. Civ. P. 12(b)(1).

______________________

CHIEF JUDGE

Dated: ____________________

Washington, DC

Case 1:13-cv-01063-RWR Document 53-1 Filed 09/13/13 Page 1 of 1


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HQ H242025

OT:RR:BSTC:IPR H242025 DAXCATEGORY: 19 U.S.C. 1337; Unfair CompetitionRichard BelangerSidley Austin LLP1501 K Street, N.W.Washington, D.C. 20005

1300 Pennsylvania Avenue NWWashington, DC 20229

U.S. Customs andBorder Protection

RE: U.S. International Trade Commission; Limited Exclusion Order; Investigation No.337-TA-744 ; Certain Mobile Devices, Associated Software, and ComponentsThereof

Dear Mr. Belanger:This is in response to your submission, dated May 10 , 2013, on behalf of yourclient, Microsoft Corporation ("Microsoft"), requesting revocation, pursuant to 19 C.F.R.Part 177.12 (b), of Headquarters Ruling Letter H226615 ("HQ H226615"), dated April 25,2013. The ruling letter in question determined that certain mobile devices manufacturedby or on behalf of Motorola Mobility, Inc. ("Motorola"), having been modified to removeparticular functionality contained therein that was found at the U.S. International TradeCommission ("ITC" or "Commission") to infringe claims 1, 2, 5, and 6 of U.S. Patent No.6,370,566 ("the ' 566 patent"), were no longer covered by those patent claims and,therefore, not subject to exclusion from entry.Microsoft seeks revocation of HQ H226615 on two separate grounds. First,Microsoft claims that the ruling letter fails to consider the infringement that results whenthe Android Calendar application on the device is set up using means other thanCorporate Sync and is configured for a server other than the Exchange server . Inessence, Microsoft challenges the entry of the redesigned Motorola devices based ontheir ability to use Google's servers and Google's synchronization protocol tosynchronize calendar objects, an ability that was present on the legacy mobile devices



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accused at the ITC. Microsoft claims that this ability was specifically accused ofinfringement and formed part of the ITC's infringement finding, such that the devices atissue in the ruling letter must be refused entry. Second , Microsoft claims that, evenabsent any consideration as to the use of Google's servers and synchronizationprotocol , the redesigned mobile devices, as modified, have not successfully avoided therelevant claims of the 566 patent and therefore are still subject to exclusion .

This ruling letter addresses the first of Microsoft 's two grounds for revocation .However, since HQ H226615, for which Microsoft seeks revocation, did not address theuse of Google's servers and synchronization protocol and whether this functionality wasspecifically accused and formed part of the infringement finding at the ITC, the portionof Microsoft's submission involving this claim is being treated as a new ruling requestconcern ing the admissibility of the modified Motorola mobile devices. Microsoft, as theITC complainant and owner of the 566 patent and thereby an importer, exporter, orother party with a direct and demonstrable interest in the question presented , qualifiesas a person that may request such a ruling . See 19 C.F.R. Part 177.1(c). Microsoft'ssecond ground for revocation-concerning the nature of the modifications in Motorola'sredesigned mobile devices- is addressed in a separate issuance (Headquarters RulingLetter H242026).FACTS:

The ITC instituted the above-referenced investigation on November 5, 2010,based on a complaint filed by Microsoft. 77 Fed. Reg. 35,427 (2012). The complaintalleged a violation 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 salewithin the United States after importation of certain Motorola mobile devices, associatedsoftware, and components thereof by reason of infringement of U.S. Patent Nos.5,579,517; 5,78 .352; 6.621 .746: 6.826,762; 6,909,91 O; 7,644,376; 5,664,133;6,578,054; and 6,370,566. !Q. With respect to the latter, the complaint indicated thatthe ' 566 patent "relates to mobile devices, and more particularly, to generating meetingrequests and group scheduling from a mobile device." See Complaint at 19, 1l 74. Thecomplaint also provided that prior to the claimed invention "[s]cheduling meetingrequests had been supported by desktop computers or laptop computers which had ahard disk drive or other high capacity memory mechanisms [but]. ..allowing a mobiledevice to also generate a meeting request is desirable." !Q. at 1l 75 . The 555 patent,accordingly, "discloses and claims a mobile device which provides the user with theability to schedule a meeting request from the mobile device itself." !Q. at 1i 76 .

