Certain Magnetic Tape Cartridges and Components Thereof, Inv. 337-TA-1058

U.S. International Trade Commission
Publication 4980 	September 2019
Washington, DC 20436
In the Matter of
CERTAIN MAGNETIC TAPE CARTRIDGES
AND COMPONENTS THEREOF
Investigation No. 337-TA-1058

U.S. International Trade Commission
COMMISSIONERS
David Johanson, Chairman
Irving Williamson, Commissioner
Meredith Broadbent, Commissioner
Rhonda Schmidtlein, Commissioner
Jason Kearns, Commissioner
Address all communications to
Secretary to the Commission
United States International Trade Commission
Washington, DC 20436

U.S. International Trade Commission
Publication 4980 	September 2019
Washington, DC 20436
www.usitc.gov
In the Matter of
CERTAIN MAGNETIC TAPE CARTRIDGES
AND COMPONENTS THEREOF
Investigation No. 337-TA-1058

UNITED STATES INTERNATIONAL TRADE COMMISSION
~ Washington, D.C.
In the Matter of
CERTAIN MAGNETIC TAPE 	Investigation No. 337-TA-1058
CARTRIDGES AND COMPONENTS
THEREOF
ORDER OF RESCISSION
The Commission instituted this investigation under section 337 of the Tariff Act of 1930,
as amended, 19 U.S.C. 1337 (“section 337”), on June l, 2017. 82 Fed. Reg. 25333 (Jun. 1,
2017). The complaint, as amended, was filed by Sony Corporation of Tokyo, Japan; Sony
Storage Media Solutions Corporation of Tokyo, Japan; Sony Storage Media Manufacturing
Corporation of Miyagi, Japan; Sony DADC US Inc. of Terre Haute, Indiana; and Sony Latin
America Inc. of Miami, Florida (collectively “Sony”). Id.
‘ On March 25, 2019, the Commission found a violation of section 337 as to claims 1, 5-8,
10, 16, and 17 of U.S. Patent No. 7,029,774 (“the ’774 patent”) and claims 1-13 of U.S. Patent
No. 6,674,596 (“the ’596 patent”). 84 Fed. Reg. 11998-12000 (Mar. 29, 2019). The
Commission issued a limited exclusion order prohibiting respondents Fujifilm Holdings
Corporation of Tokyo, Japan; Fuj-ifilmCorporation of Tokyo, Japan; Fujifilm Media
Manufacturing Co., Ltd. of Kanagawa, Japan; Fujifilm Holdings America Corporation of
Valhalla, New York; and Fujifilm Recording Media U.S.A., Inc. of Bedford, Massachusetts
(collectively, “Fujifilm”) from importing into the United States certain magnetic tape cartridges
and components thereof that infringe one or more of claims 1, 5-8, 10, 16, and 17 of the ’774
patent, and claims 1-13 of the ’596 patent. The Commission also issued cease and desist orders
1

prohibiting Respondents from further importing, selling, and distributing infringing products in
the United States.
On July 23, 2019, Sony and Fujifilm entered into a Worldwide Resolution Agreement
and Patent Cross-License (the “Agreement”). On July 25, 2019, Sony and Fujifilm jointly
petitioned, pursuant to Commission Rule 210.76, 19 CFR 210.76, to rescind the limited
exclusion order and the cease and desist orders. On August 5, 2019, the Office of Unfair Import
Investigations (“OUII”) filed a response in support of the joint petition.
Having reviewed the joint petition and OUlI‘s response, the Commission has determined
that the Agreement fully resolves the dispute between Sony and Fujifilm concerning the subject
matter of the investigation. The Commission finds that the joint petition complies with the
requirements of Commission Rule 210.76, 19 CFR 210.76. Accordingly, the Commission has
determined to rescind the limited exclusion order and the cease and desist orders issued in the
investigation.
Upon consideration of this matter, the Commission hereby ORDERS that:
1. The limited exclusion order in this investigation is rescinded.
2. The cease and desist orders in this investigation are rescinded.
3. Notice of this Order shall be served on all patties of record and published in the
Federal Register.
By order of the Commission.
Lisa R. Barton 	,
Secretary to the Commission
Issued: August 23, 2019 	'
2

CERTAIN MAGNETIC TAPE CARTRIDGES AND 	Inv. No. 337-TA-1058
COMPONENTS THEREOF
' _ 	PUBLIC CERTIFICATE OF SERVICE
I, Lisa R. Barton, hereby certify that the attached ORDER has beenvsen/ed by hand upon
the Commission Investigative Attomey, Sarah Sladic, Esq., and the following parties as
indicated, on August 23, 2019.
Lisa R. Barton, Secretary
U.S. International Trade Commission
500'E Street, SW, Room 112
Washington, DC 20436 .
On Behalf of Complainants Sonv Corporation. Sonv Storage
Media Solutions Corporation. Sonv Storage Media
Manufacturing Corporation. Sony DADC US Inc., and Sonv
Latin America Inc.:
Jeffrey S. Gerchick, Esq. - 	U Via Hand Delivery
QUINN EMANUEL URQUHART & SULLIVAN, LLP 	Q Via Express Delivery
StI'€€t,NW, SLlIt€ 	First class
Washington, DC 20005 	D other
On Behalf of Respondents FUJIFILM Holdings Corporation,
FUJIFILM Corporation. FUJIFILM Holdings
America Corporation. and FUJIFILM Recording Media
U.S.A., Inc. :
Lisa M. Kattan, Esq. 	[:1Via Hand Delivery
BAKER BOTTS LLP 	U Via Express Delivery
1299 Pennsylvania AVCIILIC,	NW 	Via First class Mail
Washington, DC 20004 	U Othar

UNITED STATES INTERNATIONAL TRADE COMMISSION
Washington, D.C.
In the Matter of
CERTAIN MAGNETIC TAPE
CARTRIDGES AND COMPONENTS
THEREOF
Investigation No.337-TA-1058
NOTICE OF COMMISSION DECISION RESCINDING THE
LIMITED EXCLUSION ORDER AND THE CEASE AND DESIST ORDERS
AGENCY: U.S. International Trade Commission.
ACTION: Notice.
SUMMARY: Notice is hereby given that the U.S. International Trade Commission has
determined to rescind the limited exclusion order and the cease and desist orders issued in the
above-captioned investigation.
FOR FURTHER INFORMATION CONTACT: Cathy Chen, Esq., Office ofthe General
Counsel, U.S. International Trade Commission, 500 E Street SW,Washington, DC 20436,
telephone(202)205-2392. Copies of non-confidential documents filed in connection with this
investigation are or will be available for inspection during official business hours(8:45 a.m. to
5:15 p.m.)in the Office of the Secretary, U.S. International Trade Commission,500 E Street SW,
Washington, DC 20436, telephone(202)205-2000. General information concerning the
Commission may also be obtained by accessing its Internet server at https://www.usitc.gov. The
public record for this investigation may be viewed on the Commission's electronic docket
(EDIS)at hups://edis.usitc.gov. Hearing-impaired persons are advised that information on this
matter can be obtained by contacting the Commission's TDD terminal on(202)205-1810.
SUPPLEMENTARY INFORMATION: The Commission instituted this investigation on
June 1, 2017. 82 FR 25333(Jun. 1, 2017). The complaint, as amended, was filed by Sony
Corporation of Tokyo, Japan; Sony Storage Media Solutions Corporation of Tokyo, Japan; Sony
Storage Media Manufacturing Corporation of Miyagi, Japan; Sony DADC US Inc. of Terre
Haute, Indiana; and Sony Latin America Inc. of Miami, Florida (collectively "Sony"). Id. The
complaint alleged violations of section 337 ofthe Tariff Act of 1930, as amended, 19 U.S.C.
1337, in the importation into the United States, the sale for importation, and the sale within the
United States after importation of certain magnetic tape cartridges and components thereof by
reason of infringement of certain claims of U.S. Patent Nos. 7,029,774("the '774 patent");
6,674,596("the '596 patent"); and 6,979,501 ("the '501 patent"). Id. The notice of
investigation named Fujifilm Holdings Corporation of Tokyo, Japan; Fujifilm Corporation of

Tokyo, Japan; Fujifilm Media Manufacturing Co., Ltd. of Kanagawa, Japan; Fujifilm Holdings
America Corporation of Valhalla, NY;and Fujifilm Recording Media U.S.A., Inc. of Bedford,
MA (collectively "Fujifilm") as respondents. Id. at 25334. The Office of Unfair Import
Investigations("OUII") was also a party in this investigation. Id.
The All found a violation of section 337. Following Commission review, on March 25,
2019, the Commission issued its final determination in the investigation, finding a violation of
section 337 as to claims 1, 5-8, 10, 16, and 17 ofthe '774 patent and claims 1-13 ofthe '596
patent, and no violation of section 337 as to claims 1, 2,4-6, and 8 ofthe '501 patent. 84 FR
11998-12000(Mar. 29, 2019). An opinion accompanied the notice, and the Commission issued
a limited exclusion order and cease and desist orders.
On July 23, 2019, Sony and Fujifilm entered into a Worldwide Resolution Agreement
and Patent Cross-License (the "Agreement"). On July 25, 2019, Sony and Fujifilm jointly
petitioned, pursuant to Commission Rule 210.76, 19 CFR 210.76, to rescind the limited
exclusion order and the cease and desist orders. The joint petition attached an unredacted
confidential version and a redacted public version of the Agreement. On August 5, 2019, OUII
filed a response in support ofthe joint petition.
Having reviewed the joint petition and OUII's response, the Commission finds that the
Agreement fully resolves the dispute between Sony and Fujifilm concerning the subject matter of
the investigation. The Commission also finds that the joint petition complies with the
requirements of Commission Rule 210.76, 19 CFR 210.76. Accordingly, the Commission has
determined to rescind the limited exclusion order and the cease and desist orders issued in the
investigation.
The authority for the Commission's determination is contained in section 337 ofthe
Tariff Act of 1930, as amended(19 U.S.C. 1337), and in part 210 ofthe Commission's Rules of
Practice and Procedure(19 CFR 210).
By order of the Commission.
Issued: August 14, 2019
01‘•Lisa R. Barton
Secretary to the Commission
2

CERTAIN MAGNETIC TAPE CARTRIDGES AND Inv. No.337-TA-1058
COMPONENTS THEREOF
PUBLIC CERTIFICATE OF SERVICE
I, Lisa R. Barton, hereby certify that the attached NOTICE has been served by hand
upon the Commission Investigative Attorney, Sarah Sladic, Esq., and the following parties as
indicated, on August 14,2019.
`1	)4o03:)Lisa R. Barton, Secretary
U.S. International Trade Commission
500 E Street, SW,Room 112
Washington, DC 20436
On Behalf of Complainants Sony Corporation,Sony Storage
Media Solutions Corporation,Sony Storage Media
Manufacturing Corporation,Sony DADC US Inc., and Sony
Latin America Inc.:
Jeffrey S. Gerchick, Esq.
QUINN EMANUEL URQUHART & SULLIVAN,LLP
1300 I Street, NW,Suite 900
Washington, DC 20005
On Behalf of Respondents FUJIFILM Holdings Corporation,
FUJIFILM Corporation,FUJIFILM Holdings
America Corporation, and FUJIFILM Recording Media
U.S.A. Inc.:
Lisa M. Kattan, Esq.
BAKER BOTTS LLP
1299 Pennsylvania Avenue,NW
Washington, DC 20004
O Via Hand Delivery
0 Via Express Delivery
1E1 Via First Class Mail
O Other:
O Via Hand Delivery
O Via Express Delivery
CE Via First Class Mail
O Other:

UNITED STATES INTERNATIONAL TRADE COMMISSION
Washington, D.C.
In the Matter of
CERTAIN MAGNETIC TAPE 	Investigation No. 337-TA-1058
CARTRIDGES AND COMPONENTS
THEREOF
LIMITED EXCLUSION ORDER
The United States Intemational Trade Commission (“Commission”) has detennined that
there is a violation of Section 337 of the TariffAct of 1930, as amended (19 U.S.C. § 1337), in
the unlawful importation, sale for importation, and sale within the United States after importation
by Respondents Fujifilm Holdings Corporation of Tokyo, Japan; Fujifilm Corporation of Tokyo,
Japan; Fujifilm Media Manufacturing Co., Ltd. of Kanagawa, Japan; Fujifilm Holdings America
Corporation of Valhalla, NY; and Fujifilm Recording Media U.S.A., Inc. of Bedford, MA
(collectively, “Fujifi1m”) of certain magnetic tape cartridges and components thereof that
infringe one or more of claims 1, 5-8, 10, I6, and 17 of U.S. Patent No. 7,029,774 (“the ’774
patent”), and claims l-l3 of U.S. Patent No. 6,674,596 (“the ’596 patent”).
Having reviewed the record of this investigation, including the written submissions of the
parties, the Commission has made its detennination on the issues of remedy, the public interest,
and bonding. The Commission has determined that the appropriate form of relief includes a I
limited exclusion order prohibiting the unlicensed entry of certain magnetic tape cartridges and
components thereof manufactured abroad by or on behalf of, or imported by or on behalf of,
Fujifilm or any of its affiliated companies, parents, subsidiaries, licensees, or other related
business entities, or their successors or assigns.
1

The Commission has also determined that the public interest factors enumerated in
19 U.S.C. § l337(d) do not preclude the issuance of the limited exclusion order, and that the
bond shall be in the amount of zero (0) percent of the entered value for all infringing magnetic
tape cartridges and components thereof during the Presidential review period (i.e., no bond).
Accordingly, the Commission hereby ORDERS that:
1. Magnetic tape cartridges and components thereof that infringe one or more of
claims 1, 5-8, 10, 16, and 17 of the ’774 patent, and claims 1-13 of the ’596 patent (“covered
articles”), and that are manufactured abroad by or on behalf of, or imported by or on behalf of,
Fujifilm or any of its affiliated companies, parents, subsidiaries, agents, or other related business
entities, or their successors or assigns, are excluded from entry for consumption into the United
States, entry for consumption from a foreign-trade zone, or withdrawal from a warehouse for
consumption, for the remaining tenns of the patents, except: 1) articles under license of the
patent owner or as provided by law, and 2) articles imported for use for the purpose of
compliance verification testing.
2. Notwithstanding paragraph 1 of this Order, covered articles are entitled to entry
into the United States for consumption, entry for consumption from a foreign-trade zone, or
withdrawal from a warehouse for consumption under bond in the amount of zero (0) percent of
the entered value of such articles, i.e., no bond, pursuant to subsection (j) of Section 337 of the
Tariff Act of 1930, as amended (19 U.S.C. § 1337(j)), and the Presidential Memorandum for the
United States Trade Representative of July 21, 2005 (70 Fed. Reg. 43,251), from the day after
this Order is received by the United States Trade Representative until such time as the United
States Trade Representative notifies the Commission that this Order is approved or disapproved
but, in any event, not later than sixty (60) days after the date of receipt of this Order. All entries
2

of covered articles made pursuant to this paragraph are to be reported to U.S. Customs and
Border Protection (“CBP”), in advance of the date of the entry, pursuant to procedures CBP
establishes.
3. At the discretion of CBP and pursuant to procedures that it establishes, persons
seeking to import magnetic tape cartridges and components thereof that are potentially subject to
this Order may be required to certify that they are familiar with the terms of this Order, that they
have made appropriate inquiry, and thereupon state that, to the best of their knowledge and
belief, the products being imported are not excluded from entry under paragraph 1 of this Order.
At its discretion, CBP may require persons who have provided the certification described in this
paragraph to furnish such records or analyses as are necessary to substantiate the certification. P
4. In accordance with 19 U.S.C. § 1337(1),the provisions of this Order shall not
apply to covered articles imported by and for the use of the United States, or imported for, and to
be used for, the United States with the authorization or consent of the Government.
S. The Commission may modify this Order in accordance with the procedures
described in section 210.76 of the Commissiorfs Rules of Practice and Procedure (19 C.F.R.
§ 210.76).
6. The Secretary shall serve copies of this Order upon each party of record in this
investigation and upon CBP.
3

7. Notice of this Order shall be published in the Federal Register.
By Order of the Commission.
Issued: March 25, 2019
Lisa R. Barton
Secretary to the Commission
4

CERTAIN MAGNETIC TAPE CARTRIDGES AND 	Inv. No. 337-TA-1058
COMPONENTS THEREOF
PUBLIC CERTIFICATE OF SERVICE
I, Lisa R. Barton, hereby certify that the attached ORDER has been served by hand upon
the Connnission Investigative Attorney, Sarah Sladic, Esq., and the following parties as
indicated, on March 25, 2019.
Lisa R. Barton, Secretary
U.S. International Trade Commission
500 E Street, SW, Room 112
Washington, DC 20436
On Behalf of Complainants Sonv Corporation. Sonv Storage
Media Solutions Corporation. Sonv Storage Media
Manufacturing Corporation. Sony DADC US Inc.. and Sonv
Latin America Inc.:
Jeffrey S. Gerchick, Esq. 	El Via Hand Delivery
QUINN EMANUEL URQUHART & SULLIVAN, LLP 	Via Expmss Delivery
I Stl'€€lI,NW, Slllt€ 	[:| First Class
Washington, DC 20005 	U other
On Behalf of Respondents FUJIFILM Holdings Corporation,
FUJIFILM Corporation. FUJIFILM Holdings
America Corporation. and FUJIFILM Recording Media
U.S.A., Inc. :
Lisa M. Kattan, Esq. 	III Via Hand Delivery
BAKER BOTTS LLP 	Via Express Delivery
1299 Pennsylvania Avenue, NW 	E Via First Class Man
Washington, DC 20004 	[:1other

UNITED STATES INTERNATIONAL TRADE COMIVHSSION
Washington, D.C.
In the Matter of
CERTAIN MAGNETIC TAPE 	Investigation No. 337-TA-1058
CARTRIDGES AND COMPONENTS
THEREOF
CEASE AND DESIST ORDER
IT IS HEREBY ORDERED THAT RESPONDENT Fujifilm Holdings America
Corporation of Valhalla, New York cease and desist from conducting any of the following
activities in the United States: importing, selling, marketing, advertising, distributing,
transferring (except for exportation), soliciting United States agents or distributors for, and
aiding and abetting other entities in the importation, sale for importation, sale after importation,
transfer (except for exportation), or distribution of magnetic tape cartridges and components
thereof that infringe one or more of claims l, 5-8, 10, l6, and l7 of U.S. Patent No. 7,029,774
(“the ’774 patent”), and claims l-13 of U.S. Patent No. 6,674,596 (“the ’596 patent”) in violation
of Section 337 ofthe TariffAct of 1930, as amended (19 U.S.C. § 1337).
I.
Definitions
As used in this Order:
(A) “Commission” shall mean the United States International Trade Commission.
(B) “Complainants” shall mean Sony Corporation of Tokyo, Japan, Sony Storage
Media Solutions Corporation of Tokyo, Japan, Sony Storage Media
Manufacturing Corporation of Miyagi, Japan, Sony DADC US Inc. of Terre
Haute, Indiana, and Sony Latin America Inc. of Miami, Florida.
l

(C) “Respondent” shall mean Fujifilm Holdings America Corporation of Valhalla,
New York.
(D) “Person” shall mean an individual, or any non-governmental partnership, firm,
association, corporation, or other legal or business entity other than Respondent or
its majority-owned or controlled subsidiaries, successors, or assigns.
(E) “United States” shall mean the fifty States, the District of Columbia,vandPuerto
Rico. S
(F) The terms “import” and “importation” refer to importation for entry for
consumption under the Customs laws of the United States.
(G) The term “covered products” shall mean magnetic tape cartridges and components
thereof that infringe one or more of claims 1, 5-8, 10, 16, and 17 of the ’774
patent, and claims l-l3 of the ’596 patent.
II.
Applicability
The provisions of this Cease and Desist order shall apply to Respondent and to any of its
principals, stockholders, officers, directors, employees, agents, licensees, distributors, controlled
(whether by stock ownership or otherwise) and majority-owned business entities, successors, and
assigns, and to each of them, insofar as they are engaging in conduct prohibited by Section III,
infra, for, with, or otherwise on behalf of, Respondent.
III.
Conduct Prohibited
The following conduct of Respondent in the United States is prohibited by this Order.
For the remaining term of the relevant ’774 or ’596 patent, Respondent shall not:
(A) import or sell for importation into the United States covered products;
2

(B) market, distribute, sell, or otherwise transfer (except for exportation) in the United
States imported covered products;
(C) advertise imported covered products;
(D) solicit United States agents or distributors for imported covered products; or
(E) aid or abet other entities in the importation, sale for importation, sale after
importation, transfer, or distribution of imported covered products.
IV.
Conduct Permitted
Notwithstanding any other provision of this Order, specific conduct otherwise prohibited
by the terms of this Order shall be permitted if:
(A) in a written instrument, the owner of the infringed patent licenses or authorizes such
specific conduct;
(B) such specific conduct is related to the importation or sale of covered products by or
for the United States; or
(C) the conduct is related to articles imported for use for the purpose of compliance
verification testing.
V.
Reporting
For purposes of this requirement, the reporting periods shall commence on January l of
each year and shall end on the subsequent December 31. The first report required under this
section shall cover the period from the date ofissuance of this order through June 30, 2019. This
reporting requirement shall continue in force until such time as Respondent has truthfully
reported, in two consecutive timely filed reports, that it has no inventory of covered products in
the United States.
3

Within thirty (30) days of the last day of the reporting period, Respondent shall report to
the Commission (a) the quantity in units and the value in dollars of covered products that it has
(i) imported and/or (ii) sold in the United States after importation during the reporting periodf
and (b) the quantity in units and value in dollars of reported covered products that remain in
inventory in the United States at the end of the reporting period.
When filing written submissions, Respondent must file the original document
electronically on or before the deadlines stated above and submit eight (8) true paper copies to
the Office of the Secretary by noon the next day pursuant to section 2l 0.4(f) of the
Commission’s Rules of Practice and Procedure (19 C.F.R. § 210.4(t)). Submissions should refer
to the investigation number (“Inv. No. 337-TA-1058”) in a prominent place on the cover pages
and/or the first page. (See Handbook for Electronic Filing Procedures,
https://wwW.usitc.gov/documents/handbook_on_filing_procedures.pdi). Persons with questions
regarding filing should contact the Secretary (202-205-2000). If Respondent desires to submit a
document to the Commission in confidence, it must file the original and a public version of the
original with the Office of the Secretary and must serve a copy of the confidential version on
Complainants’ counsel.‘
Any failure to make the required report or the filing of any false or inaccurate report shall
constitute a violation of this order, and the submission of a false or inaccurate report may be
referred to the U.S. Department of Justice as a possible criminal violation of 18 U.S.C. § 1001.
1Complainants must file a letter with the Secretary identifying the attomey to receive reports and
bond information associated with this order. The designated attorney must be on the protective
order entered in the investigation.
4

VI.
Record-Keeping and Inspection
For the purpose of securing compliance with this Order, Respondent shall retain
any and all records relating to the sale, offer for sale, marketing, or distribution in
the United States of covered products, made and received in the usual and
ordinary course of business, whether in detail or in summary form, for a period of
three (3) years from the close of the fiscal year to which they pertain.
For the purposes of determining or securing compliance with this Order and for
no other purpose, subject to any privilege recognized by the federal courts of the
United States, and upon reasonable written notice by the Commission or its staff,
duly authorized representatives of the Commission shall be permitted access and
the right to inspect and copy, in Respondent's principal offices during office
hours, and in the presence of counsel or other representatives if Respondent so
chooses, all books, ledgers, accounts, correspondence, memoranda, and other
records and documents, in detail and in summary form, that must be retained
under subparagraph VI(A) of this Order.
VII.
Service of Cease and Desist Order
Respondent is ordered and directed to:
Serve, within fifteen (15) days after the effective date of this Order, a copy of this
Order upon each of its respective officers, directors, managing agents, agents, and
employees who have any responsibility for the importation, marketing,
distribution, or sale of imported covered products in the United States;
Serve, Withinfifteen (15) days after the succession of any persons referred to in
subparagraph VII(A) of this order, a copy of the Order upon each successor; and
5

(C) Maintain such records as will show the name, title, and address of each person
upon whom the Order has been served, as described in subparagraphs VII(A) and
VII(B) of this Order, together with the date on which service was made.
The obligations set forth in subparagraphs VII(B) and VII(C) shall remain in effect until
the expiration dates of the ’774 or ’596 patents.
VIII.
Confidentiality
Any request for confidential treatment of information obtained by the Commission
pursuant to Section V or Vl of this Order should be made in accordance with section 201.6 of the
Commission's Rules of Practice and Procedure (19 C.F.R. § 201.6). For all reports for which
confidential treatment is sought, Respondent must provide a public version of such report with
confidential information redacted.
IX.
Enforcement
Violation of this Order may result in any of the actions specified in Section 210.75 of the
Commission's Rules of Practice and Procedure (19 C.F.R. § 210.75), including an action for civil
penalties under section 337(f) ofthe Tariff Act of 1930 (19 U.S.C. § 1337(f)), as well as any
other action that the Commission deems appropriate. In determining whether Respondent is in
violation of this Order, the Commission may infer facts adverse to Respondent if it fails to
provide adequate or timely information.
X.
Modification
The Commission may amend this Order on its own motion or in accordance with the
procedure described in section 210.76 of the Commission’s Rules of Practice and Procedure (19
C.F.R. § 210.76).
6

XI.
Bonding
The conduct prohibited by Section III of this Order may be continued during the sixty
(60) day period in which this Order is under review by the United States Trade Representative,
as delegated by the President (70 Fed. Reg. 43,251 (Jul. 21, 2005)), subject to Respondent
posting of a bond in the amount of zero (0) percent of the entered value of the covered products
(i.e., no bond). This bond provision does not apply to conduct that is otherwise permitted by
Section IV of this Order. Covered products imported on or after the date of issuance of this
Order are subject to the entry bond set forth in the Exclusion Order issued by the Commission,
and are not subject to this bond provision.
The bond is to be posted in accordance with the procedures established by the
Commission for the posting of bonds by complainants in connection with the issuance of
temporary exclusion orders. (See l9 C.F.R. § 210.68). The bond and any accompanying
documentation are to be provided to and approved by the Commission prior to the
commencement of conduct that is otherwise prohibited by Section III of this Order. Upon the
Secretary's acceptance of the bond, (a) the Secretary will serve an acceptance letter on all parties,
and (b) Respondent must serve a copy of the bond and any accompanying documentation on
Complainants’ counsel?
The bond is to be forfeited in the event that the United States Trade Representative
approves this Order (or does not disapprove it within the review period), unless (i) the U.S. Court
of Appeals for the Federal Circuit, in a final judgment, reverses any Commission final
determination and order as to Respondent on appeal, or (ii) Respondent exports or destroys the
2 See note 1 above.
7

products subject to this bond and provides certification to that effect that is satisfactory to the
Commission.
The bond is to be released in the event the United States Trade Representative
disapproves this Order and no subsequent order is issued by the Commission and approved (or
not disapproved) by the United States Trade Representative, upon service on Respondent of an
order issued by the Commission based upon application therefore made by Respondent to the
Commission.
By order of the Commission
Lisa R. Barton
Secretary to the Commission
Issued: March 25, 2019
8

CERTAIN MAGNETIC TAPE CARTRIDGES AND 	Inv. No. 337-TA-1058
COMPONENTS THEREOF
PUBLIC CERTIFICATE OF SERVICE
I, Lisa R. Barton, hereby certify that the attached ORDER has been served by hand upon
the Commission Investigative Attorney, Sarah Sladie, Esq., and the following parties as
indicated, on March 25, 2019.
<. . .
Lisa R. Barton, Secretary
U.S. International Trade Commission
500 E Street, SW, Room 112
Washington, DC 20436
On Behalf of Complainants Sonv Corporation. Sonv Storage
Media Solutions Corporation, Sony Storage Media
Manufacturing Corporation, Sony DADC US Inc.. and Sons;
Latin America Inc.:
Jeffrey S. G61‘ChiCk,ESq. 	E] Via Hand Delivery
QUINN EMANUEL URQUHART & SULLIVAN, LLP 	E}Via Express Ddivel-y
Street, NW, Sllltfi 	D First class
Washington, DC 20005 	U other
On Behalf of Respondents FUJIFILM Holdings Corporation,
FUJIFILM Corporation, FUJIFILM Holdings
America Corporation. and FUJIFILM Recording Media
U.S.A., Inc. :
Lisa M- Kflflfinl E$q- 	III Via Hand Delivery
BAKER BOTTS LLP 	Via Express Delivery
1299 Pennsylvania Avenue, NW 	D Via First Class Mail
Washington, DC 20004 	U other

UNITED STATES INTERNATIONAL TRADE COMMISSION
Washington, D.C.
In the Matter of
CERTAIN MAGNETIC TAPE 	Investigation No. 337-TA-1058
CARTRHXHSANDCOMPONENTS
THEREOF
CEASE AND DESIST ORDER
IT IS HEREBY ORDERED THAT RESPONDENT Fujifilm Holdings Corporationof
Tokyo, Japan cease and desist from conducting any of the following activities in the United
States: importing, selling, marketing, advertising, distributing, transferring (except for
exportation), soliciting United States agents or distributors for, and aiding and abetting other
entities in the importation, sale for importation, sale after importation, transfer (except for
exportation), or distribution of magnetic tape cartridges and components thereof that infringe one
or more of claims 1, 5-8, 10, 16, and 17 of U.S. Patent N0. 7,029,774 (“the ’774 patent”), and
claims l-13 of U.S. Patent No. 6,674,596 (“the ’596 patent”) in violation of Section 337 of the
Tariff Act of 1930, as amended (19 U.S.C. § 1337).
I.
Definitions .
As used in this Order:
(A) “Commission” shall mean the United States International Trade Commission.
(B) “Complainants” shall mean Sony Corporation of Tokyo, Japan, Sony Storage
Media Solutions Corporation of Tokyo, Japan, Sony Storage Media
Manufacturing Corporation of Miyagi, Japan, Sony DADC US Inc. of Terre
Haute, Indiana, and Sony Latin America Inc. of Miami, Florida.
(C) “Respondent” shall mean Fujifilm Holdings Corporation of Tokyo, Japan.
1

(D) “Person” shall mean an individual, or any non-governmental partnership, finn,
association, corporation, or other legal or business entity other than Respondent or
its majority-owned or controlled subsidiaries, successors, or assigns.
(E) “United States” shall mean the fifty States, the District of Columbia, and Puerto
Rico. 	1
(F) The terms “import” and “importation” refer to importation for entry for
consumption under the Customs laws of the United States.
(G) The term “covered products” shall mean magnetic tape cartridges and components
thereof that infringe one or more of claims 1, 5-8, 10, 16, and 17 of the ’774
patent, and claims 1-13 of the ’596 patent.
II.
Applicability
The provisions of this Cease and Desist order shall apply to Respondent and to any of its
principals, stockholders, officers, directors, employees, agents, licensees, distributors, controlled
(Whether by stock ownership or otherwise) and majority-owned business entities, successors, and
assigns, and to each of them, insofar as they are engaging in conduct prohibited by Section III,
infra, for, with, or otherwise on behalf of, Respondent.
III.
Conduct Prohibited
The following conduct of Respondent in the United States is prohibited by this Order.
For the remaining term of the relevant ’774 or ’596 patent, Respondent shall not:
(A) import or sell for i.mportation into the United States covered products;
(B) market, distribute, sell, or otherwise transfer (except for exportation) in the United
States imported covered products;
(C) iadvertise imported covered products;
2

(D) solicit United States agents or distributors for imported covered products; or
(E) aid or abet other entities in the importation, sale for importation, sale after
importation, transfer, or distribution of imported covered products.
IV.
Conduct Permitted
Notwithstanding any other provision of this Order, specific conduct otherwise prohibited
by the terms of this Order shall be permitted if:
(A) in a written instrument, the owner of the infringed patent licenses or authorizes such
specific conduct;
(B) such specific conduct is related to the importation or sale of covered products by or
for the United States; or
(C) the conduct is related to articles imported for use for the purpose of compliance
verification testing.
V.
Reporting
For purposes of this requirement, the reporting periods shall commence on January 1 of
each year and shall end on the subsequent December 31. The first report required under this
section shall cover the period from the date of issuance of this order through June 30, 2019. This
reporting requirement shall continue in force until such time as Respondent has truthfully
reported, in two consecutive timely filed reports, that it has no inventory of covered products in
the United States.
Within thirty (30) days of the last day of the reporting period, Respondent shall report to
the Commission (a) the quantity in units and the value in dollars of covered products that it has
(i) imported and/or (ii) sold in the United States after importation during the reporting period,
3

and (b) the quantity in units and value in dollars of reported covered products that remain in
inventory in the United States at the end of the reporting period.
When filing written submissions, Respondent must file the original document
electronically on or before the deadlines stated above and submit eight (8) true paper copies to
the Office of the Secretary by noon the next day pursuant to section 210.4(f) of the
Commission’s Rules of Practice and Procedure (19 C.F.R. § 2l0.4(f)). Submissions should refer
to the investigation number (“Inv. No. 337-TA-1058”) in a prominent place on the cover pages
and/or the first page. (See Handbook for Electronic Filing Procedures,
https://www.usitc.gov/docurnents/handbo0k_on_filing_procedures.pdt). Persons with questions
regarding filing should contact the Secretary (202-205-2000). If Respondent desires to submit a
document to the Commission in confidence, it must file the original and a public version of the
original with the Office of the Secretary and must serve a copy of the confidential version on
Complainants’ counsel.1
Any failure to make the required report or the filing of any false or inaccurate report shall
constitute a violation of this order, and the submission of a false or inaccurate report may be
referred to the U.S. Department of Justice as a possible criminal violation of 18 U.S.C. § 1001.
VI.
Record-Keeping and Inspection
(A) For the purpose of securing compliance with this Order, Respondent shall retain
any and all records relating to the sale, offer for sale, marketing, or distribution in
the United States of covered products, made and received in the usual and
1Complainants must file a letter with the Secretary identifying the attorney to receive reports and
bond information associated with this order. The designated attorney must be on the protective
order entered in the investigation.
4

ordinary course of business, whether in detail or in summary form, for a period of
three (3) years from the close of the fiscal year to which they pertain.
For the purposes of determining or securing compliance with this Order and for
no other purpose, subject to any privilege recognized by the federal courts of the
United States, and upon reasonable written notice by the Commission or its staff,
duly authorized representatives of the Commission shall be permitted access and
the right to inspect and copy, in Respondent's principal offices during office
hours, and in the presence of counsel or other representatives if Respondent so
chooses, all books, ledgers, accounts, correspondence, memoranda, and other
records and documents, in detail and in summary form, that must be retained
tmder subparagraph Vl(A) of this Order.
VII.
Service of Cease and Desist Order
Respondent is ordered and directed to:
Serve, within fifteen (15) days after the effective date of this Order, a copy of this
Order upon each of its respective officers, directors, managing agents, agents, and
employees who have any responsibility for the importation, marketing,
distribution, or sale of imported covered products in the United States;
Serve, within fifteen (15) days after the succession of any persons referred to in
subparagraph VII(A) of this order, a copy of the Order upon each successor; and
Maintain such records as will show the name, title, and address of each person
upon whom the Order has been served, as described in subparagraphs VII(A) and
VII(B) of this Order, together with the date on which service was made.
5

The obligations set forth in subparagraphs VII(B) and VII(C) shall remain in effect until
the expiration dates of the ’774 or ’596 patents.
VIII. '
Confidentiality
Any request for confidential treatment of information obtained by the Commission
pursuant to Section V or VI of this Order should be made in accordance with section 201.6 of the
Commission's Rules of Practice and Procedure (19 C.F.R. § 201.6). For all reports for which
confidential treatment is sought, Respondent must provide a public version of such report with
confidential information redacted.
IX.
Enforcement
Violation of this Order may result in any of the actions specified in Section 210.75 of the
Commission's Rules of Practice and Procedure (19 C.F.R. § 210.75), including an action for civil
penalties under section 337(f) of the Tariff Act of 1930 (19 U.S.C. § 1337(i)), as well as any
other action that the Commission deems appropriate. In determining whether Respondent is in
violation of this Order, the Commission may infer facts adverse to Respondent if it fails to
provide adequate or timely information.
>X.
Modification
The Commission may amend this Order on its own motion or in accordance with the
procedure described in section 210.76 of the Commission’s Rules of Practice and Procedure (19
C.F.R. § 210.76).
XI.
Bonding
The conduct prohibited by Section III of this Order may be continued during the sixty
(60) day period in which this Order is under review by the United States Trade Representative,
6

as delegated by the President (70 Fed. Reg. 43,251 (Jul. 21, 2005)), subject to Respondent
posting of a bond in the amount of zero (0) percent of the entered value of the covered products
(i.e., no bond). This bond provision does not apply to conduct that is otherwise permitted by
Section IV of this Order. Covered products imported on or after the date of issuance of this
Order are subject to the entry bond set forth in the Exclusion Order issued by the Commission,
and are not subject to this bond provision.
The bond is to be posted in accordance with the procedures established by the
Commission for the posting of bonds by complainants in connection with the issuance of
temporary exclusion orders. (See 19 C.F.R. § 210.68). The bond and any accompanying
documentation are to be provided to and approved by the Commission prior to the
commencement of conduct that is otherwise prohibited by Section III of this Order. Upon the
Secretary's acceptance of the bond, (a) the Secretary will serve an acceptance letter on all parties,
and (b) Respondent must serve a copy of the bond and any accompanying documentation on
Complainants’ counsel?
The bond is to be forfeited in the event that the United States Trade Representative
approves this Order (or does not disapprove it within the review period), unless (i) the U.S. Court
of Appeals for the Federal Circuit, in a final judgment, reverses any Commission final
determination and order as to Respondent on appeal, or (ii) Respondent exports or destroys the
products subject to this bond and provides certification to that effect that is satisfactory to the
Commission.
The bond is to be released in the event the United States Trade Representative
disapproves this Order and no subsequent order is issued by the Commission and approved (or
2 See note 1 above.
7

not disapproved) by the United States Trade Representative, upon service on Respondent of an
order issued by the Commission based upon application therefore made by Respondent to the
Commission.
By order of the Commission.
Lisa R. Barton
Secretary to the Commission
Issued: March 25, 2019
8

CERTAIN MAGNETIC TAPE CARTRIDGES AND 	Inv. No. 337-TA-1058
COMPONENTS THEREOF
PUBLIC CERTIFICATE OF SERVICE
I, Lisa R. Barton, hereby certify that the attached ORDER has been served by hand upon
the Commission Investigative Attorney, Sarah Sladic, Esq., and the following parties as
indicated, on March 25, 2019.
Lisa R. Barton, Secretary
U.S. Intemational Trade Commission
500 E Street, SW, Room 112
Washington, DC 20436
On Behalf of Complainants Sonv Corporation, Sony Storage
Media Solutions Corporation, Sonv Storage Media
Manufacturing Corporation, Sonv DADC US Inc., and Sony
Latin America Inc.:
Jeffrey S. Gerchick, Esq.
QUINN EMANUEL URQUHART & SULLIVAN, LLP
1300 I Street, NW, Suite 900
Washington, DC 20005
[1 Via Hand Delivery
El Via Express Delivery
[I Via First Class Mail
[:1 Other:
On Behalf of Respondents FUJIFILM Holdings Corporation,
FUJIFILM Corporation. FUJIFILM Holdings
America Corporation. and FUJIFILM Recording Media
U.S.A., Inc. :
Lisa M. Kattan, Esq.
BAKER BOTTS LLP
1299 Pennsylvania Avenue, NW
Washington, DC 20004
El Via Hand Delivery
Via Express Delivery
III Via First Class Mail
[II Other:

UNITED STATES INTERNATIONAL TRADE COMMISSION
Washington, D.C.
In the Matter of
CERTAIN MAGNETIC TAPE 	Investigation No. 337-TA-1058
CARTRIDGES AND COMPONENTS
THEREOF
CEASE AND DESIST ORDER
IT IS HEREBY ORDERED THAT RESPONDENT Fujifilm Corporationof Tokyo,
Japan cease and desist from conducting any of the following activities in the United States:
importing, selling, marketing, advertising, distributing, transferring (except for exportation),
soliciting United States agents or distributors for, and aiding and abetting other entities in the
importation, sale for importation, sale after importation, transfer (except for exportation), or
distribution of magnetic tape cartridges and components thereof that infringe one or more of
claims 1, 5-8, 10, 16, and 17 of U.S. Patent No. 7,029,774 (“the ’774 patent”), and claims 1-13 of
U.S. Patent No. 6,674,596 (“the ’596 patent”) in violation of Section 337 of the Tariff Act of
I930, as amended (19 U.S.C. § 1337).
I.
Definitions
As used in this Order:
(A) “Commission” shall mean the United States Intemational Trade Commission.
(B) “Complainants” shall mean Sony Corporation of Tokyo, Japan, Sony Storage
Media Solutions Corporation of Tokyo, Japan, Sony Storage Media
Manufacturing Corporation of Miyagi, Japan, Sony DADC US Inc. of Terre
Haute, Indiana, and Sony Latin America Inc. of Miami, Florida.
(C) “Respondent” shall mean Fujifilm Corporation of Tokyo, Japan.
l

(D) “Person” shall mean an individual, or any non-governmental partnership, firm,
association, corporation, or other legal or business entity other than Respondent or
its majority-owned or controlled subsidiaries, successors, or assigns.
(E) “United States” shall mean the fifty States, the District of Columbia, and Puerto
Rico.
(F) The terms “import” and “importation” refer to importation for entry for
consumption under the Customs laws of the United States. p
(G) The term “covered products” shall mean magnetic tape cartridges and components
thereof that infringe one or more of claims l, 5-8, 10, l6, and 17 of the ’774
patent, and claims l-13 of the ‘S96 patent.
II.
Applicability
The provisions of this Cease and Desist order shall apply to Respondent and to any of its
principals, stockholders, officers, directors, employees, agents, licensees, distributors, controlled
(whether by stock ownership or otherwise) and majority-owned business entities, successors, and
assigns, and to each of them, insofar as they are engaging in conduct prohibited by Section III,
infra, for, with, or otherwise on behalf ofi Respondent.
III.
Conduct Prohibited
The following conduct of Respondent in the United States is prohibited by this Order.
For the remaining term of the relevant ’774 or ’596 patent, Respondent shall not:
(A) import or sell for importation into the United States covered products;
(B) market, distribute, sell, or otherwise transfer (except for exportation) in the United
States imported covered products;
(C) advertise imported covered products;
2

(D) solicit United States agents or distributors for imported covered products; or
(E) aid or abet other entities in the importation, sale for importation, sale after
importation, transfer, or distribution of imported covered products.
IV.
Conduct Permitted
Notwithstanding any other provision of this Order, specific conduct otherwise prohibited
by the terms of this Order shall be permitted if:
(A) in a written instrument, the owner of the infringed patent licenses or authorizes such
specific conduct;
(B) such specific conduct is related to the importation or sale of covered products by or
for the United States; or
(C) the conduct is related to articles imported for use for the purpose of compliance
verification testing.
V.
Reporting
For purposes of this requirement, the reporting periods shall commence on January 1 of
each year and shall end on the subsequent December 31. The first report required under this
section shall cover the period from the date of issuance of this order through June 30, 2019. This
reporting requirement shall continue in force until such time as Respondent has truthfully
reported, in two consecutive timely filed reports, that it has no inventory of covered products in
the United States.
Within thirty (30) days of the last day of the reporting period, Respondent shall report to
the Commission (a) the quantity in units and the value in dollars of covered products that it has
(i) imported and/or (ii) sold in the United States after importation during the reporting period,
3

and (b) the quantity in units and value in dollars of reported covered products that remain in
inventory in the United States at the end of the reporting period.
When filing written submissions, Respondent must file the original document
electronically on or before the deadlines stated above and submit eight (8) true paper copies to
the Office of the Secretary by noon the next day pursuant to section 21O.4(t) of the
Commission’s Rules of Practice and Procedure (19 C.F.R. § 2l0.4(f)). Submissions should refer
to the investigation number (“Inv. No. 337-TA-1058”) in a prominent place on the cover pages
and/or the first page. (See Handbook for Electronic Filing Procedures,
https://www.usitc.gov/documents/handbook_on_filing_procedures.pdf). Persons with questions
regarding filing should contact the Secretary (202-205-2000). If Respondent desires to submit a
document to the Commission in confidence, it must file the original and a public version of the
original with the Office of the Secretary and must serve a copy of the confidential version on
Complainants’ counsel.‘
Any failure to make the required report or the filing of any false or inaccurate report shall
constitute a violation of this order, and the submission of a false or inaccurate report may be
referred to the U.S. Department of Justice as a possible criminal violation of l 8 U.S.C. § 1001.
VI.
Record-Keeping and Inspection
(A) For the purpose of securing compliance with this Order, Respondent shall retain
any and all records relating to the sale, offer for sale, marketing, or distribution in
the United States of covered products, made and received in the usual and
' Complainants must file a letter with the Secretary identifying the attorney to receive reports and
bond information associated with this order. The designated attorney must be on the protective
order entered in the investigation.
4

(B)
ordinary course of business, whether in detail or in summary form, for a period of
three (3) years from the close of the fiscal year to which they pertain.
For the purposes of determining or securing compliance with this Order and for
no other purpose, subject to any privilege recognized by the federal courts of the
United States, and upon reasonable written notice by the Commission or its staff,
duly authorized representatives of the Commission shall be permitted access and
the right to inspect and copy, in Respondent's principal offices during office
hours, and in the presence of counsel or other representatives if Respondent so
chooses, all books, ledgers, accounts, correspondence, memoranda, and other
records and documents, in detail and in summary form, that must be retained
under subparagraph VI(A) of this Order.
VII.
Service of Cease and Desist Order
Respondent is ordered and directed to:
(A)
(B)
(C)
Serve, within fifteen (l 5) days after the effective date of this Order, a copy of this
Order upon each of its respective officers, directors, managing agents, agents, and
employees who have any responsibility for the importation, marketing,
distribution, or sale of imported covered products in the United States;
Serve, within fifteen (15) days after the succession of any persons referred to in
subparagraph VII(A) of this order, a copy of the Order upon each successor; and
Maintain such records as will show the name, title, and address of each person
upon whom the Order has been served, as described in subparagraphs VII(A) and
Vll(B) of this Order, together with the date on which service was made.
5

The obligations set forth in subparagraphs VII(B) and VlI(C) shall remain in effect until
the expiration dates of the ’774 or ’596 patents.
VIII.
Confidentiality
Any request for confidential treatment of information obtained by the Commission
pursuant to Section V or V1 of this Order should be made in accordance with section 201.6 of the
Commission's Rules of Practice and Procedure (19 C.F.R. § 201.6). For all reports for which
confidential treatment is sought, Respondent must provide a public version of such report with
confidential infonnation redacted.
IX.
Enforcement
Violation of this Order may result in any of the actions specified in Section 210.75 of the
Commission's Rules of Practice and Procedure (19 C.F.R. § 210.75), including an action for civil
penalties under section 337(t) of the Tariff Act of 1930 (19 U.S.C. § 1337(1)), as well as any
other action that the Commission deems appropriate. In detennining WhetherRespondent is in
violation of this Order, the Commission may infer facts adverse to Respondent if it fails to
provide adequate or timely infonnation.
X.
Modification
The Commission may amend this Order on its own motion or in accordance with the
procedure described in section 210.76 of the Commission’s Rules of Practice and Procedure (19
C.F.R. §210.76).
XI.
Bonding
The conduct prohibited by Section III of this Order may be continued during the sixty
(60) day period in which this Order is under review by the United States Trade Representative,
6

as delegated by the President (70 Fed. Reg. 43,251 (Jul. 21, 2005)), subject to Respondent
posting of a bond in the amount of zero (0) percent of the entered value of the covered products
(i.e., no bond). This bond provision does not apply to conduct that is otherwise permitted by
Section IV of this Order. Covered products imported on or after the date of issuance of this
Order are subject to the entry bond set forth in the Exclusion Order issued by the Commission,
and are not subject to this bond provision.
The bond is to be posted in accordance with the procedures established by the
Commission for the posting of bonds by complainants in cormection with the issuance of
temporary exclusion orders. (See 19 C.F.R. § 210.68). The bond and any accompanying
documentation are to be provided to and approved by the Commission prior to the
commencement of conduct that is otherwise prohibited by Section Ill of this Order. Upon the
Secretary's acceptance of the bond, (a) the Secretary will serve an acceptance letter on all parties,
and (b) Respondent must serve a copy of the bond and any accompanying documentation on
Complainants’ counsel?
The bond is to be forfeited in the event that the United States Trade Representative
approves this Order (or does not disapprove it within the review period), unless (i) the U.S. Court
of Appeals for the Federal Circuit, in a final judgment, reverses any Commission final
determination and order as to Respondent on appeal, or (ii) Respondent exports or destroys the
products subject to this bond and provides certification to that effect that is satisfactory to the
Commission. 	.
The bond is to be released in the event the United States Trade Representative
disapproves this Order and no subsequent order is issued by the Commission and approved (or
2 See note 1 above.
7

not disapproved) by the United States Trade Representative, upon service on Respondent of an
order issued by the Commission based upon application therefore made by Respondent to the
Commission.
By order of the Commission.
Lisa R. Barton
Secretary to the Commission
Issued: March 25, 2019
8

CERTAIN MAGNETIC TAPE CARTRIDGES AND 	Inv. N0. 337-TA-1058
COMPONENTS THEREOF
PUBLIC CERTIFICATE OF SERVICE
I, Lisa R. Barton, hereby certify that the attached ORDER has been served by hand upon
the Commission Investigative Attomey, Sarah Sladic, Esq., and the following parties as
indicated, on March 25, 2019.
Lisa R. Barton, Secretary
U.S. International Trade Commission
500 E Street, SW, Room 112
Washington, DC 20436
On Behalf of Complainants Sony Corporation. Sonv Storage
Media Solutions Corporation. Sonv Storage Media
Manufacturing Corporation. Sony DADC US Inc.. and Sony
Latin America Inc.:
Jeffrey S. G61‘Cl’1iCk,	ESC]. 	II Via Hand Delivgry
QUINN EMANUEL URQUHART & SULLIVAN, LLP [X]Via Express Dalivery
I SYYCCY,	NW, Sllitfi E] First Class
Washington, DC 20005 	U other
On Behalf of Respondents FUJIFILM Holdings Corporation,
FUJIFILM Corporation. FUJIFILM Holdings
America Corporation. and FUJIFILM Recording Media
U.S.A., Inc. :
Lisa M» Kattan» Esq» 	II] Via Hand Delivery
BAKER BOTTS LLP 	Via Express Delivery
I299 Pennsylvania Avenue, NW 	El Via First Class Mail
Washington, DC 20004 	U Other:

UNITED STATES INTERNATIONAL TRADE COMIVIISSION
Washington, D.C.
In the Matter of 	. ’
CERTAIN MAGNETIC TAPE 	Investigation No. 337-TA-1058
CARTRIDGES AND COMPONENTS
THEREOF
CEASE AND DESIST ORDER
IT IS HEREBY ORDERED THAT RESPONDENT Fujifilm Media Manufacturing
Co., Ltd. of Kanagawa, Japan cease and desist from conducting any of the following activities in
the United States: importing, selling, marketing, advertising, distributing, transferring (except for
exportation), soliciting United States agents or distributors for, and aiding and abetting other
entities in the importation, sale for importation, sale after importation, transfer (except for
exportation), or distribution of magnetic tape cartridges and components thereof that infringe one
or more of claims 1, 5-8, 10, 16, and l7 of U.S. Patent No. 7,029,774 (“the ’774 patent”), and
claims 1-13 ofU.S. Patent No. 6,674,596 (“the ’596 patent”) in violation of Section 337 of the
TariffAct ofl930, as amended (19 U.S.C. § 1337).
I.
Definitions
As used in this Order:
(A) “Commission” shall mean the United States International Trade Commission.
(B) “Complainants” shall mean Sony Corporation of Tokyo, Japan, Sony Storage
Media Solutions Corporation of Tokyo, Japan, Sony Storage Media
Manufacturing Corporation of Miyagi, Japan, Sony DADC US Inc. of Terre
Haute, Indiana, and Sony Latin America Inc. of Miami, Florida.
1

(C) “Respondent” shall mean Fujifilm Media Manufacturing Co., Ltd. of Kanagawa,
Japan.
(D) “Person” shall mean an individual, or any non-governmental partnership, firm,
association, corporation, or other legal or business entity other than Respondent or
its majority-owned or controlled subsidiaries, successors, or assigns.
(E) “United States” shall mean the fifty States, the District of Columbia, and Puerto
Rico.
(F) The terms “import” and “importation” refer to importation for entry for
consumption under the Customs laws of the United States.
(G) The term “covered products” shall mean magnetic tape cartridges and components
thereof that infringe one or more of claims 1, 5-8, 10, 16, and 17 of the ’774
patent, and claims l-13 of the ’596 patent.
II.
Applicability
The provisions of this Cease and Desist order shall apply to Respondent and to any of its
principals, stockholders, officers, directors, employees, agents, licensees, distributors, controlled
(whether by stock ownership or otherwise) and majority-owned business entities, successors, and
assigns, and to each of them, insofar as they are engaging in conduct prohibited by Section III,
infra, for, with, or otherwise on behalf ofl Respondent.
III.
Conduct Prohibited
The following conduct of Respondent in the United States is prohibited by this Order.
For the remaining term of the relevant ’774 or ’596 patent, Respondent shall not:
(A) import or sell for importation into the United States covered products;
2

(B) market, distribute, sell, or otherwise transfer (except for exportation) in the United
States imported covered products;
(C) advertise imported covered products;
(D) solicit United States agents or distributors for imported covered products; or
(E) aid or abet other entities in the importation, sale for importation, sale after
importation, transfer, or distribution of imported covered products.
IV.
Conduct Permitted
Notwithstanding any other provision of this Order, specific conduct otherwise prohibited
by the terms of this Order shall be permitted if:
(A) in a written instrument, the owner of the infringed patent licenses or authorizes such
specific conduct;
(B) such specific conduct is related to the importation or sale of covered products by or
for the United States; or
(C) the conduct is related to articles imported for use for the purpose of compliance
verification testing.
V.
Reporting
For purposes of this requirement, the reporting periods shall commence on January 1 of
each year and shall end on the subsequent December 31. The first report required under this
section shall cover the period from the date of issuance of this order through June 30, 2019. This
reporting requirement shall continue in force until such time as Respondent has truthfully
reported, in two consecutive timely filed reports, that it has no inventory of covered products in
the United States.
3

Within thirty (30) days of the last day of the reporting period, Respondent shall report to
the Commission (a) the quantity in units and the value in dollars of covered products that it has
(i) imported and/or (ii) sold in the United States after importation during the reporting period,
and (b) the quantity in units and value in dollars of reported covered products that remain in
inventory in the United States at the end of the reporting period.
When filing written submissions, Respondent must file the original document
electronically on or before the deadlines stated above and submit eight (8) true paper copies to
the Office of the Secretary by noon the next day pursuant to section 2l0.4(f) of the
Commission’s Rules of Practice and Procedure (19 C.F.R. § 210.4(f)). Submissions should refer
to the investigation number (“Inv. N0. 337-TA-1058”) in a prominent place on the cover pages
and/or the first page. (See Handbook for Electronic Filing Procedures,
https://wWW.usitc.gov/documents/handbook_on_filing_pr0cedures.pdf). Persons with questions
regarding filing should contact the Secretary (202-205-2000). If Respondent desires to submit a
document to the Commission in confidence, it must file the original and a public version of the
original with the Office of the Secretary and must serve a copy of the confidential version on
Complainants’ counsel.‘
Any failure to make the required report or the filing of any false or inaccurate report shall
constitute a violation of this order, and the submission of a false or inaccurate report may be
referred to the U.S. Department of Justice as a possible criminal violation of 18 U.S.C. § 1001.
1Complainants must file a letter with the Secretary identifying the attorney to receive reports and
bond information associated with this order. The designated attorney must be on the protective
order entered in the investigation.
4

(A)
(B)
VI.
Record-Keeping and Inspection
For the purpose of securing compliance with this Order, Respondent shall retain
any and all records relating to the sale, offer for sale, marketing, or distribution in
the United States of covered products, made and received in the usual and
ordinary course of business, whether in detail or in summary form, for a period of
three (3) years from the close of the tiscal year to which they pertain.
For the purposes of determining or securing compliance with this Order andfor
no other purpose, subject to any privilege recognized by the federal courts of the
United States, and upon reasonable written notice by the Commission or its staff,
duly authorized representatives of the Commission shall be pemiitted access and
the right to inspect and copy, in Respondent's principal offices during oflice
hours, and in the presence of counsel or other representatives if Respondent so
chooses, all books, ledgers, accounts, correspondence, memoranda, and other
records and documents, in detail and in summary form, that must be retained
under subparagraph VI(A) of this Order.
VII.
Service of Cease and Desist Order
Respondent is ordered and directed to:
(A)
(B)
Serve, within fifteen (l 5) days after the effective date of this Order, a copy of this
Order upon each of its respective officers, directors, managing agents, agents, and
employees who have any responsibility for the importation, marketing,
distribution, or sale of imported covered products in the United States;
Serve, within fifteen (15) days after the succession of any persons referred to in
subparagraph VIl(A) of this order, a copy of the Order upon each successor; and
5

(C) Maintain such records as will show the name, title, and address of each person
upon whom the Order has been served, as described in subparagraphs VII(A) and
VII(B) of this Order, together with the date on which servioe was made.
The obligations set forth in subparagraphs VII(B) and VII(C) shall remain in effect until
the expiration dates of the ’774 or ’596 patents.
VIII.
Confidentiality
Any request for confidential treatment of information obtained by the Commission
pursuant to Section V or VI of this Order should be made in accordance with section 201.6 of the
Commission's Rules of Practice and Procedure (19 C.F.R. § 201.6). For all reports for which
confidential treatment is sought, Respondent must provide a public version of such report with
confidential information redacted.
IX.
Enforcement
Violation of this Order may result in any of the actions specified in Section 210.75 of the
Commission's Rules of Practice and Procedure (19 C.F.R. § 210.75), including an action for civil
penalties under section 337(t) of the Tariff Act of 1930 (19 U.S.C. § 1337(f)), as well as any
other action that the Commission deems appropriate. In determining whether Respondent is in
violation of this Order, the Commission may infer facts adverse to Respondent if it fails to
provide adequate or timely information.
p X.
Modification
The Commission may amend this Order on its own motion or in accordance with the
procedure described in section 210.76 of the Commission’s Rules of Practice and Procedure (19
C.F.R. § 210.76). 	.
6

XI.
Bonding
The conduct prohibited by Section III of this Order may be continued during the sixty
(60) day period in which this Order is under review by the United States Trade Representative,
as delegated by the President (70 Fed. Reg. 43,251 (Jul. 21, 2005)), subject to Respondent
posting of a bond in the amount of zero (0) percent of the entered value of the covered products
(i.e., no bond). This bond provision does not apply to conduct that is otherwise permitted by
Section IV ofthis Order. Covered products imported on or afier the date of issuance of this
Order are subject to the entry bond set forth in the Exclusion Order issued by the Commission,
and are not subject to this bond provision.
The bond is to be posted in accordance with the procedures established by the
Commission for the posting of bonds by complainants in connection with the issuance of
temporary exclusion orders. (See 19 C.F.R. § 210.68). The bond and any accompanying
documentation are to be provided to and approved by the Commission prior to the
commencement of conduct that is otherwise prohibited by Section III of this Order. Upon the
Secretary's acceptance of the bond, (a) the Secretary will serve an acceptance letter on all parties,
and (b) Respondent must serve a copy of the bond and any accompanying documentation on
Complainants’ counsel? 	_
The bond is to be forfeited in the event that the United States Trade Representative
approves this Order (or does not disapprove it within the review period), unless (i) the U.S. Court
of Appeals for the Federal Circuit, in a final judgment, reverses any Commission final .
determination and order as to Respondent on appeal, or (ii) Respondent exports or destroys the
2 See note l above.
7

products subject to this bond and provides certification to that effect that is satisfactory to the
Commission.
The bond is to be released in the event the United States Trade Representative
disapproves this Order and no subsequent order is issued by the Commission and approved (or
not disapproved) by the United States Trade Representative, upon service on Respondent of an
order issued by the Commission based upon application therefore made by Respondent to the
Commission.
By order of the Commission.
Lisa R. Barton 	'
Secretary to the Commission
Issued: March 25, 2019'
8

CERTAIN MAGNETIC TAPE CARTRIDGES AND 	Inv. No. 337-TA-1058
COMPONENTS THEREOF
PUBLIC CERTIFICATE OF SERVICE
I, Lisa R. Barton, hereby certify that the attached ORDER has been served by hand upon
the Commission Investigative Attorney, Sarah Sladic, Esq., and the following parties as
indicated, on March 25, 2019.
Lisa R. Barton, Secretary
U.S. International Trade Commission
500 E Street, SW, Room ll2
Washington, DC 20436
On Behalf of Complainants Sony Corporation, Sony Storagg
Media Solutions Corporation. Sony Storage Media
Manufacturing Corporation. Sony DADC US Inc., and Sony
Latin America Inc.:
Jeffrey S. Gerchick, Esq.
QUINN EMANUEL URQUHART & SULLIVAN, LLP
1300 I Street, NW, Suite 900
Washington, DC 20005
III Via Hand Delivery
Via Express Delivery
U Via First Class Mail
El Other:
On Behalf of Respondents FUJIFILM Holdings Corporation,
FUJIFILM Corporation, FUJIFILM Holdings
America Corporation. and FUJIFILM Recording Media
U.S.A., Inc. :
Lisa M. Kattan, Esq.
BAKER BOTTS LLP
1299 Pennsylvania Avenue, NW
Washington, DC 20004
Cl Via Hand Delivery
Via Express Delivery
I1 Via First Class Mail
\:l Other:

UNITED STATES INTERNATIONAL TRADE COMMISSION
Washington, D.C.
In the Matter of
CERTAIN MAGNETIC TAPE
CARTRIDGES AND COMPONENTS
THEREOF
Investigation No. 337-TA-105 8
CEASE AND DESIST ORDER
IT IS HEREBY ORDERED THAT RESPONDENT Fujifilm Recording Media
U.S.A., Inc. of Bedford, Massachusetts cease and desist from conducting any of the following
activities in the United States: importing, selling, marketing, advertising, distributing,
transferring (except for exportation), soliciting United States agents or distributors for, and
aiding and abetting other entities in the importation, sale for importation, sale after importation,
transfer (except for exportation), or distribution of magnetic tape cartridges and components
thereof that infringe one or more of claims 1, 5-8, 10, 16, and 17 of U.S. Patent No. 7,029,774
(“the ’774 patent”), and claims 1-13 of U.S. Patent No. 6,674,596 (“the ’596 patent”) in violation
of Section 337 of the Tariff Act of 1930, as amended (19 U.S.C. § 1337).
I.
_ 	Definitions
As used in this Order:
(A) “Commission” shall mean the United States International Trade Commission.
(B) “Complainants” shall mean Sony Corporation of Tokyo, Japan, Sony Storage
Media Solutions Corporation of Tokyo, Japan, Sony Storage Media
Manufacturing Corporation of Miyagi, Japan, Sony DADC US Inc. of Terre
Haute, Indiana, and Sony Latin America Inc. of Miami, Florida.
1

(C) “Respondent” shall mean Fujifilm Recording Media U.S.A., Inc. of Bedford,
Massachusetts.
(D) “Person” shall mean an individual, or any non-governmental partnership, firm,
association, corporation, or other legal or business entity other than Respondent or
its majority-owned or controlled subsidiaries, successors, or assigns.
(E) “United States” shall mean the fifty States, the District of Columbia, and Puerto
Rico.
(F) The terms “import” and “importation” refer to importation for entry for
consumption under the Customs laws of the United States.
(G) The tenn “covered products” shall mean magnetic tape cartridges and components
thereof that infringe one or more of claims 1, 5-8, 10, 16, and 17 of the ’774
patent, and claims 1-13 of the ’596 patent.
II.
Applicability
The provisions of this Cease and Desist order shall apply to Respondent and to any of its
principals, stockholders, officers, directors, employees, agents, licensees, distributors, controlled
(whether by stock ownership or otherwise) and majority-owned business entities, successors, and
assigns, and to each of them, insofar as they are engaging in conduct prohibited by Section III,
in/ira, for, with, or otherwise on behalf of, Respondent.
g III.
Conduct Prohibited
The following conduct of Respondent in the United States is prohibited by this Order.
For the remaining term of the relevant ’774 or ’596 patent, Respondent shall not:
(A) import or sell for importation into the United States covered products;
2

(B) market, distribute, sell, or otherwise transfer (except for exportation) in the United
States imported covered products;
(C) advertise imported covered products;
(D) solicit United States agents or distributors for imported covered products; or
(E) aid or abet other entities in the importation, sale for importation, sale after
importation, transfer, or distribution of imported covered products.
IV.
Conduct Permitted
Notwithstanding any other provision of this Order, specific conduct otherwise prohibited
by the terms of this Order shall be permitted if:
(A) in a written instrument, the owner of the infringed patent licenses or authorizes such
specific conduct;
(B) such specific conduct is related to the importation or sale of covered products by or
for the United States; or
(C) the conduct is related to articles imported for use for the purpose of compliance
verification testing.
V.
Reporting
For purposes of this requirement, the reporting periods shall commence on January 1 of
each year and shall end on the subsequent December 31. The first report required under this
section shall cover the period from the date of issuance of this order through June 30, 2019. This
reporting requirement shall continue in force until such time as Respondent has truthfully
reported, in two consecutive timely filed reports, that it has no inventory of covered products in
the United States.
3

Within thirty (30) days of the last day of the reporting period, Respondent shall report to
the Commission (a) the quantity in units and the value in dollars of covered products that it has
(i) imported and/or (ii) sold in the United States alter importation during the reporting period,
and (b) the quantity in units and value in dollars of reported covered products that remain in
inventory in the United States at the end of the reporting period.
When filing written submissions, Respondent must file the original document
electronically on or before the deadlines stated above and submit eight (8) true paper copies to
the Office of the Secretary by noon the next day pursuant to section 210.4(t) of the
Commission’s Rules of Practice and Procedure (19 C.F.R. § 210.4(t)). Submissions should refer
to the investigation number (“lnv. No. 337-TA-1058”) in a prominent place on the cover pages
and/or the first page. (See Handbook for Electronic Filing Procedures,
https://www.usitc.gov/documents/handbook_on__filing_procedures.pdf). Persons with questions
regarding filing should contact the Secretary (202-205-2000). If Respondent desires to submit a
document to the Commission in confidence, it must file the original and a public version of the
original with the Office of the Secretary and must serve a copy of the confidential version on
Complainants’ counsel.1
Any failure to make the required report or the filing of any false or inaccurate report shall
constitute a violation of this order, and the submission of a false or inaccurate report may be
referred to the U.S. Department of Justice as a possible criminal violation of 18 U.S.C. § 1001.
1Complainants must file a letter with the Secretary identifying the attomey to receive reports and
bond information associated with this order. The designated attomey must be on the protective
order entered in the investigation.
4

VI.
Record-Keeping and Inspection
For the purpose of securing compliance with this Order, Respondent shall retain
any and all records relating to the sale, offer for sale, marketing, or distribution in
the United States of covered products, made and received in the usual and
ordinary course of business, whether in detail or in summary form, for a period of
three (3) years from the close of the fiscal year to which they pertain.
For the purposes of determining or securing compliance with this Order and for
no other purpose, subject to any privilege recognized by the federal courts of the
United States, and upon reasonable written notice by the Commission or its staff,
duly authorized representatives of the Commission shall be permitted access and
the right to inspect and copy, in Respondent's principal offices during office
hours, and in the presence of counsel or other representatives if Respondent so
chooses, all books, ledgers, accounts, correspondence, memoranda, and other
records and documents, in detail and in summary form, that must be retained
under subparagraph VI(A) of this Order.
VII.
~ Service of Cease and Desist Order
Respondent is ordered and directed to:
Serve, within fifteen (15) days after the effective date of this Order, a copy of this
Order upon each of its respective officers, directors, managing agents, agents, and
employees who have any responsibility for the importation, marketing,
distribution, or sale of imported covered products in the United States;
Serve, within fifteen (15) days after the succession of any persons referred to in
subparagraph VII(A) of this order, a copy of the Order upon each successor; and
5

(C) Maintain such records as will show the name, title, and address of each person
upon whom the Order has been served, as described in subparagraphs VII(A) and
VII(B) of this Order, together with the date on which service was made.
The obligations set forth in subparagraphs VII(B) and VII(C) shall remain in effect until
the expiration dates of the ’774 or ’596 patents.
VIII.
Confidentiality
Any request for confidential treatment of information obtained by the Commission
pursuant to Section V or VI of this Order should be made in accordance with section 201.6 of the
Commission's Rules of Practice and Procedure (19 C.F.R. § 201.6). For all reports for which
confidential treatment is sought, Respondent must provide a public version of such report with
confidential information redacted.
IX.
Enforcement
Violation of this Order may result in any of the actions specified in Section 210.75 of the
Commission's Rules of Practice and Procedure (19 C.F.R. § 210.75), including an action for civil
penalties under section 337(1) of the Tariff Act of 1930 (19 U.S.C. § l337(f)), as well as any
other action that the Commission deems appropriate. In determining whether Respondent is in
violation of this Order, the Commission may infer facts adverse to Respondent if it fails to
provide adequate or timely information.
X.
Modification
The Commission may amend this Order on its own motion or in accordance with the
procedure described in section 210.76 of the Commission’s Rules of Practice and Procedure (19
C.F.R. § 210.76).
6

XI.
Bonding
The conduct prohibited by Section III of this Order may be continued during the sixty
(60) day period in which this Order is under review by the United States Trade Representative,
as delegated by the President (70 Fed. Reg. 43,251 (Jul. 21, 2005)), subject to Respondent
posting of a bond in the amount of zero (0) percent of the entered value of the covered products
(i.e., no bond). This bond provision does not apply to conduct that is otherwise permitted by
Section IV of this Order. Covered products imported on or after the date of issuance of this
Order are subject to the entry bond set forth in the Exclusion Order issued by the Commission,
and are not subject to this bond provision.
The bond is to be posted in accordance with the procedures established by the
Commission for the posting of bonds by complainants in connection with the issuance of
temporary exclusion orders. (See 19 C.F.R. § 210.68). The bond and any accompanying
documentation are to be provided to and approved by the Commission prior to the
commencement of conduct that is otherwise prohibited by Section III of this Order. Upon the
Secretary's acceptance of the bond, (a) the Secretary will serve an acceptance letter on all parties,
and (b) Respondent must serve a copy of the bond and any accompanying documentation on
Complainants’ counse1.2
The bond is to be forfeited in the event that the United States Trade Representative
approves this Order (or does not disapprove it within the review period), unless (i) the U.S. Court
of Appeals for the Federal Circuit, in a final judgment, reverses any Commission final
determination and order as to Respondent on appeal, or (ii) Respondent exports or destroys the
2 See note l above.
7

products subject to this bond and provides certification to that effect that is satisfactory to the
Commission.
The bond is to be released in the event the United States Trade Representative
disapproves this Order and no subsequent order is issued by the Commission and approved (or
not disapproved) by the United States Trade Representative, upon service on Respondent of an
order issued by the Commission based upon application therefore made by Respondent to the
Commission.
By order of the Commission. 	i
Lisa R. Barton
Secretary to the Commission
Issued: March 25, 2019
8

CERTAIN MAGNETIC TAPE CARTRIDGES AND 	Inv. No. 337-TA-1058
COMPONENTS THEREOF
PUBLIC CERTIFICATE OF SERVICE
I, Lisa R. Barton, hereby certify that the attached ORDER has been served by hand upon
the Commission Investigative Attomey, Sarah Sladic, Esq., and the following parties as
indicated, on March 25, 2019.
Lisa R. Barton, Secretary
U.S. International Trade Commission
500 E Street, SW, Room 112
Washington, DC 20436
On Behalf of Complainants Sony Corporation. Sonv Storage
Media Solutions Corporation. Sony Storage Media
Manufacturing Corporation. Sony DADC US Inc.. and Sony
Latin America Inc.:
Jeffrey S. Gerchick, Esq. 	I1 Via Hand Delivery
QUINN EMANUEL URQUHART & SULLIVAN, LLP 	Via Expmss Delivery
Stffifit, NW, SLIII6 	U First Class
Washington, DC 20005 	D other
On Behalf of Respondents FUJIFILM Holdings Corporation,
FUJIFILM Corporation. FUJIFILM Holdings
America Corporation, and FUJIFILM Recording Media
U.S.A., Inc. :
Lisa M. Kattan, Esq. 	U Via Hand Delivery
BAKER BOTTS LLP 	Via Express Delivery
1299 Pennsylvania Avenue, NW 	E‘ Via First Class Mail
Washington, DC 20004 	U other

UNITED STATES INTERNATIONAL TRADE COMMISSION
Washington, D.C.
In the Matter of
CERTAIN MAGNETIC TAPE 	Investigation No. 337-TA-1058
CARTRIDGES AND COMPONENTS
THEREOF
NOTICE OF A COMMISSION FINAL DETERNIINATION FINDING A VIOLATION
OF SECTION 337; ISSUANCE OF A LIMITED EXCLUSION ORDER AND CEASE
AND DESIST ORDERS; TERMINATION OF THE INVESTIGATION
AGENCY: U.S. International Trade Commission.
ACTION: Notice.
SUMMARY: Notice is hereby given that the U.S. International Trade Commission has found a
violation of section 337 in this investigation and has issued a limited exclusion order and cease
and desist orders. The remedial orders are suspended as to claim 17 of U.S. Patent No. 7,029,774
pending final resolution of a validity issue. The investigation is tenninated.
FOR FURTHER INFORMATION CONTACT: Cathy Chen, Esq., Office of the General
Counsel, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436,
telephone (202) 205-2392. Copies of non-confidential documents filed in connection with this
investigation are or will be available for inspection during official business hours (8:45 a.m. to
5:15 PJII.) in the Office of the Secretary, U.S. International Trade Corrnnission, 500 E Street SW,
Washington, DC 20436, telephone (202) 205-2000. General information concerning the
Commission may also be obtained by accessing its hiternet server at httgs://www.usitc.gov. The
public record for this investigation may be viewed on the Cormnission‘s electronic docket (EDIS)
at httgs://edis.usilc. gov. Hearing-impaired persons are advised that information on this matter
can be obtained by contacting the Commission’s TDD terminal on (202) 205-1810.
SUPPLEMENTARY INFORMATION: The Commission instituted this investigation on June
l, 2017, based on a complaint, as amended, filed by Sony Corporation of Tokyo, Japan; Sony
Storage Media Solutions Corporation of Tokyo, Japan; Sony Storage Media Manufacturing
Corporation of Miyagi, Japan; Sony DADC US Inc. of Terre Haute, Indiana; and Sony Latin
America Inc. of Miami, Florida (collectively “S0ny”). 82 FR 25333 (Jun. l, 2017). The
complaint alleges violations ofsection 337 of the Tariff Act of 1930, as amended, l9 U.S.C.
1337, in the importation into the United States, the sale for importation, and the sale within the
United States after importation of certain magnetic tape cartridges and components thereof by
reason of infringement of claims 1-ll and 15-20 of U.S. Patent No. 7,029,774 (“the ’774
patent”); claims 1-19 of U.S. Patent N0. 6,674,596 (“the ’596 patent”); and claims l-6, and 8 of
l

U.S. Patent No. 6,979,501 (“the ’501 patent”). Id. The complaint fiirther alleges that an industry
in the United States exists as required by 19 U.S.C. § 1337(a)(2). Id. The notice of investigation
named Fujifilm Holdings Corporation of Tokyo, Japan; Fujifilm Corporation of Tokyo, Japan;
Fujifilm Media Manufacturing Co., Ltd. of Kanagawa, Japan; Fujifilm Holdings America
Corporation of Valhalla, New York; and Fujifilm Recording Media U.S.A., Inc. of Bedford,
Massachusetts (collectively “Fujifilm”), as respondents. Id. at 25334. The Office of Unfair
Import Investigations is also a party in this investigation. Id.
On March 22, 2018, the administrative law judge (“ALJ”) granted Sony’s motion to
terminate claims 2-4, 9, 11, 15, and 18-20 of the ’774 patent, claim 3 of the ’501 patent, and
claims 14-19 of the ‘S96 patent from the investigation. See Order No. 26; Comm’n Notice of
Non-Review (Apr. 23, 2018).
The ALJ held an evidentiary hearing on May 8-1 1, 2018, and thereafter received post
hearing briefs.
On August 17, 2018, the ALJ issued his final initial determination (“ID”), finding a
violation of section 337 by Fujifilm in connection with claims 1, 5-8, 10, 16, and 17 of the ’774
patent, and claims 1-13 of the ’596 patent, but not in connection with claims 1, 2, 4-6, and 8 of
the ’501 patent. Specifically, the ID found that Fujifilm’s accused products infringe the asserted
claims of the ’774 and the ’596 patents; that the asserted claims of the ’774 and ’596 patents are
not invalid; and that a domestic industry exists with respect to both patents. Although the ID also
found that Fujifilm’s accused products infringe the asserted claims of the ’501 patent, and that a
domestic industry exists with respect to that patent, the ID found no violation as to the ’501
patent because Fujifilm established that the asserted claims are invalid.
On August 17, 2018, the ALJ also issued his recommended determination on remedy and
bonding. As instructed by the Commission, the ALJ made findings of fact and recommendations
concerning the public interest factors set forth in 19 U.S.C. 1337(d)(1) and (f)(1). 82 FR 25334;
19 CFR 210.10(b), 2l0.42(a)(1)(ii)(C). The ALJ recommended that the appropriate remedy is a
limited exclusion order and cease and desist orders directed to Fujifilm. The ALJ also
recommended that the Commission require no bond during the period of Presidential review. The
ALJ further recommended, based on the evidence presented, that public interest factors do not
weigh against or warrant tailoring any remedy.
On September 4, 2018, Sony, Fujifilm, and the Commission’s Investigative Attomey
each filed a timely petition for review of the final ID. Thereafter, the parties filed timely
responses to the petitions for review and public interest comments pursuant to Commission Rule
210.50(a)(4).
On October l8, 2018, the Commission determined to review the final ID in part and
requested the parties to brief certain issues under review and to brief issues of remedy, bonding,
and the public interest. The Commission determined to review the lD’s finding that the economic
prong of the domestic industry requirement has been satisfied for all three asserted patents imder
sections 337(a)(3)(B) and (C) based on the domestic activities of Sony’s licensee. In addition,
with respect to the ’774 patent, the Commission determined to review the ID’s findings that the
2

asserted claims are not invalid for lack of enablement and are not invalid for lack of written
description, and the ID’s finding that certain prior art tapes do not anticipate claim 17. The
Commission also determined to review the ID’s findings with respect to the ’596 patent in their
entirety. Other than the ID’s economic prong finding, the Commission did not review any other
finding related to the ’S0l patent.
On October 23, 2018, the Patent Trial and Appeal Board (“PTAB”) of the U.S. Patent
and Trademark Office issued a Final Written Decision in an inter partes review finding claims
15 and 17 of the ’774 patent unpatentable.
On November 1, 2018, the parties filed submissions to the Commission’s questions and
also briefed the issues of remedy, bonding, and the public interest. As part of its submission,
Fujifilm requested that the Commission stay the enforcement of any remedial orders should the
Commission find a violation of section 337 in connection with claims 15 and 17 of the ’774
patent in view of the PTAB’s Final Written Decision finding those claims invalid. On
November 8, 2018, the parties filed responses to the initial submissions. That same day, Sony
and Fiuifilm also filed a joint unopposed motion to submit certain replacement pages to their
respective initial written submission.
Having examined the record of this investigation, including the final ID, and the parties’
submissions, the Commission has determined to (1) affirm the lD’s findings that the asserted
claims of the ’774 patent are not invalid for lack of enablement and are not invalid for lack of
written description; (2) affirm with modifications the ID’s finding that certain prior art tapes do
not anticipate claim 17 of the ’774 patent; (3) affirm with modifications the ID’s finding that
Fujifilm has not proven that the asserted claims of the ’596 patent are obvious over Platte and
Kano; (4) take no position on whether Fujifilm’s own acts of direct infringement can form a
basis for a violation of section 337 with respect to the ’596 patent, and whether Fujifilm
contributorily infringes the ’596 patent; (5) affirrn with modifications the ID’s fmding that the
economic prong of the domestic industry requirement has been satisfied for the ’596 patent under
sections 337(a)(3)(B) and (C) based on the domestic activities of Sony’s licensee; (6) affirm with
modifications the ID’s finding that the economic prong of the domestic industry requirement has
been satisfied with respect to the ’774 and the ’501 patents under section 337(a)(3)(B) based on
the domestic activities of Sony’s licensee; and (7) take no position on whether the economic
prong of the domestic industry requirement has been satisfied with respect to the ’774 and the
’5Ol patents under section 337(a)(3)(C) based on the domestic activities of Sony’s licensee. The
Commission adopts the ID’s findings to the extent that they are not inconsistent with the
Commission opinion issued herewith. The Commission action results in a violation of section
337 as to claims 1, 5-8, 10, 16, and 17 of the ’774 patent, and claims 1-13 of the ’596 patent, but
not as to claims 1, 2, 4-6, and 8 of the ’50l patent.
The Commission has also detennined to grant Sony’s and Fujifilm’s joint motion to
submit certain replacement pages to their respective initial written submission.
Having found a violation of section 337 in this investigation, the Commission has
detennined that the appropriate fonn of relief is: (1) a limited exclusion order prohibiting the
unlicensed entry of magnetic tape cartridges and components thereof that infringe one or more of
3

claims 1, 5-8, 10, 16, and 17 ofthe ’774 patent, and claims 1-13 ofthe ’596, and (2) cease and
desist orders directed to the domestic Fujifilm respondents. The Commission has also determined
that the public interest factors enumerated in section 337(d) and (f) (19 U.S.C. 1337(d) and (f))
do not preclude issuance of the limited exclusion order or cease and desist orders. The
Commission has, however, determined to exempt Fujifilm’s magnetic tape cartridges and
components thereof that are imported or used for the purpose of compliance verification testing.
In view of the PTAB’s Final Written Decision finding claim 17 of the ’774 patent
unpatentable, the Commission has determined to suspend the enforcement of the limited
exclusion order and cease and desist orders as to that claim pending final resolution of the _
PTAB’s Final Written Decision. See 35 U.S.C. § 318(b).
The Commission has further determined to set a bond at zero (O)percent of entered value
during the period of Presidential review (19 U.S.C. l337(j)). The Commission’s orders and
opinion were delivered to the President and to the United States Trade Representative on the day
of their issuance.
The authority for the Commissiorfs determination is contained in section 337 of the
Tariff Act of 1930, as amended (19 U.S.C. 1337), and in Part 210 of the Commission’s Rules of
Practice and Procedure (19 CFR Part 210).
By order of the Commission.
W%®
Lisa R. Barton
Secretary to the Commission
Issued: March 25, 2019
4

CERTAIN MAGNETIC TAPE CARTRIDGES AND 	Inv. No. 337-TA-1058
COMPONENTS THEREOF
PUBLIC CERTIFICATE OF SERVICE
I, Lisa R. Barton, hereby certify that the attached NOTICE has been served by hand
upon the Commission Investigative Attorney, Sarah Sladic, Esq., and the following parties as
indicated, on March 25, 2019.
Lisa R. Barron, Secretary
U.S. Intemational Trade Commission
500 E Street, SW, Room 112
Washington, DC 20436
On Behalf of Complainants Sonv Corporation. Sonv Storage
Media Solutions Corporation. Sonv Storage Media
Manufacturing Corporation. Sonv DADC US Inc.. and Sonv
Latin America Inc.:
Jeffrey S. Gerchick, Esq. 	El Via Hand Delivery
QUINN EMANUEL URQUHART & SULLIVAN, LLP 	Via Express Delivery
S1II‘6€I,NW, SUIIG U First Class
Washington, DC 20005 	U Qther
On Behalf of Respondents FUJIFILM Holdings Corporation,
FUJIFILM Corporation. FUJIFILM Holdings
America Corporation, and FUJIFILM Recording Media
U.S.A., Inc. :
Lisa M. Kattan, Esq. 	U Via Hand Delivery
BAKER BOTTS LLP 	E Via Express Delivery
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Washington, DC 20004 	D other