Among the exhibits accompanying the complaint was Exhibit 59, which containeda claim chart for the 566 patent that listed the various claim limitations and identifiedthe features in the accused Motorola mobile devices purported to satisfy thoselimitations. The chart for claim 1 of the '566 patent from Exhibit 59 is depicted below.



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'566 Patent1. A mobile device,compnsmg:

an object store;

an application programconfigured to maintain objectson the object store;

a user input mechanismconfigured to receive userinput information;

a s nchronization com onent

3

Exemplary Motorola DevicesTo the extent the preamble is construed to be limiting, theMotorola Droid 2 is a mobile device, as depicted below inFigure 1-1. See Ex. A, "Droid 2 by Motorola A955,"http://developer.motorola.com/products/droid2 (visited Sept.9, 2010).

Figure 1-1

The Droid 2 includes an object store.By way of example, the Droid 2 includes 8 GB of microSDmemory and 512 MB of RAM. See Ex. B, "Droid 2 byMotorola Technical Specifications,"http://www.motorola.com/Consumers/US-EN/ConsumerProduct-and-Services/Mobile-Phones/ci.Motorola-DROID-2-US-EN.alt (visited Sept. 9, 201 O); Ex. A.The Droid 2 includes an application program configured tomaintain objects on the object store.By way of example, the Droid 2 includes a Calendarapplication configured to maintain event objects on theobject store.The Droid 2 includes a user input mechanism configured toreceive user input information.By way of example, the Droid 2 includes an on-screen touchke board and a h sical "slide side" keyboard. See Ex. A.The Droid 2 includes a synchronization com onent



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'566 Patentconfigured to synchronizeindividual objects stored onthe object store with remoteobjects stored on a remoteobject store;a communications componentconfigured to communicatewith a remote devicecontaining the remote objectstore;

wherein the applicationprogram is further configuredto generate a meeting objectand an electronic mailscheduling request objectbased on the user inputinformation.

4

Exemplary Motorola Devicesconfigured to synchronize individual objects stored on theobject store with remote objects stored on a remote objectstore. See generally Ex. B ("Synchronization Support forCorporate calendar, email and contacts (Exchange 2003 and2007), Google contacts, calendar and Gmail contacts.").The Droid 2 includes a communications componentconfigured to communicate with a remote device containingthe remote object store.By way of example, the Droid 2 includes EVDO Rev.Awireless capability for data and 802.11 x Wireless LANcapability. See Ex. A.The Droid 2's calendar application program is furtherconfigured to generate a meeting object and an electronicmail scheduling request obj ect based on the user inputinformation. See Ex. C, "Droid 2 - Calendar,"https://motorola-global-portal.custhelp.corn/app/answers/detail/a_ id/5163 3/-/droid-2---calendar (visited Sept. 9, 2010) ("Add details about theevent. Tap in a text box for the keyboard to enter a name,time, and optional additional details about the event . . . .Any contacts from your established Gmail, Enterprise andSocial Networking accounts can be searched to contact foran event.").

Figure 1-2: User input generating a meeting objectFor instance, as seen in Figure 1-2, the Calendar applicationprogram generates meeting objects called "Events" based onthe user in ut information.