PUBLIC VERSION
UNITED STATES INTERNATIONAL TRADE COMMISSION
Washington, D.C.
In the Matter of
CERTAIN MAGNETIC TAPE 	Investigation No. 337-TA-1058
CARTRIDGES AND COMPONENTS
THEREOF
' COMMISSION OPINION
I. INTRODUCTION
The Commission instituted this investigation on June I, 2017, based on a complaint, as
amended, by Sony Corporation of Tokyo, Japan; Sony Storage Media Solutions Corporation of
Tokyo, Japan; Sony Storage Media Manufacturing Corporation of Miyagi, Japan; Sony DADC
US Inc. of Terre Haute, Indiana; and Sony Latin America Inc. of Miami, Florida (collectively
“Sony”). 82 Fed. Reg. 25333 (Jun. 1, 2017). The complaint alleged violations of section 337 of
the Tariff Act of I930, as amended, I9 U.S.C. § I337, in the importation into the United States,
the sale for importation, and the sale within the United States after importation of certain
magnetic tape cartridges and components thereof by reason of infringement of certain claims of
three U.S. Patents: 7,029,774 (“the ’774 patent”); 6,674,596 (“the ’596 patent”); and 6,979,501
(“the ’501 patent”). Id. The complaint further alleged that an industry in the United States exists
as required by 19 U.S.C. § 1337(a)(2). Id. The notice of investigation named as respondents
Fujifilm Holdings Corporation of Tokyo, Japan; Fujifilm Corporation of Tokyo, Japan; Fujifilm
Media Manufacturing Co., Ltd. of Kanagawa, Japan; Fujifilm Holdings America Corporation of
Valhalla, NY; and Fujifilm Recording Media U.S.A., Inc. of Bedford, MA (collectively
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PUBLIC VERSION
“Fujifilm”). Id. at 25334. The Office of Unfair Import Investigations was also a party in this
investigation. Id.
The presiding administrative law judge (“ALJ”) conducted an evidentiary hearing on
May 8-1 1, 2018. On August 17, 2018, the ALJ issued his final Initial Determination (“ID”) and
his recommended determination (“RD”) on remedy and bonding in this investigation. The final
ID found a violation of section 337 with respect to claims 1, S-8, 10, 16, and 17 of the ’7'l4
patent and claims 1-13 of the ’596 patent, and no violation with respect to claims 1, 2, 4-6, and 8
of the ’50l patent. ' Specifically, the final ID found that Fujifilm’s accused products infringe the
asserted claims of the ’774 and the ’596 patents; that the asserted claims of the ’774 and ’596
patents are not invalid; and that a domestic industry exists with respect to both patents. Although
the final ID also found that Fujifilm’s accused products infringe the asserted claims of the ’501
patent, and that a domestic industry exists with respect to that patent, it found no violation as to
the ’501 patent because Fujifilm had established that the asserted claims were invalid. The RD
recommended that a limited exclusion order (“LEO”) and cease and desist orders (“CDO”) issue
against all Fujifilm respondents, prohibiting, inter alia, the importation of articles that infringe
the asserted claims of the ’774 and the ’596 patents.
Sony, Fujifilm, and the C0mmission’s Investigative Attorney (“IA”) filed petitions for
review of the final ID. On October 18, 2018, the Commission determined to review the final ID
' The final ID provides an overview of the technology at issue in each of the three
asserted patents and the asserted claims. See ID at 5-6, 26-31 (the ’774 patent), 86-90 (the ’501
patent), 122-25 (the ’596 patent). It also discusses the accused products and the domestic
industry products relevant to each asserted patent. Id at 6-12.
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in part.2 Specifically, the Commission determined to review the final ID’s finding that the
economic prong of the domestic industry requirement has been satisfied for allthree asserted
patents under sections 337(a)(3)(B) and (C) based on the domestic activities of Sony’s licensee.
Other than this finding, the Commission did not review any other finding related to the ’501
patent, including the final ID’s finding that Fujifilm had established that the asserted claims of
the ’50l patent are invalid. With respect to the ’774 patent, the Commission determined to also
review the final ID’s findings that certain claims are not invalid for lack of enablement and lack
of written description, and the final ID’s finding that prior art magnetic tapes do not anticipate
claim l7. Further, the Commission determined to review the final ID’s findings with respect to
the ’596 patent in their entirety.
The Commission solicited further briefing from the parties on certain issues under
review, and requested briefing from the parties, interested govemment agencies, and the public
on remedy, the public interest, and bonding. On November 1, 2018, the parties filed their initial
submissions on the issues under review and on remedy, the public interest, and bonding.3 On
November 8, 2018, the parties filed responses to the initial submissions.“ That same day, Sony
2See Notice of a Commission Determination to Extend the Target Date and to Review In
Part a Final Initial Determination Finding a Violation of Section 337; Schedule for Filing Written
Submissions (Oct. 18, 2018) (“Notice of Review”).
3Complainants’ Initial Submission in Response to the Commission’s October 18, 2018
Notice and Request for Written Submissions (Nov. 1, 2018) (“CSub”); Complainants’ Written
Submission on Remedy, Bonding and Public Interest (Nov. 1, 2018) (“CRmdy”); Response of
the Office of Unfair Import Investigations to the Commission’s Request for Written Submissions
Regarding the Issues Under Review and Remedy, Bonding, and the Public Interest (Nov. 1,
2018) (“IASub”); Respondents’ Initial Written Submission in Response to the Commission’s
Determination to Review-In-Part the Final Initial Determination (Nov. 1, 2018) (“RSub”).
4 Complainants’ Reply to the Submission by the Office of Unfair Import Investigations
on the Commission’s Questions (Nov. 8, 2018) (“CReplyIA”); Complainants’ Reply to the
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and Fujifilm filed a joint unopposed motion to submit certain replacement pages to their
respective initial submission.
On March 25, 2019, the Connnission issued a notice finding a violation of section 337 as
to the ’774 and the ’596 patents. No violation had already been found as to the ’50l patent as a
result of the Commission’s earlier decision not to review the final ID’s finding that Fujifilm had
established that the asserted claims of the ’50l patent are invalid. Also, on March 25, 2019, the
Commission issued a limited exclusion order and cease and desist orders directed to all Fujifilm
respondents, prohibiting, inter alia, the importation of articles that infringe claims 1, 5-8, 10, 16,
and 17 of the ’774 patent and claims 1-13 of the ’596 patent. However, as explained below, the
Commission has determined to suspend enforcement of these remedial orders as to claim 17 of
the ’774 patent pending the appeal of a recently issued Final Written Decision (“FWD”) of the
Patent Trial and Appeal Board (“PTAB”) finding this claim invalid. Further, on March 25, 2019,
the Commission granted Sony’s and Fujifilm’s joint motion to submit certain replacement pages
to their respective initial submission. This Opinion sets forth the Commission’s reasoning in
support of its determination for the issues under review, and its reasoning in support of its
determination on remedy, the public interest, and bonding.
Submission by Respondents on the Commission’s Questions (Nov. 8, 2018) (“CReplyR”);
Complainants’ Reply Submission on Remedy, Bonding, and Public Interest (Nov. 8, 2018)
(“CReplyRmdy”); Reply Submission of the Office of Unfair Import Investigations to the Private
Parties’ Written Submissions Regarding the Issues Under Review and Remedy, Bonding, and the
Public Interest (Nov. 8, 2018) (“IAReply”); Respondents’ Written Submission in Reply to the
Office of Unfair Import Investigations’ Initial Submission In Response to the Commission’s
Written Questions (Nov. 8, 2018) (“RReplyIA”); Respondents’ Written Submission in Reply to
Complainant Sony’s Initial Submission In Response to the Commission’s Written Questions
(Nov. 8, 2018) (“RReplyC”); Respondents’ Reply to Complainants’ and OUII’s Submissions on
Remedy, Bonding, and Public Interest (Nov. 8, 2018) (“RReplyRmdy”). 	t
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»
PUBLIC VERSION
II. ANALYSIS
A. The ’774 Patent
i. The Final ID’s Finding That Certain Asserted Claims of the ’774
Patent Do Not Lack Enablement and Written Description5
In its Notice of Review, the Commission asked the parties to address the following:
l. What is the proper scope of the claim limitations “a skew less than about 0.5”
and “a kurtosis less than about 4.0” in the ’774 patent? Please discuss whether
the asserted claims are enabled and adequately described if the claimed ranges
are construed to include negative skew and kurtosis less than about 3.0, as
Fujifilm argues, and alternatively, if the claimed ranges for these parameters are
construed to be limited to values that approach Gaussian distribution, i.e., zero
skew and kurtosis of three, as Sony argues. Under the latter construction, please
also address Fujifilm’s argument that a person of ordinary skill in the art would
not know how to achieve a skew less than 0.30 and a kurtosis less than 3.4.
a. Claim Construction
Other than claim 17, the asserted claims of the ’774 patent require a “skew less than
about 0.5” and a “ktutosis less than about 4.0[/3.7]."6 The final ID found that “a person of
ordinary skill in the art would understand that ‘[t]he claimed ranges for these parameters
approach Gaussian distributions“ and it is undisputed that a person of ordinary skill in the art at
the time of the invention would have understood that a Gaussian distribution has a skew of 0.0
and a kurtosis of3.(). ID at 84; see also id. at 82-83; CX-0002C at Q/A 59, 62, 66; CX-0012C at
Q/A 64, 338, 342; RX-0003C at Q/A 552-554, 803-804. Having reviewed the record evidence
5Although Fujifihn argued before the ALJ that the asserted claims of the ’774 patent are
not enabled as to five claim limitations, Fujifilm’s petition for Commission review was limited to
two limitations: a “skew less than about 0.5” and a “kurtosis less than about 4.0[/3.7]” in claims
I, 5-8, 10, and 16. See generally RPet at 35-41; CResp at 34 n.11. Thus, our analysis is limited
to the final ID’s determinations that Fujifihn failed to prove that claims 1, 5-8, 10, and 16 are not
enabled and are not adequately described for their full scope of the claimed “skew” and
“kurtosis” ranges. Fujifilm has abandoned its lack of enablement and written description
arguments with respect to the other three limitations. See l9 C.F.R. § 2l0.43(b)(2).
' 6Claim 17 does not recite the “skew” and “kurtosis” limitations. Claim 7 requires a
“kurtosis value [] less than or equal to about 3.7.” JX-3 at 13:9-l0.
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PUBLIC VERSION
and the parties’ submissions, the Commission determines that the final ID correctly construed the
“skew” and “kurtosis” limitations in the ’774 patent, and we affirm its validity determinations
relating to those two limitations.
Fujifilm argues that a plain reading of a “skew less than about 0.5” and a “kmtosis less
than about 4.0” indicates open-ended ranges that include within the claim scope skew values less
than 0.0 and kuttosis values less than 3.0. See RSub at 1-3. We find Fujifilm’s interpretation of
the claims is inconsistent with the teachings of the ’774 patent.
According to the ’774 patent, the prior art backside layers that existed at the time of the
invention were fonned by disbursing “relatively large particles” on a relatively smooth surface in
order to “decrease friction and increase durability.” ID at 27 (citing JX-3 at 2: 1-5). These
“relatively large particles” were a problem because, when the tape was wound around a spool,
the peaks of the large particles on the backside layer of one section of the tape would come into
contact with the magnetic recording surface on the top magnetic layer of a different section of
the tape, and could leave “imprints, pits, or embossments” on the magnetic layer. Id. (citing JX
3 at 2:5-24). The “imprints, pits, or embossments” lefi by the backside layer on the magnetic
layer are undesirable because they can “damage the recording characteristics of the magnetic
recording tape.” Id. (citing JX-3 at 2:21-23). 	I 	'
The ’774 patent endeavored to alleviate the embossments on the magnetic layer while
improving the durability and frictional characteristics of the tape by specifying surface properties
of the backside or backcoat7 that were different than those of the conventional backside layers
that existed at the time. Id. at 28 (citing JX-'3 at 2:23-28). The difference between the
7The ’774 patent specification uses the terms “backside” and “backcoat”
interchangeably. See JX-3 at 3:37.
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PUBLIC VERSION
conventional backside surface and the backside surface described in the ’774 patent can be seen
by comparing Figures 1 and 3 of the patent. Id. (citing JX-3 at 5: l 8-21; see id. at 5:47-51 (“As
illustrated in FIG. 3, the peaks 64 and the valleys 66 are exaggerated for illustrative purposes
only. The peaks 64 are generally not as large as the peaks seen with bimodal backside surfaces
(see for example peak 20 of FIG. l”))). 	_
Specifically, as shown in Figure 3, the backside surface 42 of tape 30 has a large number
of peaks with relatively small and uniform heights so that a “relatively large plurality of peaks 64
contact[s] the recording surface 56 of an adjacent winding 60 or 62.” Id. (citing JX-3 at 5:52
55). Thcsc peaks form a “relatively random” surface, which the patent describes as
“approaching a Gaussian surface,” instead of the “typical bimodal backside surface” of the
conventional tapes shown in Figure 1. Id. at 29 (citing JX-3 at 5:18-21). According to the
patent, the structure of the backside more uniformly distributes the load transfeired from the
adjacent recording surface such that “the number of pits or embossments formed in recording
surface 56 are decreased and/or the pits or embossments formed are less pronounced.” Id. (citing
JX-3 at 5:39-625). 	'
The ’774 patent specification describes physical characteristics of the backside surface by
using measurements such as “skew, peak height mean, peak-to-valley roughness, plateau ratio,
and kurtosis.” Id. (citing JX-3 at 8:10-9:13). According to example measurements provided in
the patent, a backside according to the invention exhibits decreased values for these surface
measurements. Id. (citing JX-3 at 9156-12:49). 	'
The ’774 patent specification provides the following description of the surface
measurement parameter, “skew,” for a magnetic recording medium:
Skew (Rsk)is the third moment of a roughness distribution and measures the
asymmetry of the surface profile about a mean plane of the surface being
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PUBLIC VERSION
evaluated. Negative skew indicates a predominance of valleys, whilepositive skew
indicates a predominance of peaks. Skew illustrates load carrying capacity,
porosity and other characteristics. Negative skew generally is a criterion for a
good bearing surface. With regard to magnetic recording medium 30, it is
generally desirable to decrease positive skew by decreasing thepredominance of
high peaks, and, consequently, decreasing the number and/or size ofpits or
embossments. However, it is also generally desirable to maintain at least a low
level ofpositive skew to decrease the excessfrictional forces on the magnetic
recording medium that can cause handling problems during use of the magnetic
recording medium. In one embodiment, the magnetic recording medium 30 has a
skew of less than about 0.5.
JX-3 at 8:I3-29 (emphasis added). The specification also provides the following description of
the surface measurement parameter, “kurtosis,” for a magnetic recording medium:
Kurtosis (Rku)is a measure of the distribution of spikes above and below the mean
line of the backside surface 42 and generally indicates the randomness of the
surface. In particular, kurtosis is the fourth derivative of the roughness
distribution of the measured surface. In general, for relatively spiky surfaces,
kurtosis is greater than three; for wavysurfaces, kurtosis is less than three; and
for perfectly random surfaces, kurtosis is generally equal to three. For instance,
in one example, a truly Gaussian surface generally has a kurtosis value of three.
As such, it is desirable to have a surface roughness approximating a Gaussian
surface as opposed to a bimodal surface ofprior art, magnetic recording
mediums. In one embodiment, magnetic recording medium 30 has a kurtosis of
less than or equal to about 4.0, more preferably of less than or equal to about 3.7.
Id. at 8:65-9:12 (emphasis added).
In view of the above disclosures, the ’774 patent makes clear that going beyond a
Gaussian distribution, and thereby having a bi-modal distribution, would defeat the purpose of
the invention of the ’774 patent. Id. at 9:5-12, Fig. 3, 5: 18-21. The specification makes
references to negative skew and a kurtosis less than three as part of the general definitions of
skew and kurtosis, and not as part of the inventions disclosed therein. Therefore, when reading
the claims of the ’774 patent in view of the specification, a person of ordinary skill in the art
would understand that the proper scope of the “skew less than about 0.5” limitation is a positive
skew that is less than about 0.5. See id. at 5:18-21, 8:20-27, 9:2-7; CX-0012C at Q/A 326-339,
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363. Likewise, a person of ordinary skill in the art would understand that the proper scope of “a
kurtosis less than about 4.0” is a kurtosis value of less than about 4.0 to about 3.0. See JX-3 at
5:18-21, 8:20-27, 9:2-7; CX-0012C at 340-342, 363.
We are unpersuaded by Fujifilm’s argument that a surface approaching a Gaussian
surface (i.e., having a skew of zero and kurtosis of 3) is merely one embodiment and that Sony’s
construction improperly imports one disclosed embodiment into the claims. See RSub at 3.
Following the disclosures describing “skew” and “kurtosis,” the specification describes the
embodiment in which the magnetic recording medium has “a skew‘of less than about 0.5” and “a
kurtosis of less than or equal to about 4.0, more preferably of less than or equal to about 3.7.”
JX-3 at 8:20-29, 9:2-13. Consequently, if a surface approaching a Gaussian surface is merely
one embodiment, as Fujifilm suggests, it is clear from these disclosures that claims l, 5-8, l0,
and 16 of the ’774 patent cover that embodiment (i.e., magnetic recording mediums having a
positive skew less than about 0.5 and a kurtosis less than about 4.0 to about 3.0). See id. at 8:20
29, 9:2-13, 12:50-14:41.
b. Enablement
Because the Commission adopts the final ’1D’sdetermination that the proper scope of the
“skew less than about 0.5” limitation is a positive skew that is less than about 0.5 and the proper
scope of“a kurtosis less than about 4.0” is a kurtosis value of less than about 4.0 to about 3.0, the
Commission does not need to consider Fujifilm’s argument that those limitations are not enabled
for skew values less than zero and kurtosis values less than three. See RSub at 4-5.
Fujifilm argues that the “skew” and “kurtosis” limitations are also not enabled for skew
values less than 0.30 and kurtosis values less than 3.4 because the smallest skew and kurtosis
values achieved by the inventors of the ’774 patent and disclosed in the patent are 0.30 and 3.4,
respectively. See id. at 6. Having reviewed the record evidence and the parties’ submissions, the
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Commission determines to affirm the ALJ’s finding that Fujifilm did not meet its burden in
proving claims 1, 5-8, I0, and 16 of the ’774 patent is invalid for lack of enablement. ID at 82.
A party must prove invalidity based on a lack of enablement by clear and convincing
evidence. “To be enabling, the specification of a patent must teach those skilled in the art how to
make and use the full scope of the claimed invention without ‘undue experimentation.”’
Genentech, Inc. v. Novo Nordisk, A/S, 108 F.3d 1361, 1365 (Fed. Cir. 1997) (quoting In re
Wright, 999 F.2d 1557, 1561 (Fed. Cir. 1993)). Enablement is a question of law involving
underlying factual inquiries. ld.; see In re Wands, 858 F.2d 731, 737 (Fed. Cir. 1988) (holding
that whether undue experimentation is required is a “conclusion reached by weighing many
factual considerations... includ[ing] (1) the quantity of experimentation necessary, (2) the
amount of direction or guidance presented, (3) the presence or absence of working examples, (4)
the nature of the invention, (5) the state of the prior art, (6) the relative skill of those in the art,
(7) the predictability or unpredictability of the art, and (8) the breadth of the claims.”).
Fujifilm argues that the Federal Circuit’s decision in MagSil Corp. v. Hitachi Global
Storage Techs., Inca, 687 F.3d 1377 (Fed. Cir. 2012) is instructive. RSub at 4. However, the
court found the open-ended limitation at issue in Magsil to be invalid for lack of enablement
based on much more evidence than presented by Fujifilm in this case. In Magsil, the claims at
issue recited “a change in resistance of at least 10%.” Id. at 1381. The court found the claims
invalid for lack of enablement because the claims covered resistive changes from 10% up to
infinity, while the patent specification only discloses enough infonnation to achieve an 11.8%
resistive change at the time of the invention. Id. at 1382-83. iAmongother evidence relied on by
the court, the named inventor testified that before the application was filed, he did not know how
to achieve a tunnel junction with greater than 20% change in resistance. Id. at 1382. There was
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PUBLIC VERSION
also evidence of conflicting testimony regarding the highest possible resistive change that could
be achieved with the invention. Id. The inventor also acknowledged that even someone of
extraordinary skill in the art at the time of the invention could not have predicted the exact
process and materials needed for the 120% resistive change achieved over ten years later. Id. In
addition, the named inventors were not able to achieve even a 20% change a year after filing the
application in 1995, and 604% junctions were not achieved until 2008. Id. The court found the
field of an to have “advanced vastly after the filing of the claimed invention.” Id.
In contrast to the evidence before the court in MagSiI, here, Fujifilm points principally to
the direct testimony of its expert, Dr. Wang. See RSub at 6-7 (citing RX-3C at Q/A 555, 865,
867, 869, 880).“ We have reviewed the evidence of record, including Dr. Wang’s testimony on
the issue, and find that the ALJ appropriately weighed the evidence and we agree with his
findings. In particular, we find Dr. Wang’s analysis consists only of conclusory and wholly
unsupported statements. As such, the final ID correctly concluded that Fujifilm failed to
introduce any evidentiary support for its argument that a person of ordinary skill in the art would
not know how to achieve a skew less than 0.30 and a kurtosis less than 3.4. ID at 83-84.
Aside from Dr. Wang’s testimony, Fujifilm argues that one of the named inventors, Dr.
Ebner, “could not say whether a [person of ordinary skill in the art] would have been able to
achieve the full range of the claims as written.” RSub at 7 (citing JX-26 at 35:21 -36: l , 76:2-18,
78:19-79:8; 80:2-81 :8; 81:19-82:5). Dr. Ebner, however, was testifying that a person ofordinary
skill in the art would not have known how to create a magnetic tape with the claimed skew and
8 Fujifilm’s submission also cites to Dr. Wang’s testimony at RX-3C at Q/A 885, but that
testimony relates to “skirt signal-to-noise ratio”—a claim limitation that Fujifilm waived by not
raising its lack of enablement and written description arguments with respect to that limitation in
its petition for review. See supra note 5.
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PUBLIC VERSION
kurtosis ranges before the effective filing date of the ’774 patent. See JX-26 at 76:2-18, 78: l9-_v
79:8; 80:2-81:8; 81:19-82:5. In fact, Dr. Ebner testified that a person of ordinary skill in the art
“on May 23“, 2005, [the effective filing date of the ’774 patent,] with the benefit of reading the
disclosure of the ’774 patent,” could have developed a backside formulation that achieves the
surface properties claimed in the patent with only routine experimentation. Id at 147:l 6-148:8.
Moreover, Sony’s expert, Dr. Bogy, testified that a person of ordinary skill in the art
would recognize how to modify the manufacturing processes and material compositions and
sizes for making the claimed magnetic media to approach a Gaussian distribution. See CX-12C
at Q/A 363. He also testified that the ’774 patentfs “disclosures regarding how and to what
extent the recited parameters change based on various factors, such as compositions of the
backside, sizes of various particles such as silica texture particles, and presence or lack of
multiple groups of carbon black particles with different primary sizes would have glided a
person of ordinary skill in the art’s performance of routine experimentation that could be
conducted to achieve the full scope of the claims.” Id. at Q/A 328; see also id. at Q/A 329-42.
Dr. Bogy further opined:
[T]he disclosure would have guided a person of ordinary skill in the art in the
direction of routine experiments required to make magnetic recording media with
a backside surface having a skew less than 0.3—the lowest skew value set forth in
Table l. For example, a person of ordinary skill in the art would have referenced
differences among the Examples, such as Example l’s l5 nm as compared to
Example 2’s 24 nm and Comparative Example Cl ’s 0.2 percent per unit weight of
silica texture particles having a primary size of about 700 nm, and recognized
whether and by how much such differences affect the skew of the backside
surface. 	.
Id. at Q/A 333. As the AL] recognized, Fujifilm fails to provide any evidence rebutting Dr.
Bogy’s testimony, including no evidence of any unpredictability of the art and the quantity of
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PUBLIC VERSION
experimentation needed to approach a Gaussian distribution on the backside of the magnetic
tape. ID at 84.
Fujifilm argues that it was not required to present a “formulaic recitation” under the
rubric of a Wands analysis, “because the Wands factors are ‘illustrative, not mandatory.”’ RSub
at 6. However, even if Fujifilm was not required to present evidence specifically related to the
Wands factors, it “had the burden to show by way of testimony or documentary evidence the
amount of experimentation needed.” Cephalon, Inc. v. Watson Pharms., Inc., 707 F.3d 1330,
1339 (Fed. Cir. 2013); see also U.S. v. Telectronics, Inc., 857 F.2d 778, 785 (Fed. Cir. 1988)‘
(patent challenger has the “burden to show by facts supported by clear and convincing evidence
that the patent was not enabling”). The final ID correctly found Fujifilm provided no such
evidence. ID at 83. Thus, the Commission affinns the final ID’s finding that Fujifilm did not
clearly and convincingly prove the “skew” and “kurtosis” ranges in claims 1, 5-8, 10, and 16 of
the ’774 patent are not enabled.
c. Written Description
. Fujifilm argues that the inventors of the ’774 patent “recognized it was ‘desirable to have
a surface roughness approximating a Gaussian surface,’ [but] provided only two purportedly
inventive examples, both of which fell well short of the stated goal of the Gaussian surface (see
Table l).” RSub at 9. Fujifilm contends that “[t]here is no explanation in the ’774 Patent as to
how the skew and kurtosis of the backcoat surface can be lowered further from the values found
in Examples 1 and 2 to a skew of0 and a kurtosis of3.0.” Id. at 10.
llaving reviewed the record evidence and the parties’ submissions, the Commission
affirms the ALJ’s finding that Fujifilm did not meet its burden in proving claims l, 5-8, 10, and
16 of the ’774 patent is invalid for lack of written description. In particular, we find that the final
ID correctly concluded that “Fujifilm has not presented any non-conclusory evidence that the
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PUBLIC VERSION
embodiments in the specification are not sufficient to reasonably convey to one of ordinary skill
in the art that the inventors had possession of the claimed invention.” ID at 85.
Written description is a question of fact, judged from the perspective of one of ordinary
skill in the art as of the relevant filing date. See Vas—Cath,Inc. v. Mahurkar, 935 F.2d 1555,
1563-64 (Fed. Cir. 1991). As the ALJ found, Dr. Wang offers nothing more than a conclusory
assertion that the disclosed species are insufficient to support a finding that the inventor had
possession of, and otherwise described, the full scope of each limitation of claim 1 of the ’774
patent. ID at 85 (citing RX-3C at Q/A 878-87). Accordingly, the ALJ concluded that Fujifi1m’s
expert testimony “that the inventors did not describe lower values than those disclosed in the
specification” is not clear and convincing evidence of no written description. Id.
The Federal Circuit has made “clear that the absence of examples” explicitly covering the
full scope of the claim language “does not render the written description inadequate.” Falka
Gunter Falkner v. Inglis, 448 F.3d 1357, 1366 (Fed. Cir. 2006). As the court explained
in LizardTech, Inc. v. Earth Res. Mapping, Inc;
A claim will not be invalidated on section 112 grounds simply because the
embodiments of the specification do not contain examples explicitly covering the
full scope of the claim language. That is because the patent specification is written
for a person of skill in the art, and such a person comes to the patent with the
knowledge of what has come before. Placed in that context, it is unnecessary to
spell out every detail of the invention in the specification; only enough must be
included to convince a person of skill in the art that the inventor possessed the
invention and to enable such a person to make and use the invention without
undue experimentation. p
424 F.3d 1336, 1345 (Fed. Cir. 2005) (citing Union Oil C0. v. Atl. Richfield C0., 208 F.3d 989,
997 (Fed. Cir. 2000); In re GPACInc., 57 F.3d 1573, 1579 (Fed. Cir. 1995)). Although Fujifilm
argues that Falko-Gunter is distinguishable, F_ujifi1m’sentire Written description argument is that
the ’774 patent does not provide additional examples or describe how to get values lower than
14

PUBLIC VERSION
those disclosed in the specification. See RSub at 5, 8-10. This is exactly the argument that was
rejected in Falko-Gunter. See 448 F.3d at 1366.
By contrast, Sony’s expert explained that a person of ordinary skill in the an reading the
’774 patent would have recognized that the inventors disclosed the manufacturing process and
material compositions for making the claimed magnetic media, as well as factors affecting skew
and kurtosis, including sizes and distributions of specific particles and distributions of sizes of
particles such as carbon black and textured silica in the composition of the backside surface, and
the specific amounts of change in skew and kurtosis that results from those factors. See CX
0012C at Q/A 361-74; IX-3 at 9:57-12:49. Sony’s expert opined that a person of ordinary skill
in the art would have recognized the ’774 patent discloses how continued adjustment of factors
such as sizes of specific particles would decrease skew and kurtosis. See CX-0012C at Q/A 328
34, 361-74; IX-3, Fig. 3, Fig.4, 5: 18-21, 5:30-34, 5:52-67, 9:5-l2. Thus, the Commission
affirms the ALJ’s finding that Fujifilm did not clearly and convincingly prove the “skew” and
“kurtosis” ranges in claims 1, 5-8, 10, and l6 of the ’774 patent are not adequately described.
ii. The Final ID’s Finding That Sony’s Prior Art Tapes D0 Not
Anticipate Claim 17 of the ’774 Patent
The ALJ found Fujifilm’s testing methods for measuring the surface roughness
parameters unreliable, and the Commission did not review that finding. Nevertheless, Fujifilm
argues that it has proven claim l7 of the ’774 patent is anticipated by Sony’s Advanced
Intelligent Tape Generation 3 (“AIT-3”) tapes through Sony’s own testing of those tapes in
August 2003 as reflected in the “Toraysee document” (RX-150C). “Even if this evidence is
persuasive,” the ALJ found that “it does not address Fujifilm’s measurements for the other
claimed characteristics of the magnetic tapes, such as skew and kurtosis.” ID'at 74 n.l2. Other
than this statement, the final ID did not directly address whether the Toraysee document
l5

PUBLIC VERSION
anticipates claim 17. The Commission determined to review this issue, and in its Notice of
Review, it asked the parties to address the following: 	V
2. Please discuss whether Sony’s prior art AIT-3 tapes anticipate claim l7 of
the ’774 patent, including Fujifilm’s argument that the Toraysee document
discloses the claimed “peak-to-valley roughness” and “peak height mean”
values.
As an initial matter, while the final ID in footnote 12 stated that the Toraysee document
does not address Fujifilm’s measurements for other claimed characteristics of the magnetic tapes,
such as skew and kurtosis, the ALI did not find that claim 17 recites requirements for skew and
kurtosis. See id. Nor did the ALJ base his rejection of Fujifi1m’s argument that claim 17 is
anticipated by Sony’s AIT-3 tapes on the lack of disclosure of skew and kurtosis information in
the Toraysee document. i
Based on the record evidence and the parties’ submissions, we affirm the ALJ’s finding
that Fujifilm has not shown by clear and convincing evidence that claim 17 is anticipated by
Sony’s AlT-3 tapes. Our determination includes the additional analysis provided below.
e Fujifilm argues that the backside surface measurements in the Toraysee document are
representative of Sony AIT-3 tapes that were on sale in the United States prior to May 23, 2004.
Fujitilm’s evidence consists of the Toraysee document, Sony’s stipulation, and the testimony of
its expert, Dr. Wang.‘ RSub at 12-13 (citing RX-0150C; JX-O0l3 Nos. l-3; RX-3C at Q/A 777,
779, 781). Dr. Wang testified that the Toraysee document shows “the results of testing involving
rolls of tape using the AKL formulation in August 2003” and that “the AKL formulation was
used in the prior art AIT-3 tapes.” RX-3C at Q/A 777.
Even in view of the Toraysee document and Sony’s stipulation, Wefind that Fujifilm has
failed to prove by clear and convincing evidence that the Toraysee document actually shows that
the backside surface of commercially available Sony AIT-3 tapes in the relevant 2003 time
16

PUBLIC VERSION
I
period had a peak-to-valley roughness and a peak height mean that meet the ranges required by
claim 17. First, as Sony argues, Fujifilm failed to prove that the measurements shown in the
Toraysee document are accurate (i.e., calibrated) measurements representative of the commercial
Sony AIT-3 tapes that Fujifilm asserts as prior art. CReplyR at 6-7.
i Id. at 7.
Second, even if the “P-V” numbers in the Toraysee document are peak-to-valley
roughness measurements, as Sony stipulates, Dr. Bogy explained that “Dr. Wang offers no
evidence, let alone clear and convincing evidence in my opinion, that this is a peak-to-valley
roughness number representative of the backside surface of a SDX3-100C product as a whole
that was publicly used or sold in the United States before the critical date.” CX-12C at Q/A 241;
see CSub at 12.
CSub at 12 (citing CX-12C at Q/A 241-42,
249~5O).
Id.
VEven more troublesome is the fact that Fujifilm merely assumes that the manufacturing
method used for the samples tested in the Toraysee document is the same as that used for
commercial Sony AIT-3 tapes sold in the United States,
i 	cRep1yRaw<@m
l7

PUBLIC VERSION 	.
-.”" 	RReplyIAat 6 (citingIX-0065Cat l49:7—25).	Buttheburdenrestson
Fujifilm to show that the SDX3-100C tape products that are said to be prior art were made with
the same backpaint as the test rolls of the Toraysee document. Sony’s expert, Dr. Bogy, testified
“[c]0ntrary to Dr. Wang’s conclusion, it could very well be that the backpaint of the test rolls of
the Toraysee testing, which I understand occurred in August 2003, differed from the backpaint of
SDX3-100C tape products offered for sale before the filing of the ‘774 patent and that the
difference did materially affect the backcoat surface properties." CX-12C at Q/A 246.
Fujifilm’s expert, Dr. Wang, “has failed to show that there is no material difference between the
test rolls and SDX3-100C products publicly used or sold in the United States before the critical
date, or that there were no changes in the AKL formulation, or the method of manufacture
associated with this formulation, between those products referenced in the Toraysee Document
and any SDX3-100C product that may have been publicly used or sold in the United States
before the critical date.” Id. at Q/A 243; see also id. at Q/A 244. Consequently, we conclude
that the Toraysee document is insufficient to establish by clear and convincing evidence that
Sony’s AIT-3 tapes meet the “peak height mean” and “peak-to-valley roughness” limitations of
claim 17 ofthe ‘774 patent.
9All emphasis is original unless otherwise indicated.
l8

PUBLIC VERSION
B. The ’596 Patent
i. Claim Construction“ 	A
Independent claims l and 9 recite “memory drive means.” The ALJ found that all parties
agrcc that the limitation should be construed as a means-plus-function limitation pursuant to 35
U.S.C. § 112, 1]6, and all parties agree that the function of the means is reading and writing
management information, which is information that can control whether the tape can be written
to or not. ID at 134. The parties, however, disputed the appropriate structure corresponding to
the claimed function. Id. In particular, Sony and the IA contend that “SCSI buffer controller 26”
is a corresponding structure for the memory drive means for both the remote and contact
memory embodiments, whereas Fujifilm contends that “SCSI buffer controller 26” is not part of
the memory drive means in the contact memory embodiment. Id. at 136.
On review, the Commission adopts the ALJ’s construction of “memory drive means.”
While claim construction is a question of law, the determination of corresponding structure is a
question of fact. We find that the record evidence supports the ALJ’s finding that the “SCSI
buffer controller 26” is a necessary component of the tape drive that performs the function of
reading and writing management information in both the remote and contact memory
embodiments disclosed in the ’596 patent.
As stated in the final ID, the ’596 patent claims a tape drive for reading from and writing
to a specific type of tape cassette that has solid-state memory in addition to a magnetic tape. Id.
at 122 (citing IX-l at Abstract). The ’596 patent specification describes two embodiments of the
1°In addition to challenging the ALJ’s construction for the “memory drive means”
limitation, Fujifilm petitioned for Commission review of the ALJ ’s finding that Fujifilm had not
met its burden to establish that the claim elements that include a slash (“/”), for example,
“writing/reading,” are indefinite. ID at 133. The Commission has determined to adopt the final
ID’s analysis and findings on this issue. Id. at 131-33.
I9

PUBLIC VERSION
invention. In both embodiments, the tape ca/ssettehas a memory that stores management
information. In one embodiment (Fig. 3A), the cassette 1 contains a “remote memory chip 4”
and wirelessly communicates with a system controller 15 through a remote memory interface 30
in the tape drive 10 (Fig. 1) using an antenna 5. JX-l at 4:7-30, 6:51-67, 7:59-64. In another
embodiment (Fig. 3B), the cassette 1 contains a “contact memory 104” having terminals 105A-E
that are physically and electrically connected to the system controller 15 in the tape drive 10. Id.
at 4:48-55, 4:64-5:8, 9: l0-20. V
As shown in Figure 1, the patent specification describes that tape drive 10 uses “an SCSI
interface 20” to transmit data between a host computer 40 and a compression/decompression
circuit 21 via an SCSI buffer controller 26. Id. at 6:55-60. Sony’s expert explained that the
SCSI buffer controller 26 is used to “deal with the differing data transfer speeds between the tape
drive’s system controller and the host computer, on the one hand, and the system controller and
the memory, on the other.” ID at 138 (quoting CX-0003C at Q/A 390). The ID correctly
characterizes the issue here is whether the ’596 patent clearly links or associates the SCSI buffer
controller 26 with the functions performed by the memory drive means in the contact memory
embodiment. Id. at I37-138.
Fujifilm’s argument that the ALJ rested his construction of “memory drive"means” on an
“ambiguous” disclosure ignores what the ALJ actually determined. Although the ALJ
acknowledged that certain disclosures within the ’596 patent are “ambiguous” or “open to
alternative interpretations,” after consideration of the entire specification, and weighing the
expert testimony, hieconcluded that the SCSI buffer controller is clearly associated with the
reading and writing function performed by the memory drive means. Id. at 140. As a result, the
ALJ finds that “a SCSI buffer controller shall be considered to be a part of the corresponding
20

PUBLIC VERSION
structure of the recited memory drive means for both the remote and contact memory
embodiments.” Id.
In addition, the ALJ properly relied on and credited the testimony of Sony’s expert, Dr.
Mowry, as to the understanding of a person of ordinary skill in the art reading the patent
specification that is consistent with the intrinsic evidence. Specifically, Dr. Mowry explained
that a SCSI buffer controller is necessary even where the system controller can “directly access”
the contact memory because the SCSI buffer controller 26 is cormected not just to the remote
memory interface 30, but is also connected to the SCSI 20, the compression/decompression
circuit 21, the system controller 15, and the SCSI Buffer Memory 27. CX-0003C at Q/A 391-92;
JX-1 at Fig. 1. He opined that the SCSI buffer controller plays a key role in the reading and
writing operations of the tape drive as taught by the specification. Id; JX-1 at 6:51-67, 7:55-58;
see also CX-0003C at Q/A 385-93; Tr. (Mowry) at 41 1:25-412:13.
Finally, the final ID properly relied in part on disclosure of the host computer in its claim
construction. The specification expressly describes the role of the host computer in relation to
the SCSI buffer controller and its function of reading and Writingmanagement information. JX
1 at 6:55-7:3, 7:5-58, 9:5-9, 17:34-40, 18:1-12‘, 18:54-57, 20:6-10. Relying on this disclosure,
the final ID properly found that the specification teaches sharing management infonnation from
the memory “with a host computer in order to determine subsequent read/write operations.” ID
at 139. The final ID also found, based on Dr. Mowry’s testimony, that an SCSI buffer controller
is necessary to manage different data transfer speeds between the system controller, the host
computer, and the memory. Id. at 140 (citing CX-3C at Q/A 390; see also RX-4C at Q/A 237).
Thus, the final ID correctly determined, “[t]he ’596 patent specification links the recited function
of the memory drive means to the SCSI buffer in relation to communicating with a host
21

PUBLIC VERSION
computer and writing information to the tape media.” Id. (emphasis added). Accordingly, the
Commission adopts the ALJ’s construction of the “memory drive means” term on review.
ii. Infringement
Sony argues that Fujifilm’s accused LTO tape cartridges, when used with compatible
LTO drives, infringe claims l-l3 of the ’596 patent. Sony contends that Fujifilm’s own acts in
using the accused LTO tape cartridges in compatible LTO drives in the U.S. directly infringe the
claims and that Fujifilm indirectly infringes those claims by inducing and contributing to
infringement by third parties.
a. Direct Infringement 	V
Fujifilm petitioned for Commission review of the ALJ’s finding that the accused LTO
products satisfy the “memory drive means” limitation of claims 1 and 9 and the “interface
means” limitation of claim 8. '1 Id. at 143. There is no dispute that these limitations are means
plus-function limitations and that the corresponding structure for these limitations requires a
“remote memory interface 30” as shown in Figures 1 and 2 of the ’596 patent.
The ALJ found that Sony pointed to sufficient evidence that the accused LTO products
pcrfomi the identical function as the “memory drive means” and “interface means” limitations,
and that they perform that function in relevant part with the LTO Cartridge Memory (CM)
Reader required in each LTO drive, which is equivalent to the remote memory interface as
disclosed in the specification. Id. at 147. On review, the Commission determines that the ALJ
properly applied the law of literal infringement to the facts, and record evidence supports finding
1' The Commission adopts the ALJ’s findings that the accused LTO products meet all
other limitations recited in claims I-13 of ’596 patent. See ID at 140-51. Fujifilm did not
petition for Commission review of these findings.
22

PUBLIC VERSION
-thatthe accused LTO products include a structure that has both ftmctional identity and structural
equivalence to the “remote memory interface 30” of the ’596 patent.
The final ID relied on Dr. Mowry’s testimony regarding Figure F.5 of the LTO-4, -5, and
-6 specifications, which show that the LTO CM Reader, just like remote memory interface 30 of
the’596patent,employs 	toremotely	communicate	_
M 	wi¢hth-m@m<>ryi.andthu
perfonns the recited function of reading and writing management information in the same way.
Id. at 143-47; CX-0003C at Q/A 500-47, 717-25, 734. In particular, Figure F.5 from the LTO
specificationsprovidesdetailsshowingthe intemalstructureof the LTOCM Reader—_
S 	thID found and as Fujifi1m’s expert admitted on cross examination. ID at 146; Tr. (Messner) at
745115-17, 746:4-19; IX-90C at 188; CX-0003C at Q/A 526-32, 719. That figire also highlights
thebasiccomponents	theinterface	mustcomprise	andtheirfunctions,	—
- 	See	CX-00
Q/A	719.	The	LTO	specifications	further	describe
- 	See	id	at	Q/A	505,543-41
JX-104C at 174, 178; JX-91C at»185, 189; JX-90C at 184, 188. And the specifications state that
M 	<:><-<»r><>3c-
Indeed, the LTO CM Reader, as Dr. Mowry testified, represents nearly identical structure to
remote memory interface 30 of the ’596 patent. Id. at Q/A 505-14, 516-19, 533-47.
In addition, the final ID found supporting evidence included a Fujifihn marketing
brochure that depicts the CM Reader, and includes text stating that “[a]s a tape is loaded, the
drive’s CM-Reader reads the CM and the tape is identified.” CX-0392; see also ID at 145-46
23

PUBLIC VERSION
(citing CX-3C at Q/A 512-25, JX-28C, CX-561, CX-562, CX-564, and CX-1149C). The final
ID_also pointed to testimony from Fujifilm’s own expert as supporting evidence, including
testimony that “each LTO tape drive has a CM reader in it” and testimony agreeing that the LTO
specifications “include some requirements with respect to how the LTO CM reader
communicates with the memory in the cartridge” and that the LTO CM reader has an antenna.
ID at 146 (citing Tr. (Messner) at 745115-l7, 746:4-l9). Indeed, Fujifilm’s expert admitted that
he “didn’t say there was no remote memory interface” and, in fact, testified that the LTO-drives
“must” have “an interface for communicating with the remote memory.” Tr. (Messner) at
753116-754114;see also RX-0584C at Q/A 200.
In view of the above, we agree with the ALJ that the accused LTO products include a
structure that has both functional identity and structural equivalence to the “remote memory
interface 30” of the ’596 patent. The Commission thus affirms the ALJ’s conclusion that the
accused LTO products, when combined with compatible LTO drives, infringe the asserted claims
of the ’596 patent.
Having adopted the ALJ’s finding of direct infringement of the asserted ’596 patent
claims by third parties, the Commission takes no position on whether “Fujifilm’s own acts of
direct infringement can fonn a basis for a violation "ofsection 337.” ID at 143 (emphasis added).
The Commission vacates the final ID’s analysis as to Suprema, Inc. v. International Trade
C()mmissi0n, 796 F.3d 1338 (Fed. Cir. 2015), and its determination that because Fujifilm’s
importation of the accused tape cartridges does not satisfy the tape drive limitations of the
asserted claims at the time of importation, Fujifilm’s direct infringement cannot be the basis of a
violation of section 337. See ID at l5l-52.
24

PUBLIC VERSION
b. Indirect Infringement
The Commission also determines to affinn the ALJ’s finding of inducement of
infringement by Fujifilm. The AL] found that the “evidence shows that Fujifilni knew that its
accused tape cartridges infringed the asserted claims of the ’596 patent when used with a
corresponding LTO tape drive, or that Fujifilm was willfully blind to the infringement.” Id. at
154. Specifically, the record evidence supports the final ID’s finding that Fujifilm had actual
knowledge	ofinfringement.	The	final	IDfound	that	Fujifilm
-. 	1a.;seealsocx-3c atQ/As43-59.In2003,beforethe’596patentissued,
cx-7catQ/A	52-53;	cx-3catQ/A	844,	s4s.InJuly	2004,_
- 	C7C at Q/A 51-54; CX-3C at Q/A 848. In September 2015, Sony provided Fujifilm with a claim
chart that explained, with respect to exemplary claims 14-17, how the accused LTO products
infringe the ’596 patent. CX-3C at Q/A 855-59; CX-7C at Q/A 24-34; CX-565C; CX-566C.
The record evidence also supports the final ID’s finding that Fujifilm had knowledge that
its LTO cartridges could be used with LTO drive products to infringe claims 1-13 of the ’596
patent. ID at 154. In particular, the final ID did not err in relying on S0ny’s prior allegations
that Fujifilm’s tape cartridges infringe claims 14-16 to find that Fujifilm had knowledge that its
cartridges could be used with tape drives to infringe claims 1-13. Id. at 154-155. The final ID
found that Fujifilm’s counsel in opening statement stated that claims 14-16 “are very similar” to
the claims at issue here. Id. at 155 (citing Tr. (Scheinfeld) at 93: 18-21). The evidence shows
that when Sony notified Fujifilm that its LTO tape products were infringing the ’596 patent,
Sony highlighted the LTO CM Reader, in particular, as support. See CX-565C at 9. And
Fujifi1m’s expert admits the LTO fonnat specifications “include some requirements” regarding
. 25

PUBLIC VERSION
“how the LTO CM reader communicates with the memory in the cartridge.” Tr. (Messner) at
746:4-19.
The record evidence further supports the final ID’s finding that Fujifilm had the requisite
specific intent to bring about infringement. To establish Fujifilm’s intent, the final ID relied on
Fujifilm’s product literature, website, and domestic customer support for the accused products.
ID at 156. According to the final ID, this evidence shows that Fujifilm instructs and encourages
customers to use the accused LTO products with compatible LTO drives to store and protect
data. Id. (citing CX-3C at Q/A 867-83 (Sony’s expert, Dr. Mowry, explaining CX-0135C; CX
0400; JX-0045C; JX-0092, JX-0093, JX-0094)). 	'
Fujifilm’s conduct also satisfies the willful blindness test enunciated by the Supreme
Court in Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754 (2011), as well as the Federal
Circuit’s induced infringement case law. Under Global-Tech, “a willfully blind defendant is one
who takes deliberate actions to avoid confirming a high probability of wrongdoing and who can
almost be said to have actually known the critical facts.” 563 U.S. at 769. In other words, “(l)
the defendant must subjectively believe that there is a high probability that a fact exists and (2)
the defendant must take deliberate actions to avoid learning of that fact.” Id.
The record evidence shows that Fujifilm subjectively believed that its accused LTO
products likely infringed claims 1-13 of the ’596 patent. For instance, as discussed above, even
mh1sFu1ifi1m—
i 	seecx-M	mat154. Thus, we agree with the final ID’s conclusion that if Fujifilm lacked actual knowledge of
26