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'566 Patent

5

Exemplary Motorola Devices

Create eventlearn Meeung

WhoRequired :

StartMl.FJ.frl

i. o 9:15AM

Figure 1-3: User input adding contact informationfor attendee

As seen in Figure 1-3 , the Calendar applicationprogram allows users to input contact information formeeting attendees in order to generate electronic mailscheduling requests.MIME-Version 1 0Recer.ed by ed08 Sep 2010 07 16 -0700 (PDT!Reply To _Sender Google Calendar Auto-Submrtted auto-generatedMessage-ID >Date Wed 08 Sep 2010 16 0000Subj...-;,11iiiiM1iiaiii'ii 11iTeairnii iMiiiti111Ql i@i irl1Seio l10 2om - 3om l1ohn sm1th@a unrverslly edu )From To "1ohn sm1th@a unr."ers1ty edU"-Con tent -Type mutt1part mixed boundary=OO16e68ee2e 7092f58Q.l8fc02abdYou ha-.-e been 111\led to the follo.v1ng e-.entTii ie Team MeetingWhen Fn Sep 10 2pm - 3pm Cen tral TimeCalendar 1ohn smllh@a unoyersrty eduWho wuser08 wuser organizer 1ohn sm1th@a unrvers1ty eduE\'ent details

Figure 1-4: Electronic mail scheduling request receivedby attendeeAs seen in Figure 1-4 , the Calendar application programgenerates electronic mail scheduling request objectsbased on the user input information.



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6The chart above from Exhibit 59 includes the claim limitations requiring "anapplication program configured to maintain objects on the object store" and "asynchronization component configured to synchronize individual objects stored on theobject store with remote objects stored on a remote object store" wherein "theapplication program is further configured to generate a meeting object and an electronic

mail scheduling request object based on the user input information ." Significantly, theclaim chart shows the features of the accused devices believed to satisfy each of theclaim limitations. In particular, Microsoft alleged that the "application program" wassatisfied by the device's "Calendar application" and that the "synchronizationcomponent" was supplied by the "Synchronization Support for Corporate calendar,email and contacts (Exchange 2003 and 2007), Google contacts, calendar and Gmailcontacts," according to the accompanying materials from Exhibit B to Exhibit 59 .Motorola was notified of the complaint and the matter was assigned to anAdministrative Law Judge ("ALJ"), who presided over the next stage of the investigation.On December 17, 2010, the ALJ set a target date for completion of the investigation and

issuance of his final initial determination ("FID"), and also directed the parties to submita proposed procedural schedule . See Order No. 3. On January 10 , 2011, the ALJconfirmed that the joint procedural schedule submitted by the parties would control theinvestigation. See Order 4. The joint procedural schedule, inter a/ia, provided for thefiling of preliminary infringement and non-infringement contentions, the identification ofclaim terms in dispute, the taking of depositions, and the exchange of expert reports.On November 22, 2010, Motorola responded to the complaint and its variousallegations. Afterward, the parties began exchanging briefs and submitting motionsrelated to various aspects of the investigation , such as their respective proposedconstructions for the disputed claim terms. Significantly, during this period, the parties

also engaged in other aspects of discovery, such as deposing expert witnesses , inpreparation fo r the investigation hearing before the ALJ . This portion of theinvestigation , particularly that involving expert discovery, developed the administrativerecord at the ITC.During this period, Microsoft deposed Peter John Cockerell , one of Motorola'switnesses, on May 3, 2011. See Microsoft Ruling Request (May 10, 2013) at Exhibit D.Cockerell's testimony was later incorporated into Microsoft's direct trial exhibit CX-1081 C (an updated claim chart for the '566 patent) that Motorola was served with atleast by June 28, 2011. .!Q. at Exhibit A ; see also Motorola Mobility, Inc. Objections toComplainant Microsoft Corporation's Direct Exhibits at 1 (August 4, 2011 ). As with

Exhibit 59 to Microsoft's complaint, the "application program" limitation is allegedly metby the accused device's calendar application. However, unlike Exhibit 59, the"synchronization component" limitation does not expressly reference any Googleprograms, but does refer at least to the Motorola ActiveSync system as described byCockerell in his testimony and in the Exchange Protocol. On the other side, Motoroladeposed Hugh M. Smith, Microsoft's expert witness, on July 8, 2011 . During thedeposition, Smith's testimony referenced, inter alia, the testimony of Cockerell.