PUBLIC VERSION
infringement, the only reasonable explanation in light of the evidence is that Fujifilm took steps
deliberately to avoid the knowledge of its infringement.
Fujifilm argues that the final ID did not identify any evidence that it took “deliberate I
actions” to avoid learning of the facts necessary to detcrminc infringement. But Fujifi1m’s
failure to investigate a high probability of wrongdoing is a deliberate action to avoid knowledge.
By deliberately declining to take reasonable measures to confirm noninfringement when faced
w~hof Sony’s prior allegations that Fujifilrn’s LTO tape cartridges infringe claims 14-16 of the ’596
patent, Fujifilm willfiilly blinded itself to the likelihood that the LTO tape cartridges it made for
use with compatible LTO drives infringed claims 1-13 of the ’596 patent. See Global-Tech, 563
U.S. at 769.
Accordingly, the Commission affirms, with the supplemental reasoning discussed above,
the ALJ’s determination that Sony established a violation of section 337 based on Fujifilm’s
induced infringement of claims 1-13 of the ’596 patent.
Sony argued in its petition for review that the final ID erred in determining that Sony did
not establish a violation of section 337 based on Fujifilm’s contributory infringement because the
final ID found that the use of the "accusedFujifilm LTO tape cartridges in compatible LTO tape
drives manufactured by IBM results in patent exhaustion and represents a substantial non
infringing use. ID at 160-164. The Commission has determined to take no position on whether
Fujifilm contributes to the direct infringement by third parties in the United States and vacates
the final ID’s analysis on this issue at pages 158-164‘ See 19 C.F.R. § 210.45; Beloit Corp. v.
Valment 0y, 742 F.3d 1421, 1423 (Fed. Cir. 1984).
27

PUBLIC VERSION
iii. DomesticIndustry - Technical Prong
The ALJ_foundtwo main categories of products to be articles protected by the ’596
patent. First, he found that Sony had established that its LTO tape cartridges, when used with
compatible LTO drives, practice the ’596 patent based on evidence that mirrors the evidence it
relied on for proving that the accuscd products infringe. ID at 165. As discussed above, We
affirm the ALJ’s finding that third parties practice each element of the asserted claims of
the ’596 patent by using Fujifilm’s accused LTO tape cartridges in compatible LTO drives. We
therefore also affirm the ALJ’s conclusion that Sony’s LTO products are articles protected by
the ’596 patent. Id. at 165-166.
Second, the ALJ found that licensed IBM 3592 products, when used with compatible
3592 tape drives, practice the asserted claims of the ’596 patent. Id. at 166. Specifically, the
ALJ found that “Sony provides evidence that the [IBM] 3592 products operate in the same Way
using virtually the same information as LTO products’ for the purposes of the asserted claims.”
[d.; see, e.g., CX-0003C at Q/A 186-212, 1005-254. Specific to the IBM 3592 products, the
record evidence, including expert testimony, IBM guides, testimony from IBM, and the IBM
3592 media specifications, supports the final ID’s finding that the IBM 3592 products include a
structure equivalent to the remote memory interface disclosed in the ’596 patent. ID at I66; see
also CX-0003C at Q/A 1086-96, 1101-04, 1211; JX-0100C; JX-0099C; JX-0095C; JX-0096C;
JX-0137; JX-0138; CX-1304C at Q/A 35, 60-62; JX-28C (Hill) 55:5-8, 56:8-20). For example,
IBM’s witness testified
—. 	cx-1304c at Q/A35,60-62;JX-28C(Hill)55:5-s,56:8-20.Likewise,and
similar to the LTO specifications,
CX-0003C at
28

PUBLIC VERSION '
Q/A1086-87	(emphasis	added).Thespecifications	BISO	provide	diar
whichSW8 expert
testified ‘isjust like the LTO products. Id.
In view of the above, the Commission affirms the ALJ’s finding that Sony’s LTO and
IBM’s 3592 products, when combined with compatible LTO and IBM drives, practice the
asserted claims of the ’596 patent. The Commission thus affirms the ALJ’s conclusion that the
technical prong of the domestic industry is satisfied with respect to the ’596 patent.
iv. Invalidity 	V
Fujifilm petitioned for Commission review of the ALJ’s findings that: (1) the claims are
not anticipated by U.S. Patent No. 6,128,148 (“Platte” or RX-0224); and (2) the claims are not
rendered obvious in view of Platte and JP H09-161451 to Kano (“Kano” or RX-0095). 12 ID at
167-168,171-176.
With respect to the first finding, because the Commission adopts the ALJ’s construction
of “memory drive means” to include inter alia the SCSI Buffer Controller 26 as corresponding
structure, id. at 134-140, we also adopt the ALJ’s finding that Platte does not disclose a SCSI
buffer controller and, therefore, does not anticipate the asserted claims, id. at 168.
With respect to the second finding, the ALJ found that Kano discloses a data library
system that includes a SCSI interface by which data can be exchanged with a host computer and
which can be recorded on the tape media. Id. at 171. Fujifilm argued that it is appropriate to
combine the teachings of Platte and Kano because they utilize similar hardware and are also both
'2 Fujifilm did not petition for review of the ALJ’s finding that Fujifilm did not prove by
clear and convincing evidence that the asserted claims of the ’596 patent are invalid as
anticipated by Japanese Patent Pub. No. H6-60470 (“Sawada”) or obvious in view of Sawada
and Kano. See ID at 168-71, 176-78. The Commission adopts the final ID’s findings and
conclusions as to Sawada and the Sawada and Kano combination. Id.
29 	V

. PUBLIC VERSION
directed to the same field of use and applications for the cassettes and drives. Id. at 172. After
summarizing the parties’ argiments and noting the experts offered “significant conflicting
testimony” as to whether there is a reason to combine the references and whether there would be
an expectation of success, the ALJ found that Fujifilm failed to establish by clear and convincing
evidence that a skilled artisan would combine the teachings of Platte and Kano given the
conflicting expert testimony. Id. at 172-75. In its Notice of Review, the Commission asked the
parties to address this issue: 	I
3. Please discuss whether Platte and Kano render obvious the asserted claims of
the ’596 patent.
Having reviewed the record evidence and the parties’ submissions, the Commission has
determined to affinn with modifications the ALJ’s conclusion that Fujifilm has failed to establish
by clear and convincing evidence that Platte and Kano render obvious the asserted claims of the
’596 patent. In particular, the Commission finds that although Platte is analogous art, Fujifilm
failed to establish that a person of ordinary skill in the art would have been motivated to combine
Platte’s video recorders with the teachings of Kano’s data library system to arrive at the claimed
inventions of the ’596 patent, and failed to establish that there would have been a reasonable
expectation of success if the two were combined. 13
13 Fujifilm asserts that the “key limitations defining the alleged benefits of the ’596
Patent were not found by the ID to be missing from Platte (RX-0224)” and that “the ID did not
“findany limitations (including the SCSI buffer controller) absent from the combined teachings of
Platte and Kano.” RSub at 15, 16. While the ALJ rejected Fujifilm’s assertion of Platte based
on its lack of the “memory drive means,” he expressly refrained from addressing Sony’s and the
IA’s arguments that Platte Failsto teach claim limitations other than “memory drive means”
“given [his] determination that Platte fails to teach a SCSI buffer controller or equivalent
structure as a component of the structure corresponding to the claimed memory drive means.”
ID at 168 n.25; see CSub at l7. In view of the Commission’s determination to affirm on the
basis that Fujifilm fails to establish a motivation to combine Platte and Kano and a reasonable
expectation of success in the combination, the Commission takes no position on whether Platte
teaches claim limitations other than “memory drive means.” See CSub at 17-22; RReplyC at 5
9.
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PUBLIC VERSION
A claim would have been obvious “if the differences between the subject matter sought to
be patented and the prior art are such that the subject matter as a whole would have been obvious
at the time the invention was made to a person having ordinary skill in the an to which said
subject matter pertains.” 35 U.S.C. § 103(a) (2006). In order to determine if a claim would have
been obvious, “the scope and content of the prior art are to be determined; differences between
the prior art and the claims at issue are to be ascertained; and the level of ordinary skill in the
pertinent art resolved.” KSR Inz’l C0. v. Teleflex Inc., 550 U.S. 398, 406
(2007) (quoting Graham v. John Deere C0., 383 U.S. 1, 17 (1966)). Given the differences
between the prior an and the claimed invention, the claimed combination would have been
obvious only if there was an apparent reason for a skilled artisan “to combine the known
elements in the fashion claimed by the patent at issue.” Id at 418. i
What a prior art teaches, whether a skilled artisan would have been motivated to combine
references, and whether there is an expectation of success in combining the references are
questions of fact. See Apple, Inc. v. Samsung Elecs. C0., 839 F.3d 1034, 1051 (Fed. Cir. 2016)
(en bane); Arctic Cat Inc. v. Bombardier Recreational Prods. 1nc., 876 F.3d 1350, 1361 (Fed.
Cir. 2017). “‘The factual inquiry whether to combine references must be thorough and
searching,’ and ‘[t]he need for specificity pervades [our] authority.”” In re Nuvasive, Inc., 842
F.3d 1376, 1381-82 (Fed. Cir. 2016). “[A] clear, evidence-supported account of the
contemplated workings of the combination is a prerequisite to adequately explaining and
supporting a conclusion that a relevant skilled artisan would have . . . reasonab1[e] expeet[ation
ot] success.” See Pers. Web Techs., LLC v. Apple, Inc., 848 F.3d 987, 994 (Fed. Cir. 2017).
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Art is analogous when it is: (1) fi'om the same field of endeavor as the claimed invention;
or (2) reasonably pertinent to the particular problem faced by the inventor, if the art is not from
the same field of endeavor. In re Bigio, 381 F.3d 1320, 1325-1326 (Fed. Cir. 2004).
In view of the record evidence and the parties’ arguments, we find that the appropriate
field of endeavor for the ’596 patent is the field of endeavor related to “a tape drive as a _
computer peripheral,” as Sony argues, rather than the broader field of “magnetic tape systems,”
as Fujifilm argues. CReplyR at 10; RReplyC at 10; see also Tr. (Messner) at 775: 15-777: 15
(Fujifilm’s expert testifying that “tape drive” is broad enough to encompass a “VCR,” a
“telephone answering machine,” and a “car stereo”).
Our determination of the relevant field of endeavor is consistent with the ’596 patent
specification. For example, the ’596 patent specifically states that the field of the invention
“relates generally to tape drive units intended for maintaining data written on a magnetic tape
and to recording media for use therewith.” JX-1 at 1:7-10. The ’596 patent specification 7
describes two embodiments of the claimed tape drive system, and in both embodiments, the
Commission adopted the final ID’s finding that the SCSI buffer controller and system controller
play key roles in the reading and writing operations of the tape drive. See ID at 140; JX-1 at
6:51-67, 7:55-58; CX-3C at Q/A 160-61, 305, 310, 389-93; Tr. (Mowry) at 411:20-413:1. The
specification also describes the role of the host computer in relation to the SCSI buffer controller
and its function of reading and writing management infonnation. See ID at 139-40; JX-1 at
Fig.1, 6:55-7:58, 9:5-9, 17:34-40, 18:1-12, 18:54-57, 2016-10. Our determination ofthe relevant
field of endeavor is also consistent with the extrinsic evidence. See Tr. (Mowry) at 398: 10-399:5
(testifying that “everyone in the ficld at the time knew what you meant when you said a tape
drive - a computer peripheral for storing digital data on magnetic tape”), 479:9-480:7; see also
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CX-0003C at Q/A 305-16; CX-0013C at Q/A 75-87, 148-51. Thus, we find that the field of
endeavor for the ’596 patent is related to a magnetic tape drive as a computer peripheral.
We find that this field of endeavor does not encompass Platte. Sony’s expert contrasted
Platte’s field of endeavor with that of the ’596 patent:
Unlike the ’596 patent, Platte-US is directed to home and commercial audio and
video tape technology. The analog audio and video technology at the center of
Platte-US substantially differed fi'om the digital recording technology of the ’596
patent’s tape system. Platte is, as a result, not concemed with archiving or
backing-up digital data residing on the hard drive of a computer. Platte-US never
uses the term “tape drive” at all, and not because Platte-US refers to such an
apparatus by a different name. Tape drives are simply absent from Platte. For
instance, Platte does not mention read or write heads (or any heads for that
matter). Indeed, the only computer identified by Platte is the one that a video
rental store might have at the check-out counter, as explained in RX-0224 at
column 3, lines 64 to 67. As explained at column 2, lines 52 to 57, Platte-US
discloses audio and video cassettes for use in ceitain commercial contexts,
including in a camcorder or a video recorder, in an audio playback device, or as
-video cassettes prerecorded with movies for use by video rental stores. 	.
CX-0013C at Q/A 205; see also id. at Q/A 208-11. Other than attorney argument, Fujifilm
offers no credible evidence refuting Dr. M0w1y’s testimony and supporting its contention that
the field of endeavor should be as broad as “magnetic tape drives.” For example, Fujifilm’s
submission cites to expert testimony as to the level of ordinary skill in the an as it relates to the
’596 patent. RSub at 19 (citing CX-3C at Q/A 133; RX-4C at Q/A 63). While both Platte and
Kano “disclose tape cassettes in which magnetic tape is wound around two reels,” id. (citing RX
4C at Q/A 934), the ’596 patent claims at issue are directed to a tape drive apparatus and not to a
tape cassette (which is claimed in non-asserted claims 14-19).
Nevertheless, even though the ’596 patent’s field of endeavor does not encompass Platte,
Platte is analogous art because it addresses the same problem as the ’596 patent. Dr. Mowry
explains that the purpose of the ’596 patent is:
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[T]he ’596 patent discloses the objective of securing digital data recorded to back
up tapes, using “read-only” memory and factory-set data regarding possible uses
for reading and Writing from and to the tape cassette.
CX-0013C at Q/A 205. Similarly, Platte describes the object of its invention as securing data,
which:
consists of reliably blocking undesired or unallowed operating states of the
recording and/or reproduction device, in conjunction with a certain recording
medium or a certain magnetic tape cassette, and enabling only desired or allowed
operating states when this magnetic tape cassette is inserted into the recording
and/or reproduction device. An undesired operating.state can be, for example, the
recording function if the cassette already contains recordings and these are not to
be overwritten or erased.
RX-0224 at l:45-54. Thus, both the ’596 patent and Platte are concerned with improving the
security of data recorded on magnetic tape cartridges and controlling their operational use. r
Having found that Platte is analogous art to the ’596 patent, we tum to the question of
whether Fujifilm has clearly articulated a reason why a person of ordinary skill in the art would
look to the teachings of Kano’s tape library system to modify Platte’s video recorder. As the
final ID noted, the parties’ experts offered “significant conflicting testimony” on the issues of
whether there was a motivation to combine the Platte and Kano references and whether a skilled
artisan would have had a reasonable expectation of success in doing so. ID at 172-176. Because
of this conflicting testimony and because it was Fujifilm’s burden to prove invalidity, the final
ID found that “Fujifilm has failed to establish by clear and convincing evidence that one skilled
in the art would combine the teachings of Platte and Kano thus rending claims 1-13 of the ’596
\
patent invalid as obvious.” Id. at 175.
Although the final ID relied on the conflicting nature of the experts’ testimony, we find
Sony’s expert provided a more fulsome analysis that supported his opinions that a skilled artisan
would not have been motivated to combine the Platte and Kano and would not have had a
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reasonable expectation of success. 14 In particular, Fujifilm failed to “articulate a reason why a
[POSA] would combine the prior art references” that is “rationa[1ly]” connected to an “adequate
evidcntiary basis.” Nuvasive, 842 F.3d at 1382-84. Fujifilm makes two argniments to support its
claim that a POSA would be motivated to combine Kano’s SCSI buffer controller with Platte’s
video recorder. V .
First, Fujifilm argues that a person of ordinary skill in the art would be motivated to
combine Platte and Kano because of their “significant interrelated teachings, including storing
similar video data on the magnetic tape, storing similar management information in the built-in
memory, and using similar hardware to both read and write that data and information.” RSub at
23. However, contrary to Fujifilm’s assertion, Dr. Mowry testified that the disclosures of Platte
and Kano are not technologically similar. CX-0013C at Q/A 205; see also id. at Q/A 217, 587.
Dr. Mowry explained that “many significant technical differences” exist between Platte and
Kano, including “they (1) are directed to fundamentally different hardware and system
architecture; (2) use different data formats and writing/reading techniques; (3) are motivated by
different practical and technical concems; (4) are intended for different markets and users; (5)
and address different operational objectives.” CSub at 15 (citing CX-0013C at Q/A 201-14, 457
69, 587-90). “Considering that Platte is directed to users of camcorders who make home videos
and to video rental stores who lend prerecorded cassettes to customers to take back to their
14Thc final ID does not discuss any objective indicia of non-obviousness and Sony did
not raise any in its response to Fujifilm’s petition for review on this issue. The parties’
submissions in response to the Commission’s notice briefly mention secondary considerations of
non-obviousness. See RSub at 26; CReplyR at 13 n.8. Given the Commission’s decision to
affirm with modifications the final ID’s finding of non-obviousness, the Commission takes no
position on the parties’ arguments regarding objective indicia of non-obviousness. See Otsuka
Pharm. Co., Ltd. v. Sandoz, Inc., 678 F.3d 1280, 1296 (Fed. Cir. 2012) (finding no need to
address a district court’s findings on objective evidence because the district coLu't’sfinding that
an accused infiinger failed to prove primafacie obviousness was correct).
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homes,” Dr. Mowry testified that “one of ordinary skill in the art would not have been motivated
to look to Kano, which relates to enterprise grade tape library systems.” CX-0013C at Q/A 587;
see also id. at Q/A 595.
Second, Fujifilm contends that a person of ordinary skill in the art would be motivated to
combine Platte and Kano to facilitate communication between a computer and a cassette since
“one of the applications taught by Platte is ‘loading data into the cassette memory from a
memory of a computer.”’ RSub at 25 (citing RX-0224 at 3:64-67; Tr. (Mowry) at 922:2O-22).
Fujifilm argues that “[i]t cannot be reasonably disputed that a POSA would have been motivated
to look for a communication protocol and associated hardware to satisfy this need” and one
“‘common way of providing computer access to peripheral devices’ that ‘dates back to the
1980s’ is through a SCSI interface,” as disclosed inside of the tape drives of Kano. Id. at 23-24
(citing Tr. (Mowry) at 914:3-17; see also RX-4C at Q/A 941-46). However, Dr. Mowry
explained that “[t]here was no need to modify Platte to add a tape streamer drive system
controller, a SCSI Buffer controller, or any other element from Kano” because “Platte’s A/V
devices do not interoperate with computers (and thus need no computer interface)—indeed. ..the
only computer Platte discloses is for a video store counter.” CSub at 24 (citing Tr. (Mowry) at
922:1 l-22). Fujifilm incorrectly asserts that Platte “teaches” the “application[]” of “connecting
its tape drive to a computer.” Id. at 27 (citing RPet at 74, in tum citing RX-224 at 3:64-67).
Platte discloses only that “the data records” associated with a cassette “are reloaded, for example,
from the memory of a computer” at the check-out counter of a video rental store. Id. “Nowhere
does Platte disclose a ta e drive, let alone disclose connectih such a drive to a com uter at the	P 	g P
check-out counter.” Id. (citing RX-224 at 3:64-67; Tr. (Mowry) at 922: l 1-22, 923: l-1 1).
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Moreover, Sony’s expert explained that Kano “teaches away from the claimed inventions
of the ’596 patent” in that Kano emphasizes optimizing the speed of its automated tape libraries
that remotely receive commands from a host computer and teaches reading data “without
physically loading the tape cassettes” in a drive, Whereas the ’596 patent introduces additional
steps upon loading of the cassette in the drive to protect the contents of the memory and the tape,
slowing access to data stored on tape. Id. at‘24-25 (citing CX-00l3C at Q/A 7-8, 14-15, 19, 67,
588); see RX-95 at 1ll9,'Fig. 4. Dr. Mowry explains that Kano pursues a different objective from
that of the ’596 patent: Y
Kano is not concerned with the security of the tape storage system. It is instead
focused on increasing the speed of data access in a tape library system. With
respect to the ’596 patent, in contrast, security is a concern of the first order.
To accelerate the speed and efficiency of the library system, Kano directs the
bypass of the drive and thus teaches away from a comparison of information
stored on the media and in the memory. Such a comparison would have
necessitated the sacrifice of speed for security and would have slowed down
Kano’s tape library system. lt would have also put additional stress on the drives,
<which would have, in turn, further diminished the efficiency of Kano’s tape
library system.
CX-0013C at Q/A 467. Thus, “Kano’s emphasis on speed would have led a [person of ordinary
skill in the art] away from the ’596 patent, which sacrifices speed for security.” CResp at 75
(citing CX-00l3C at Q/A 587-88; see also ID at 175).
Even if a person of ordinary skill in the art would be motivated to combine Platte and
Kano, Fujifilm has failed to establish a reasonable expectation of success in making the
combination. Fujifilm’s evidence consists of attorney argument asserting that the combination
would have been “trivial,” and conclusory expert testimony that a POSA would have had a
reasonable expectation of success in making the combination. RX-4C at Q/A 940-46. But
“Fujifilm says virtually nothing about the workings of its proposed combination of Platte and
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Kano or the many technical challenges in getting there.” CSub at 28. By contrast, Dr. Mowry
testified “that combining Platte and Kano would ‘require substantial design and programming
work . . . [to] reconcil[e] the systemic differences and integrat[e] the disparate technology,’
including ‘an array of hardware and firmware design challenges that . . . would have been very
difficult . . . to implement.”’ Id. (citing CX-0013C at Q/A 590). He identified numerous
technical differences that would have been barriers to any attempt to combine Platte and Kano.
CX-0013C at Q/A 75-87, 587, 589-90, 599. We find Dr. Mowry’s opinions concerning a person
of ordinary skill in the art’s expectation are not “conclusory” but rather are grounded in
substantial evidence regarding the technical differences between Platte and Kano that would
render them incompatible, as well as the significant challenges combining them would present.
See ID at 174-76. _
Therefore, the Commission affirrns, with the supplemental reasoning provided above, the
ALJ’s finding that Fujifilm failed to establish by clear and convincing evidence that claims 1-13
of the ’596 patent are obvious in view of Platte and Kano. The Commission finds that the record
evidence establishes that a skilled artisan would not have been motivated to combine the two
references and would not have had a reasonable expectation of success.
C. Domestic Industry —Economic Prong
i. The Final ID’s Finding That a Domestic Industry Exists Based on the
Domestic Activities of Sony’s Licensee
Sony argues that IBM is a licensee of the asserted patents and the economic prong of the
domestic industry requirement with respect to all asserted patents is satisfied based on IBM’s
expenditures relating to the IBM 3592 system, which comprises the 3592 tape cartridges and
tapedrives. Id. at 199. Sonyallocates— 	in expensesforlaborassociatedwith
maintenance and operations for the 3592 family of products between 2014 and September 2017,
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and_ 	in expensesforlaborassociatedwithresearchanddevelopmentfortheIBM
3592 family of products since 2012. Id. at 209.
Fujifilm argues that the Sony-IBM Agreement as written is defective and does not cover
IBM’s 3592 products.” Id. at 201. The dispute regarding the Sony-IBM Agreement concerns
three sections of the license. First
CX-1058C at I5 Second,
Id. at 16. Finally,
(emphasis added). The ALJ explained that the “source of the dispute arises from this last
section:
ID at 200.
The ALJ found that section 337 allows articles that practice the patent claims under
authorization from the patent owner to be considered in the domestic industry analysis and the
Patent Act does not require that the authority to practice the patented invention must be granted
in writing. Id. at 202-203. Thus, the ALJ reasoned that “[s]ufficient evidence of authorization
from Sony for IBM to practice the patent claims, even if not reduced to writing, can suffice to
bring the IBM 3592 tape products within the umbrella of domestic industry products upon which
Sony may rely.” Id. at 203. The ALJ found that “the evidence shows that since at least as early
as 2010, IBM has had Sony’s authorization to manufacture articles and/or have articles
manufactured on IBM’s behalf that are both protected by the Asserted Patents and that would
otherwise be subject to a claim of infringement but for Sony’s authorization.” Id. (citing CX
'5 The final ID noted that Sony relies on two agreements with IBM and that both
agreements are identical in all respects relevant to this investigation. See ID at 199 (citing CX
1058Candcx-10440). This opinioncitesonlyto the. agreementin cx-1058c.
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1230C; CX-1046C and CX-1047C); see also id. at 204 (citing CX-7C at Q/A 85, 90-95).
Altematively, the ALJ found that the licenses at issue are governed under New York law, and
“thataNewYorkcourtwouldinterprettheSony-IBM	licensetoinclude
— 	M	atWith respect to the ’774 and ’50l patents (“the Media Patents”), Fujifilm and the IA
argue that the domestic industry extends atmost to expenditures relating to IBM 3592 tape
cartridges and cannot include expenditures relating to IBM 3592 tape drives. See id. at 205, 206
The AL] found that “[a]lthough it is possible to exploit the ’774 and ’50l patents through all
manner of tapes, including LTO and other formats, it is not possible to exploit IBM 3592 tape
cassettes—articles protected by the patent——withoutan IBM 3592 drive.” Id. at 208. He
explained that “[i]t is Lmdisputedthat IBM 3592 tapes can only be used in an IBM 3592 drive.”
Id. The ALJ concluded that “the reality of the marketplace developed around the IBM 3592
family of products is that IBM 3592 tape drives are necessary to use IBM 3592 tapes and vice
vcrsa,” and, thus, “the IBM 3592 tapes protected by the ’774 and ’50l patents cannot be
‘exploited’ absent their use in conjunction with IBM 3592 tape drives that do not themselves
practice the ’774 and ’50l patent claims.” 1d. at 208-209.
With respect to the economic prong under subsection (C), Fujifilm and the IA argue that
Sony has failed to demonstrate a nexus between the IBM expenditures and the patented
technology. Id. at 215. The AL] determined that investments associated with the research and
development of the IBM 3592 tape drives are an “‘investment [that is] itself an exploitation of
an
the patent in view of the finding that “(i) 3592 tapes and drives are articles practicing the ’596
patent and (ii) 3592 tape drives are necessary to exploit 3592 tapes practicing the ’774 and ’50l
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patents.” Ia’.at 215-216. The ALJ reasoned that “‘0rdinary inference’ applies here, where the
domestic industry products»-at least for some of the patents (i.e., the ’774 and ’50l patents)—
include non-patented articles (and their associated research and development expenses)
necessary to ‘exploit’ the asserted patents.” Id. at 216 (citing Certain Integrated Circuit Chips,
Inv. No. 337-TA-859, Comm’n Op. at 42 (Aug. 22, 2014)). Finally, the ALJ found that “IBM’s
investments are quantitatively significant as required by section 337(a)(3)(B) as well as
quantitatively substantial as required by section 337(a)(3)(C).” Id. at 218.
ii. The Commissi0n’s Determination That IBM’s 3592 Products
Are Domestic Industry Products Upon Which Sony May Rely
The Commission affirms with modifications the ALJ’s finding that the record evidence
establishes that IBM has authorization from Sony to practice the asserted patents such that the
IBM 3592 products fall within the umbrella of domestic industry products upon which Sony may
rely. Id. at 203. _
The ALJ based his conclusion on two independent grounds. First, he found that there is
sufficient evidence of authorization from Sony for IBM to practice the patent claims at least as
early as 2010 even Without considering any written agreements between Sony and IBM. Id.
Fujifilm relies on general contract law principles that an oral agreement cannot supersede a
written instrument and the parole evidence rule. RPet at 7-12. Because this is not a contract
dispute between Sony and IBM over their license agreement, such reliance is misplaced. The
parol evidence rule applies “only [to] . . . ‘prior agreements or understandings”’ that precede
contract formation, such as “agreements, promises or understandings that were part of the
negotiations directly leading to the written . . . agreement.” Exhibitgroup/Giltspur, Inc. v. Spoon
Exhibit Servs., 273 A.D.2d 874, 874 (N.Y. App. Div. 2000). Here, Sony is not relying on any
evidence of a prior or contemporaneous agreement or evidence from the negotiations directly
41
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PUBLIC VERSION
leading to the written cross-license at issue in the case but, rather post-litigation correspondence
and hearing testimony regarding the understanding of the contracting parties during the time
period since the execution of their license. We, therefore, affirm the final ID’s finding that the
evidence of record
- 	IDat203-204(citingcx-1230c,cx-1046c,andcx-1047c);seealsocx-7c at
Q/A 85. 	V
Second, the ALJ found that the Sony-IBM Agreement covers IBM’s 3592 tape products,
—. 	Id.at205.TheALJfound	thataNewYorkcourtwould	interpret
Id. at 204-205 (citing Ross v.
Sherman, 95 A.D.3d 1100, 1101 (N.Y. App. Div. 2012)).
Fujifilm argues that the ALJ should not have considered extrinsic evidence and failed to
addressthe lack of ambiguityin] of the Agreement. RPet at 14. But the final ID found_
ambiguitywhenit rejectedFujifilm’sinterpretationofI after finding“no credibleevidence
<>r<~=><p1anafi@nasI<>why
i 	11>	at	204-	the
final ID correctly found that under New York law, “where some absurdity has been identified or
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the contract would otherwise be unenforceable either in Whole or in part,” “courts may as a
matter of interpretation carry out the intention of a contract by transposing, rejecting, or
supplying words to make the meaning of the contract more clear.” Id. (citing Wallace 600
Partners C0., 658 N.E.2nd 715, 717 (N.Y. 1995)). Accordingly, we find that the ALJ’s
consideration of extrinsic evidence to interpret the Sony-IBM Agreement was not error.
in additionto thesetwo grounds,the Commissionfinds that] of the Agreement
expressly grants 	CX
l058C at 15. The final ID_didnot addresswhether- of the Sony-IBMAgreementcovers
IBM’s 3592 tape products 	. See RPet at 16
19; CResp at 9-l l. Section
_ 	cx-10580	at15.
Fujifilm does not disputethat IBM’s domesticindustryproductsare coveredby‘
asdefined	intheagreement.	Seeid.at2,8- —
However, Fujifihn
argues that the Sony-IBM Agreement
More specifically, Fujifilm contends that while IBM may be granted
rightsto sell certainproductsunder- of the Sony-IBMAgreement,IBMalso must satisfy
the requirements of
See RPet at 16; CX-1058C at 15-l6.
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— 	RPet	at16-17.	Fujifilm	contends	that	the	findings	of
Cyrix Corp. v. Intel C0rp., 77 F.3d 1381 (Fed. Cir. 1996); Thorn EMIN. Am., Inc. v. Hyundai
Elecs. Indus. Co., Lta'., 1996 WL 33415780 (D. Del. July 12, 1996); and Tulip Computs. Intern.
B. V.v. Dell Comput. C0rp., 2003 WL 1606081 (D. Del. Feb. 4, 2003) (Magistrate Judge’s
Revs"	and	Recommendation),	‘
_, 	areconsistent	withthisunderstanding.	Id.at 17.
We find Fujifilm’sinterpretationofK of the Agreementis inconsistentwith the
plain language of the Sony-IBM Agreement and is not supported by the Cyrix decision
interpreting	an	IBM	license	agr@¢mfi=11l - 	For
example, in Cyrix, Intel argued that its licensee IBM acted outside the scope of their license
agreement when it acted as a foundry for Cyrix by manufacturing microprocessors according to
specifications supplied by Cyrix and selling that finished product back to Cyrix for resale under
Cyrix’ brand name. 77 F.3d at 1382-83. Cyrix filed an action seeking declaratory judgment that
it was immune from infringement liability based on the argument that IBM was acting within its
rights under the Intel-IBM license in acting as a foundry for Cyrix. Id. _at1383-84. Cyrix argued
that IBM had the right, under § 2.2.1, thc granting clause of the Intel-IBM license agreement, to
manufacture products covered by Intel’s patents regardless of who designed those products. Id.
at l385. Because the purchase of a patented product from a valid licensee shields the purchaser
from infringement liability to the patentee, Cyrix argued that it was free from liability to Intel
16The district court did not adopt the magistrate judge’s Febnlary 4, 2003, Report and
Recommendation finding that licensee IBM’s purchase and sale of allegedly infringing product
designed and manufactured by defendant was covered under the “make, use, or sell” grant of a
licensing agreement on the patent at issue. See Tulip Cornputs. Intern. B. V.v. Dell Comput.
Corp., 262 F.Supp.2d 358 (D. Del. 2003) (holding that IBM’s purchase and sale of allegedly
infiinging product from defendant was not done pursuant to the rights as licensee). No party
discusses the district court decision.
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when it purchased the microprocessors IBM manufactured at its request. Id. at 1384. Intel ‘
countered that § 2.2.1 of the Intel-IBM agreement only permitted IBM to sell products designed
by IBM. Ia’. at 1384-85.
In considering the parties’ arguments, the Federal Circuit examined what it determined
was the unambiguous language of the granting clause of the Intel-IBM license agreement. Id. at
1385. The Federal Circuit found that § 2.2.1 granted IBM the right “to make, use, lease, sell and
otherwisetransferIBMLicensedProducts.”Id. —, 	“IBMLicensedProducts”
was defined in a separate section to include “IHS Products,” among other products. Id. When
the court read those sections together, it found that “IBM Licensed Products” were not limited to
products designed by IBM. Id. 	t
The Federal Circuit also disagreed with Intel’s argument that the restricted “have made”
grant of the Intel-IBM agreement limited IBM’s right to have Cyrix design products for IBM.
Id. at I386. The court concluded that since “IBM did not have the products made for it, [the
‘have made’] provision does not limit its rights to make and have designed the products it sold to
Cyrix.” Id. Thus, the Federal Circuit distinguished between the separate rights granted under the
“make, use, or sell” and “have made” grants.
While Cyrix does not address the precise facts at issue here, we find that the Court’s
broad interpretation of the 	in a similar IBM license agreement supports
Sony’s argument that
Cyrix also supports Sony’s
interpretation	thatothergrantingclausesinthelicensesuchasthe— 	are
separate from and do not limit the 	. Still further, Sony’s interpretation
ofthe— 	does	notrender	the 	meaningless	here.The
45

PUBLIC VERSION 	.
parties do not dispute that the separate 	of the Sony
IBM Agreement
contrast, the
Thus, in addition to the two grounds that the ALJ found to support its
conclusion that lBM’s 3592 products are domestic industry products upon which Sony may rely,
the Commissionfinds that] of the Sony-IBMAgreementexpresslygrantsIBMa license
that covers IBM’s 3592 products and IBM’s sale of them.
iii. The Commission’s Determination That a Domestic Industry Exists
Under Sections 337(a)(3)(B) and (C) With Respect to the ’596 Patent
With respect to the ’596 patent, the only remaining issue with respect to whether IBM’s
domestic expenditures in the 3592 products satisfy the economic prong of the domestic industry
requirement under subsections (B) and (C) is Whether IBM’s maintenance expenses are excluded
from the Sony-IBM Agreement. Specifically, Fujifilm argues that IBM’s maintenance expenses
are	not	covered	bythe	Sony-IBM	agreement	because
1% at 20- Fujifilm
contends	thatthe“IDerredbynotaddressing‘ 	Id.
The Commission finds this argiment waived because Fujifilm failed to raise it in its pre
hearing	brief.	See	CRcsp	at16-l7.	Even	absent	waiver,
— 	CX-10580	at2°	(emphasis	ad<1@d>~	'
Therefore, the Commission affirms the ALJ’s finding that all of the maintenance and R&D
expenditures associated with IBM 3592 products relied upon by Sony are included in the
domestic industry for the ’596 patent LlI1d6l'subsections (B) and (C). Before the Commission and
46

PUBLIC VERSION
with respcct to the ’596 patent, Fujifilm does not challenge the ALJ’s finding that IBM’s
maintenance and R&D expenditures associated with IBM’s 3592 products are both quantitatively
significant as required by section 337(a)(3)(B) as well as quantitatively substantial as required by
section 33'/(a)(3)(C). ID at 218.
iv. The C0mmission’s Determination That a Domestic Industry Exists
Under Section 337(a)(3)(B) With Respect to the Media Patents
In its Notice of Review, the Commission asked the parties to address the following:
4. Please discuss the extent to which the scope of the domestic industry with
respect to the ’774 and the ’5Ol patents should extend to the R&D investments
and employment of labor and capital by Sony’s licensee in proprietary tape
drives, which the ID found are necessary to exploit the technology of the tape
media that are protected by the ’774 and the ’50l patents. Please address the
Investigative Attomey’s argument that the “ID conflated exploiting the patented
article with exploiting the patented technology” and whether these two allegedly
different analyses would render a different result under the “realities of the
V marketplace” exception in this investigation.
Fujifilm and the IA argue that the ID erred in finding that a domestic industry exists
under sections 337(a)(3)(B) and (C) with respect to the Media Patents based on IBM’s domestic
expenditures for labor associated with research and development, and for maintenance and
operations for the 3592 products. Specifically, they contend that the realities of the marketplace
do not warrant finding that the domestic industry for the Media Patents extends beyond the
“articles protected by the patent,” i.e., the 3592 tape cartridges, to also include the 3592 tape
drives, which are not covered by the claims of the Media Patents.
Having reviewed the record evidence and the parties’ submissions, the Commission has
determined to affirm with modifications the ALJ’s finding that a domestic industry exists under
section 337(a)(3)(B) with respect to the Media Patents based_on the domestic activities of Sony’s
licensee IBM. The Commission takes no position on whether the final ID also properly found
that a domestic industry exists under section 337(a)(3)(C) with respect to the Media Patents.
47

PUBLIC VERSION
“The Commission has held that in certain circumstances, the realities of the marketplace
required a modification of the principle that the domestic industry is defined by the patented
article.” Certain Video Game Systems and Wireless Controllers and Components Thereof, Inv.
No. 337-TA-770, Comm’n Op. at 66 (Oct. 28, 2013) (“Video Game Systems”). Factors to
consider regarding the realities of the marketplace analysis include whether the patented
technology is sold as a separate entity or article of commerce; whether it is an essential
component of the downstream product; and whether the domestic industry activities “have a
direct relationship to exploitation of the patented technology.” Id at 66-67. ‘
For example, the Commission determined that the realities of the marketplace warranted
crediting domestic investments in a personal computer in a case involving patented and
copyrighted sofiware since the software was an essential component of the computers assembled
in the United States and the computers cannot be used without the sofiware. Certain Personal
Computers and Components Thereof, lnv. No. 337-TA-140, USITC Pub. 1504, Comm’n Op. at
41 (Mar. 1984) (“Personal Computers”). In Certain Double-Sided Floppy Disk Drives and
Components Thereof; Inv. No. 337-TA-215, the domestic industry was defined to include “the
domestic production of double-sided floppy disk drive, rather than the patented head assemblies
incorporated in the disk drives, because it is the importation and sale of the disk drives that
compete directly with the domestic activities of the patentee.” Video Game Systems, Comm‘n
Op. at 66-67 (citing Certain Double-Sided Floppy Disk Drives and Components Thereof, Inv.
No. 337-TA-215, USITC Pub. 1860, Comm’n Op. at 17-18 (Oct. 15, 1985) (“Floppy Disk
Drives)).
In a more recent example, the Commission in Video Game Systems found that the
specification of the asserted patents made clear that the technology of the patented invention
48

PUBLIC VERSION
involved “a wand having certain transmitter and motion-sensitive circuitries that interact
wirelessly with receivers or actuators distributed throughout the play facility.” Comm’n Op. at
67-68. The Commission determined that the complainant was entitled to rely on expenses
related to “the claimed wand, [the] electronic receivers within the MagiQuest effect, and the
relevant main server software that coordinate these effects,” id. at 73, “which are central to
enabling [the complainant] to exploit the technology of the claimed toy wands, but not on
expenses relating to the entire MagiQuest attraction,” id. at 70, such as the “physical space,
design themes, physical props, other peripheral items, and sales and training staff,” id. at 68.
In yet another recent case, the Commission in Certain Sleep-Disordered Breathing
Treatment Systems and Components Thereof, Inv. No. 337-TA-890 (“Sleep-Disordered
Breathing"), credited domestic investments in an unpatented S9 flow generator because the flow
generator “is central to enabling [complainant] to exploit the patented technology of the H5i
humidifier” given that the humidifier “is designed to work only with the S9 flow generator,” and
some of the “H5i humidifiers are sold in a"co-pack’ with an S9 flow generator.” Final ID at 147
(Sep. 16, 2014). ‘7 Notably, the Commission found that “[a]lthough the H5i humidifier is a
distinct product that is sometimes sold separately, it cannot function on its own, and cannot
practice the claims . . . without an S9 flow generator.” Id. at 149 (citing, e.g., claim 1: “a
connecting structure configured to connect between the CPAP apparatus and humidifier”). In
contrast, as for the remaining asserted patents directed to a respiratory mask, the Commission
found that the S9 and H5i “are not central to enabling [complainant] to exploit the patented
'7 ln Sleep-Disordered Breathing, the Commission did not review the ALJ’s finding that
the complainant had established the existence of a domestic industry under 19 U.S.C.
§§ l337(a)(3)(A) and (B). See Inv. No. 337-TA-890, Comrn’n Op. at 45 n.l3 (Jan. 16, 2015).
49

PUBLIC VERSION
technology of its masks because these masks are compatible with other CPAP devices and
humidifiers, and they are marketed and sold separately from [S9 and H5i].” Id. at 147.
In sum, the Commission has credited domestic investments when they are made with
respect to an “essential,” “necessary,” and/or “integral” part of the article covered by the patent
claims and/or is “central to enabling” exploitation of the article covered by the patent claims.
In this case, the record evidence supports the ALJ’s determination to include IBM’s
domestic investments in its 3592 tape drives in the economic prong analysis for the Media
Patents. The facts relevant to this issue appear to be substantially uncontested. The evidence
shows that, unlike the open standard LTO tapes and drives, IBM developed its own proprietary
storage fonnat for its 3592 tapes and drives. S0ny’s economic expert, Dr. Prowse, testified that
technology in tapes “cannot be exploited from an economic perspective without a drive and
without [the] development of a drive.” Tr. (Prowse) at 166:2-4. Mark Hill, of IBM, explained
that
CX-1304C at Q/A 20. He further
testified that
_ 	and	that
Id. at Q/A 147 (emphasis added). IBM’s Kenneth Woo explained that
IX-29C at 29:2-4.
Sony’s technical expert, Dr. Mowry, explained, “when wc start talking about a recording
system,” there is no reason to distinguish “the tape drive [as] being separate flom the medium, or
cartridge.” Tr. (Mowry) at 395:9-l5.
50

PUBLIC VERSION
The evidence thus strongly supports the ALJ’s conclusion that “the IBM 3592 tapes
protected by the ’774 and ’50l patents cannot be ‘exploited’ absent their use in conjunction with
IBM 3592 tape drives.” ID at 108-109. The exclusive operational relationship between 3592
tapes and 3592 tape drives is similar to the electronic receivers and toy wand in Video Game
Systems,the flow generator and humidifier in Sleep-Disordered Breathing, the computer and
software relationship in Personal Computers, and the floppy disk drive and head assembly at
issue in Floppy Disk Drives.
Fujifilm and the IA assert that although the 3592 tape cartridge and 3592 tape drive are
designed and intended to be used together, they are entirely separate articles of commerce
because they “are marketed and sold separately, in significantly different quantities, and at
significantly different price points.” RSub at 32-33; see IAReply at ll. Thus, according to
Fujifilm and the IA, the domestic industry extends at most to expenditures relating to IBM 3592
tape cartridges and cannot include expenditures relating to IBM 3592 tape drives.
Sony argues that Video Game Systems, in fact, shows that sales quantities and country of
manufacture are not determinative. CSub at 32. There, the Commission found that the patented
toy wand was sold as “a stand-alone item” to customers for use at complainant’s MagiQuest live
action attractions. Video Game Systems, Comm’n Op. at 56, 67. Based on the “realities of the
marketplace,” the Commission included in the domestic industry investments in “the electronic
receivers within the MagiQuest effect, and the relevant main server software that coordinate
these effects”—hardware and software that was built into the attractions and therefore not sold as
goods to customers. Id. at 70, 73. As Sony argues, neither the sales numbers nor the lack of
details about manufacturing location of the receivers and software affected the Commission’s
analysis of the scope of the domestic industry. CSub at 37.
51