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Both Microsoft and Motorola submitted their Pre-Hearing Briefs on August 8 ,2011 , incorporating their various arguments regarding all issues in light of the testimonyup to this point. The investigation hearing commenced on August 23, 2011 . However,on August 24, 2011 , counsel for Motorola notified Microsoft's counsel that Motorolawithdrew its contentions and responses with respect to Microsoft 's assertion of the ' 566patent and thereby would not dispute infringement. See ALJ FID at 65 (citing HearingTranscript 1438:7-24); see also Microsoft Ruling Request (May 10, 2013) at Exhibit F.After the hearing concluded, the parties submitted their Post-Hearing Briefs addressingvarious issues. Based on the administrative recorded developed , including Motorola'sconcession, the ALJ on December 20, 2011, found that Microsoft established by apreponderance of the evidence that the accused devices infringe claims 1, 2, 5, and 6 ofthe '566 patent. See ALJ FID at 65 .

Microsoft and Motorola both filed Petitions for Commission Review on January 5,2012 , and then filed responses on January 13, 2012, to their respective Petitions forCommission Review. The Commission provided notice of the issues under review onMarch 2, 2012. The parties then submitted their Opening Briefs on Commission Reviewon March 19, 2012, and filed their responses thereto on March 27, 2012. In itsresponsive brief, Motorola raised the issue that any exclusion order that may issue withrespect to the ' 566 patent should not extend to the ability of the Motorola devices to useGoogle's servers and synchronization protocols to synchronize calendar objects. SeeMotorola Mobility lnc. 's Response to Complainant Microsoft Corporation's Opening Briefon Commission Review at 45.

Motorola explained that the mobile devices accused at the ITC , in two ways, cansynchronize calendar objects generated on the device. First, the device can utilize aMicrosoft Exchange server and the Microsoft Exchange ActiveSync protocol tosynchronize calendar objects. !Q. Motorola referred to this implementation as"corporate sync." !Q. The second way is that the device can utilize Google's server andGoogle's synchronization protocol to synchronize calendar objects . Motorola arguedthat Microsoft abandoned its claim to the latter and presented no evidence regardinginfringement based on this functionality. !Q. at 46. According to Motorola, in addition tothe lack of evidence presented , the second way of synchronization does not satisfy theelectronic mail scheduling request object and therefore cannot be found to infringe. !Q.

The ITC did not make a finding on this issue and instead took no position, notingthat "Motorola . .argues that any exclusion order should not extend to the accusedproducts' use of Google's servers and Google's synchronization protocol to synchronizecalendar objects. RespResp at 46 (citing MSFT PHB at 79-114; CX-974C at 089-155) .We decline to consider this issue because it was raised by Motorola for the first time ina responsive brief." Ultimately, the ITC, in affirming , modifying, and reversing aspectsof the ALJ 's FID, determined that the appropriate form of relief was a limited exclusionorder prohibiting, with limited exception, the unlicensed entry for consumption of mobiledevices, associated software, and components thereof covered by claims 1, 2, 5, or 6 ofthe 566 patent that are manufactured abroad by or on behalf of, or imported by or onbehalf of, Motorola.



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ISSUE:The issue presented is whether the record supports a finding that Microsoftspecifically alleged and established that the use of Google's servers and Google's

synchronization protocol by the legacy Motorola mobile devices satisfies particular claimlimitations of the ' 566 patent and , as such, formed part of the ITC's infringement finding.LAW AND ANALYSIS:

Section 337, as amended, 19 U.S.C. 1337, makes unlawful the importation ofarticles that infringe a valid and enforceable United States patent and authorizes theITC, upon finding a violation, to direct that those articles be excluded from entry. 19U.S.C. 1337(a)(1)(B), (b)(1 ), (d); see also John Mezzalingua Associates. Inc. v. U.S.lnt'I Trade Comm'n, 660 F.3d 1322, 1324 (Fed. Cir. 2011 ). The ITC, therefore, mustfind that patent infringement has occurred for there to be a violation this section .Patent infringement determinations entail two steps. The first step is to interpretthe meaning and scope of the patent claims asserted to be infringed. 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 bane), aff'd , 517 U.S. 370(1996). The first step is a question of law; the second step is a question of fact. SeeFreedman 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 indirectinfringement. One variety of direct infringement in patent law is literal infringement. "Toshow literal infringement of a patent, a patentee must supply sufficient evidence toprove that the accused product or process meets every element or limitation of a claim."Rohm &Haas Co. v. Brotech Corp ., 127 F.3d 1089, 1092 (Fed. Cir. 1997). It, therefore,is "well settled" that each element of a claim is material and essential and, for a court orthe ITC to find infringement, the patentee must show the presence of every element inthe accused device by a preponderance of the evidence. Id . As the complainantasserting infringement, Microsoft bore the burden of proof to accuse and establishwhich specific features satisfied the various claim limitations. See SymbolTechnologies. Inc. v. Opticon. Inc., 935 F.2d 1569, 1574 (Fed . Cir. 1991) (recognizingthat beyond the claim chart prepared by patentee 's expert witness, no detailed analysisoccurred linking the particular parts of the accused device with the claimed elementsand finding infringement limited to that which was contained in the claim chart) ; see alsoRohm & Haas, 127 F.3d at 1091-1093.

When a violation is found , 19 U.S.C. 1337(d) provides that the ITC shall notifythe Secretary of the Treasury of its finding and the Secretary , through CBP, shall refuseentry to the articles in question. The ITC provides notification by issuing exclusionorders, of which there are two types: limited exclusion orders and general exclusionorders. See Fuji Photo Film Co . Ltd. v. U.S. lnt'I Trade Comm'n, 474 F.3d 1281 , 1286(Fed. Cir. 2007). Regardless of the remedy imposed, both types of exclusion ordersdirect CBP to bar the infringing products from entering the country. Yingbin-Nature



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(Guangdong) Wood Indus. Co. v. U.S. lnt'I Trade Comm'n, 535 F.3d 1322, 1330 (FedCir. 2008). Both types of exclusion orders place the burden on the importer to establishan article's admissibility through its modification, authorization, or as otherwise providedby law. Hyundai Electronics Industries Co ., Ltd. v. U.S. lnt'I Trade Comm'n, 899 F.2d1204, 1210 (Fed. Cir. 1990).The ITC generally directs its exclusion orders to articles "covered by " theinfringed claims of the relevant patents . In the Matter of Certain Hardware LogicEmulation Systems and Components Thereof, Inv. No. 337-TA-383 , CommissionOpinion at 16 (Publication 3089, dated March 1998) ("[T]he Commission's long-standingpractice is to direct its remedial orders to all products covered by the patent claims as towhich a violation has been found , rather than limiting its orders to only those specificmodels selected for the infringement analysis ."). Moreover, "exclusion orders must beread in the context of the investigations in which they were issued and theCommission's findings in that investigation." In the Matter of Certain GPS Devices andProducts Containing Same, Inv. No. 337-TA-602, Advisory Opinion at 4 (dated April 20,2010).Accordingly, it is the ITC that is charged with administering section 337 anddetermining whether the complainant has met its burden during the investigation toestablish infringement with evidence that every limitation from the asserted claim hasbeen satisfied by a feature in the accused device. See Vastfame Camera, Ltd. v. U.S.Int' Trade Comm'n, 386 F.3d 1108, 1110 (Fed. Cir. 2004); see also Fuji Photo Film Co.,Ltd. v. U.S. lnt'I Trade Comm'n, 386 F.3d 1095 (Fed. Cir. 2004) (recognizing the ITC'sparamount authority to determine whether section 337 has been violated, the issuanceany Customs rulings notwithstanding); see also In the Matter of Certain Lens-Fitted FilmPackages, Inv. No. 337-TA-406, Consolidated Enforcement and Advisory Opinion(acknowledging the ITC as the arbiter of whether its orders have been violated). CBP'senforcement responsibility in the exclusion order context is to apply the infringementfindings from the ITC record to determine whether imported articles exhibit thoseelements of the adjudged infringing products that the ITC complainant previouslycontended and proved satisfy the specific limitations of the asserted claims. In light ofthe above, CBP will not refuse entry on the basis of features that were present on theaccused devices at the time of the ITC investigation but were not specifically accusedand found to satisfy the limitations in the asserted patent claims identified in theexclusion order.Microsoft contends that Motorola conceded, and that the ITC therefore held, thatthe Android Calendar application infringes the '566 patent regardless of whether the