PUBLIC VERSION
Moreover, Fujifilm’s aiid the IA’s position is inconsistent with the C0rnmission’s
decisions in Floppy Disk Drives and Sleep-Disordered Breathing. In Floppy Disk Drives, the
Commission affinned the ALJ’s decision to define the domestic industry as the domestic
operations devoted to the manufacture of double-sided floppy disk drives, rather than the head
assemblies, even though the ALJ found the patent at issue was directed to the head assembly, and
the head assembly was a separate article of commerce. See Floppy Disk Drives, Comm’n Op.,
1985 WL 73063, at *l l (Oct. 15, 1985). The AL] arrived at this conclusion because a “head
assembly is used every time a disk drive is used and a drive is useless without a head assembly.”
1d.; see also Floppy Disk Drives, USITC Pub. 1860, ID at 53-54 (May l986) (finding “the head
assembly is a necessary and integral part of the floppy disk drive”).
ln Sleep-Disordered Breathing, after finding that “the H5i humidifier and S9 flow
generator are actually sold by [complainant] as separate articles,” ID at 149, the ALJ went on to
find that the flow generator was within the scope of the domestic industry because the humidifier
“cannot be used alone,” id. at l50, because the “H5i humidifier is wholly dependent on the S9
flow generator,” id., and because “the S9 is thus central to enabling [complainant] to exploit the
patented technology of [the] humidifier,” id. As Sony explains, “[d]istinctions in those realities
explain why a domestic industry for patented CPAP masks that could be used with other
companies’ flow generators and humidifiers does not include investments in complainant’s
technically and commercially compatible humidifiers and flow generators while the domestic
industry for a patented humidifier does include investments in a flow generator that is necessary
for a consumer’s use of the humidifier.” CReplyR at 15. In the fomier case, consumers could
still buy and use (that is, exploit) the masks in conjunction with products available in the
marketplace even if the complainant had never invested in compatible humidifiers and flow
52

PUBLIC VERSION
generators business.‘ Id. In the latter case, stopping production of the compatible flow generator
meant eliminating any possible use of the humidifier by consumers. 18Id.
Fujifilm and the IA also underscore the fact that the ALJ found that the Media Patents
can be exploited through all manner of tapes, including LTO and other formats, not just the 3592
format. Wc agree with Sony that this finding is irrelevant to whether the 3592 drives are
necessary to exploit the IBM 3592 tape cartridges. The Commission has defined the domestic
industry to include investments necessary to bring to market the patented teclmology as
embodied in the asserted domestic industry products. See Video Game Systems, Comm’n Op. at
70 (including investments “central to enabling [complainant] to exploit the technology of the
claimed toy wands”); Sleep-Disordered Breathing, ID at l47 (finding “that the S9 flow generator
is central to enabling [complainant] to exploit the patented technology of the H5i humidifier”).
Here, the “3592 tape and drive products at issue make up a closed, proprietary data storage
system” and there is no dispute that one cannot be used without the other. CSub at 30; sée also
id. at 33-34; Tr. (Prowse) at 166:2-4; CX-1304C at Q/A 20, 147. Moreover, investigations _
finding a violation of section 337 necessarily involve exploitation of an asserted patent through
multiple products including an asserted domestic industry product and an accused product. See,
e.g., Personal Computers, Inv. No. 337-TA-140, Pub. 1504, Comm’n Op. at _l7-21, 37-42 (Mar.
1984). But the Commission has not declined to look to the realities of the marketplace simply on
'8 As Sony points out, none of the cases on which Fujifilm relies involves a finding that
the patented article at issue—the hinges, the microcarriers, the connectors—could not be used
without an additional article. CReplyR at 16 (citing Certain Concealed Cabinet Hinges, Inv. No.
337-TA-289, ID, 1989 WL 608804, at *55 (Sep. 28, 1989); Certain Limited-Charge Cell Culture
Microcarriers, Inv. N0. 337-TA-129, USITC Pub. 1486, Comm’n Action & Order at 5 & n.10,
37 (Feb. 1984); Certain Modular Structural Systems, Inv. No. 337-TA-164, Comm’n Op. at 13
14 (June 1984)).
53_

PUBLIC VERSION
the ground that it is possible to exploit an asserted patent through multiple products. See id.;
CSub at 36. 	» ‘
Fujifilm and the IA further argue that IBM’s investments in maintenance or research and
development do not “have a direct relationship to exploitation of the patented technology’;
because none of those investments were related to the development of the tape media inside the
3592 cartridge and so IBM’s investments are “far removed from the technology protected by the
patent.” lASub at 17-18 (citations omitted); see also RSub at 28. On the contrary, the record
evidence shows that IBM’s 3592 drive investments “have a direct relationship to exploitation of
the patented technology” just like the patented toy wand in Video Game Systems was found to
have this “direct relationship” because the specification at issue established that the wands were
intended to “interact wirelessly with [external] receivers.” CSub at 34 (quoting Video Game
Systems, Comm’n Op. at 67-68).
As Sony explains, the Media Patent specifications make clear that Sony’s claimed
inventions are intended to improve the performance of tape media when they are used in
conjunction with tape drives. Id. (citing JX-2.5; JX-3.9). The ’501 patent specification defines
the invention in pan by the tape media’s “cross web dimensional difference from the magnetic
recording head used therewith,” explicitly referring to use with the recording head of a tape
drive. Id. at 34-35 (citing JX-2 at 2: 16-18; CX-2C at Q/A 167). The ’774 patent specification
explains that the invention creates a recording medium that “exhibits improved signal and error
characteristics,” two measures that contemplate a tape drive writing data to and reading data
from the medium. Id. at 35 (citing JX-3 at 3:52-55; CX-2C at Q/A 75-78).
54

PUBLIC VERSION
Sony has established that IBM’s domestic 3592 drive development work is devoted to
improving the interopembility of the 3592 tape media.with drives. For example, S0ny’s expeit,
Dr. Prowse, explained at the hearing:
T1".(Prowse) at 165:5-l66:7; see also CX-4C at Q/A 222-24; IX-28C at 119:3-19; IX-3.10; IX
28(‘.6, 12, 20:3-16; 41:10-I7; IX-2.6. In addition, the testimony ofMr. Hill, IBM’s coiporate
dessgn@==§he 	at	Q/A	10,	98»	1<><>»~><,28<
‘Z013-l6,ll9:l6-19. 	'
55

PUBLIC VERSION
The IA argues the ID erroneously conflates exploiting the patented article with exploiting
the patented technology. IASub at 19. The IA contends that the proper analysis should consider
whether IBM’s domestic activities have “a direct relationship to the exploitation of the patented
technology,” and not whether the 3592 tape drives are necessary to exploit the 3592 tapes%the
patented articles. See id. We find the IA’s position is a distinction without a difference. If a
patented article practices the patent claim, but the patented article cannot function on its own
without a non-patented product, or in other words the non-patented product is essential to the
practice of the patented article, then the non-patented product necessarily has a direct
relationship to the exploitation of the patented technology. In this case, while the claimed
subject matters of the Media Patents can be practiced without a tape drive, there is no dispute
that the tape media is useless Without a tape drive. In other words, the tape drive is necessary to
bring the patented technology to the consumer market.
Fujifilm further argues that “although that the patents-at-issue in Sleep-Disordered
Breathing and Video Game Systems did not ‘directly claim’ components of the separate aiticle of
commerce, but those components were expressed in the claims in manner that made them
necessary to define the invention claimed.” RSub at 34 (citing Video Game Systems, Commfn
Op. at 6-7, 70 (“a wireless receiver capable of receiving data from a transmitter external to the
elongated body”); Sleep-Disordered Breathing, ID at I01, 149 (“connecting structure configured
to connect between the CPAP apparatus and humidifier”)). However, the analysis in those
cases was based on crediting investments that were necessary to bring the patented technology to
the consumer market. See CSub at 38; Video Game Systems, Comm’n Op. at 68-7_O;Sleep
Disordered Breathing, ID at I48-149. In Video Game Systems, the Commission found that the
claims were directed to a toy wand and the claim language “interactive play environment” was
56

PUBLIC VERSION
“mere intended use.” Comm’n Op. at 61-62. Similarly, in Sleep-Disordered Breathing, the ALJ
found that the claims only directly claim a humidifier in one asserted patent and masks in the
other asserted patents despite the claim language describing a broader CPAP therapy system. ID
at 147-148. Nevertheless, the Commission found in both cases that the complainants were
entitled to rely on expenses that were needed to ensure that the patented articles could be used by
consumers.
Therefore, the Commission affirms, with the supplemental reasoning discussed above,
the ALJ’s finding that a domestic industry exists under section 337(a)(3)(B) with respect to the
Media Patents based on IBM’s significant investments in labor and capital for the 3592 products.
III. JOINT MOTION
On November 8, 2018, Sony and Fujifilm jointly moved to submit certain replacement
pages to their respective initial submissions in response to the Commission’s Notice of Review. 19
The Commission has determined to grant the joint motion. In particular, at the request of Sony,
Fujifilm sought to submit replacement pages for page nos. 31 and 37 of its initial submission,
which redact statements that Fujifilm made regarding Inv. No. 337-TA-1076. Fujifilm is the
complainant and Sony is the respondent in the 1076 investigation. Proposed replacement pages
with these redactions were attached as Exhibit A to the motion. Sony sought to submit a
replacement page to correct a citation on page no. 17 of its initial submission. A proposed
replacement page with this change was attached as Exhibit B to the motion.
'9 See Joint Unopposed Motion to Submit Certain Replacement Pages to the Private
Parties’ Initial Written Submissions in Response to the Commission’s Determination to Review
In-Part the Final Initial Determination, EDIS Doc ID 661382 (Nov. 8, 2018).
57

PUBLIC VERSION
IV. REMEDY, BONDING, AND PUBLIC INTEREST
A. Remedy
_ i. Limited Exclusion Order
' Fujifilm does not dispute that an LEO is appropriate in the event of a finding of a
violation, but it contends that certain express exemptions should be included in the order. RSub
at 38-39. First, Fujifilm argues that LTO-7 cartridges and components should be expressly
excluded from any LEO. Id. at 38. The ALJ recommends the issuance of an LEO “prohibiting
the importation of all the accused products found to infringe the Asserted Patents,” but rejects
Fujifi1m’s request to expressly exclude LTO-7 products given that they were not a part of the
investigation. RD at 222. Sony argues that “Order No. 14 made clear that an infringement
determination regarding Fujifilm’s LTO-7 products would not be made during the violation stage
of this investigation, putting them squarely within the purview of Commission or CBP post
issuance procedures.” CReplyRmdy at 2-5 (citing Order No. l4); see also IAReply at 15. Since
it is clear from the record that these products were not timely accused in this investigation and as
a result were not adjudieated as part of this investigation, we concur with the ALJ’s
recommendation against including an express carve out for the LTO-7 products.
Second, Fujifilm contends that any LEO should expressly state that Fujifilm LTO
cartridges intended for sale to IBM, or components intended for manufacture of LTO cartridges
for sale to IBM, are not subject to such orders. RSub at 38. The ALJ recommends “tailoring the
exclusion order to incorporate Fujifilm’s proposed exception for IBM-branded LTO-4, LTO-5
and LTO-6 products and their components given that such products are manufactured and
imported pursuant to a license granted by Sony.” RD at 221-222. The LAasserts that if the
standard certification provision is included in the LEO, this express carve out is unnecessary.
IAReply at 15. As Sony points out, “the Commission’s limited exclusion orders typically
.53

PUBLIC VERSION
contain an exception for importations ‘under license of the patent owner or as provided by law. ”’
CReplyRmdy at 6 (citing Certain Semiconductor Memory Devices & Prod. Containing Same,
Inv. No. 337-TA-414, RD, 1999 WL 1267282, at *3 (Dec. 13, 1999)). We agree with the IA and
Sony that the standard exception for licensed imports renders Fujifilm’s request unnecessary.
Third, Fujifilm argues that the Commission should tailor any remedial orders to exempt
the LTO tape cartridges or components thereof imported for the mandatory annual compliance
verification testing that is performed in the United States, as well as permit repair or replacement
of existing LTO cartridges. RSub at 39; RReplyRmdy at 3. Sony does not object to an
exemption for imports for compliance verification testing but argues that Fujifilm has not
established any need for an exemption for repair and replacement. CReplyRmdy at 1-2. Sony
argues that “[e]xempting imports for repair and replacement is not warranted when a respondent
has not established that a repair or replacement program exists.” Id. at 7 (citing Certain Wireless
Devices with 3G Capabilities & Components Thereof, Inv. Noi 337-TA-800, RD, 2013 WL
3961221, at *3 (July 8, 2013) (“[I]t has not been shown why a replacement, service and repair
exclusion should be added to any limited exclusion order.”)).2° Fujifilm contends that the
Commission routinely grants these exemptions and did so in Certain Magnetic Data Storage
Tapes and Cartridges Containing the Same, Inv. No. 337-TA-1012. RSub at 39 (citing Certain
Mobile Devices, Associated Software, & Components Thereof Inv. No. 337-TA-7-44, Comm’n
Op. at 21-22 (Jun. 5, 2012)); The IA does not object to the inclusion of such provisions as a
similar provision was included in the remedial order for Inv. No. 337-TA-1012. IAReply at 15
2°Investigation No. 337-TA-800 was terminated with a finding of no violation as to
certain respondents and a withdrawal of the complaint as to the remaining respondents.
Therefore, no remedial order was issued in that investigation.
59

PUBLIC VERSION
I6. However, other than making a request for a repair and replacement exception and stating
that such request is routinely granted, Fujifilm has not shown why a‘repair or replacement
exception should be included in any remedial order.“ Because Fujifilm does not provide a
justification to exempt repair and replacement LTO cartridges, the Commission has determined
not to include such an exemption in the LEO. Thus, the Commission grants Fujifilm’s
unopposed request to include an exemption for compliance verification testing, but finds that
Fujifilm has not shown that a repair and replacement exemption is warranted here.
Fourth, Fujifilm requests that the Commission stay any remedial orders as to claims 15
and l7 of the ’774 patent pending final resolution of any appeal of a recently issued Final
Written Decision of the Patent Trial and Appeal Board finding these claims invalid. RSub at 39
(citing F ujifilm Corp. v. Sony C0rp., IPR20l7-01268, Paper No. 51 at 21-22 (Oct. 23, 2018);
Certain Three-Dimensional Cinema Systems and Components Thereof Inv. No. 337-TA-939,
Comm’n Op. at 60 (Aug. 23, 2016) (“Three-Dimensional Cinema”)). The IA argues that this
case is distinguishable from Three- Dimensional Cinema. IAReply at l6. In that investigation,
the Commission’s determination to exercise its discretion and suspend enforcement of the
remedial orders as to certain asserted claims pending final resolution of the PTAB’s Final
Written Decision had no practical effect because all of the accused products were still subject to
immediate exclusion based on the Commission’s findings of violation with respect to other
patents and claims. See id. (citing Three-Dimensional Cinema, Comm’n Op. at 60). By contrast,
21 In Inv. No. 337-TA-1012, the Commission granted Sony’s request for an exemption to
allow for importation of cartridges which Sony certifies are necessary for replacement under its
warranty agreements because the Commission accepted evidence in the form of customer letters
as sufficient support to exempt replacement parts from the LEO. Comm’n Op. at 127 (Apr. 2,
2018). The Commission received no public interest submissions on behalf of the public in this
investigation.
60

PUBLIC VERSION
the IA argues that “staying the remedial orders as to claims 15 and 17 could have the practical
effect of exempting Fujifilm’s LTO-5 products, which are only accused of infringing claim 17 of
the ’774 patent, from the orders.” Id. Sony argues that a stay is not warranted because its appeal
of the PTAB’s Final Written Decision has not yet been exhausted, so the claim remains valid.
CReplyRmdy at 7-8. Sony also argues this case is distinguishable from Three-Dimensional
Cinema. Sony asserts the Commission in Three-Dimensional Cinema “suspended relief as to an
entire patent because cancellation of the claims at issue in the PTAB’s decision would have
resulted in a finding of no violation for that patent, at least due to a loss of the requisite domestic
industry.” Id. at 8. Sony contends that “Fujifilm has not identified any investigation in which
the Commission stayed or suspended a remedial order for only part of an infringed patent,
especially when the prospective outcome of a PTAB decision would leave the domestic industry
for that patent undisturbed.” Id. at 8-9.
As an initial matter, claim 15 of the ’774 patent has been terminated from the
investigation and, therefore, Fujifilm’s request is moot with respect to that claim. Fujifilm also
requests a stay of any remedial orders as to claim 17 of the ’774 patent pending any appeal of the
PTAB decision but, other than citing Three-Dimensional Cinema, which suspended enforcement
of the remedial orders as to the claims at issue rather than staying them, Fujifilm provides no
justification to support its stay request. Fujifilm appears to confuse two separate procedures: a
stay pending appeal of the Commission’s decision and a suspension of remedial relief pending
appeal of a PTAB decision. To clarify, a party requesting a stay of a Commission decision
pending appeal of that decision bears the burden of demonstrating that a stay is warranted under
a four-prong test. See Certain Semiconductor Chips with Minimized Chip Package Size and
Products Containing Same, Inv. N0. 337-TA-605, USITC Pub. No. 4282 (Nov. 2011), C0mm’n
61

PUBLIC VERSION
Op. at 3 (July 29, 2009); Certain Marine Sonar Imaging Devices, Inv. 337-TA-921, Comm’n
Op. Denying Stay Pending Appeal at 4 (Oct. 20, 2016) (“Section 10(d) of the Administrative
Procedure Act provides an agency with the authority to ‘postpone the effective date of action
taken by it, pending judicial review’ if the ‘agency finds that justice so requires.’”) (quoting 5
U.S.C. § 705).“ Because, Fujifilm has not analyzed the four factors, it has not established that a
stay of the remedial orders pending appeal is warranted.
A suspension of remedial relief pending appeal of a PTAB decision is what was provided
in Three-Dimensional Cinema, the decision cited by Fujifilm for its request. The Commission in
Three-Dimensional Cinema explained that the suspension of relief provided in that case derived
from the Commission’s “broad discretion in selecting the form, scope and extent of the remedy.”
Comm’n Op. at 60 (citing Viscofan, S.A. v. Int’! Trade Comm ’n, 787 F.2d 544, 548 (Fed. Cir.
1986)). The Commission finds this case to be similar to Three-Dimensional Cinema. Fujifilm’s
LTO-5 products are found to infringe not only claim 17 of the ’774 patent, but also claims l-13
of the ’596 patent. See ID at 6-7, 8. Therefore, as was the case in Three-Dimensional Cinema, a
suspension in the enforcement of the remedial orders as to claim l7 of the ’774 patent pending
final resolution of the appeal of the PTAB decision will have no practical effect since Fujifilm’s
LTO-5 products will still be subject to immediate exclusion based on the Commission’s finding
of a violation With’respect to claims 1-13 of the ’596 patent. We are unpersuaded by Sony’s l
argument that the Commission should not suspend a remedial order to only part of an infringed
patent. The Commission finds a violation of section 337 on a per-claim basis, not on a per
patent basis. In light of the advanced posture of the appeal and the Commission’s finding of a
22The four-prong test used by the Commission to evaluate stays pending appeal is
derived from Standard Havens Pr0ds., Inc. v. Gencor Indus., Inc., 897 F.2d 511, 512 (Fed. Cir.
1990).
62

PUBLIC VERSION
violation as to Fujifi1m’s accused products (all of which will be subject to immediate exclusion
even if relief is suspended as to claim 17 of the ’774 patent), the Commission has determined to
exercise its discretion and suspend enforcement of the remedial orders as to claim 17 of the ’774
patent pending the appeal of the PTAB’s Final Written Decision.” Upon final resolution, the
Commission will take appropriate action as to claim 17 of the ’774 patent.
23Commissioner Schmidtlein supports the Commission’s decision to suspend
enforcement of the remedial orders as to claim l7 of the ’774 patent pending any appeal of the
PTAB’s Final Written Decision. However, she does not support the “no practical effect” rational
provided by the Commission majority as the basis for the suspension.
With certain exceptions not relevant here, the Commission retains broad discretion in
selecting the form, scope, and extent of the remedy for a section 337 violation. Viscofan, S./1. v.
Int 'l Trade Comm ’n, 787 F.2d 544, 548 (Fed. Cir. 1986). Recognizing this broad discretion,
Commissioner Schmidtlein believes that suspending enforcement of remedial orders is
appropriate for patent claims determined to be unpatentable by a final written decision of the
PTAB issued prior to the Commission’s final determination. Her view is guided by the goal of
the inter partes review (“IPR”) procedure under the Leahy-Smith America Invcnts Act (“AIA”)
to provide a quick and cost effective altemative to litigation for certain patent validity issues
under 35 U.S.C. §§ 102 or 103. _ p
The legislative history of the AIA shows that Congress “detennined that it would be
simpler, and ultimately better, to make a clean start” by replacing inter partes reexamination
with “a quick, inexpensive, and reliable altemative to district court litigation to resolve questions
ofpatent validity.” S. Rep. No. 110-259, at 20 (2008); see also H.R. Rep. No. 112-98, at 46
48 (2011); 157 Cong. Rec. S951 (Feb. 28, 2011) (Sen. Hatch); 157 Cong. Ree. S948 (Feb. 28,
2011) (Sen. Grassley); Cong. Rec. S1350 (Mar. 8, 201 1) (Sen. Leahy). “The new procedure
allows private parties to challenge previously issued patent claims in an adversarial process
before the Patent Office that mimics civil litigation.” SASInstitute Inc. v. Iancu, 138 S.Ct. 1348,
1352 (2018).
Several aspects of the statutoiy framework reflect Congress’s goal that IPR proceedings
be an efficient and effective substitute for litigation. In particular, the AIA explicitly accounts
for litigation timing, provides an adjudicative proceeding with certain discovery and an oral
hearing, allows defendants one year to file an IPR petition from service of the complaint in a
lawsuit, and estops defendants from re-litigating invalidity grotmds before the Commission and
in district court after completion of the IPR proceeding. See 35 U.S.C. §§ 3l5(a), 3l5(b), 3l5(e),
316(a)(5), 316(a)(10).
Because Congress intended the IPR procedure be an altemative to district court litigation,
and because the Commission does not issue enforceable remedial relief for claims held invalid
by a district court, see SSIH Equip. S.A. v. Int ’l Trade Comm ’n, 718 F.2d 365, 370 (Fed. Cir.
1983), Commissioner Schmidtlein believes that suspending enforcement of remedial orders is
63

PUBLIC VERSION
Finally, Fujifilm argues that an LEO should be delayed for six (6) months to delay
potential disruptions to U.S. consumers. The ALJ does not recommend delaying entry of an
LEO in the event the Commission finds that a violation of section 337 has occurred. RD at 221.
Sony contends there is no reason to delay issuance of the LEO because it will not disrupt the
supply of any generation of LTO product. CRmdy at 3-4. Fujifilm raised this request before the
ALJ but did not raise it again in its submissions to the Commission. Therefore, the Commission
will not delay entry of any remedial order. 	_
Having found a section,337 violation based on the infringement of the ’774 and the ’596
patents‘,the Commission has detennined to issue an LEO prohibiting Fujifilm from importing
certain magnetic tape cartridges and components thereof that infringe one or more of claims 1, 5
8, 10, 16, and 17 of the ’774 patent, and claims 1-13 of the ’596 patent. Consistent with
appropriate for patent claims determined to be unpatentable by a final written decision of the
PTAB issued prior to the Commission’s final determination.
Commissioner Schmidtlein is aware that the Commission is required by statute to make
determinations on violations of section 337 “at the earliest practicable time.” 19 U.S.C. §_
l337(b)(l). She observes that the Commission’s decision to suspend enforcement of remedial
orders after first determining the issue of violation is consistent with this statutory mandate. She
also recognizes that stays of 337 proceedings prior to a decision on violation are disfavored in
light of this statutory mandate. She -takesno position at this time as to whether it may be
appropriate to stay section 337 proceedings prior to a Commission decision on violation in
certain circumstances, such as when all parties agree to a stay or when a final written decision of
the PTAB issues either before institution or early in the proceeding.
Finally, in Commissioner Schmidtlcin’s view, there is no tension between determining to
suspend enforcement when the PTAB final written decision issues prior to the Commission’s
final determination, as is the case here, and the Commission’s determination in Certain Network
Devices, Related Software and Components Thereof (II), Inv. No. 337-TA-945, Comm’n Op. at
3 (Aug. 16, 2017) (public version). In Network Devices, unlike the situation here, three weeks
after the Commission’s final determination and issuance of remedial orders, the PTAB issued a
final written decision that some of the patent claims in the remedial orders are unpatentable. The
Commission declined to temporarily rescind its remedial orders on the grounds that the
respondent had not showed that a PTAB final Written decision is a changed “condition” under
section 337(k). Id. at 10-12.
64

PUBLIC VERSION
Commission practice, the LEO includes a certification provision. See Certain Access Control
Systems and Components Thereofl Inv. No. 337-TA-1016, Comm’n Op. at 35 (Aug. 21, 2018).
The LEO will also include a provision exempting the infringing products for compliance
verification testing. As stated above, the Commission suspends the enforcement of the LEO with
respect to claim l7 of the ’774 patent pending the appeal of the PTAB’s Final Written Decision.
ii. Cease and Desist Order
ln addition to, or in lieu ofl an exclusion order, the Commission may issue cease and
desist orders (“CDO”) to respondents found to be violating Section 337. l9 U.S.C. § l337(f).
Under Commission precedent, “[c]ease and desist orders are generally issued when, with respect
to the imported infringing products, respondents maintain commercially significant inventories
in the United States or have significant domestic operations that could undercut the remedy
provided by an exclusion order.”24 Certain Air Mattress Systems, Components Thereof and
Methods of Using the Same, lnv. No. 337-TA-971, Comm’n Op. at 49 (Jun. 20, 2017) (citations
and footnote omitted). “[T]here is no lower limit on the number of articles a domestic
respondent must have in inventory before that inventory can be found to be ‘commercially
significant.’” Certain Agricultural Vehiclesand Components Thereof: Inv. N0. 337-TA-487,
C0mm’n Op. at 14 (Sept. 24, 2004). 	s "
Should the Commission find a violation of section 337, the ALJ recommends issuance of
a CDO prohibiting “Fujifilm from selling its accused products because Fujifilm maintains a
24When the presence of infringing domestic inventory is asserted as the basis for a CDO
under section 337(f)(1), Commissioner Schmidtlein does not adopt the view that the inventory
needs to be “commercially significant” in order to issue the order. See, e.g., Certain Table Saws
Incorporating ActiveInjury ll/litigation Technology and Components Thereofl Inv. No. 337-TA
965, Comm’n Op. at 6-7, n.2 (Feb. l, 2017). ln Commissioner Schmidtlein’s view, the presence
of some infringing domestic inventory, regardless of the commercial significance, provides a
basis to issue a CDO. See id.
65 ‘

PUBLIC VERSION
commercially significant inventory of the accused products and components thereof in the
United States.” RD at 223-24 (citing CX-4C at Q/A 355-71). Before the ALJ, Sony and the IA
submitted that a CDO is appropriate because “as of September 30, 2017, Fujifilm maintained
over_ units of LTO-4,LTO-5and LTO-6tape productsin inventoryin the UnitedStates,
’ 	located	atseveral	sites	throughout	theUnited	States.	'Id.at
222-23; JX-7C; CX-4C at Q/A 365-66. According to Sony, during September 2017, for
example,Fujifilmsold approximately- unitsof LTO-4,LTO-5and LTO-6tapes in the
United	States,	andFujifilm’s	inventory	wasapproximately 	IDat
223. Sony also points to Fujifilm’s inventory of components and bulk cartridges for
manufacturing LTO-4, LTO-5, and LTO-6 tape products. Id. at 222-23; CX-4C at Q/A 368-69;
CX-950C; CX-952C; JX-7C.
Fujifilm argues that any CDO should be tailored in the same way as an LEO, i.e., exempt
all Fujifilm manufactured LTO-7 cartridges and components thereof; exempt any LTO cartridges
and components thereof intended for sale to IBM; permit importation for compliance verification
testing; and permit importation for repair or replacement of existing LTO cartridges.
RReplyRmdy at l-3. Fujifilm also argues that Sony failed to meet its burden of proving that
Fujifilm has a commercially significant inventory of accused products because Sony ignores that
Fujifilm can pcrmissibly sell its inventory in the U.S. to IBM. Id. at 3-4.
In view of the evidence and the parties’ arguments, the Commission finds that Sony has
shown that Fujifilm maintains a commercially significant inventory of infiinging imported
products to warrant the issuance of a CDO against Fujifilm. See RD at 223-24 (citing CX-4C at
Q/A 355-71); see also JX-41C at 326:7-327:4; JX-7C; CX-947C. Fujifilm does not address its
domestic inventory in its submissions and, other than the arguments discussed above, Fujifilm
66

PUBLIC VERSION
does not object to Sony’s argument that CDOs are warranted against all Fujifilm respondents.
See RReplyRmdy at 3-4; RSub at 38-40. Moreover, in discussing the issuance of a CDO order,
the RD and the parties refer to Fujifilm collectively (both foreign and domestic entities). See,
e.g., ID at 223-24; RSub at 38-40; CSub at 4-6; IASub at 24. Accordingly, the Commission has
determined to issue CDOs directed to all Fujifilm respondents.“ As discussed above with
respect to the LEO, the CDOs include a provision exempting products for compliance
verification testing, but does not include any other exemption requested by Fujifilm. Further, as
discussed above with respect to the LEO, the Commission suspends the enforcement of the
CDOs with respect to claim 17 of the ’774 patent pending the appeal of the PTAB’s Final V
Written Decision.
B. Public Interest
Section 337 defines a two-stage process for the Commission to act upon a complaint.
The Commission first “determines, as a result of an investigation under this section” whether
“there is a violation of this section.” See l9 U.S.C. § l337(d)(l). If the Commission determines
a violation has occurred, the Commission “shall direct that the articles concerned . . . be
excluded from entry into the United States unless after considering the eflect of such exclusion”
on four public interest factors the Commission determines a remedy should not issue. Id.
(emphasis added). Those factors are: (1) the public health and welfare; (2) competitive
conditions in the U.S. economy; (3) the production of competitive articles in the U.S.; and (4)
U.S. consumers. Id. 	.
With this context in mind, we turn to the particular facts of this investigation. The
Commission directed the ALJ to make findings of fact and recommendations concerning the
25 Commissioner Schmidtlein supports issuance of the CDOs in this investigation due to
the presence of some infringing domestic inventory, regardless of the commercial significance.
67

PUBLIC VERSION
public interest factors set forth in 19 U.S.C. l337(d)(l) and (f)(l). 82 Fed. Reg. 25334 (Jun. 1,
2017); l9 CFR 210. l0(b), 21O.42(a)(l)(ii)(C). The ALJ finds the statutory public interest factors
do not preclude the Commission from issuing remedial order(s) in this investigation.
As to the public health and welfare, the ALJ finds that the “evidence shows that the
availability of Accused Products has no critical effect on the public health, safety and welfare in
the United States.” RD at 227. Accordingly, the ALJ finds that “there is no evidence that the
public health and we]fare will be,adversely affected by an exclusion order in this investigation.”
Id. No party contests this finding. Indeed, Fujifilm specifically acknowledges this fact. RSub at
36.
As to competitive conditions in the United States economy, the ALJ finds that “there is
no evidence that the competitive conditions in the U.S. economy will be adversely affected by an
exclusion order in this investigation.” RD at 229. Specifically, the ALJ finds the “evidence
shows, based on Fujifi1m’s own calculations, that a remedial order issued in 2018 as to LTO-4,
LTO-5,andLTO-6productswouldimpact— 	ofFujifilm’s	domesticLTOsales
in	view	of	’ 	Id.	The	ALJ	reasons	“[g]iven	that
there is no evidence to conclude that this trend will not continue, any immediate impact on
Fujifilm with respect to LTO-4, LTO-5, and LTO-6 products should diminish.” Id. Moreover,
the ALJ states that “Fujifilm will still be able to manufacture and sell LTO-4, LTO-5, and LTO-6
products pursuant to their license with IBM and to manufacture and sell future generation LTO
products.” Id.
Fujifilm does not contest these facts, other than asserting that an LEO would “impact the
financial viability of Fujifilm’s domestic operations.” RSub at 37. However, the Commission
has determined that preservation of infringing activities of a respondent is not a public interest
68

PUBLIC VERSION
concern. See Certain Erasable Programmable Read-Only Memories, Inv. No. 337-TA-276,
Comm’n'Op., 1989 WL 608791, at *64 (Apr. 28, 1989) (citing Windsurfing Int’! Inc. v. AMF,
1nc., 782 F.2d 995, I003 n.l2 (Fed. Cir. 1986) (“One who elects to build a business on a product
found to infringe cannot be heard to complain if an injunction against continued infringement
destroys the business so elected.”)).
Fujifilm argues that Sony has no domestic industry of its own and, instead, “attempts to
co-opt Fujifilm-manufactured 3592 tape cartridges as its own for ptuposes of its domestic
industry claim” while also relying on Fujifilm-manufactured LTO tape cartridges for purposes of
its infringement claim. RSub at 37. But the Commission has recognized that the domestic
industry inquiry is not only limited to the activities of the patent owner, but also involves
activities of licensees, here the domestic operations of IBM, Sony’s licensee. In any event,
Fujifilm’s attempt to re-argue the domestic industry reduirement cloaked in policy terms is
unmoored from any public interest factor enumerated in the statute.
Sony argues that its requested relief would not harm competitive conditions in that it does
not remove a single supplier from the LTO market because Fujifilm can supply competing and
altcmative products to IBM under a license agreement between Sony and IBM. CRmdy at 8
(citing ID at 229; JX-43C,l44:20-145:6; CX-4C at Q/A 305-06, 339; CX-1132C; CX-l436.141
155; CDX-4C, 49-52; JX-119C; JX-121C; Tr. (Vander Veen) at 567:25-568:l0). Sony asserts
that “permitting.Fujifilm to continue infringing Sony’s patents is likely to harm competitive
conditions in the LTO market” since “[i]or close to a decade now, Fujifilm has pursued an
ongoing anticompetitive and exclusionary strategy aimed at reducing the number of participants
in the LTO market.” Id. at 9. Specifically, Sony alleges that since 2009, “Fujifilm has
deliberately sought monopoly power over the supply of barium ferrite (“BaFe”), a magnetic
69

PUBLIC VERSION
particle that is essential to -LTO-7tape products and also used in Fujifilm’s LTO-6 products.” Id.
Sony	claims	Iha*
— 	Id.Fujifilm	responds	thatthesearguments	havenomeritandthat
\
none of Sony’s domestic industry products use BaFe. These arguments were considered by the
ALJ, and he found there was no evidence that competitive conditions in the U.S. economy would
be adversely affected by the Commission’s remedial orders. RD at 227-29.
As to U.S. production of like or directly competitive articles, the ALJ finds that “there is .
no evidence that an exclusion order would have an adverse effect on the production of likely or
directly competitive products in the United States.” Id at 232. The ALJ finds that “the evidence
shows that there will be a diminishing impact, if any, of an exclusion order with respect to
Fujifilm’s LTO-4, LTO-5, and LTO-6 products because of Sony’s (and others’) ability to supply
the same or similar products toithe market, including by Fujifilm by virtue of manufacturing
licensed LTO tapes to IBM.” Id. at 231.
Fujifilm argues that Sony and Fujifilm are currently the only suppliers of LTO-4, -5 and
6 products, and Fujifilm manufactures a significant majority of them. RSub at 38. Fujifilm
contends that if it ceased its domestic production of these products, Sony would have to increase
its production capacityby more than - to account for the shortage. Id. I 	_
Sony claims “production of like or directly competitive articles will remain robust” if an
LEO issues. CRmdy at l0 (citing CX-4C at Q/A 301-09). Sony notes that Fujifilm has argued
in previous data cartridge investigations that LTO customers can meet data storage needs by
using competing data storage products, including tape media products that fall outside the scope
of relief. Id. at ll. At the hearing in this investigation, Sony asserts that Fujifilm’s expert
70

PUBLIC VERSION
testifiedthatnon-LTOstoragesystemsaccountfor- 	of the storagemediamarket. Id.
(citing Tr. (Vander Veen) at 569:2O-570:4, 573:25-574110). Sony also asserts that “Sony and
Fujifilm LTO-6 tapes both conform to the same specification and are functionally
interchangeable.” Id. Still further, Sony asserts that it “has excess capacity and could increase
its production of LTO products to meet higher demand from the exclusion of the infringing
products.” Id. at ll-12.
In short, the parties have pointed to no evidence that domestic production of like or
directly competitive articles would be adversely impacted by the remedial orders as the ALJ
found. i
With regard to U.S. consumers, the ALJ finds “that there is no evidence U.S. consumers
will be adversely affected by an exclusion order in this investigation.” RD at 233. The ALJ
finds “that the evidence of record demonstrates that U.S. consumers of LTO products will have
ample alternative choices for LTO products, including LTO-4, LTO-5 and LTO-6 products
manufactured by Fujifilm for IBM.” Id. Fujifilm does not contest these findings and its
submissions do not address this factor.
Sony argues that the “requested remedies would have minimal or no impact on U.S.
consumers; in fact, they will benefit consumers by promoting innovation and increasing product
quality and diversity through enforcement of intellectual property rights. CRrndy at 12 (citing
CX-4C at Q/A 340-54). As the ALJ correctly found, Sony states that “consumers can even
continuebuyingFujifilm-manufacturedversionsof the productssoldunderIBM’sbrand
I 	1d.at I2-13(citations	omitted).
The Commission did not receive any post-RD public interest comments from the public.
71

PUBLIC VERSION
Based on the record here, the Commission finds no indication that the remedial orders
would have an adverse impact on U.S. consumers.
In sum, based on the record developed before the ALJ, we find there is no evidence in the
record that an LEO and CDOs would have an adverse impact on the public health and welfare,
competitive conditions in the United States economy, the production of like or directly
competitive articles in the United States, or United States consumers. Accordingly, the
Commission finds that the statutory public interest factors do not preclude the issuance of
remedial orders. 	‘
C. Bonding
If the Commission determines to issue an exclusion order and/or cease and desist orders
in this investigation, then affected articles will still be entitled to entry and sale under bond
during the 60-‘dayPresidential review period. The amount of such a bond must “be sufficient to
protect the complainant from any injury.” l9 U.S.C. § l337(j)(3); see also l9 ‘C.F.R. §
2l0.50(a)(3). The complainant bears the burden of establishing the need for a bond. Certain
Rubber Antidegradants, Components Thereof and Prods. Containing Sam-e,Inv. No. 337-TA
533, Comm’n Op. at 39, 4O(July 21, 2006); see also Certain Laser Imageable Printing Plates,
Inv. No. 337-TA-636, Comm’n Op. at 9 (November 30, 2009).
The Commission typically sets the Presidential review period bond based on the price
differential between the domestic and the infringing products or based on a reasonable royalty.
See, e.g., Certain Microsphere Adhesives, Processes for Making Same, and Products Containing
Same, Including Self-Stick Repositionable Notes, Inv. N0. 337-TA-366, Comm’n Op. at 24,
USITC Pub. T949 (Jan. 1996) (setting bond based on price differentials); Certain Digital
Televisionsand Certain Products Containing Same and Methods of Using Same, Inv. No. 337
TA-617, Comm’n Op. at l7-19 (Apr. 23, 2009) (setting bond based on a reasonable royalty).
72

PUBLIC VERSION
Where the available pricing information is inadequate, then the bond may be set at 100% of the
entered value of the accused products. See, e.g., Certain Voltage Regulators, Components
Thereof and Products Containing Same, Inv. N0. 337-TA-564, C0mm’n Op. at 79-80, USITC
Pub. 4261 (Oct. 201 l). On the other hand, if a complainant fails to provide evidence concerning
the appropriate bond, then the Commission may decline to impose any bond. See, e.g., Certain
Silicon Microphone Packages and Products Containing the Same, Inv. No. 337-TA-629,
C0mm’n Op. at 20 (August 21, 2009).
Sony argues that a 100 percent bond is appropriate because “the Commission usually sets
bond rates based on the price differential between the domestic industry products and the
accused products. ..when accurate pricing information is unavailable or\unreliable.” ID at 224
225. According to Sony “accurate pricing information is not available thus warranting a 100 per
cent bond.” Id. at 225. Fujifilm submits that Sony has failed to carry its “burden of establishing
a bond value and in doing so has ignored its own pricing data.” Id. The IA argues that Sony has
not carried its burden to prove that it is entitled to a 100% bond given that “the parties
exchange[d] pricing information and Fujifilm was able to perform a price comparison.” Id.
The ALJ found that Sony has failed to carry its burden in showing that any bond is
warranted. Id. The ALJ noted that Sony has failed to establish that a price differential cannot be
detemiined-, especially given that Fujifilm was able to perfonn a price comparison. Id. (citing
RX-0585C at Q/A 227-68).
In view of the record evidence and the parties’ arguments, the ALJ’s recommendation
that no bond be imposed during the Presidential review period is appropriate and consistent with
Commission precedent. See, e.g., Certain Silicon Microphone Packages and Products
Containing the Same, Inv. No. 337-TA-629, Comm’n Op. at 20 (August 21, 2009). Accordingly,
73

PUBLIC VERSION
the Commission has determined to set a bond at zero percent, i.e., no bond, during the period of
Presidential review.
V. CONCLUSION p
The Commission finds a violation of section 337 with respect to the ’774 and ’596
patents, but not with respect to the ’501 patent. The Commission adopts all findings and
conclusions in the final ID that are not inconsistent with this opinion.
By order of the Commission.
.07‘%Z‘§Z>
Lisa R. Barton
Secretary to the Commission
Issued: April 9, 2019
74

CERTAIN MAGNETIC TAPE CARTRIDGES AND 	Inv. No. 337-TA-1058
COMPONENTS THEREOF
PUBLIC CERTIFICATE OF SERVICE
I, Lisa R. Barton, hereby certify that the attached COMMISSION OPINION has been
served by hand upon the Cormnission Investigative Attomey, Sarah Sladic, Esq., and the
following parties as indicated, on April 10, 2019.
fia@Lisa R. Barton, Secretary
U.S. International Trade Commission
500 E Street, SW, Roorn 112
Washington, DC 20436
On Behalf of Complainants Sonv Corporation. Sony Storagg
Media Solutions Corporation, Sonv Storage Media
Manufacturing Corporation, Sonv DADC US Inc.. and Sony;
Latin America Inc.:
Jeffrey S. Gerchick, Esq.
QUINN EMANUEL URQUHART & SULLIVAN, LLP
1300 I Street, NW, Suite 900
Washington, DC 20005
U Via Hand Delivery
Via Express Delivery
El Via First Class Mail
El Other:
On Behalf of Respondents FUJIFILM Holdings Corporation,
FUJIFILM Corporation. FUJIFILM Holding
America Corporation, and FUJIFILM Recording Media
U.S.A., Inc. :
Lisa M. Kattan, Esq.
BAKER BOTTS LLP
1299 Pennsylvania Avenue, NW
Washington, DC 20004
1:1Via Hand Delivery
Via Express Delivery
U Via First Class Mail
[:1 Other:

UNITED STATES INTERNATIONAL TRADE COMMISSION
Washington, D.C.
In the Matter of
CERTAIN MAGNETIC TAPE
CARTRIDGES AND COMPONENTS
THEREOF
Investigation No. 337-TA-1058
NOTICE OF A COMMISSION DETERMINATION TO EXTEND THE TARGET DATE
AND TO REVIEW IN PART A FINAL INITIAL DETERMINATION FINDING A
VIOLATION OF SECTION 337; SCHEDULE FOR FILING WRITTEN SUBMISSIONS
AGENCY: U.S. International Trade Commission.
ACTION: Notice.
SUMMARY: Notice is hereby given that the U.S. International Trade Commission has
determined to extend the target date for completion of the above-referenced investigation to
December 21, 2018, and to review in part the Administrative Law Judge's ("AU") final initial
determination ("ID"), issued on August 17, 2018, finding a violation of section 337 in the above-
referenced investigation.
FOR FURTHER INFORMATION CONTACT: Cathy Chen, Esq., Office of the General
Counsel, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436,
telephone (202) 205-2392. Copies of non-confidential documents filed in connection with this
investigation are or will be available for inspection during official .business hours (8:45 a.m. to
5:15 p.m.) in the Office of the Secretary, U.S. International Trade Commission, 500 E Street SW,
Washington, DC 20436, telephone (202) 205-2000. General information concerning the
Commission may also be obtained by accessing its Internet server at https://www.usitc.gov.
The public record for this investigation may be viewed on the Commission's electronic docket
(EDIS) at https://edis.usite.gov. Hearing-impaired persons are advised that information on this
matter can be obtained by contacting the Commission's TDD terminal on (202) 205-1810.
SUPPLEMENTARY INFORMATION: The Commission instituted this investigation on June
1, 2017. 82 FR 25333 (Jun. 1, 2017). The complaint, as amended, was filed by Sony
Corporation of Tokyo, Japan; Sony Storage Media Solutions Corporation of Tokyo, Japan; Sony
Storage Media Manufacturing Corporation of Miyagi, Japan; Sony DADC US Inc. of Terre
Haute, Indiana; and Sony Latin America Inc. of Miami, Florida (collectively "Sony"). Id. The
complaint alleges violations of section 337 of the Tariff Act of 1930, as amended, 19 U.S.C.
1337 ("section 337"), in the importation into the United States, the sale for importation, and the
sale within the United States after importation of certain magnetic tape cartridges and
components thereof by reason of infringement of certain claims of U.S. Patent Nos. 7,029,774
1