application is configured for Google servers using Google Account or Exchange serversusing Corporate Sync. See Microsoft Ruling Request (May 10, 2013) at 2. Microsoftargues that "[w]hen the Calendar application is set up with Google Account it isconfigured to communicate with Google servers; when configured through CorporateSync, Calendar communicates instead with Exchange servers." Id . Microsoftconcludes that "[r]egardless of which set of servers it is set up to communicate with, the



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While it may be that the "application program" limitation from claim 1 of the 566patent is satisfied by the Android Calendar application regardless of the means withwhich it is set up, this does not indicate where in the record Microsoft actually accusedand established that the use of Google's synchronization protocol by the legacyMotorola mobile devices satisfies the "synchronization component" limitation . Microsoftpoints to the testimony from Cockerell's deposition but that testimony in its entiretyseems to counter Microsoft's position more than support its claim that Google 'ssynchron ization protocol was specifically accused. See Microsoft Ruling Request (May10, 2013) at 2 (citing to its Exhibit D (i.e. , Cockerell Deposition) at 20); but compare at26:20-27:9; 42:24-43:18. Moreover, the updated claim chart contained in CX-1081C,which incorporates aspects of Cockerell's deposition testimony, focuses on theActiveSync system and does not refer to Google's synchronization protocol. Microsofthas not identified any portion of its expert reports or witness statements that clarifieswhere in the record a Google synchronization protocol was claimed to satisfy the"synchron ization component." Moreover, during his deposition, Microsoft's expertwitness, Hugh M. Smith, testified that the focus of his infringement analysis was on theActiveSync protocol alone concerning the limitation in question , which, as CX-1081Creveals , was the "synchronization component." See Smith Deposition (July 8, 2011) at141 :7-143-1 3. Microsoft, likewise, does not point to any support in its Pre- or PostHearing Briefs for its position that Google's synchronization protocol was specificallyaccused to satisfy this claim limitation.

Microsoft does point to the statement in the Commission Opinion that the ITCdeclined to consider this issue. However, this statement seems to imply that the use ofGoogle's servers and Google's synchronization protocol was not specifically accused ,or at t he very least that the record was u nclear, because if it had been specificallyaccused , the ITC would have expressly denied Motorola's assertion as .having beensubject to the concession it made and, consequently, the ALJ's infringement finding.

Nevertheless, since the admissibi lity question for CBP's purposes dependsexclusively on whether Microsoft specifically accused these features in the Motorolamobile devices of satisfying the particular claim limitation from the ' 566 patent, CBPcontacted the Office of the General Counsel at the ITC for guidance and clarification ofthe agency's own record . However, the General Counsel 's Office was unable to providethe clarification requested . When asked for confirmation regarding the record itdeveloped and the precise infringement findings that resulted in the exclusion order'sissuance, the ITC reiterated that it took no position on the matter and suggested anapproach for CBP to resolve the issue that it declined to consider.In light of the above, CBP determines that the record is insufficient to support afinding that the legacy Motorola devices at the ITC were specifically accused andproven to infringe based on their ability to use Google's servers and Google'ssynchronization protocol and, as noted above, CBP will not refuse entry on the basis of



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features that were present on the accused devices at the time of the ITC investigationbut were not specifically accused and found to satisfy the limitations of the assertedpatent claims in the exclusion order.HOLDING:

Based on the foregoing , including the determination that the administrativerecord does not support a finding that Microsoft specifically accused the ability in thelegacy Motorola devices of using Google's servers and Google's synchronizationprotocols to satisfy the limitation from claim 1 of the 566 patent requiring a"synchronization component ," and because there is no dispute that these features werepresent on the devices before the ITC during the investigation , CBP shall not refuseentry on the basis of these features, absent additional guidance from the ITC.This decision is limited to the speci

13-09-13 u.s. government's motion to dismiss microsoft's dc complaint

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