("the '774 patent"); 6,674,596 ("the '596 patent"); and 6,979,501 ("the '501 patent"). Id. The
complaint further alleges that an industry in the United States exists as required by 19 U.S.C. §
1337(a)(2). Id. The notice of investigation named Fujifilm Holdings Corporation of Tokyo,
Japan; Fujifilm Corporation of Tokyo, Japan; Fujifilm Media Manufacturing Co., Ltd. of
Kanagawa, Japan; Fujifilm Holdings America Corporation of Valhalla, NY; and Fujifilm
Recording Media U.S.A., Inc. of Bedford, MA (collectively "Fujifilm") as respondents. Id. at
25334. The Office of Unfair Import Investigations is also a party in this investigation. Id.
On March 22, 2018, the AUJ granted Sony's motion to terminate certain asserted patent
claims from the investigation. See Order No. 26; Comm'n Notice (Apr. 23, 2018). The
evidentiary hearing was held on May 841, 2018.
On August 17, 2018, the AUJ issued his final ID and his recommended determination,
finding a violation of section 337 by Fujifilm in connection with claims 1, 5-8, 10, 16, and 17 of
the '774 patent and claims 1-13 of the '596 patent, but not in connection with claims 1, 2, 4-6,
and 8 of the '501 patent. Specifically, the ID concludes that Fujifilm's accused products
infringe the asserted claims of the '774 patent and the '596 patent; that the asserted claims of the
'774 and '596 patents are not invalid; and that a domestic industry exists with respect to both
patents. Although the ID finds that Fujifilm's accused products also infringe the asserted claims
of the '501 patent, and that a domestic industry exists with respect to that patent, the ID
concludes no violation as to the '501 patent because the asserted claims are invalid.
On September 4, 2018, Sony, Fujifilm, and the Commission's Investigative Attorney
each filed a timely petition for review of the final ID. All parties challenge certain aspects of
the ID's finding with respect to the economic prong of the domestic industry requirement.
Sony additionally challenges certain claim construction and validity findings related to the '501
patent and certain infringement findings related to the '596 patent. Fujifilm additionally
challenges certain claim constructions and findings related to validity, infringement, and the
technical prong of the domestic industry requirement relevant to the '774 and the '596 patents;
and the ID's finding that the asserted claims of the '501 patent are not indefinite. The
Commission's Investigative Attorney additionally challenges the ID's failure to construe two
claim terms in the '774 patent, and the ID's finding that Fujifilm does not contributorily infringe
the '596 patent. Thereafter, the parties filed timely responses to the petitions for review and
public interest comments pursuant to Commission Rule 210.50(a)(4).
The Commission has determined to extend the target date in this investigation to
December 21, 2018.
Having examined the record of this investigation, including the ID, the petitions for
review, and the responses thereto, the Commission has determined to review the ID in part. The
Commission has determined to review the ID's finding that the economic prong of the domestic
industry requirement has been satisfied for all three asserted patents under sections 337(a)(3)(B)
and (C) based on the domestic activities of Sony's licensee. In addition, with respect to the '774
patent, the Commission has determined to review the ID's findings that the asserted claims are
not invalid for lack of enablement and lack of written description, and the ID's finding that
Sony's prior art tapes do not anticipate claim 17. The Commission has also determined to
2

review the ID's findings with respect to the '596 patent in their entirety. The Commission does
not review the remainder of the ID.
The parties are requested to brief their positions on only the following issues under
review with reference to the applicable law and the evidentiary record.
1. What is the proper scope of the claim limitations "a skew less than about 0.5"
and "a kurtosis less than about 4.0" in the '774 patent? Please discuss whether
the asserted claims are enabled and adequately described if the claimed ranges
are construed to include negative skew and kurtosis less than about 3.0, as
Fujifilm argues, and alternatively, if the claimed ranges for these parameters are
construed to be limited to values that approach Gaussian distribution," i.e., zero
skew and kurtosis of three, as Sony argues. Under the latter construction,
please also address Fujifilm's argument that a person of ordinary skill in the art
would not know how to achieve a skew less than 0.30 and a kurtosis less than
3.4.
2. Please discuss whether Sony's prior art AIT-3 tapes anticipate claim 17 of
the '774 patent, including Fujifilm's argument that the Toraysee document
discloses the claimed "peak-to-valley roughness" and "peak height mean"
values.
3. Please discuss whether Platte and Kano render obvious the asserted claims of
the '596 patent.
4. Please discuss the extent to which the scope of the domestic industry with
respect to the '774 and the '501 patents should extend to the R&D investments
and employment of labor and capital by Sony's licensee in proprietary tape
drives, which the ID found are necessary to exploit the technology of the tape
media that are protected by the '774 and the '501 patents. Please address the
Investigative Attorney's argument that the "ID conflated exploiting the patented
article with exploiting the patented technology" and whether these two allegedly
different analyses would render a different result under the "realities of the
marketplace" exception in this investigation.
In connection with the final disposition of this investigation, the Commission may issue
an order that could result in the exclusion of the subject articles from entry into the United States.
Accordingly, the Commission is interested in receiving written submissions that address the form
of remedy, if any, that should be ordered. If a party seeks exclusion of an article from entry
into the United States for purposes other than entry for consumption, the party should so indicate
and provide information establishing that activities involving other types of entry either are
adversely affecting it or likely to do so. For background, see Certain Devices for Connecting
Computers via Telephone Lines, Inv. No. 337-TA-360, USITC Pub. No. 2843 (December 1994)
(Commission Opinion).
3

If the Commission contemplates some form of remedy, it must consider the effects of that
remedy upon the public interest. The factors the Commission will consider include the effect
that an exclusion order would have on (1) the public health and welfare, (2) competitive
conditions in the U.S. economy, (3) U.S. production of articles that are like or directly
competitive with those that are subject to investigation, and (4) U.S. consumers. The
Commission is therefore interested in receiving written submissions that address the
aforementioned public interest factors in the context of this investigation.
If the Commission orders some form of remedy, the U.S. Trade Representative, as
delegated by the President, has 60 days to approve or disapprove the Commission's action. See
Presidential Memorandum of July 21, 2005, 70 FR 43251 (July 26, 2005). During this period,
the subject articles would be entitled to enter the United States under bond, in an amount
determined by the Commission and prescribed by the Secretary of the Treasury. The
Commission is therefore interested in receiving submissions concerning the amount of the bond
that should be imposed if a remedy is ordered.
WRITTEN SUBMISSIONS: The parties to the investigation are requested to file written
submissions on the issues identified in this notice. Parties to the investigation, interested
government agencies, and any other interested parties are encouraged to file written submissions
on the issues of remedy, the public interest, and bonding. Such submissions should address the
recommended determination by the AUJ on remedy, the public interest, and bonding.
Complainants and the Office of Unfair Import Investigations are also requested to submit
proposed remedial orders for the Commission's consideration. Complainants are further
requested to state the dates that the patents expire, the HTSUS numbers under which the accused
products are imported, and any known importers of the accused products. The written
submissions and proposed remedial orders must be filed no later than close of business on
November 1, 2018. Initial submissions are limited to 40 pages, not including any attachments
or exhibits related to discussion of the public interest. Reply submissions must be filed no later
than the close of business on November 8, 2018. Reply submissions are limited to 20 pages,
not including any attachments or exhibits related to discussion of remedy, the public interest, and
bonding. No further submissions on these issues will be permitted unless otherwise ordered by
the Commission.
Persons filing written submissions must file the original document electronically on or
before the deadlines stated above and submit 8 true paper copies to the Office of the Secretary by
noon the next day pursuant to Commission Rule 210.4(f), 19 C.F.R. 210.4(0. Submissions
should refer to the investigation number ("Inv. No. 1058") in a prominent place on the cover
page and/or the first page. (See Handbook for Electronic Filing Procedures,
https://www.usite.govisecretary/documents/handbook on filing procedures.pdf). Persons with
questions regarding filing should contact the Secretary, (202) 205-2000.
Any person desiring to submit a document to the Commission in confidence must request
confidential treatment. All such requests should be directed to the Secretary to the Commission
and must include a full statement of the reasons why the Commission should grant such
treatment. See, 19 CFR 201.6. Documents for which confidential treatment by the Commission
is properly sought will be treated accordingly. All information, including confidential business
4

information and documents for which confidential treatment is properly sought, submitted to the
Commission for purposes of this Investigation may be disclosed to and used: (i) by the
Commission, its employees and Offices, and contract personnel (a) for developing or
maintaining the records of this or a related proceeding, or (b) in internal investigations, audits,
reviews, and evaluations relating to the programs, personnel, and operations of the Commission
including under 5 U.S.C. Appendix 3; or (ii) by U.S. government employees and contract
personnel, solely for cybersecurity purposes. All contract personnel will sign appropriate
nondisclosure agreements. All nonconfidential written submissions will be available for public
inspection at the Office of the Secretary and on EDIS.
The authority for the Commission's determination is contained in section 337 of the
Tariff Act of 1930, as amended (19 U.S.C. 1337), and in Part 210 of the Commission's Rules of
Practice and Procedure (19 CFR Part 210).
By order of the Commission.
Lisa R. Barton
Secretary to the Commission
Issued: October 18, 2018
5

CERTAIN MAGNETIC TAPE CARTRIDGES AND Inv. No. 337-TA-1058
COMPONENTS THEREOF
PUBLIC CERTIFICATE OF SERVICE
I, Lisa R. Barton, hereby certify that the attached NOTICE has been served by hand
upon the Commission Investigative Attorney, Sarah Sladic, Esq., and the following parties as
indicated, on October 19, 2018.
Lisa R. Barton, Secretary
U.S. International Trade Commission
500 E Street, SW, Room 112
Washington, DC 20436
On Behalf of Complainants Sony Corporation, Sony Storage
Media Solutions Corporation, Sony Storage Media
Manufacturing Corporation, Sony DADC US Inc., and Sony
Latin America Inc:
Jeffrey S. Gerchick, Esq.
QUINN EMANUEL URQUHART & SULLIVAN, LLP
1300 I Street, NW, Suite 900
Washington, DC 20005
On Behalf of Respondents FUJIFILM Holdings Corporation,
FUJIFILM Corporation, FUJIFILM Holdings
America Corporation, and FUJIFILM Recording Media
U.S.A., Inc.:
Lisa M. Kattan, Esq.
BAKER BOTTS LLP
1299 Pennsylvania Avenue, NW
Washington, DC 20004
El Via Hand Delivery
El Via Express Delivery
El Via First Class Mail
El Other:
CI Via Hand Delivery
Ell Via Express Delivery
[1 Via First Class Mail
E Other:

PUBLIC VERSION
UNITED STATES INTERNATIONAL TRADE COMMISSION
Washington, D.C.
In the Matter of
CERTAIN MAGNETIC TAPE CARTRIDGES
AND COMPONENTS THEREOF
INV. NO. 337-TA-1058
t
INITIAL DETERMINATION ON VIOLATION OF SECTION 337 AND
RECOMMENDED DETERMINATION ON REMEDY AND BOND
- 	Administrative Law Judge Clark S. Cheney
(August 17, 2018)
Appearances:
For the Complainants Sonv Corporation. Sonv Storage Media Solutions Corporation. Sony
Storage Media Manafacturing Corporation. Sonv DADC USInc.. and Sony Latin America Inc. Z
Jeffrey S. Gerchjck, Esq. and S. Alex Lasher, Esq. of Quimi Emanuel Urquhart & Sullivan, LLP
of Washington DC. 	'
Edward J. DeFranc0, Esq. and Eric Huang, Esq. of Quinn Emanuel Urquhart & Sullivan, LLP of
New York, NY.
Kevin P.B. Johnson, Esq. and Andrew J. Bramhall, Esq. of Quinn Emanuel Urquhart & Sullivan,
LLP of Redwood City, CA.
David F. Nickel, Esq. and Matthew N. Duescher, Esq. of Foster, Murphy, Altman & Nickel, PC
of Washington, DC.
For the Respondents F tgi_ifilmHoldings Corporation. F aii/ilm Corporation. F viii/ilm Media
Manafacturing Co.. Ltd.. F a/'_i/ilmHoldings America Corporation. and F LtfifilmRecording Media
U S A Inc ‘
Robert C. Seheinfeld, Esq., Robert L. Maier, Esq., Neil Sirota, Esq. and Jennifer C. Tempesta,
Esq. of Baker Botts L.L.P. of New York, NY.
Lisa M. Kattan, Esq. and Thomas C. Martin, Esq. of Baker Botts L.L.P. of Washington, DC.
Syed Fareed, Esq. of Baker Botts L.L.P. of Austin, TX.
Eliot D. Williams, Esq. of Baker Botts L.L.P. of Palo Alto, CA.

PUBLIC VERSION
David J. Tobin, Esq. of Baker Botts L.L.P. of Dallas, TX.
For the Commission Investigative Staffi
Margaret D. Macdonald, Esq., Director; David O. Lloyd, Esq., Supervisory Attorney; Sarah J
Sladic, Esq., Investigative Attomey of the Office of Unfair Import Investigations, U.S
International Trade Commission
2

PUBLIC VERSION
TABLEOFConrnwrs
I. Introduction ................................................................................................................ .. 2
II.
III.
A
B.
C.
D
E.
IV.
A
V.
A
B.
C.
D
E.
F.
E.
Jursidiction & Importation .................................................................................... ..
Relevant Law ........................................................................................................ ..
Procedural History............................................................................................... .. 2
The Private Parties ............... ..
The Technology at Issue ..................................................................................... ..
The Accused Products ......................................................................................... ..
The Domestic Industry Products ......................................................................... ..
Subject Matter Jurisdiction........
Personal Jurisdiction ......................................................................................... ..
In Rem Jurisdiction ............................................................................................ ..
Importation ........................................................................................................ ..
Claim Construction 	............................................................. ..
Infringement ...................................................................................................... ..
Statutory Subject Matter (35 U.S.C. § 101) ...................................................... ..
Validity .............................................................................................................. .. 20
Domestic Industry ..j....................................................... .. 	24
U.S. Patent Number 7,029,774 ............................................................................. .. 26
The Asserted ’774 Patent Claims ...................................................................... .. 30
Level of Ordinary Skill in the Art ..................................................................... .. 31
Claim Construction and Indefiniteness ............................................................. .. 32
Infringement ................................... 	36
Domestic Industry —Technical Prong ............................................................... .. 57
Invalidity and Unpatentability .............».............................................................. .. 58
U.S. Patent Ntunber 6,979,501 ............................................................................. .. 86
The Asserted ’501 Patent Claims ...................................................................... .. 89
Level of Ordinary Skill in the Art 	.................... .. 90
Claim Construction and Indefiniteness ............................................................. .. 90
Infringement ................................................................................................ 99
Domestic Industry —Technical Prong ............................................................. .. 104
Invalidity ......................................................................................................... .. 105
VI. U.S. Patent Number 6,674,596 ........ ................ 122
A The Asserted ‘S96 Patent Claims .................................................................... .. 123
iii

VII.
A
B
C
VIII
IX.
A.
B
C
X.
A.
B
C
D
XI.
F.
PUBLIC VERSION
Level of Ordinary Skill in the Art ................................................................... .. 125
Claim“Construction and Indefinitcness ........................................................... .. 126
Infringement .................................................................................................... .. 140
Domestic Industry —Technical Prong ............................................................. .. 164
Invalidity ........................................ 	167
Domestic Industry —Economic Prong ............................................................ .. 178
Introduction ........................................... ..,....................................................... .. 178
A Domestic Industry Does Not Exist Based on Sony Subsidiaries ................ .. 181
A Domestic Industry Exists Relating to IBM 3592 Products ......................... .. 199
Conclusions of Law......................................................................................... .. 219
Recommended Determination on Remedy & Bond ........................................... .. 220
Limited Exclusion Order ................................................................................. .. 220
Cease and Desist Order ................................................................................... .. 222
Bond During Presidential Review ........... 	224
Public Interest ..................................................................................................... .. 225
Public Health and Welfare ............................................................................. 226
Competitive Conditions in the United States Economy ................................. 227
Productionof Like or Directly CompetitiveProducts in the United States 230
United	States	Consumers	232
Initial Determination ........................................................................................... .. 233
iv

i PUBLIC VERSION '
TABLEor Anannvmnous
CDX 	Complainant’s demonstrative exhibit
CIB 	C0mpIainant’s initial post-hearing brief
CPB 	Complainanfs pre-hearingbiief
CPX Co1npIainant’sphysicai exhibit
CRB 	Compiainanfs reply post-hearing b1ief_
CX 	Complainanfs exhibit
Dep. 	Deposition
IX 	Joint Exhibit
RDX 	Resp0ndent’s demonstrative exhibit
RIB Respondent’s initial post—hearingbrief
RPX 	Respondent’s physical exhibit
RPB 	Respondent’s pre-hearing brief .
RRB 	Respondent’s reply post-hearing brief
RRX 	Respondent’s rebuttal exhibit
RX 	Respondent’s exhibit
SIB 	Staff’s initial post-hearing brief
SPB 	Staff‘s pre-hearing brief
SRB 	Staffs reply post-hearing brief q
Tr. 	Transcript
V

PUBLIC VERSION
UNITED STATES INTERNATIONAL TRADE COMMISSION
Washington, D.C.
In the Matter of
CERTAIN MAGNETIC TAPE CARTRIDGES 	INV. NO. 337-TA-1058
AND COMPONENTS THEREOF _
r
INITIAL DETERMINATION ON VIOLATION OF SECTION 337 AND
RECOMMENDED DETERMINATION ON REMEDY AND BOND
Administrative Law Judge Clark S. Cheney
A (August 17, 2018)
Pursuant to the Notice of Investigation, 82 Fed. Reg. 25333 (June 1, 2017), this is the
Initial Determination in the matter of Certain Magnetic Tape Cartridges and Componerzls
Thereqfi Investigation No. 337-TA-1058. 19 C.F.R. §§ 2l0.l0(b), 210.42(a)(1)(i).
For the reasons stated herein, I have determined that a violation of section 337 of the
Tariff Act of 1930, as amended, has occurred in the importation into the United States, the sale
for importation, or the sale Within the United States after importation of ‘certain magnetic tape
cartridges and components thereof with respect to U.S. Patent Nos. 7,029,774 and 6,674,596. I
have also determined that no violation of section 337 has occurred with respect to U.S. Patent
N0. 6,979,501.

PUBLIC VERSION
I. INTRODUCTION
' A. Procedural History 	'
On April 28, 2017, complainants Sony Corporation; Sony Storage Media Solutions
Corporation; Sony Storage Media Manufacturing Corporation; Sony DADC US lnc.; and Sony
Latin America Inc. (collectively “Sony” or “complainants”) filed a complaint alleging violations
of section 337 based upon the importation into the United States, the sale for importation, and the
sale within the United States after importation of certain magnetic tape cartridges and
components thereof by reason of infringement of certain claims of U.S. Patent No. 6,674,596
(“the ’596 patent”); U.S. Patent No. 6,979,501 (“the ’5Ol patent”); and U.S. Patent No.
7,029,774 (“the ’774 patent”). See 82 Fed. Reg. 25333 (June 1, 2017).
On June 1, 2017, the Commission instituted this investigation to determine:
whether there is a violation of subsection (a)(l)(B) of section 337
in the importation into the United States, the sale for importation,
or the sale Within the United States after importation of certain
magnetic tape cartridges and components thereof by reason of
infringement of one or more of claims 1-19 of the ’596 patent;
claims 1-6 and 8 of the ’501 patent; and claims 1-11 and 15-20 of
the ’774 patent, and Whether an industry in the United States exists
as required by subsection (a)(2) of section 337.
Id. at 25334.
The named respondents are FUJIFILM Holdings Corporation of Tokyo, Japan;
FUJIFILM Corporation of Tokyo, Japan; FUJIFILM Media Manufacturing Co., Ltd. of
Kanagawa, Japan; FUJIFILM Holdings America Corporation of Valhalla, NY; and FUJTFILM
Recording Media U.S.A., Inc. of Bedford, MA (collectively, “Fujifilm” or “respondents”). Id.
The Commission Investigative Staff (“Staff”) is also a party to this investigation. Id.
On March 8, 2018, Sony moved Without opposition for partial termination of this
investigation with respect to claims 2-4, 9, 11, 15, and 18-20 of the ’774 patent, claim 3 of the
2

PUBLIC VERSION
?5Olpatent, and claims 14-19 of the ’596 patent. See Mot. 1058-022. The motion was granted
on March 22, 2018. See Ord. No. 26.
An. evidentiary hearing was held May 8-l l, 2018, to determine whether section 337 has
been violated by reason of the importation and sale of the accused magnetic tape products and
components thereof based upon infiiugement of one or more of: (i) claims 1, 5-8, 10, I6, and 17
of the ’774 patent; (ii) claims 1, 2, 4-6, and 8 of the ’50l patent; and (iii) claims 1-13 of the ’596
patent (collectively, the “Asserted Patents”).
B. ' The Private Parties
1. Complainants
a) Sony Corporation
Sony Corporation is a Japanese corporation with a principal place of business located at
I-7-1 Konan, Minato-kn, Tokyo, 108-0075, Japan. Co1nplaint'1[11, Sony Corporation owns all
rights, title, and interestiin and to the Asserted Patents. Id. W 39, 45, 51.
b) Sony Storage Media Solutions Corporation
Sony Storage Media Solutions Corporation is a Japanese corporation with a principal
place of business located at 1-7-l Konan Minato-ku, Tokyo, 108-0075, Japan. Sony Storage
Media Solutions Corporation is a wholiy owned subsidiary of Sony Corporation. Id. 1]l2.
c) Sony Storage Media Manufacturing Corporation
Sony Storage Media Manufacturing Corporation is a Japanese corporation with a
principal place of business located at 3-4-1 Sakuragi, Tagajo, Miyagi, 985-0842, Japan. Sony
Storage Media Manufacturing Corporation is a.wholly owned subsidiary of Sony Storage Media
Solutions Corporation, which, as noted above, is a wholly owned subsidiary of Sony
Corporation. Id. if 13.
3

PUBLIC VERSION
d) Sony DADC US Inc.
Sony DADC US Inc. is a Delaware corporation with a principal place of business located
at 1800 North Fruitridge Avenue, Teire Haute, Indiana, 47804, USA. Sony DADC US Inc. is a
wholly owned subsidiary of Sony Corporation of America, which itself is a wholly owned
subsidiary of Sony Corporation. Id. ‘Hl4.
e) Sony Latin America Inc.
Sony Latin America Inc. is a Florida corporation with a principal place of business
located at 5201 Blue Lagoon Drive, Suite 400, Miami, Florida, 33126, USA. Sony Latin
America Inc. is a wholly owned subsidiaiy of Sony Corporation of America, which itself is a
wholly owned subsidiary of Sony Corporation. Id. 1t15.
2. Respondents
a) Fnjifilm Holdings Corporation
Fujifihn Holdings Corporation is a. Japanese corporation with its principal place of
business at 7-3 Akasaka. 9—chon1e,‘Minato-ku,Tokyo, 107-0052, Japan. See Resp. to Complaint
1[ 21. Fujifilm Holdings Corporation is a holding company, and respondents Fujifihn
Corporation, Fujifilm Holdings America. Corporation, and Fujifihn Recording Media U.S.A.,
I.uc.,are subsidiaries of Fnjifilm Holdings Corporation. Id.
b) Fujifilm Corporation
l Fujifihn Corporation is a Japanese corporation with its principal place of business at 7-3
Akasaka 9-choine, Minato-kn, Tokyo, 107-0052, Japan. Id. 1]21. Fujifihn Corporation is an
operating company and a wholly owned.subsidiary of Fujifihn Holdings Corporation. Fujifilm
Coiporation leads the design, manufacture, and sale of Fujifilm magnetic tape media. Id.
4

PUBLIC VERSION
c) Fujifilm Media Manufacturing C0., Ltd.
Fujifilm Media Manufacturing Co., Ltd., is a Japanese corporation with its principal place
of business at 12-l Ohgi-cho 2-chome, Odawara, Kanagawa, 250-0001, Japan. Id. 1] 23.
Fujifilm Media Manufacturing Co. is a wholly owned subsidiary of Fujifilm Corporation.
' d) Fujifilm Holdings America Corporation
Fujifilm Holdings America Corporationis a Delaware corporation with its principal place
of business in, Valhalla, New York. RIB at 7. Fujifilm Holdings America Corporation is a
wholly owned subsidiary of Fujifilm Corporation. See Resp. to Complaint 1]24.
e) Fujifilm Recording Media U.S.A., Inc.
Fujifilm Recording Media U.S.A., Inc., is a Delaware corporation with its principal place
of business at 45 Crosby Dr., Bedford, MA, 01730-1401. Id. 1]24. Fujifilm Recording Media
U.S.A., Inc., is a wholly owned subsidiary of Fujifilm Holdings America Corporation, which, as
noted above, is a wholly owned subsidiary of Fujifilm Corporation. Fujifilm Recording Media
U.S.A., Inc., is _the manufacturing, marketing, and sales arm for Fujifilm Corporation’s
professional broadcast video and data tape recording media business in the United States. Id.
C. The Technology at Issue
The technology in this investigation relates to magnetic tape recording. Complaint ii 3.
Magnetic tapes are used by companies across a wide range of industries for data storage backup
systems and fast access data libraries.
The accused Fujifilm tape products and the alleged Sony and IBM domestic industry
products both follow the Linear Tape-Open (“LTO”) format. Id. “Linear” recording refers to a
method of arranging data in parallel tracks that linearly span the length of the tape. Id. 1]4.
The LTO fonnat was developed by an organization known as the LTO Consortium,
which was originally formed by Intemational Business Machines (“IBM”), Hewlett Packard
5

PUBLIC VERSION
(“HP”) and Seagate (now Quantum) in 1998. Id. The LTO Consortium sets forth technical
specifications for the LTO format. Id. First generation LTO tapes (LTO-1) became available in
2000 and newer generations have been released over time, including LTO-2 (2003), LTO-3
(2005), LTO-4 (2007), LTO-5 (2010) and LTO6 (2012) and LO-7 (2015). Id. ‘,17.
I Standard LTO tapes are rewritable, meaning that data can be written to the tape many
times and read from the tape many times. These standard tapes are also referred to as “R/W”
tapes, for “read/write” or “rewritable.” See CIB at 5; 118. In some applications, however, it is
desirable to write data to the tape once and then protect the written data against erasure or
overwriting. See id. at 5. Tapes that can only be written to once are called “WORM” tapes, for
“write once, read many.” Id.
All parties agree that the asserted claims of the ’774 and"501 patents are directed to
magnetic tape media. CIB at 8; RIB at 166, 167, 171; SIB at 7-8. All parties further agree that
theiasserted claims of the ’596 patent are directed to a system that involve both a tape cartridge
and a tape drive. CIB at 8; RIB at 166; SIB at 8-10.
D. The Accused Products
Sony accuses Fujifilm LTO-4, LTO-5, and LTO-6 tapes‘ of infringing various asserted
claims of the Asserted Patents. See Complaint 1H]26, 27; CIB at 9.
~ 1. The ’774 patent 	.
With respect to the ’774 patent, Sony accuses the following Fujifilm products (both
rewritable tapes and WORM tapes) of infringing the claims indicated below:
1 Fujifilm makes some LTO-4, LTO-5, and LTO-6 tapes for IBM. Sony does not accuse those
IBM-branded tapes of infringement. According to Sony, tapes made by Fujifilm for IBM enjoy
a license to the Asserted Patents. See CIB at 9.
6

PUBLIC VERSION
. - _U.S§Patent No. 7,029,774: Fujifilm Accused Products
LTO-4 	LTO-5 1 	LTO-6
X 	X
X 	X
10
16
17 	X
CIB at 22-36.
With respect to the ‘S01 patent, Sony accuses the following Fujifilm products of
2. The ’501patent
infringing the claims indicated below:
=»~ ULS.Patent No. 6,979,501: Fujifilm Accused Products
Claim _ LTO-4 	LTO-5 _ LTO-6
WORM 	WORM 	WORM
X 	X 	X
X 	X 	X
Id. at 118-140
With respect to the ’596 patent, Sony accuses the following Fujifilm products of
3. The ’596patent
infringing the claims indicated below:

PUBLIC VERSION
. ‘U.S.Patent No. 6,674,596: Fujifilm Accused Products I
Claim 	LTO-4 	LTO-5 1 LTO-6
R/W WORD/I RIW WORM X R/W WORM
X X X X 6 X X
X X _ X
X 	X 	X
X 	X 	X
X 	X 	X
X X 6 X
11
12
13 	i
Id. at 145-152.
E. The Domestic Industry Products
Sony alleges two main categories of products to be articles protected by the Asserted
Patents. The first categoiy comprises LTO-4, LTO-5, and LTO-6 tape cartridges manufactured
by Sony? The Sony-inanufactured carnidges are labeled with the Sony brand or are labeled as
OEMproductsfor—. 	SeeComplaint1f1[	86,87;CIBat 9 (citingCX-0008Cat
Q/A 8-13; CX-1229C).
The second category of alleged domestic indusny aiticles comprises IBM 3592 products,
Sony contends that IBM produces the 3592 products under a license from Sony} IBM 3592 tape
_iZ.. 	_
2 Section VII.B below discusses the nature and location of Sony’s alleged domestic industry
activities.
3 Section VII.C below discusses the nature and location of the alleged IBM domestic industiy
activities.
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PUBLIC VERSION
cartridges have a.proprietaiy format and can only be used in an IBM 3592 drive.‘ As with LTO
tapes, there have been several generations of [BM 3592 tapes. The record shows that the format
for
-. 	cx-1304atQ/A25. 	.
1. The ’774 patent
With respect to the "774 patent, Sony asserts that the following Sony-nlanufactnred LTO
tape cartridges practice the claims indicated below:
Claim 	LTO-4 	LTO-5 	no-6
, 1 	» x 	x 	x
s 	X 	x 	x
- 	6
' 7
» 	8 	V 	V 	t
I 10 = X 	X
16 - X X
7 17 * X 	X	. U.S. Patent No_7,029,774: Son -Manufactured Tale Cartridges ,' i
CIB at 37-40".
Sony also asserts that various generations of licensed IBM 3592.tape cartridges practice
the following claims of the ’774 patent: 	.
4 IBM 3592 tape cartridges differ from LTO tape cartridges in this respect. LTO tape cartridges
made by one rnanufactrrrer are interoperable with LTO drives made by various rnannfacmrers.
This difference will be discussed in the following sections.
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PUBLIC VERSION ~
Claim 	IBM 3592 IBM 3592 IBM 3592 IBM 3592
Gen. 1 9 Gen. 2 Gen. 3 Gen. 4
X 	X
X
10 	X
16 	X
17
U.S. Patent No. 7,029,774: IBM 3592 Tape Cartrid es
i X { X
Id. at 37-40.
2.. The ’50I patent
tape carhidges practice the claims indicated below:
With respect to the ‘S01 patent, Sony asserts that the following Sony-manufvactnredLTO
U.S. Patent No. 6,979,501: Son -Manufactured Ta e Cartridges
Claim 	LTO-4 ‘ LTO-5 	LTO-6
R/W WORM
I 	1 	X
Id. at 83-87
following claims of the ’50l patent:
Sony also asserts that licensed IBM 3592 Generation 3 tape camidges practice the
1'0
WORM R/W IWORM
x 	x

PUBLIC VERSION
U.S. Patent-No. 6,979,501: IBM 3592 Tape Cartridges '. -I1A -4 . "
Claim 	IBM 3592 IBM 3592 IBM 3592 IBM 3592
- Gen. 1 Gen. 2 	Gen. 3 Gen. 4
X
X
Id. at 83-87.
3. The ’596 patent
With respect to the ’596 patent, Sony asserts that Sony—manufactnred LTO tape
caitridges, when used with compatible LTO drives, practice the following claims:
U.S. Patent No._6,674,596:Sony-Manufactured Tape Cartridges
Claim 	LTO-4 	4 LTO-5 p LTO-6
R/W WORM~R/W WORM.RlW WORM
'X‘XtX X 	X
' X 	X 	X
X ‘ X
X - X
X 	X
X » X
9
10
11
12
13
Id. at 145-152
Sony also contends that IBM 3592 tape cartridges (generations 1-4, compnsmg models
JA, JB, JC, JD, JJ, JK, JL, JR, JW, IX, JY, and JZ), when used with compatible IBM 3592 tape
(hives (generations 2—5A.;comprising models TS1 120, TS1 I30, TS1140, TS! 1450,and TS1155),
practice the following claims of the ’596 patent:
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1 , . i U.S. Patent No. 6,674,596; IBM 3592 "Tape Cartridges & Drives" I
Claim IBM 3592 	IBM 3592 	IBM 3592 	IBM 3592
Gen. 1 System Gen. 2 System Gen. 3 System Gen. 4 System
RIW WORM R/W WORM R/W WORM R/W WORM
X X X X X X X X.
3 X X X X
X 	X 	X 	X
X I X 	X 	X
X 	X 	X 	X
X X Y X X
9 	t
1 I0
‘ 11
12
13
Id. at 145-152.
II. JURSIDICTION & IMPORTATION
A. Subject Matter Jurisdiction
Section 337 confers subject matterjurisdicfion on the Commissionto investigate,if
appropriate, to provide a remedy ‘for, unfair acts and unfair methods of competition in the
importation, the sale for importation, or the sale after importation of articles into the United
States. See 19 U.S.C. §§ 1337(a)(l)(B) and (a)(2). Sony filed a complaint.alleging a violation of
this subsection. Accordingly, the Connnission has subject matter jurisdiction over this
investigation under section 337 of the Tariff Act of 1930. See Amgen, Inc. v. U.S. Int’I. Trade
Comm ’n, 902 F.2d 1532, l536 (Fed. Cir. 1990).
B. Personal Jurisdiction 	'
Fnjifilm has appeared and participated in this investigation. The Commission therefore
has personal jurisdiction over Fujifilm. See, e.g., Certain Optical Disk Controller Chips &
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PUBLIC VERSION
Chipsets & Prods. Containing Same, Including DVD Players & PC Optical Storage Devices,
Inv. No. 337-TA.-506',Initial Det. at 4-5 (May 16, 2005) (unreviewed in relevant part).
C. In Rem Jurisdiction
Fujifilm does not dispute that the Commission has in rem jurisdiction over the accused
LTO—4,LTO-5 and LTO-6 tape media products and components thereof that have been imported
into the United States. See RIB at 8. In fact, Fujifilm has stipulated to the importation of the
accused LTO-4, LTO-5, and LTO-6 tape media.products and components thereof into the United
States. See JX-7C. Accordingly, the Commission has in rem jurisdiction over the LTO-4,
LTO-5 and LTO-6 tape media products and components thereof.
D. Importation
As noted above, Fujifihn has stipulated to the importation of the accused LTO-4, LTO-5,
and LTO-6 tape media products and components thereof into the United States. See JX-7.
Accordingly, the importation requirement of section 337 is satisfied.
III. RELEVANT LAW
A. Claim Construction 	.
“An infringement analysis entails two steps. The first step is determining the meaning
and scope of the patent claims asserted to be infringed. The second step is comparing the
properly construed claims to the device accused of infringing.” Markman v. Westview
Instmments, Inc., 52 F.3d 967, 976 (Fed. Cir. 1995) (en bnnc) (internal citations omitted), afi"a',
S17 U.S. 370 (1996). Claim construction resolves legal disputes between the parties regaiding
claim scope. See Eon Corp. IP Holdings v. Silver Spring Networks, 815 F.3d at I314, 1319 (Fed.
Cir. 2016). _ .
Evidence intrinsic to the application, prosecution, and issuance of a patent is the most.
sigiificant source of the legally operative meaning of disputed claim language. See Bell All.
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PUBLIC VERSION
Network Servs., Inc. v. Covad C0mmc’ns Grp., Ina, 262 F.3d 1258, 1267 (Fed. Cir. 2001). The
intrinsic evidence includes the claims themselves, the specification, and the prosecution history.
See Phillips v. AWH Corp, 415 F.3d'l303, 1314 (Fed. Cir. 2005) (en banc); see also Markman,
52 F.3d at 979. As the Federal Circuit explained in Phillips, courts must analyze each of these
components to determine the “ordinary and customary meaning of a claim term” as understood
by a person of ordinary skill in the art at the time of the invention. 415 F.3d at 1313.
“It is a ‘bedrock principle’ of patent law that ‘the claims of a patent define the invention
to which the patentee is entitled the right to exclude.’” Phillips, 415 F.3d at 1312 (quoting
Innova/Pure Water, Inc. v. Safari Water Filtration Sys., Inc, 381 F.3d 1111, 1115 (Fed. Cir.
2004)). “Quite apart from the written description and the prosecution history, the claims
themselves provide substantial guidance as to the meaning of particular claims terms.” Id. at
1314; see also Interactive Gifi Express, Inc. v. Compuservé Inc., 256 F.3d 1323, 1331 (Fed. Cir.
2001) (“In construing claims, the analytical focus must begin and remain centered on the
language of the claims themselves, for it is that language that the patentee chose to use to
‘particularly point[ ] out and distinctly claim[ ] the subject matter which the patentee regards as
his invention.”’). The context in which a term is used in an asserted claim can be “highly
instructive.” Phillips, 415 F.3d at 1314. Additionally, other claims in the same patent, asserted
or unasserted, may also provide guidance as to the meaning ofa claim term. Id.
The specification “is always highly relevant to the claim construction analysis. Usually,
it is dispositive; it is the single best guide to the meaning of a disputed term.-” Ia’. at 1315
(quoting Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed. Cir. 1996)). “[T]he
specification may reveal apspecial definition given to a claim term by the patentee that differs
from the meaning it would otherwise possess. In such cases, the inventor’s lexicography
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PUBLIC VERSION
governs.” Id at 1316. “In other cases, the specification may reveal an intentional disclaimer, or
disavowal, of claim scope by the inventor.” Id. As a general rule, however, the particular
examples or embodiments discussed in the specification are not to be read into the claims as
limitations. Id. at 1323. In the end, “[t]he construction that stays true to the claim language and
most naturally aligns with the patent’s description of the invention will be . . . the correct
construction.” Id. at 1316 (quoting Renishaw PLC v. Marposs Societa’ per Azioni, 158 F.3d
1243, 1250 (Fed. Cir. 1998)).
In addition to the claims and the specification, the prosecution history should be
examined, if in evidence. Id. at 1317; see also Liebel-Flarsheim C0. v. Medrad 1nc., 358 F.3d
898, 913 (Fed. Cir. 2004). The prosecution history can “often inform the meaning of the claim
language by demonstrating how the inventor understood the invention and whether the inventor
limited the invention in the course of prosecution, making the claim scope narrower than it
would otherwise be.” Phillips, 415 F.3d at 1317; see also Chimie v. PPG Indus. Inc., 402 F.3d
1371, 1384 (Fed. Cir. 2005) (“The purpose of consulting the prosecution history in construing a
claim is to ‘exclude any interpretation that was disclaimed during prosecutionf”).
When the intrinsic evidence does not establish the meaning of a claim, then extrinsic
evidence (i.e., all evidence external to the patent and the prosecution history, including
dictionaries, inventor testimony, expert testimony, and learned treatises) may be considered.
Phillips, 415 F.3d at 1317. Extrinsic evidence is generally viewed as less reliable than the patent
itself and its prosecution history in detennining how to define claim terms. Id. at 1317. “The
court may receive extrinsic evidence to educate itself about the invention and the relevant
technology, but the court may not use extrinsic evidence to arrive at a claim construction that is
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PUBLIC VERSION
clearly at odds with the construction mandated by the intrinsic evidence.” Elkay Mfg. C0. v.
Ebca Mfg. C0., 192 F.3d 973, 977 (Fed. Cir. 1999).
B. Infringement
In a section 337 investigation, the complainant bears the burden of proving infringement
of the asserted patent claims by a preponderance of the evidence. See Spansion, 629 F.3d at
1349. This standard “requires proving that infringement was more likely than not to have
occurred.” Warner-Lambert C0. v. Teva Pharm. USA, Inc., 418 F.3d 1326, 1341 n.15 (Fed. Cir.
2005).
1. Literal infringement
Literal infringement is a question of fact. F inisar Corp. v. DirecT V Grp., Inc., 523 F.3d
1323, 1332 (Fed. Cir. -2008). “Literal infringement requires the patentee to prove that the
accused ‘device contains each limitation of the asserted claim(s). If any claim limitation is
absent, there is no literal infringement as a matter of law.” Bayer AG v. Elan Pharm. Research
C0rp., 212 F.3d 1241, 1247 (Fed. Cir. 2000).
2. Indirect infringement
Section 271 of the Patent Act defines both direct infringementand the two categories of
indirect infringement, active inducement of infringement and contributory infringement. 35
U.S.C. § 271(a), (b), and (c). There can be no indirect infringement absent direct infringement.
See Limelight Networks, Inc. v. Akamai Technologies, Ina, 134 S.Ct. 2111, 2117 (2014); Aro
Manufacturing C0. v. Convertible Top Replacement C0., 365 U.S. 341 (1961); see also Met-Coil
Sys. Corp. v. Korners Unltoi, rIna, 803 F.2d 684, 687 (Fed. Cir. 1986) (“Absent direct
infringement of the patent claims, there can be neither contributory infringement . . . nor
inducement of infringement”) (citations omitted).
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PUBLIC VERSION
- 	a) Inducement of infringement
» Section 27l(b) of the Patent Act prohibits inducement of infringement: “[w]hoever
actively induces infiingement of a patent shall be liable as an infiinger.” 35 U.S.C. § 27 l(b). See
DSU Med. Corp. v. JMS C0., 471 F.3d 1293, 1305 (Fed. Cir. 2006) (en bans) (“To establish
liability under section 27l(b), a patent holder must prove that once the defendants knew of the
patent, they actively and knowingly aided and abetted another's direct infringement") (citations
omitted). “The mere knowledge of possible infringement by others does not amount to
inducement; specific intent and action to induce infringement must be proven.“ Id. (citations
omitted). A violation of section 337 may arise from an act of induced infringement. Suprema,
796 F.3d at 1351-52 (en bcmc opinion). .
b) Contributory infringement
' Section 27l(c) of the Patent Act. prohibits contributory infringement. See 35 U.S.C.
§27l(c). “Under 35 U.S.C. § 27l(c), a party who sells a component with knowledge that the
component is especially designed for use in a patented invention, and is not a staple aiticle of
commerce suitable for substantial noninfringing use, is liable as a contributory infringer.”
W0rdtecl1$ys., Inc. v. Integrated Networks Solutions, Inc., 609 F.3d I308, 1316 (Fed. Cir. 2010).
To establish contributory infringement in a section 337 investigation, it must be shown that “( 1)
there is an act of direct infringement in violation of section 337; (2) the accused device has no
substantial non-infringing uses; and (3) the accused iufringer impoited, sold for importation, or
soldafter importation within the United States, the accused components that contributed to
another’s direct infringement.” Spansion, 629 F.3_dat 1353. 	'
C. Statutory Subject Matter (35 U.S.C. § 101) 	.
The detennination of whether a patent’s claims are directed to subject matter that is
patentable under 35 U.S.C. § 101 is an issue of law. See CLS Bank Int ‘Iv. Alice Corp P2§v.,717
17 	i‘

PUBLIC VERSION
F.3d 1269, 1276 (2013) (en banc) (citing Bancorp Servs., LLC vl Sun Life Assurance C0. of
Can., 687 F.3d 1266, 1273 (Fed. Cir. 2012)). 35 U.S.C. §_101 delineates four categories of
patentable inventions: “Whoever invents or discovers any new and useful process, machine,
manufacture, or composition of matter, or any new and useful improvement thereof, may obtain
a patent therefore, subject to the conditions and requirements of this title.” 35 U.S.C. § 101; see
also Intellectual Ventures I LLC v. Capital One Bank (USA), 792 F.3d 1363, 1366 (Fed. Cir.
2015). The Supreme Court has identified ‘“[l]aws of nature, natural phenomena, and abstract
ideas”’ as patent-ineligible exceptions to 35 U.S.C. § 101. Ultramercial, Inc. v. Hulu, LLC, 772
F.3d 709, 714 (Fed. Cir. 2014), cert denied. sub norn. Ultramercial, LLC v. WildTangent, Inc.,
135 S. Ct. 2907 (2015) (quoting Alice Corp. Ply. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347, 2354
(2014)) (“Alice”). Thus, for example, “[p]atents that merely claim well-established, fundamental
concepts fall within the category of abstract ideas.” Cyberfone Sys., LLC v. CNN Interactive
Grp., Inc., 558 Fed. App’x 988, 991 (Fed. Cir. 2014) (citing Bilski v. Kappos, 561 U.S. 593, 611
12 (2010)). An invention, however, “is not rendered ineligible for patent simply because it
involves an abstract concept.” Alice, 134 S. Ct. at 2354 (citing Diamond v. Diehr, 450 U.S. 175,
187 (1981)).
The Supreme Court has enunciated a two-part analysis for detennining whether patent
claims are directed to eligible subject matter. See Genetic Techs. Ltd. v. Merial L.L.C., 818 F.3d
1369, 1374 (Fed. Cir. 2016). The first question is whether a claim is drawn to an abstract idea.
Id. (citing Alice, 134 S. Ct. at 2355). If the claim is drawn to an abstract idea, the second
question is whether the claim recites an “inventive concept’ sufficient to ‘transform’ the claimed
abstract idea into a patent-eligible application.” Alice, 134 S. Ct. at 2357 (quoting Mayo
Collaborative Servs. v. Prometheus Laboratories, Inc., 132 S. Ct. 1289, 1294, 1298 (2012)
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PUBLIC VERSION
(“Mayo”)). In this regard, using a. computer to implement or manipulate an abstract idea does
not necessarily make the claimed configuration patent-eligible. See Ultramercial, 772 F.3d at
717 (quoting In re Bilski, 545 F.3d 943, 963 (Fed. Cir. 2008)); see also Bzmcorp Servs., 687 F.3d
at 1278, cert. denied, 134 S. Ct. 2870 (2014) (“[A]dding a ‘computer aided’ limitation to a claim
covering an abstract concept, without more, is insuflicient to render the claim patent eligible.”’)
(quoting Dealer-track, Inc. v. Huber, 674 F.3d 1315, 1333 (Fed. Cir. 2012)). Additionally, the
Federal Circuit has indicated that claims directed to improving computer fiurctioning by the use
of unconventional methods may appropriately be patented. See Enfislz,LLC v. Microsoft Corp,
822 F.3d 1327, 1335 (Fed. Cir. 2016) (“[W]e find it relevant to ask whether the claims are
directed to an improvement to computer functionality versus being directed to an abstract idea,
even at the first step of the Alice analysis”).
In Enfish, the Federal Circuit explained that:
[i]n setting up the two-stage Mayo/Alice inquiry, the Supreme
Court has declaredi “We must first determine whether the claims at
issue are directed to a.patent-ineligible concept.” That formulation
plainly contemplates that the first step of the inquiry is a
meaningful one, i.e., that a substantial class of claims are not
directed to a patent~ineligible concept. The “directed to” inquiry,
therefore, cannot simply ask whether the claims involve a patent
ineligible concept, because essentially every routinely patent
eligible claim involving physical product and actions involves a
law of nature and/or natural phenomenon-after all, they take place
in the physical world. . . . [R]ather, the “directed to” inquiry
applies a stage-one filter to claims, considered in light of the
specification, based on whether their character as a. whole is
directed to excluded subject matter.
Id. Enfish therefore provides, among other things, that the “directed to" inquiry frmctions as a
filter to claims, when interpreted in view of the specification, based on whether their character as
a whole is directed to a patent ineligible concept.
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PUBLIC VERSION
Enfish also explains that claims’directed to improvements of existing technology (e.g.,
computer functionality——includingthose directed wholly to non-structural sofiware-based
improvements) can be patent eligible in contrast to claims directed to “a process that qualifies as
an ‘abstract idea‘ for which computers are invoked merely as a tool” and that the determination
is made by looking to the applicaut’s specification. Id. at 1335-1336. Nevertheless, the use of
generic computer technology, however “specific” to the particular environment, will not provide
eligibility, if the functionality described constitutes an abstract idea. See TL1 Commc'ns LLC v.
AVAuto., LLC, 823 F.3d 607, 611 (Fed. Cir. 2016) (holding that 35 U.S.C. § 101 applies where
“the specification makes clear that the recited physical components merely provide a generic
environment in which to carry out the abstract idea of classifying and storing digital images in an
organized manner”).
_ D. Validity
A patent is presumed valid. See 35 U.S.C. § 282; Microsofi Corp. v. 1741'	Ltd. P’ship, I31
S. Ct. 2238, 2242 (2011). A respondent who has raised patent. invalidity as an affirmative
defense has the burden of overcoming this presumption by clear and convincing evidence. See
Microsoft, l31 S. Ct. at 2242. As with an infringement analysis, an analysis of invalidity
involves two steps: determining the scope of the claim and comparing the properly construed
claim with the prior"art to detennine whether the claimed invention is anticipated and/or rendered
obvious. Tate Access Floors, Inc. v. Interface Architectural Resources, Inc., 279“F.3d 1357,
1365 (Fed. Cir. 2002). 	" '
1. Anticipation (35 U.S.C. § 102)
Under 35 U.S.C. § 102, a claim is anticipated, and therefore invalid, when “the four
comers of a single, prior art document describe every element of the claimed invention, either
expressly or inherently, such that a person of ordinary skill in the art could practice the invention
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PUBLIC VERSION
without undue experimentation.” Advanced Display Sys., Inc. v. Kent Stale Univ., 212 F.3d
1272, 1282 (Fed. Cir. 2000), cert. denied, 532 U.S. 904 (2001). To be considered anticipatory,
the prior art reference_must be enabling and describe the applicant’s claimed invention
sufficiently to have placed it in possession of a person of ordinary skill in the field of the
invention. See Helzfix Ltd. v. Blok-Lok, Ltd., 208 F.3d 1339, 1346 (Fed. Cir. 2000). I
2. Obviousness (35 U.S.C. § 103)
Under 35 U.S.C. § 103, a patent may be found invalid as obvious if “the differences
between the subject matter sought to be patented and the prior art are such that the subject matter
as a whole would have been obvious at the time the invention was made to a person having
ordinary skill in the art to which said subject matter pertains.” 35 U.S.C. § l03(a). Because
obviousness is determined at the time of invention, rather than the date of application or
litigation, “[t]he great challenge of the obviousness judgment is proceeding without any hint of
hindsight.” Star Scientific, Inc. v. R.J. Reynolds Tobacco C0., 655 F.3d 1364, 1375 (Fed. Cir.
2011).
When a patent is challenged as obvious, the critical inquiry in determining the differences
between the claimed invention and the prior art is whether there is an apparent reason to combine
the known elements in the fashion claimed by the patent at issue. See KSR Int ’l C0. v. Teleflex,
Inc., 550 U.S. 398, 417-418 (2007). Thus, when a patent is challenged as obvious, based on a
combination of several prior art references, “the burden falls on the patent challenger to show by
clear and convincing evidence that a person of ordinary skill in the art would have had reason to
attempt to make the composition or device, or carry out the claimed process, and would have had
a reasonable expectation of success in doing so.” PharmaStem Therapeutics, Inc. v. ViaCell,
1nc., 491 F.3d 1342, 1360 (Fed. Cir. 2007) (citations omitted).
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Obviousness is a determination of law based on underlying determinations of fact. Star
Scientific, 655 F.3d at 1374. The factual determinations behind a finding of obviousness include:
(1) the scope and content of the prior art, (2) the level and content of the prior art, (3) the
dififerencesbetween the claimed invention and the prior art, and (4) secondary considerations of
non-obviousness. KSR, 550 U.S. at 399 (citing Graham. v. John Deere C0., 383 U.S. 1, 17
(1966)). These factual determinations are referred to collectively as the “Graham factors.”
Secondary considerations of non-obviousness include commercial success, long felt but
unresolved need, and the failure of others. Id. When present, secondaiy considerations “give
light to the circumstances suiroimding the origin of the subject matter sought to be patented," but
they are not dispositive on the issue of obviousness. Geo. M. Martin C0. v. Alliance Mach. S_vs.
Int 'l., 618 F.3d 1294, 1304-06 (Fed. Cir. .2010). For evidence of secondary considerations to be
given substantial weight in the obviousness determination, its proponent must establish a nexus
between the evidence and the merits of the claimed invention. See W Union Co. v. M0neyGram
Payment Sys. Inc., 626 F.3d 1361, 1372-73 (Fed. Cir. 2010) (citing In re GPAC Ina, 57 F.3d
1573, 1580 (Fed. cit. 1995)).
3. Written Description and Enablement (35 U.$.C. § 112, {I1)5
The hallmark of the written description requirement is the disclosure of the invention.
See Ariaa'Pharm., Inc. v. Eli Lilly and C0., 598 F.3d 1336, 1351 (Fed. Cir. 2010) (en banc). The
test for determining the sufficiency of the written description in a patent requires “an objective
’ 5The Leahy-Smith America Invents Act (“AIA”) amended portions of the Patent Act of
1952, and provided that its provisions would “take effect upon the expiration of the 1-year period
beginning on the date of the enactment of this Act and shall apply to any patent issued on or afier
that effective date.” Pub. L 112-29, § 35. The AM was enacted on September 16,‘201 1, and the
effective date of the AIA for most sections, including § 112, was September 16, 2012. This
investigation involves patents that issued before the effective date of the AIA. Accordingly, I
will refer to the paragaphs of pre-AIA § 112 by paragraph number.
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PUBLIC VERSION
inquiry into the four corners of the specification from the perspective of a person of ordinary
skill in the art. Based on that inquiry, the specification must describe an invention
understandable to that skilled artisan and show that the inventor actually invented the invention
claimed.” Id. Compliance with the written description requirement is a question of fact and “the
level of detail required to satisfy the written description requirement varies depending on the
nature and scope of the claims and on the complexity and predictability of the relevant
technology.” Id.
To satisfy the enablement requirement a patent specification must “contain a written
description of the invention . . . to enable any person skilled in the art . . . to make and use the
same.” 35 U.S.C. §112, 1]1. The specification must enable a person of ordinary skill in the art to
practice the claimed invention without undue experimentation. Transocean Oflshore Deepwater
Drilling, Inc. v. Maersk Contractors USA,Inc., 617 F.3d 1296, 1305 (Fed. Cir. 2010). Although
a specification need not disclose minor details that are well known in the art, this “rule” is
“merely a rule of supplementation, not a substitute for a basic enabling disclosure.” Auto. Tech.
Int’! Inc., v. BMW 0fN. Am., 501 F.3d 1274, 1283 (Fed. Cir. 2007) (quoting Genentech, Inc. v.
Nova Nordisk, A/S, 108 F.3d 1361, 1366 (Fed. Cir. 1997)). “It is the specification, not the
knowledge of one killed in the art, that must supply the novel aspects of an invention in order to
constitute adequate enablement.” Auto. Tech., 501 F.3d at 1283. _
Enablement is a question of law with underlying questions of fact regarding undue
experimentation. Transocean, 617 F.3d at 1305. The factors weighed by a court in detennining
whether a disclosure requires undue experimentation include: (1) the quantity of experimentation
necessary, (2) the amount of direction provided, (3) the presence of working examples, (4) the
nature of the invention, (5) the state of the prior art, (6) the relative skill of those in the art, (7)
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the predictability of the art, and (8) the breadth of the claims. In re Wands, 858 F.2d 731, 737
(Fed. Cir. 1988). 	_'
4. Indcfiniteness (35 U.S.C. § 112, 112)
A claim must also be definite. Pursuant to 35 U.S.C. § 112, 112, a patent specification
“shall conclude with one or more claims particularly pointing out and distinctly claiming the
subject matter which the applicant regards as his invention.” 35 U.S.C. § 112, 112. Section 112,
1]2 requires “that a patent’s claims, viewed in light of the specification and prosecution history
inform those skilled in the art about the scope of the invention with reasonable certainty.”
Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120, 2129 (2014). A patent claim that is
indefinite is invalid. 35 U.S.C. § 282(b)(3)(A).
E. Domestic Industry
For a patent-based complaint, a violation of section 337 can be found “only if an industry
in the United States, relating to the articles protected by the patent . . . concerned, exists or is in
the process of being established.” 19 U.S.C. § 1337(a)(2). Under Commission precedent, this
domestic industry requirement of section 337 consists of an economic prong and a technical
prong. See Certain Stringed Musical Instruments and Components Thereofl Inv. No. 337-TA
586, Comm’n Op. at 12-14, 2009 WL 5134139 (U.S.I.T.C. Dec. 2009). The complainant bears
the burden of establishing that the domestic industry requirement is satisfied. See Certain Set
Top Boxes and Components Thereofl Inv. No. 337-TA-454, Final Initial Determination at 294,
2002 WL 31556392 (U.S.I.T.C. June 21, 2002) (unreviewed by Commission in relevant part).
1. Economic prong
Section 337(a)(3) sets forth the following economic criteria for determining the existence
of a domestic industry in such investigations:
24

PUBLIC VERSION
(3) For purposes of paragraph (2), an industry in the United States
shall be considered to exist if there is in the United States, with
respect to the articles protected by the patent, copyright, trademark,
mask work, or design concerned —
(A) significant investment in plant and equipment;
(B) significant employment of labor or capital; or
(C) substantial investment in its exploitation, including
engineering, research and development, or licensing.
7 Given that these criteria are listed in the disjunctive, satisfaction of any one of them will
be sufficient to meet the economic prong of the domestic industry requirement. See Certain
Integrated Circuit Chipsets and Prods. Containing Same, Inv. No. 337-TA-428, Order No. 10,
Initial Determination (unreviewed) (May 4, 2000).
2. Technical prong
The technical prong of the domestic industry requirement is satisfied when the
complainant in a patent-based section 337 investigation establishes that it is practicing or
exploiting the patents at issue.‘ See 19 U.S.C. § l337(a)(2) and (3); Certain Microsphere
Adhesives, Process for Making Same and Prods. Containing Same, Including Self-Stick
Repositionable Notes, Inv. No. 337-TA-366, Comm’n Op. at 8, 1996 WL 1056095 (U.S.l.T.C.
Jan. 16, 1996). “The test for satisfying the ‘technical prong’ of the industry requirement is
essentially [the] same as that for infringement, i.e., a comparison of domestic products to the
asserted claims.” Alloc, Inc. v. lnl'l Trade Comm ’n, 342 F.3d 1361, 1375 (Fed. Cir. 2003). To
prevail, the patentee must establish by a preponderance of the evidence that the domestic product
practices one or more claims of the patent. It is sufficient to show that the products practice any
claim of that patent, not necessarily an asserted claim of that patent. See Certain Male
Prophylactic Devices, Inv. No. 337-TA-546, Comm’n Op. at 38 (U.S.I.T.C. Aug. l, 2007).
25

PUBLIC VERSION
IV. U.S. PATENT NUMBER 7,029,774
United States Patent Number 7,029,774, entitled “Magnetic Recording Medium with
Backside to Decrease Recording Surface Embossment,” issued to James A. Greczyna, Brian D.
Brong, and Stephen R. Ebner on April 18, 2006. JX-0003 atlcover page (’774 patent). The
patent issued from Application Number 11/135,783 filed on May 23, 2005. Id. The patent is
assigned on its face to Imation Corporation. Id The evidence indicates that Irnation assigned
this patent to Sony on August 3, 2015. CX-0007C at Q/A 58-67 (direct witness statement of
Hiroshi Kamitani); CX-1081 at 3; JX-0139C.
‘ The ’774 patent describes specific properties of a magnetic recording medium in the form
of a tape that is commonly wound around a spool inside a tape cartridge. JX-0003 at Figure 1,
1:16-20, 1:51-67; see CX-0002C at Q/A 44, 47 (direct witness statement of Sony’s expert, Dr.
l3ogy)|; RX-0003C at Q/A 546, 550 (direct Witness statement of Fujifilm’s expert, Dr. Wang).
The tape cartridge might take the shape of an audio tape, video tape, or computer tape, and the
magnetic recording medium might be referred to as the magnetic tape within the tape cartridge."
JX-0003 at 1:7-10, 1:16-17; see CX-0002C at Q/A 44. Depending on the context, the word
“tape” may refer to either the tape cartridge or the magnetic tape. The tape cartridge can be
inserted into a tape drive that extracts the magnetic tape from the cartridge, reads data from or
writes data to the tape, and then returns the tape to the cartridge. CX-0002C at Q/A 44.
The physical structure of the tape 30, shown below in Figure 2 of the ’774 patent,
comprises four layers. JX-0003 at Abstract, Figure 2, 3:34-6:62. Layer 32 is referred to as the
substrate, with top surface 38 and bottom surface 40. Id. at 3:34-4:9. Support layer 50 “extends
over and is bonded to the top surface 38 of the substrate,” and the “magnetic recording layer 52
extends over and is bonded to the top surface 54 of the support layer 50.” Id. at 4:12-31. The
magnetic recording layer 52 contains recording surface 56 upon which data is recorded. Id. at
' 26

PUBLIC VERSION
4:12-63. Backside layer 36 “extends along and is bonded to tie bottom surface 40 of the
substrate 32.” Id. at 3:34-50. The purpose of backside layer 36 is to improve the durability,
electroc inductivity, and tracking characteristics of the t tpe. Id. at Abstlact, 1:38-41.
/- so
se
_ 	\
Q _ 54
34
. 	QQ 	38
32
as 	4° '
42
Fig. 2 	V _
recording to the ’774 patent, the backside layers that existed at the time were formed by
disbursi ig “relatively large particles” on a relatively smooth s trface in order to “decrease
friction llld increase durability.” Id. at 2:1-5. These “relatively la "geparticles” were a problem
because, when the tape was wound around a spool, the peaks of the particles on the backside
layer of one section of the tape would come into contact with the magnetic particles on the top
magneti: layer of a different section of the tape, and coulil leave “imprints, pits, or
emboss ients” on tie magnetic layer. Id. at 2:5-24. Sony’s erpert, Dr. Bogy, provided a
graphic, which is e bedded below, to illustrate how the backside la yer (yellow) of one section of
tape comes into co itact with the magnetic layer (blue) of anoth :r section of tape when it is
wound around atspo >1. CX-0002C at Q/A 49 (describing CDX-0002C at 4). The “imprints, pits,
or embossments” le 1 by the backside layer on the ma gneticlayer are undesirable because they
can “da iage the rec Jrding characteristics of the magnetic recording tape.” JX-0003 at 2:21-23.
27

PUBLIC VERSION
Backcoatlayerot	~ 	4,‘ Id»
ouierwlndiflfl 	- 	' M 	‘P er Wm ma
5 	. 	»
Magnetic Layerof / 	X"' 	. Inner winding
lnflerwinding 	"‘“ 	'
l
he ’774 pa :ent endeavored to alleviate the e lbOSS1118lJlIS	on the magnetic layer while
improvi lg the druability and frictional characteristics 0 ‘the tape by specifying surface properties
of the b tckside that were different than those of the ba :kside layers that existed at the time. Id.
at 2223- 28. The dif Terencebetween the conventional backside sur Taceand the backside surface
describei in the ’77 I patent can beseen by comparing Figures l and 3 of the patent, below. Id.
at 5218-21; see id. it 5:47-5l_ (“As illustrated in FIG. 3, the pea :s 64 and the valleys 66 are
exagger ited for ‘illustrative purposes onlyt The peaks L4are generally not as large as the peaks
seen wit 1bimodal b ickside surfaces (see for example p :ak 20 of FI 3. 1.”).
' 	(10 	_/-30
-13-num-annpanns
_ 1° 	Y se
. 	i ' ~ - - - - - - - - —- - - —
" $4 ‘I 42
66 	60
A 1;‘-1
11" . 1
(pR.§>§m, Fig. 3 _
Specifically, as shown in Figrue 3, the backside of the invention has a. large number of
peaks with relativel r small and uniform heights so that a “relative .y large plurality of peaks 64
contact[ :] the recor ling surface 56 of an adjacent winding 60 or 62.“ Id. at 5:52-55. These
1
23

_ 	PUBLIC VERSION
peaks form a “relat .vely random” smface, which the ‘774 patent describes as “approaching a
Gaussiai surface,” instead of the “typical bimodal backside surfa :e" of the conventional tapes
shown i 1Figure 1. Id. at 5:18-21. According to the ’774 patent, the structure of the backside
more unlfonnly dist ibutes the load transferred from the adjacent re ;ording surface such that “the
number of pits or e nbossments formed in recording surface 56 ar : decreased and/or the pits or
emboss rents forme 1are less pronormced.” Id. at 5:39- 5:25. 	,
he ’774 pa ient describes the_physical characteristics of t re backside surface by using
measurements such as “skew, peak height mean, pea. :-to-valley oughness, plateau ratio, and
lcurtosis.“ Id. at 8:10-9:13. According to the example measurem rnts provided in the patent, a
backside according to the invention exhibits decreased values for these surface measurements.
See id. at 9:56-12: 19. Specifically, Table 1 in the patent. spe :ification, embedded below,
“illustrates that Examples 1 and 2 exhibit decreased skew, peak mean height, peak-to-valley
roughneas, plateau "atio, and kurtosis with respect to ‘Comparative Examples Cl.-C4.” Id. at
9:58-61. 	‘
TABLE 1
Surface Measurement" Parameters
I 	PcaJ<-lo
4 	Valley Plateau
Peak Mean Roughness Ratio KIUTOSIS
Emmvle 3kW~’(Rn=) 3§i3l1l'(R;\m5 (RJ (RM/1%’) (Rm)
I 	0.30 	291 nm 0.61 3.4	U7 um
2 	0.40
Cl 0.53
C2 	0.80
C3 	0.90
C4 0.89
I72 nm
234 nm
327 um
359 nm
482 nm
Z76 nm
346 nm
449 nrn
S15 xun
675 mn
0.62
0.68
0.73
0.72
0.71
Id. at l0:l~l4.
29

PUBLIC VERSION .
The Asserted ’774 Patent Claims
Sony asserts claims 1, 5, 6, 7, 8, 10, 16, and 17 of the ’774 patent in this investigatlon
Asserted claims 16 and 17 depend on unasserted independent claim 15, and therefore include the
limitations of claim 15. 35 U.S.C. § 112, 1]4. Those claims provide:
A magnetic recording medium comprising:
a substrate defining a first surface and a second surface opposite the first '
surface; 	1
a magnetic side formed over the first surface of the substrate and defining
a recording surface; and
a backside coated on the second surface of the substrate and configured to
decrease embossment of the recording surface, the backside defining a
backside surface opposite the substrate, the backside surface having a
skew less than about 0.5 and a kurtosis less than about 4.0.
* * * * *
The magnetic recording medium of claim 4, wherein the peak-to-valley
roughness is less than about 300 IHI1.
=l= =l< * * 	*
The magnetic recording medium of claim 1, wherein the backside surface
has a plateau ratio of less than or equal to about 0.65.
>l< 95 * * *
The magnetic recording medium of claim 1, wherein the kurtosis value is
less than or equal to about 3.7.
The magnetic recording medium of claim 1, wherein the magnetic
recording medium has a skirt signal-to~noise ratio of greater than about
0.2 relative dB along a substantial entirety of a total length of the magnetic
recording medium. * * >l<* *
The magnetic recording medium of claim 1, wherein the magnetic
recording medium has a small error rate of less than about 0.5 errors/m
along a substantial entirety of a total length of the magnetic recording
medium. * * * * *
A magnetic recording medium comprising:
a substrate defining a first surface and a second surface opposite the first
surface; 	I 1 t
a magnetic side coated on the first surface of the substrate and defining a
recording surface; and
a backside coated on the second surface of the substrate and configured to
decrease the embossment of the recording surface, wherein the backside
defines a backside surface opposite the substrate, the backside surface
having a peak height mean less than about 200 and a peak-to-valley
roughness less than about 325 mn.
30

PUBLIC VERSION
16. The magnetic recording medium of claim 15, wherein the backside
surface has a skew less than about 0.5.
>l< 	=l< 	>l< 	* 	>l=
17. The magnetic recording medium of claim 15, wherein the peak-to-valley
roughness is less than about 300 nm.
IX-0003 at 12:51-61, 13:4-14, 13:21-24, 14:1-16.
B. Level of Ordinary Skill in the Art
Sony, Fujifilm, and Staff largely agree on the level of a person of ordinary skill in the art
as of the date of the ’774 invention, with only slight differences in their proposals that do not
affect the substantive analysis in this investigation. CIB at 14 (citing RX-0003C at Q/A 562;
CX-0002C at Q/A 82); RIB at 12 (citing RX-0583C at Q/A 19-20; CX-0012C at Q/A 72-73);
SIB at 27 (citing CX-0002C at Q/A 88; RX-0003C at Q/A 562). Given the evidence of record
cited by the private parties and Staff, and that the parties’ positions would not be changed or
materially altered under either of the proposeddefinitions, I find that a person of ordinary skill in
the art can be either of the following:
1. A person with “a bachelor’s degree in materials science, physics, mechanical
engineering, electrical engineering, or a closely related field, and at least five years of
experience in the [field] of magnetic recording media production, or a master’s
degree or higher in materials science, physics, mechanical engineering, electrical
engineering, or a closely related field, and at least three years of experience in the
field of magnetic recording media production. A person with less education but more
relevant practical experience may also meet this standard, as would a person with
more education but less practical experience.” CX-0002C at Q/A 82. 	.
2. “[A] person with (a) a bachelor’s degree in materials science, electrical engineering,
mechanical engineering, chemistry, or a closely related field, and at least five years of
experience—-either in industry or academic research—relating to magnetic tape, or
(b) a master’s degree or higher in materials science, electrical engineering,
mechanical engineering, chemistry, or a closely related field, and at least three years
of experience——eitherin industry or academic research—relating to magnetic tape. A
person with less education but more relevant practical experience, or more relevant
education but less practical experience, may also meet this standard.” RX-0003C at
Q/A 562.
31

PUBLIC VERSION
C. Claim Construction and Indefiniteness
There are six disputed claims relevant to the asserted claims of the ’774 patent:
1. skew;
2. kurtosis;
3. peak height mean;
4. peak-to-valley roughness;
5. plateau ratio; and
6. small error rate.
Joint Motion for Leave to File Second Amended Joint List of Proposed Claim Terms, Exhibit A
at 9-11 (May 25, 2018); Order No. 39 (June 29, 2018) (granting motion).
Only the first term, skew, requires construction. The construction of the other terms do
not affect any issue in this investigation, and therefore the tenns need not be construed. See RIB
at 12; SRB at 2; Vivid Techs, Inc. v. American Sci. & Eng ’g, 1nc., 202 F.3d 795, 803 (Fed. Cir.
1999); Vanderlande Indus. Nederland BV v. Int ‘l Trade Comm, 366 F.3d 1311, 1323 (Fed. Cir.
2004)
1. “skew” 	1
The term “skew” appears in asserted independent claim l and dependent claim 16, and is
incorporated by dependency into asserted claims 5, 6, 7, 8, 10, and 17. The parties propose the
following constructions for this term:
32

PUBLIC VERSION
Sony r .- -i Fujifilrn Y m Staff t .
Rik the third moment of a Indefinite or alternatively,
roughness distribution and “Skew is the third moment of
measures the asynnnetry of aroughness distribution”
the surface profile about a
mean plane of the surface
being evaluated
R51, the third moment of a
roughness distribution and
measures the asymmetry of the
surface profile about a mean
plane of the surface being
evaluated, as measured using
an optical interferometer, such
as a Wyko® Optical
Interferometer
Joint Motion for Leave to File Second Amended Joint List of Proposed Claim Terms, Exhibit A
at 9 (May 25, 2018).
The specification provides an explicit definition for skew:
Skew 1'Rsk) is the third moment of a. roughness distribution and
measures the asvmmetrv of the surface profile about a mean plane
of the surface being evaluated. Negative skew indicates a
predominance of valleys, while positive skew indicates a
predominance of peaks. Skew illustrates load carrying capacity,
porosity and other characteristics. Negative skew generally is a
criterion for a good bearing surface. With regard to magnetic
recording medium 30, it is generally desirable to decrease positive
skew by decreasing the predominance of high peaks, and,
consequently, decreasing the number and/or size of pits or
embossments. However, it is also generally desirable to maintain
at least a low level of positive skew to decrease the excess
frictional forces on the magnetic recording medium that can cause
handling problems during use of the magnetic recording medium.
In one embodiment, the magnetic recording medium 30 has a skew
of less than about 0.5.
JX-0003 at 8:13-29 (emphasis added).
Nevertheless, Fujifilm argues that the term is indefmite because the invent0r’s definition
improperly mixes two different concepts. RIB at 12-14. Fujifihn starts with the observation that
the specification describes measuring the surface parameters using a “Wyko® Optical Profiler”
machine. JX—0003at 8:4-9. Fujifilrn then refers to the docrunentation for that machine,
33

excerpted below, w ich states that skew can be measured as (i) “Rik,” measured “about the mean
PUBLIC VERSION
line,” or (ii) “Ssk,” easured “about the mean plane.” I (-0116.
["tem1 | Dillfilflon l Calculation l 	Ose
SROWTCSS'8 H FY3850!!! Ol “C
|\$yIm'\r:\ry0! the profile altm 1h:
mean nab. Negative skew hdlcatci a
etlominanc ohm! ,vh1o ‘live
'9
pf 	0 	lays | pm:
_ skowis seen on surlaocs wlh peaks.
*$>¢**
| " 	‘ __ ‘ 	j" aicsload carrying capacity
R“ '-T 	" Z) 	crmraciorislicsc’mn
"R,, in 	earl-irmionalmachining procrsscs.
Ne§mi'o slum is n uhevlnn In 6
0:.‘tnminq surtacc.
Skemess measures the asymmetry	Sm
of the pvoflleabout we mean
pmitivn skew ls soon on sutaces
with punks.
| 	.\' .1! J
plane. Negativeskewindimtcsa S, = -—- 	,~;' v
predominance ofvalleys.vhilo 	k NMS’ 	( H. I)
#|I*=ll**
Sq can illustratt load carrying capacity,
pcmslty, and clnraclvtrktlcs0! Hm
conventional midiining proazsscs. Sulaccs
Q pl m 	mat um smnorhtxrtum cmmod with
particulates ha\c poslwc stcvmcss. mile a
surface win deep scratches! pits willmnzoir
neoatwn smwmsi. llS.,,amends = 1.5, gm
should not inc avcmgc roughness atom to
chnmcrcrize mcsurtace. Shcwness is uzry
- 	sensitive to outlets imhc surface data.
Fujifilm poi its out that the definition of “skew” in the specification conflates the RS1;
moniker with the S,k requirement that the measureme it be “about a mean plane.” RIB at 13.
Fujifihn’s expert, Dr. Wang, opines that certain products, such as the Sony LTO-1 tapes, will
only sat sfy the claimed values for skew when using the R51,‘for mla but will fall outside the
claimed values whe r using the Sskformula. RX-0003C at Q/A 861. He concludes that a person
of ordinary skill in the art. would therefore not have been able to determine with reasonable
certainty whether a eroductinfringes the claim. Id.
Inventors Ill y provide a definition for a. term in the specification “that differs fiom the
meaning it would otherwise possess.” Phillips v. AWH Corp, 41 5 F.3d I303, 1316 (Fed. Cir.
2005) (en banc). 'hen an inventor does so, the law is clear that “the inventor’s lexicography
governs.” Id. A person of ordinary skill in the art readi mgthe term “skew” in the asserted claims
in view of the specification would therefore understa ld that the I€l'lI1is defined as “the third
moment of a rough ress distribution and measures the asymmetry >fthe surface profile about a
mean plane of the surface being evaluated,” regardless of how such a person might have
otherwise understooi the term.
34

PUBLIC VERSION q
Accordingly, the ’774 patent informs, with reasonable certainty, a person of ordinary skill
in the art what “skew” requires such that the term is not indefinite. Nautilus; Inc. v. Biosig
Instruments, lnc., 134 S. Ct. 2120, 2124 (2014).
Staffs proposed construction adds a requirement that “skew” must be “measured using
an optical interferometer, such as a Wyko® Optical Interferometer.” Staff bases its proposal on
the following paragraph in the specification. SIB at 28-29.
In one embodiment, the backside surface 42 is analyzed to
determine values for a plurality of s1u'face measurement
parameters. More particularly. the backside surface 42 is analyzed
to determine the surface measurement parameters using a Wyko®
Qptical Profiler manufactured by Veeco Instruments. Inc. of
Tucson. A1iz., or other suitable device. More specifically, the
values used throughout this application were measured using a
Wyko® Optical Interferometer. In one example, at least a portion
of the surface measurement parameters analyzed includes skew,
peak height mean, peak-to—vall'eyroughness, plateau ratio, and
l{l1I'l0SlS.
JX-0003 at 8:2-l2 (emphasis added). 	y
Staff recognizes that the inclusion or elimination of its additional proposed requirement
“does not have any material effect on any issue in this investigation, because both Sony and
Eujifilm used optical interferometers when measuring the surface parameters” and therefore
Sony’s proposed construction “would also be appropriate." SIB at 29 11.8;see CX-0002C at Q/A
219 (Sony’s expert, Dr- Bogy, testifying that his “infringement [and] domestic industry
opinions” do not change tmder Staffs proposed construction). I"will therefore not consider
whether Staffs additional proposed language is necessary because “only those terms need be
construed that are in controversy, and only to the extent necessary to resolve the controversy."
Vivid Techs., Inc. v. Am. Sci. & Engflg, Ina, 200 F.3d 795, 803 (Fed. Cir. 1999).
35

PUBLIC VERSION
Accordingly, the term “skew” is construed to mean “the third moment of a roughness
distribution and measures the asymmetry of the surface profile about a mean plane of the surface
being evaluated.”
D. Infringement
Sony alleges that Fujif1lm’s LTO-4 and LTO-6 tape products infringe claims 1, 5, 6, 7, 8,
10, 16, and 17 of the ’774 patent, and that Fujifilm’s LTO-5 tape products infringe claim 17.
CIB at 19. Sony relies on measurements of the physical characteristics of the products,
Fujif1lm’s documents, admissions of Fujifilm witnesses, and its expert’s opinions to support its
allegations. Id. at 19-36 (citing evidence). Sony’s expert, Dr. Bogy, provided his opinions on
the evidence and set forth a limitation-by-limitation infringement analysis for the asserted
claims. CX-0002C at Q/A 267-354 (citing to and explaining evidence). .
Staff agrees that Pujifilm’s LTO-4 and LTO-6 products infringe claims 1, 7, 8, and 10,
but disagrees that the LTO-4 and LTO-6 products infringe claims 5, 6, 16, or 17, or that the
LTO-5 products infringe claim 17. SIB at 36-51 (citing evidence). For the latter claims, Staff
contends that Sony did not properly measure the “peak-to-valley roughness” or the “plateau
ratio” of the accused products. SIB at 8-1 l, 42-49-51.
Fujifilm does not provide test results or measurements of its own products as counter
evidence that its products do not meet the limitations of the asserted claims. See Tr. at
667:25-668:1 1, 669:2-5 (Dr. Wang). Fujifilm instead attacks Sony’s evidence to argue that Sony
failed to meet its burden to prove infringement. Fujifilm specifically claims that Sony’s
measurements of the accused products are not sufficient to establish infringement, arguing that
(1) Sony’s expert analyzed the data from the wrong tapes, (2) Sony’s expert did not properly
determine whether the accused products decrease embossment, (3) Sony’s expert incorrectly
measured skew, (4) Sony’s expert incorrectly measured skirt signal-to-noise ratio, (5) Sony’s
36

PUBLIC VERSION
expert incorrectly measured small error rate, and (6) Sony’s expert incorrectly measured peak
height. RIB at 15-25.
To prove that Fujifilm infringes the asserted claims of the ’774 patent, Sony “must
establish by a preponderance of the evidence that one or more claims of the patent read on the
accused device literally or under the doctrine of equivalents.” Sprmsion, Inc. v. Im"l Trade
Comm'n, 629 F.3d I331, 1349 (Fed. Cir. 2010) (internal quotations and citations omitted). The
preponderance of the evidence standard “simply requires proving that infringement was more
likely than not to have occurred.” Warner-Lambert Co. v. Teva Phnmz. USA, Inc, 4K8 F.3d
1326, 1341 n.l5 (Fed. Cir. 2005). This burden never shifls to Fujifihn—“the risk of decisional
uncertainty stays on [$ony].” Tech. Licensing Corp. v. Videotek,Inc., 545 F.3d 1316, 1327 (Fed.
Cir. 2008).
Based on the evidence and arguments of the parties mentionedabove and set forth in
detail in the following subsections, I find that Sony has established by a preponderance of the
evidence that Fujifilm’s LTO-4 and LTO-6 tape products infringe claims 1, 5, 6, 7, 8, 10, 16, and
17 of the ’774 patent, and that Fujifilm’s LTO-5 tape products infringe claim 17.
1. Sony’s expert more likely than not directed and relied on the
measurements of the correct products.
Fujifilm accuses Dr. Bogy of providing unreliable infringement opinions that should be
given no weight because he did not direct the testing as described in his witness statement, he did
not know how the accused product samples were mounted, he did not know what condition the
samples were in when they were tested, he did not know which testing settings were used by the
testing facility, and he did not lcnowwhich actual tapes were tested by the testing facility. RIB at
l8. To establish Dr. Bogy’s lack of direction and knowledge, Fujifilm points to screenshots
taken from the facility’s testing equipment that display timestamps of between September 10 and
37'

PUBLIC VERSION
20, 2017. Id. at 15-16 (citing CX-0258C; CX-0259C; CX-0260C; CX-0261C; CX—0262C;CX
0263C; CX-0264C; CX-0265C; CX—0266C;CX-0267C; CX-0268C). Fujifilm concludes that
the tests shown by these screenshots “were taken without Dr. Bogy’s involvement, and not on
the Horizon-purchased tapes on which he relies” because Dr. Bogy testi_fiedthat the tapes were
shipped to the testing facility on September 27, 2017, which was after the date shown on the
screenshots, and that he visited MAC in October to start the testing that he describes in his
witness statement. Id. at 17-18.
Fujifilm has waived this argument by not raising it in its pre-hearing brief. See RPB at
19-31; cf SRB at 6; CRB at 3 n.2. This investigation is governed by the ground rules of Chief
Judge Bullock. Notice of Amended Ground Rules (Aug. 18, 2017) (EDIS Doc. ID 620450).
Ground Rule 8.2 states that the “pre-trial brief shall set forth a party’s contentions on each of the
proposed issues” and “[a]ny contentions not set forth in detail as required herein shall be deemed
abandoned or withdrawn, except for contentions which a party is not aware and could not be
aware in the exercise of reasonable diligence at the time of filing the pre-trial brief.” Id. at 13.
Fujifilm offers no reason for its failure to raise this argument in its pre-hearing brief, and there is
no indication that Fujifilm was not fully aware of the facts underlying its argument well before
the deadline for filing its pre-hearing brief. See CRB at 3 n.2 (representing that Sony’s
infringement contentions incorporated the evidence upon which Fujifilm now relies); CRB at 5
n.4 (stating that Fujifilm chose not to depose MAC during discovery); SRB at 6. Fujifilm cannot
now present this argument for the first time in its post-hearing brief.
Even if Fujifilm did not waive this non-infringement argument, the evidence it relies on
does not sufficiently disrepute the evidence that Dr. Bogy’s opinions were based on
measurements from the correct products.
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Sony went about gathering its evidence of infringement by engaging an independent
testing lab—Measurement Analysis Corporation (“MAC”)—to measure certain properties of the
accused products at the direction of its expert, Dr. Bogy. CIB at 20; CX-0002C at Q/A 94-96
(direct witness statement of Dr. Bogy). The undisputed evidence shows that “MAC is a well
known, respected, and trusted laboratory in the industry of magnetic recording media” and is
used by Sony, Fujifilm, and others in the regular course of their businesses to test and measure
the physical, surface, functional, and structural characteristics of their magnetic recording media.
CX-0002C at Q/A 95. MAC also provides Compliance Verification (CV) testing for magnetic
tape manufacturers to verify their compliance with the respective LTO specifications. Id.; Tr. at
219:20-22O:1O(Dr. Bogy testifying that “[e]ach LTO member has to submit its tapes to MAC
every year for compliance verification”); JX-0134 at 2. As a result of its regular testing for
these companies, MAC has developed standard industry-accepted procedures for taking the types
of measurements it performed for Dr. Bogy. CX-0002C at Q/A 96.
Dr. Bogy testified that he directed Sony’s counsel to purchase accused products from a
company called Horizon Systems and then ship the products to MAC. Id. at Q/A 98-100; see
CX-0382C (packing list from Horizon Systems showing that certain tapes were shipped on
September 27, 2017, to Sony’s counsel). Dr. Bogy opined that the purchased products appeared
to be authentic and materially identical to the same products purchased from other vendors. CX
0002C at Q/A 100-101. Dr. Bogy further testified that he visited MAC’s laboratory in October,
met with their technicians and engineers who were performing the tests, and inspected and
approved MAC’s equipment, testing procedures, preparation of the tapes for testing, test setup,
the testing itself, and the recording of test data. Id at Q/A 97.
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PUBLIC VERSION
According to the documents provided by MAC in this investigation, it received forty-nine
magnetic tape media cartridges of nine different types of cartridges from Sony’s counsel on
October 5 and 12, 2017. JX-0134 at 2. It then performed various tests on the cartridges and
produced a “Final Report” on October 25, 2017, that Dr. Bogy used to help form his
infringement opinions. CX—0002Cat Q/A 105; JX-0134. This report describes the testing setup
and procedure, and summarizes the data and measurements MAC obtained from the testing. CX
0002C at Q/A 106; JX-0134. MAC also produced separate measurement data and 1‘6pO1'tS	for
surface roughness, missing pulse, and skirt signal-to-noise ratio. Id. at Q/A 109-111 (citing
surface roughness documents at CX-0074, CX-0075, CX-0077, CX-1700, CX-1703, CX-1706,
CX-1712, CX-1715, and CX-1718; missing pulse documents at CX-1687C, CX-1690C, CX
1693C, JX-0134C, CX-1702C, CX-1705\C, CX-1708C, JX-0134C, CX-1714C, CX-1717C, CX
1720C, and JX-0134C; and skirt signal-to-noise ratio documents at CX-1686C, CX-1721C, JX
0134C, CX-1692C, CX-1723C, JX-0134C, CX-1707C, CX-1723C, JX-0134C, CX-1713C, CX
1725C, and JX-0134C).
_ Some of the files generated by MAC consist of screenshots from the display of the testing
equipment that show various measurement results and associated metadata. See CX-0258C. For
example, the screenshot below is from the Zygo “Microscope Application” that shows certain
test results for “Sample V-6 BOT Back Side_1.” Id.
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PUBLIC VERSION
The bottom section of these screenshots, titled “Meas ure Attributes,” supposedly displays the
date and time the t =stwas mu. In its post-healing brief, Fnjifilm excerpts and annotates this
section for nine 0 1‘the screenshots, each of which shows a date before Sony’s counsel
purpmtedly purchased the tapes relied on by Dr. Bogy. RIB 1t 15~l7. For example, the
screenshot for “SlamjaleV-6” above, a poltion of which is excenpted below, contains a timestamp
of “Thu Sep 14 l6:13:07 2017” as annotated with a yellow box by Fujifilnfs cotmsel. Id. at I5
(excerpt ng and anu »tatingCX~0258C).
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PUBLIC VERSION
As an initial matter, Dr. Bogy did not testify that he relied on the screenshots to form his
opinions. See CX-0002C at Q/A 109-111 (listing the exhibit numbers for the testing summaries
and reports from MAC,‘ not exhibit numbers for the screenshots). The only reference to the
screenshots in his direct witness statement is to explain the difference between 3D and 2D
topographic data. CX-0002C at Q/A 134-135 (citing CX-0073). He instead relies on the Final
Report, which he calls the “summary report,” produced by MAC as well as other evidence that
shows the measurement results of the products. See id. at Q/A 105 The Final Report states that
the information contained therein was generated from the products it received on October 5 and
12, 2017. JX-0134 at 2. 	'
Further, after he was presented with Fujifilm’s line of questioning for the first time at the
hearing and asked to explain, Dr. Bogy testified that the date on the screenshot “is something
that’s called an attribute and is put in by the operator, not coming from the measurement
software.” Tr. at 272:15-273:21. He explained that the operator of the equipment is not
necessarily concerned with setting the date because the screenshots are not intended to be used as
evidence. Id. And, when describing his own experience with the testing equipment, Dr. Bogy
testified that the date stamped on the results by the equipment does not correspond to the date the
test was taken if he does not change the date shown on the system. ld.; see id. at 273125-274:3
(“I have recently . . . noticed that the date on my Zygo screen was 2008.”).
The documentary evidence corroborates Dr. Bogy’s testimony. The screenshots
excerpted and amiotated by Fujifilm’s counsel in its post-hearing brief are for samples V-'6,VI-1,
IV-1, Ill-1, I-1, V-1, IV-6, VI-6, and II-1. _RIB at 15-17. The Final Report states that MAC
received on October 5 and 12, 2017, the magnetic tape media cartridges labeled “I-1~4, II-1~4,
111-1~4,IV-1~9, V-1~10, VI-1~10, VII-1~4, and VII-6~9,” where the tilde supposedly represents
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PUBLIC VERSION
a range such that I-l~4 comprises four cartridges labeled I-1, I-2, I-3, and I-4. JX-0134 at 2.
That the sample numbers are identical between the Final Report and the labels affixed to the
cartridges received by MAC as described by Dr. Bogy is evidence that the screenshots were
tal-zenfor the same tapes described in the report.
The raw data underlying the Final Report also shows a date for each test that comports
with the timeline proffered by Dr. Bogy. For example, CX-0074C is a spreadsheet that contains
the surface roughness data for the Fujifilm LTO-4 product. CX—0002Cat Q/A 311. This
spreadsheet has a. date of “l0/ 10/17” for sample “QE-G4-001.” CX-0074C. As shown in CX
002lC,'a single physical tape cartridge is labeled with both “IV-1"’and “QE-G4-001.” The raw
data is therefore evidence that the tapes received by MAC on October 5 and 12, 2017, were
tested by MAC afier they were received.
~ Viewing the evidencei as a whole establishes that the accused products purchased on
September 27, 2017, and received by MAC on October 5 and £2, 2017, are more likely than not
the same tapes whose measurements appear in the Final Report dated October 25, 2017, and in
the imderlying data relied on by Dr. Bogy. Fujifilm has therefore failed to establish that the
opinions of Sony’s expert based are unreliable on this basis.
2. Sony properly relied on evidence of the claimed physical
characteristics to establish that the accused products more likely than not
have “a backside surface . . . configured to decrease embossment of the
recording surface.” 	if
Fujifihn argues that Sony failed to present evidence that the accused products have “a
backside surface . . . configured to decrease embossment of the recording surface” as required by
independent claims 1 and 15. RIB at 18. Fujifilm’s argiuneut, however, is not persuasive
because Fujifilm.misunderstands the evidence proffered by Sony.
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PUBLIC VERSION
Fujifilm’s support for its argument comes solely from its cross-examination of Sony’s
expert, Dr. Bogy: V . '
Q. Okay. Now, Doctor, when it says decrease embossment, what
does that mean? Decrease relative to what?
A. Relative to what it would have been if they did not have the
surface properties in the claims of the patent. _
Q. Okay. Now, you did not do any comparative testing showing
embossment levels in the accused products as compared with some
other products; conect?
A. I did not. _ .
Tr. at 205:9-22. From this testimony, Fujifihn concludes that Sony was required to conduct
“relative” or “comparative” testing of the accused products. RIB at I8-l9. Fujifilm does not
suggest or propose how such testing would be done or which reference products the accused
products could be tested against. Fujifihn only argues that Sony’s failure to perform this
comparative test requires a finding of non-infringement. 	.
Dr. Bogy’s testimony on this issue was more thorough than Fujifihn presents. His
testimony that led up to the cross-examination questions was that a. backside surface is
configured to decrease embossment if it has the claimed surface_characteristics. CX-0002C at
Q/A 304-307. For support, he relies to the disclosure in the ’774 patent that decreasing specific
surface measurement values leads to “a decrease in the number of and/or level of pits or
embossments formed in adjacent layers of tape . . . .” Id. at Q/A 305 (citing ’774 patent at 91.62
66). He also relies on the deposition of an inventor of the ’774 patent, who testified that “the
surface structure of the backside coating” “allowed it to minimize embossment into the magnetic
coating.” id. at Q/A 306 (citing JX-0026 at 36:9-37:1).
Dr. Bogy’s complete testimony establishes that the accused products more likely than not
have a backside configured to decrease embossment because they have surface chzuacteristics
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PUBLIC VERSION
that a person of ordinary skill in the art would understand results in decreased embossment. This
indirect. evidence of infiingernent is sufficient. See Spansiorz, 629 F.3d at 1352 (“[The patent
owner’s] burden to show infringement by a preponderance of the evidence does not require
physical validation of all indirect evidence”).
Fujifiim argues that this “configured to decrease embossment: limitation will be
improperly read out of the claims if it can be met by simply showing that the accused products
have the claimed surface characteristics. RIB at l9 (citing Teras Instruments Inc. v. United
States Int’! Trade Comm ’n, 988 _F.2d 1165, 1171 (Fed. Cir." 1993)); RRB at 27-28 (same).
Fujifilnfs argument is misplaced because this limitation has not been construed (nor did Fujifilm
propose that it should be construed) such that it will always be satisfied when the claimed surface
characteristics are met. Instead, Sony established that the accused products satisfy this limitation
under the specific facts in this investigation through indirect evidence. Fujifilm could have
attacked Sony’s_evidence that a person of ordinary skill in the art would understand that certain.
surface characteristics would result in decreased ernbossment, or put. forth evidence of its own
that its products did not decrease embossment even though they had the claimed surface
characteristics. Fujifilm chose not to present any such evidence or argument, so the evidence
offered by Sony on this matter is unrebutted in the record, and convincing. See SIB at 28.
3. Sony’s measurements and calculations of “skew” are sufficient to
show that the accused products satisfy the limitation.
As set forth above, the limitation “skew” in asserted claims 1 and 16 is construed as “the
third moment of a roughness distribution and measures the asymmetry of the surface profile
about a mean plane of the surface being evaluated.” Section IV.C.l, supra. Fujifilm argues that
Sony failed to provide evidence of infringement under this construction because its expert “relies
solely upon Rsk evaluated about a mean line, rather than a mean plane.” RIB at 20. Fujifihn
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PUBLIC VERSION
clarifies that the issue “isn’t whether the data is 2D or 3D; it’s whether the calculations are
about a mean line or plane.” Id. (emphasis in original). Fujifilm contends that Sony’s expert did
not calc ilate the sur ?aceprofile about a mean plane because he calculated Rskseparately for each
row and then averaged the rows together. Id. (citing C 1-0002Cat 2/A 64 (“If the measurements
are over an area, the 1the summation series would be da tapoints in an area and not just a line.”).)
Legardlessof whether Fujifilm’s interpretation of the cons ruction of “skew” is correct,
the evidence shows that S0ny’s measurements and calculations of skew were about a mean
plane. Sony’s exp mt, Dr. Bogy, testified that skew is calculate! according to the following
formula, where “n” is the number of surface height data points in th 2sample:
"==*=
CX-000 ZCat Q/A 62. Fujifilni’s expert states, without explanatio r, that this formula “is a one
dimensi anal.summa ion that measures asymmetry about a.mean line.” RX-0583C at Q/A 149.
But Dr. Bogy explains that “this fomiula applies whether the measurements are over a single
trace (Ii re) or over multiple traces (lines) that form scanned area, " and that, for a scanned area
(or plan 2),“the sum nation series would be data points in an area and not just a line.” Id. at Q/A
64; cf Fr. at 227:9-228:5 (Dr. Bogy explaining that a measure nent along a line is in two
dimensi I115befause the line is one dimension and the height of every point on the line is the
second imension). 	_
ts for the measurementstaken of the accuse I products, Dr. Bogy testified that each
sample zomprised reasurements at I000 points along a line, and 1000 lines within the sample
window. Tr. at 227: 16-229:22 (“I000 rows and l000 columns” results in “a million data points
in that reasuremenf’); CX-0002C at Q/A 128-131 (“M AC took 3D measurements”); JX-0134 at
5. Dr. logy further testified that the software used by MAC calc lated the surface parameters,
V 	46 	p

‘ 	PUBLIC VERSION
including skew, by taking into accoimt all of the measured data points. CX-0002C at Q/A I28,
l40-141; JX-0134 at 5 (“The 3D topographic data was used to calculate . . . Rsk(Skewness) . . .
.3!)
The evidence therefore shows that Sony’s measurements of the data used to calculate‘
skew were “about a mean plane” and its calculations were also “about. a mean plane.”
Accordingly, Fujifilm’s argument that skew must be calculated “about a mean plane,” even if
correct, has no impact on Sony’s infringement analysis.
4. Sony’s measurements of the “peak-to-valley roughness” are sufficient
to show that the accused products satisfy the limitation under any proposed
construction. 	‘
Staff contends that Sony’s measurements of the accused products are not sufficient to
establish that the “peak-to-valley roughness is less than about 300 nm" limitation of asserted
claims 5 and 17, and the “pea1k—t0-valleyroughness less than about 325 inn” limitation of
independent claim 15 upon which asserted claim 16 depends, are met. SIB at 42. Staff similarly
contends that Sony’s measurements are not sufficient to establish that the “plateau ratio of less
than or equal to about 0.65” limitation of asserted claim 6 is met because each proposed
construction for “plateau ratio” is based in part on “peak-to-valley roughness.” Id.; see Joint
Motion for Leave to File Second Amended Joint List of Proposed Claim Terms, Exhibit A at 10
(May 25, 2018).
Specifically, Sony and Fujifilm propose that “peak-to-valley roughness (Rz) is an average
maximum profile of the ten greatest peak-to-valley separations in the evaluation area,” which is
taken verbatim from the specification. Joint Motion for Leave to File Second Amended Joint
List of Proposed Claim Terms, Exhibit A at 10-ll (May 25, 2018); JX-0003 at 8:38-40. Staffs
proposed construction inserts an additional requirement that “the peak-to-valley separations are
determined by measuring the distance from the top of a peak to the bottom of an adjacent
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PUBLIC VERSION
valley,” which is also taken verbatim from the specification. Joint Motion for Leave to File
Second Amended Joint List of Proposed Claim Terms, Exhibit A at 10-11 (May 25, 2018);
JX-0003 at 8:40-42. Staff also proposes that the measurement be taken by “an optical
interferometer, such as a Wyko® Optical Interferometer” for the same reasons as discussed
above in relation to the construction of the “skew” limitation. Joint Motion for Leave to File
Second Amended Joint List of Proposed Claim Terms, Exhibit A at 10-ll (May 25, 2018); SIB
at 34; Section IV.C.1, supra.
Sony contends that the difference between their construction and Staffs construction
“has no impact on infringement/invalidity because meeting Sony’s/Fujif1lm’s proposed
construction necessarily meets Staffs construction.”6 SIB at 18. Sony’s expert, Dr. Bogy,
explains “the numbers that we get from taking the highest peaks and lowest valleys without
regard to the adjacent issue is greater than the number you would get if you restricted the valleys
- - lowest valleys to be adjacent to the highest peaks.” Tr. at/255214-259:1. Fujifilm’s expert,
Dr. Wang, agrees that calculating “the 10 greatest peak-to-valley separations in the area
regardless of whether those peaks and valleys [are] adjacent . . . is necessarily greater than or
equal to a measure that is limited to adjacent peaks and valleys." RX-0003C at Q/A 703. In
6 Staff contends that Sony waived its ability to argue that its measurements necessarily produce
greater values than measurements performed under Staff’s construction. SRB at 8-9. Sony’s
pre-hearing brief on this issue states only that “Fujifilm’s LTO-4 tapes have a backside surface
having a peak-to-valley roughness of 135.39 nm, and Fujifilm‘s LTO-6 tapes have a backside
surface having a peak-to-valley roughness of 119.84 nm.” SPreB at 31. Sony’s pre-hearing brief
did not specifically call out the mathematical tautologies underlying its argument here, but
Fujifilnfs expert had done so in his direct witness statement that was exchanged prior to the pre
hearing brief deadline. RX-0003C at Q/A 703. Staff does not contend any party is prejudiced by
Sony repeating Fujif1lm’s experts’ opinions in its post-hearing brief, nor did Staff object to the
relevant testimony of Sony’s expert at the hearing. See Tr. at 255:14-259:1 (Dr. Bogy). I will
therefore consider Sony’s argument in this instance.
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PUBLIC VERSION
other words, because the claim limitations require the peak-to-valley roughness to be less than a
certain value, an incorrect measurement that necessarily creates a higher number than a correct
measurement will show infringement if the resultant measurement falls below the claimed value.
Sony’s measurements therefore constitute acceptable evidence of infringement if Staff s
construction of the limitation is correct. See Spansion, 629 F.3d at 1352.
Assuming that Sony’s measurements sufficiently establish that the accused products have
a peak-to-valley roughness under the claimed limit, Staff contends that the measurements are
insufficient to satisfy the “plateau ratio of less than or equal to about 0.65” limitation of claim 6.
SRB at 9. Staff explains that the “peak-to-valley roughness” measurement is the denominator in
the “plateau ratio” calculation, so a measurement that results in a necessarily greater peak-to
valley roughness value than required will also necessarily reduce the resulting plateau ratio. 1d.;
see JX-0003 at 8:55-57 (defining plateau ratio as “Rpm/ R1” Where Rp|]]is the peak height mean
and R, is the peak-to-valley roughness value). For example, where the numerator is constant
(e.g., 1), the value of a ratio with a denominator of 2 (i.e., 1/2)is greater than the value of a ratio
with a larger denominator of 4 (i.e., %).
Staft‘s argument as to “plateau ratio” appears correct according to basic mathematics, but
Staff raised this argument for the first time in its reply post-hearing brief. Staff does not cite to
the transcript or any other part of the record to show that Sony was put on notice of Staff‘s
argument. Accordingly, Sony did not have the opportunity to present counterarguments or
citations to the evidence that might explain how its measurements might still establish that the
accused products more likely than not infringe claim 6 in light of Staffs assertions. For
example, as Staff recognizes, it is “unclear how much larger the actual plateau ratios would be”
under a measurement done according to Staff‘s proposed construction. SRB at 9. Further, it is
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PUBLIC VERSION
unclear if or how Sony’s measurement of peak—to-valley roughness also impacts the
measurement of peak height mean, which is the numerator of the plateau ratio, such that any
increasein the value of the peak-to-valley roughness measurement would be negated by a
corresponding increase in the value of the peak height mean measurement. Sony might have put
evidence in the record that the plateau ratios calculated pursuant to Staff's proposed construction
of “peak-to-valley roughness" would still fall below the limit in claim 6, but Sony was not given
the opportimity to cite to any such evidence in response. And Fujifilm did not present any
argument or evidence that its products do not satisfy the “plateau ratio” limitation under Staff s
proposed construction. RIB at 15-25; RRB at 24-29. Because Sony was not able to respond to
Staffs argument raised for the first time in its reply brief, I will not consider it. See G.R. 11.3
(“The post-trial reply brief shall discuss the issues and evidence discussed in the initial post-trial
briefs of each opposing party . . . .”). 	_
In sum, Sony’s measurements constitute proper direct evidence. under Sony’s and
Fujifihn’s proposed construction of “peak-to-valley roughness” and proper indirect evidence
under Staff’s proposed construction. Accordingly, a construction of “peak-to-valley rouglmess”
to resolve the differences between the parties’ constructions will not resolve a controversy
between the parties in this investigation. See VividTechs, 200 F.3d at 803. 	.
5. Sony’s expert properly relied on the specifications associated with the
accused products to measure “skirt signal-to-noise ratio” and “small error
rate.” 	‘
Fujifilm argues that Complain_ant’sexpert, Dr. Bogy, “applied a flawed methodology for
measuring” the signal-to-noise ratio (“skSNR”) of asserted claim 8 and the small error rate
of asserted claim 10. RIB at 20-24. Claim 8 requires that “the magnetic recording medimn has a
skirt signal-to-noise ratio of greater than about 0.2 relative dB along a substantial entirety of a
total length of the magnetic recording medium,” and claim 10 requires “the magnetic recording
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medium has a small error rate of less than about 0.5 errors/m along a substantial entirety of a
total length of the magnetic recording medium.” JX-0003 at 13:11-14 (emphasis added), 13:21
14 (same).
The fundamental disagreement between the parties is whether these two measurements
must be made according to the ECMA-319 specification, also known as the LTO-1 specification,
or whether the measurements can be guided by the specifications of the individual products, as
Sony did in this investigation. Specifically, Sony tested Fujifilm’s LTO-4 products using an
LTO-4 drive head and reference tape as set forth in the LTO-4 specification, and it tested
Fujifilm’s LTO-6 products using an LTO-6 drive head and reference tape as set forth in the
LTO-6 specification. CX-0002 at Q/A 166-174, 194-199 (Dr. Bogy’s direct Witness statement).
Fujifilm argues that Sony should have tested Fujifilnfs LTO-4 and LTO-6 products using an
LTO-1 drive head and reference tape pursuant to the ECMA-319 specification as Fujifilm’s
expert, Dr. Wang, did in this investigation for non-LTO-1 prior art tapes. RIB at 21; SIB at 47.
The claims do not specify a particular method of measuring the properties at issue. Nor
does the specification of the ’774 patent, which teaches only that “[o]ne example method of
measuring the skirt signal to-noise ratio is described in ECMA International Standard 3.19.”
JX-0003 at 12:27-29. As Staff and Sony recognize, there is no legal basis for importing this
“one example” from the specification into the claims. SIB at 27 (citing Varco, L.P. v. Pason Sys.
USA Corp, 436 F.3d 1368, 1373 (Fed. Cir. 2006); Gillette C0. v. Energizer Holdings, Ina, 405
F.3d 1367, 1374 (Fed. Cir. 2005)); CIB at 32-33 (citing Phillips, 415 F.3d at 1320). Fujifilm’s
counterargument that there is no basis for reading the commercial specifications for the accused
products into the claims is also correct. RIB at 23.
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Indeed, there is no basis for reading any specific measurement methodology into the
claims, and thus no reason to construe these limitations to impose such a requirement. A person
of ordinary skill in the art would recognize that the skSNR and small error rate values required
by the claims would be measured in a way appropriate for the specific magnetic tapes. This is
because different types of magnetic tapes can have a different properties, “including the number
of data tracks, the locations of the data tracks, the width of gap between data tracks, the width of
a data track, and the length of each bit recorded on a data track.” CX-0012C at Q/A 194
(rebuttal witness statement of Dr. Bogy); CX-0002C at Q/A 168 (direct Witness statement of Dr.
Bogy); see RX-05 83C at Q/A 177 (Fujif1lm’s expert, Dr. Wang, testifying that “ECMA-319 and
the LTO specifications require a reference tape that is selected as the standard reference for the
product generation for various measurements including skirt SNR”). In particular, the
measurement of both skSNR and small error rate requires writing and measuring data from the
data tracks, and using a drive head that does not match up with the specific tape parameters will
“result in improper and inaccurate measurements.” CX-0012C at Q/A 197; Tr. 225:4-17.
Whether skSNR and small error rate were measured in a way appropriate for the specific
tapes is a factual question of infringement, not a legal question of claim construction. Cf ADC
Telecommunications, Inc. v. Switchcraf‘, Ina, 281 Fed. Appx. 989, 992-993 (Fed. Cir. 2008)
(nonprecedential) fliolding that, because the claims did not require any particular testing method
for the disputed limitations and the specification lacked clear guidance of a particular testing
method, “[t]he parties’ dispute over the proper testing method is therefore a factual question that
the district court properly submitted to the jury”).
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Fujifilm argues that S0ny’s measurements of the LTO-4 and LTO-6 products that Sony
took pursuant to the respective LTO-4 and LTO-6 specifications are not sufficient. to show
infringement for three reasons.7
First, Fujifilm points out that the LTO-4 and LTO-6 specifications are confidential such
that a person of ordinary skill in the art would not necessarily have access to the specifications.
RIB at 21-22; Tr. at 262:5-266:14 (Dr. Bogy testifying that a person needs to be a member of the
LTO consortium to access the LTO specifications). This matters, according to Fujifilm, because
using confidential specifications to detennine infringement “deprives the ’774 [p]atent of its
public notice function.” RIB at 22 (presenting this assertion as attorney argument without any
citations, and not explaining what “public notice function” it is referring to, or what such “public
notice function” requires). Fujifilm’s angst is misdirected. A company who manufactures an
LTO-compliant tape according to the relevant LTO specification would necessarily have access
to the LTO specification to properly measure the skSNR and small error rate of the tape in order
to determine if the tape falls within the claimed limitations. Measuring the physical properties of
LTO-4 and LTO-6 tapes according to their respective specifications is therefore proper.
Second, Fujifilm points out that the LTO-4 and LTO-6 specifications did not yet exist at
the time of the invention of the ’774 patent. RIB at 24. Fujifilm argues that a person of ordinary
skill in the art at the time of the invention could not have performed the measurements in the
same way as Sony’s expert, which makes Sony’s measurementsimproper. Id. But, as discussed
above, such a person would have recognized that a tape should be measured in a way appropriate
7 Fujifilm also contends that Dr. Bogy did not follow the IBM 3592 specification when
measuring the IBM 3592 tapes. RIB at 22-23. But the IBM 3592 tapes are not accusedof
infringement, and Fujifilm does not explain how its contention, even if true, would result in non
infringement of the accused products.
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PUBLIC VERSION
for the specific magnetic recording medium. See Tr. 692:8-693:16 (Dr. Wang testifying that
skSNR “is a relative measurement made in comparison to a reference tape,” and that a person of
ordinary skill in the art “would have known at the time of the invention that a standard reference
tape is tied to a particular specification”). A person of ordinary skill in the art would have
understood that the asserted claims are not limited to products that exist only before or at the
time of the invention, and that after-arising products would have to be measured in ways
appropriate for those products. See Innogenetics, N.V. v. Abbott Laboratories, 512 F.3d 1363,
1371-72 (Fed. Cir. 2008) (“Our case law allows for after-arising technology to be captured
within the literal scope of valid claims that are drafted broadly enough”); SuperGuide Corp. v.
DirecT V Enterprises, Ina, 358 F.3d 870, 878-80 (Fed. Cir. 2004) (finding that the claim
limitation “regularly received television signal” was broad enough to encompass digital signals
even though no televisions that could receive digital signals existed as of the filing date).
~ Third, Fujifilm argues that Sony’s approach improperly requires that an accused product
be commercialized with an associated specification. RIB at 23. Fujifilm points out that the
‘embodiments in the ’774 patent were not commercial products, and that the claims are directed
to the magnetic tape rather than to a cartridge that embodies a commercial product. But neither
Sony nor Staff assert that the claims can only cover commercial products or that only
commercial specifications can be used to determine whether the physical properties of magnetic
tape satisfies the claim limitations. The claims only require that the magnetic tapes at issue have
certain properties. Whether or not the properties were properly measured is a factual
infringement issue. The magnetic tapes at issue here happen to /be commercial products and an
acceptable standard for measuring their physical properties happens to be set forth in a
corresponding commercial specification. To answer the hypothetical posed to Dr. Bogy at the
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hearing, “a tape engineer working at a.new start—upcompany in Silicon Valley [would] be able to
determine whether or not they are infringing claims 8 and 10” by measuring the physical
properties of its tape according to an appropriate method, which might be specific to that specific
tape. See Tr. 180110-15.
In sum, claims 8 and I0 set forth values for skSNR and small error rate that fall within
the scope of the invention. The claims do not specify a specific methodology for measuring
those values, nor does the specification require a single methodology be used for every type of
tape. A person.of ordinary skill in the art at the time of the invention would understand that the
values would be measured in a way appropriate for the specific tape at issue, as different types of
tapes with different properties may require different measurement methodologies. Sony
established that the properties of the accused LTO-4 and LTO-6 products can be appropriately
measured by following the respective LTO-4 and LTO-6 specifications. Sony’s expert therefore
properly relied on the measurements of the skSNR and small error rate of the accused products
performed according to those specifications. 	'
6. Sony’s measurements of the “peak height mean” are sufficient to
show that the accused products satisfy the limitation under any proposed
construction.
Fujifilm argues that the “measurement methodology” of Cornplainant’s expert, Dr. Bogy,
“does not satisfy any party’s proposed constructions . . . [that] require ‘peak height mean’ to
include the mean height of all peaks.” RIB at 5 (emphasis added). Asserted claims 16 and 17
depend on claim 15, which requires “a peak height mean less than about 200 [nm].” JX-0003 at
14:1-16.
Fujifilm contends that Dr. Bogy “used only . . . ‘the single highest peak found in each
sampling area’” and discarded the remaining peaks, instead of using all peaks. RIB at 25
(quoting CX-0002C at Q/A 68). But that is not what Dr. Bogy did. The support for Fujifihn’s
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contention comes from the portion of Dr. Bogy’s direct witness statement where he discusses
general technical concepts. For peak height mean, Dr. Bogy explained that, “[i]n mathematical
terms, Peak Height Mean for a measured sample area is determined by dividing the evaluated
surface into multiple sampling areas and calculating the mean average of the single highest peak
found in each sampling area.” CX-0002C at Q/A' 68. /1
Dr. Bogy’s statement of peak height mean “in mathematical terms” is not relevant for
two reasons. See CIB at 30.8 First, the ’774 patent defines peak height mean as “the mean
height of peaks 42 extending above a standard plane of backside surface 42 over the length of the
magnetic recording medium,” which all parties regurgitate in their proposed constructions for the
term. JX-0003 at 8:30-33; Joint Motion for Leave to File Second Amended Joint List of
Proposed Claim Terms, Exhibit A at 9-10 (May 25, 2018). Second, the measurements relied on
by Dr. Bogy comply with this definition. As he testified, “MAC obtained the peak height mean
based on the full set of the 1000x1000 data set by deriving the mean height of the peaks
extending above the standard plane in the full data set.” CX-0002C at Q/A 141. Staff also
points out that the device MAC used to obtain the peak height mean value calculates “the
arithmetical average height of all peaks,” which complies with the proposed constructions. SIB
at 50 (quoting Tr. at 712:9-713116 (Dr. Wang testifying about the manual for the software used
in connection with the Zygo machine) and citing CX§0275 at 487 (the manual for the software
used in connection with the Zygo machine)). i
8 Sony’s arguments regarding “peak height mean” are included in the “Direct Infringement of
Claim 6” section of its “Corrected Initial Post-Hearing Brief,” even though the “peak height
mean” limitation only appears in asserted claims 16 and 17 through their dependency on claim
15. CIB at 30. ' 	.
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Sony’s measurements therefore constitute proper evidence of “peak height mean” as
required by claims 16 and 17.
E. Domestic Industry —Technical Prong 	.
Sony alleges that (1) its LTO-4 and LTO-5 products practice claims 1, 5, 6, 7, 10, 16, and
17 of the ’774 patent; (2) its LTO-6 products practice claims 1, 5, 6, 7, 8, 10, 16, and 17; (3) the
IBM 3592 Gen 2 (JB, JX) products practice claims 1, 5, 6, 7, 8, 10, 16, and 17; (4) the IBM Gen
3 (JC, JY, JK) products practice claims 16 and 17; and (5) the IBM 3592 Gen 4 (JD, JZ, JL)
products practice claims 1, 5, 6, 7, 10, 16, and 17. CIB at 37. S0ny’s evidence that these
products practice the claims is from “the same testing protocols that it used to evaluate
infringement” of the accused products. CX-0002 at Q/A 355-519 (Sony’s expert, Dr. Bogy,
citing to and explaining documentary evidence to provide a limitation-by-limitation analysis of
how the domestic industry products practice the asserted claims); CIB at 37-40 (citing evidence);
SIB at 51-52 (same). p 	- ‘
For the same reasons as set forth in its infringement analysis, Staff agrees that the
domestic industry products satisfy the limitations of the claims except for the “peak-to-valley
roughness” and “plateau ratio” limitations of claims 5, 6, 16, and 17. SIB at 52. Staff concludes
that the technical prong is therefore satisfied because “Sony’s LTO-4 and LTO-5 tape products
and IBM’s 3592 Generation 4 products practice claims 1, 7, and 10 of the ’774 patent, and . . .
S0ny’s LTO-6 tape products and IBM’s Generation 2 tape products practice claims 1, 7, 8 and 10
of the ’774 patent.” Id.
Fujifilm’s initial post-hearing brief states only that “Sony has failed to show the DI
Products practice these claims for the same reasons” as it argued for infringement, and its reply
post-hearing brief states only that “Sony’s DI arguments fail for the same reasons as its
infringement analysis.” RIB at 26; RRB at 30.
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As discussed above, I rejected Fujif1lm’s and Staff‘s arguments that the evidence relied
on by Sony is insufficient to establish infringement. Accordingly, based on the evidence and the
arguments of the parties, I find that Sony established by a preponderance of the evidence that (1)
its LTO-4 and LTO-5 products practice claims 1, 5, 6, 7, 10, 16, and 17 of the ’774 patent; (2) its
LTO-6 products practice claims 1, 5, 6, 7, 8, 10, 16, and 17; (3) the IBM 3592 Gen 2 (JB, JX)
products practice claims l, 5, 6, 7, 8, 10, 16, and 17; (4) the IBM Gen 3 (JC, JY, JK) products
practice claims 16 and 17; and (5) the IBM 3592 Gen 4 (JD, JZ, JL) products practice claims 1,
5, 6, 7, 10, 16, and 17. The technical prong of the domestic industry is therefore satisfied. See
19 U.S.C. § 1337(a)(2) and (3); Certain Microsphere Adhesives, Process for Making Same and
Prods. Containing Same, Including SelfiStick Repositionable Notes, Inv. N0. 337-TA-366,
Comm’n Op., 1996 WL 1056095, at *8 (U.S.I.T.C. Jan. 16, 1996).
F. Invalidity and Unpatentability
Fujifilm contends that the IBM 3592 Generation 1 tapes render invalid asserted claims 1,
5, 6, 7, 8, 10, 16, and 17 of the ’774 patent and the Sony AIT-39 tapes render invalid asserted
claims 1, 5, 6, 7, 16, and 17 under 35 U.S.C. § 102. RIB at 26-36. Fujifilm also contends that
both tapes render claims 8 and 10 obvious under 35 U.S.C. § 103 in view of the knowledge and
experience of a person of ordinary skill in the art. Id. at 36-37. Next, Fujifilm contends that the
asserted claims are rendered obvious over‘ the Sasaki patent in View of the knowledge and
experience of a person of ordinary skill in the art. Id. at 37-40. Fujifilm further contends that the
9 Sony states that Fujifilm’s invalidity contentions are not directed to all AIT-3 tapes, but only
the SDX3-100C product. CIB at 40 n.9. Fujifilm explains that “SDX3-100C refers to a model
of AIT-3 compatible tape cassette.” RIB at 22 n.3. Staff clarifies that Sony‘s SDX3-100C tapes
are compatible with Sony’s AIT-3 format. SIB at 60. No party provides a reason why the
distinction-is relevant. I therefore refer to the prior art product as “AIT-3” without determining
whether the moniker applies to all AIT-3 tapes or only to the SDX3-100C product.
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asserted claims are invalid under 35 U.S.C. § 112 for failing to satisfy the Writtendescription and
enablement requirernents,10 and that the claims are unpatentable under 35 U.S.C. § 101 for
claiming “the abstract idea of a tape with a normal backside distribution.” Id. at 40-47. 3
Sony disagrees with Fujifilm’s contentions of invalidity. CIB at 40-62. Staff agrees with
Sony that Fujifilm has not met its burden to establish that the claims are invalid under any of its
theories. SIB at 53-70. 	.
A patent is presumed valid. 35 U.S.C. § 282; Microsoft Corp. v. i4i Ltd. P’ship, 564 U.S.
91, 100 (2011). A respondent who has raised patent invalidity as an affinnative defense, whether
through section 102, 103, or 112, has the burden of overcoming this presumption by clear and
convincing evidence. See Microsoft, 564 U.S. at 101-114. “Although not susceptible to precise
definition, clear and convincing evidence has been described as evidence which produces in the
mind of the trierof fact an abiding conviction that the truth of [the] factual contentions are highly
probable.” Buildex Inc. _v.Kason Indus, Inc, 849 F.2d 1461, 1463 (Fed. Cir. 1988) (internal
quotations and citations omitted). 	.
The respondent’s ultimate burden to prove invalidity never shifts to the complainant to
prove validity, but once the respondent satisfies its burden of persuasion, the complainant has
“the burden of going forward with the evidence” that the prior art does not anticipate the claim,
that the Written description supports the claim, or whatever is necessary to respond to the
respondenfs theory of invalidity. Tech. Licensing Corp. v. Videotek, Inc., 545 F.3d 1316, 1327
10Fujifilm also contends that the claims are invalid as indefinite under 35 U.S.C. § 112 because a
person of ordinary skill in the art would not understand, with reasonably certainty, the meaning
of the tenn “skew.” RIB at 12-14, 45. This contention is addressed in the claim construction
section above, as the parties briefed this issue in the claim construction portions of their post
hearing briefs. Section IV.C.1, supra. 	. 	'
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(Fed. Cir. 2008). Regardless of the evidence put forth by both sides, “the risk of decisional
uncertainty stays on the [respondent}” such that “if the fact trier of the issue is lefi uncertain, the
[respondent] loses.” Id.
Based on the evidence and arguments of the parties set forth in detail in the following
subsections, I find that Fujifilm did not present clear and convincing evidence that (1) the IBM
3592 Generation 1 and Sony AIT-3 tapes anticipate or render obvious the asserted claims, (2)
Sasaki renders obvious the asserted claims, (3) the asserted claims are not enabled, and (4) the
asserted claims are not adequately described. I also find that the asserted claims are directed to
patentable subject matter as required by 35 U.S.C. § 101.
1. Fujifilm did not prove by clear and convincing evidence that the IBM
3592 Generation 1 and Sony AIT-3 tapes anticipate or render obvious the
asserted claims.
Fujifilm contends that two commercial products that existed at the time of the ’774
invention—IBM’s 3592 Generation 1 tapes and Sony’s AIT-3 tapes—anticipate asserted claims
1, 5, 6, 7, 16, and 17, that [BM’s 3592 Generation 1 tapes anticipate asserted claims 8 and 10,
and that both products render obvious asserted claims 8 and 10 when combined with the
knowledge and experience of a person of ordinary skill in the art. RIB at 26-37 (citing
evidence).
Sony and Staff do not contest that the products qualify as prior art under the relevant
provisions of 35 U.S.C. § 102. Sony and Staff also do not contend that the products were
considered by the Patent Office during the prosecution of the ’774 patent. See JX-0003 at cover
page.
Regarding the IBM 3592 Generation 1 tapes, the evidence shows that the tapes were sold,
offered for sale, and used in the United States by September 2003, which was before the asserted
invention date of the ’774 patent. RIB at 26-27 (citing RX-0003C at Q/A 575-588 (explaining
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IX-0028C; RX-0023; RX-0109; RX-0110; RX-0301; RX-0304; RX-0312; RX-0316)). Fujifilm
retained two experts, Dr. Wang and Dr. Raeymaekers, to measure surface roughness values for
eight different IBM 3592 Generation 1 tapes, although Fujifilm only offered up Dr. Wang as a
witness at the hearing. See RX-0003C (direct witness statement of Dr. Wang); CX-1544C
(expert report of Dr. Raeymaekers). Both experts independently directed Evans Analytical
Group Laboratories (“BAG”) to measure surface roughness parameters (e.g., skew, kurtosis,
peak-to-valley roughness, plateau range, and peak height means) of the tapes using the Contour
GT-X8 optical profilometer manufactured by Bruker Corporations. RX-0003C at Q/A 656, 659;
CX-1544C 1]13. Dr. Wang also relies on skSNR and small error rate measurements of the IBM
3592 Generation 1 tapes conducted by a technician at the Fujifilm Recording Media Research
Laboratories in Odawara, Japan. RX-0003C at Q/A 730, 738. Dr. Wang then walked through
the evidence to provide a limitation-by-limitation anticipation and obviousness analysis for the
asserted claims. RX-0003C at Q/A 575-591, 617-640, 656-665, 671-760, 783-793 (citing to and
explaining documentary evidence). 	0
As to the Sony AIT-3 tapes, the evidence shows that the tapes_were made, used, and
offered for sale in the United States in 2000 and 2001, which was before the filing date of the
’774 patent. RIB at 33 (citing RX-0003C at Q/A 603-615 (explaining JX-0012C, JX-0013C,
RX-0305, RX-0308, RX-0309, RX-0310, RX-0311, RX-0403C, RX-0407C, RX-0411C, RX
0412C)). For these tapes, Fujifilm retained only Dr. Raeymaekers to measure the surface
roughness values, and Dr. Wang relied on his review of Dr. Raeymaekers’ expert report to form
his opinions on the methodology and measurements tmderlying his conclusions. RIB at 33; RX
0003C at Q/A 643-649; Tr. at 696:7-10. The AIT-3 tapes were not tested for skSNR or small
error rate values as required by claims 8 and 10 of the ’774 patent. Dr. Raeymaekers directed the
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same company (EAG) to measure the same values using the same equipment as was used for the
IBM 3592 Generation I tapes, although there were “minor differences in mounting and
measurement parameters” that no party contends are relevant. RIB at 33 (citing RX-0003C at
Q/A 641, 660, 666-668). Dr. Wang flien walked through the evidence to provide a lin1itation-by
limitation anticipation and obviousness analysis for the relevant claims. RX-0003C at Q/A 592
615, 641-649, 666-742, 761-783, 794—797(citing to and explaining docimaentary evidence).
Sony contends that Fujifilm’s acquisition, preparation, mounting, measurements, and
calculations of measured values of the prior art tapes are all rmreliable. For the reasons
discussed below, the evidence shows that Fujifihn reliably acquired and prepared samples of the
tapes, but did not reliably mount, measure, or calculate some of the measured values of the
samples. Fujifihn has therefore failed to prove by clear and convincing evidence that the prior
art tapes anticipate or render obvious the asserted claims of the ’774 patent.
a) The evidence does not indicate irregularity in the sample
preparation of IBM 3592 Generation I tapes by Fujifilm’s experts. '
Both of Fujifihn’s experts, Dr. Wang and Dr. Raeymaekers, directed EAG to measure the
same physical IBM 3592 Generation 1 tapes. Sony and Staff contend that their reports of the
measurements are not reliable because their descriptions of the tape preparations are inconsistent.
Sony and Staff, however, selectively cite to portions of Dr. Wang’s testimony and ignore other
portions where Dr. Wang explains how his report is consistent with Dr. Raeymaekers report.
Sony and Staff argue that the reliability of the measurements directed.by Dr. Wang and
Dr. Raeymaekers is called into question because their descriptions of the preparation of the tape
samples for testing cannot coexist. CIB at 43; SIB at 53-54. Each expert describes opening the
same tape cartridge, removing the tape reel from the cartridge, and cutting about 20 meters from
the front of the reel. Specifically, Dr. Wang testified that he instructed EAG to “open the
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cartridge by removing the screws,” “remov[e] the reel of magnetic tape” and cut away “at least
about 20 meters of the tape . . . to ensure that we were past the leader portion.” RX-0003C at
Q/A 657. Dr. Raeymaekers similarly reported that a “testing sample was prepared . . . by
unscrewing the screws holding both halves of the cartridge together, and pulling the cartridge
apart,” removing the tape reel from the cartridge, and removing “[t]he first 20 meters or more of
the tape on the reel . . . starting from the leader pin” to “ensur[e] that a portion of the magnetic
recording tape (not the leader tape) was sampled.” CX-1762 111115-17. According to Sony and
Staff, only one of the experts, not both, could have removed the first 20 meters of the tape from
the tape reel, starting from the leader pin, as there is only one first 20 meters of tape starting from
the leader pin. CIB at 43; SIB at 53-54; CX-0012C at Q/A 153-154.
Fujifilm points to other testimony from Dr. Wang that seems to explain this
inconsistency. RRB at 10. Dr. Wang testified that the technician at EAG opened the cartridge,
cut the samples, mounted some of the samples, and performed some measurements while Dr.
Wang was physically present. Tr. at 717112-713:4. He elaborated that the technician “collected
two sample segments spaced about a few meters apart . . . to create one test sample for my
surface roughness measurements, and a second sample for Dr. Raeymaekers’ measurements”
after “first remov[ing] the leader tape.” RX-0003C at Q/A 659. This explanation makes sense.
Dr. Wang’s report that EAG prepared both samples at the same time is consistent with Dr.
Raeymaekers’ report. CX-1762 {I 16 (“A testing sample was prepared as f0llows.”). The
description by both experts that the first 20 meters of the tape was removed credibly refers to the
same action by EAG in preparing samples for both experts, not two separate conflicting events.
Perhaps anticipating Fujifilm’s response, Sony and Staff both contend that taking two
samples from the same tape at the same time exposes the second sample to the enviromnent
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while it is waiting to be prepared and tested. CIB at 43; SIB at 54. Sony and Staff rely on the
testimony of Sony’s expert that taking two samples could be problematic because it could
“alter[] the properties of the surfaces of tl1etapes and impact the results of [the] measurements.”
CX-0012C at Q/A I61. However, Dr. Wang testified that -“EAGmeasured the surface roughness
of the mounted samples shortly after they were cut and mounted” or, if the “samples were
measured within a day or two,” BAG “placed the slides in plastic clean room containers, which
kept the tape surface from contact with any other surface or air currents, and stored them in
laboratory conditions.” RX-0003C at Q/A 661. He concluded that storing the tape in this
manner “would not impact its surface roughness measurements.” Id. The testimony of Sony’s
expert that storing a sample before measuring it “could” alter its properties does not directly
address or rebut Dr. Wang’s testimony of what actually occmred.
The preparation of the samples tested by EAG for Dr. Wang and Dr. Raeymaekers
therefore appears to be reliable. 	A
b) The evidence indicates that the IBM 3592 Generation 1 and
Sony AIT-3 tapes tested by Fujifilm have the same characteristics as
the same tapes that existed as of the critical prior art dates.
Fujifihn asserts that the IBM 3592 Generation 1 and Sony AIT-3 tapes qualify as prior art
to the ’774 patent because they were sold or offered for sale more than one year before the
invention of the subject matter claimed by the ’774 patent. See RIB at 26-27. Sony does not
challenge that, as a general matter, IBM 3592 Generation l and Sony AIT-3 tapes were sold or
offered for sale during the relevant time, but Sony argues that Fujifihn failed to establish that the
tapes that were tested for this investigation “are representative of products as they were on-sale
or in use in the United States” 13 to 15 years prior. CIB at 47.
Fujifilm provided evidence toestablish that some of the IBM 3592 Generation 1 tapes it
tested were acquired during the relevant timeframe and stored pursuant to Fujifilm’s standard
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archival policies procedures. RX-0002C at Q/A 27-57 (witness statement of Hiroaki Takano).
For the Sony AIT-3 tapes, Fujifilm showed that its expert opened new tapes with markings that
indicated manufacturing dates before May 2003. RX-0003C at Q/A 642-649. Fujifilm’s expert
also testified that the tapes appeared new with no signs of damage due to exposure to extreme
conditions that might damage the tape. Id. at 618-649.
Sony complains that Fujifilm did not do enough to show that the surface roughness and
signal measurements of the prior art tapes were not affected by temperature or humidity
variations during the period of time the tapes were in storage. CIB at 47-48. For example, Sony
states that Fujifilm’s expert did not perform an independent investigation of the temperature and
humidity variations over this period of time for the facility where the tapes were stored. Id. at 48
(citing Tr. at 673:l9-679:lO). Sony’s expert explains that such an investigation is necessary
because the characteristics of tapes “change over time depending on the environment in which
they are maintained and what the tapes are subject to, such as humidity, temperature, dusts,
impurities, gas, and physical transportation or movements of the tapes.” CX-0012C at Q/A
208-217. 	S
Sony’s complaints do not sufficiently rebut Fujifilm’s evidence because they are not
directed to these specific facts. For example, Sony does not asset that Fujifilm’s archival process
actually, or even likely, fell outside of the proper temperature and humidity ranges, despite
deposing Fujifilmis employee who testified on this topic. Similarly, S0ny’s expert asserts that
the passage of time can erode characteristicsvof the tapes, but he does not provide an opinion as
to whether the amount of time that passed in this case would be likely to have an effect, and if so,
what effect it would have. See CX-0012C at Q/A 206-217.
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The evidence does not show any irregularities in treatment of the prior art tapes that
could impact their physical characteristics in a way that would cause them to wrongly satisfy the
claim limitations 13 to 15 years after they were manufactured. Sony’s complaints are theoretical
in nature and divorced from specific facts of the physical tapes relied on by Fujifihn, and
therefore do not sufficiently disrepute Fujifilm’s evidence.
c) Fujifilm did not establish that the tape mounting procedure
used by its experts resulted in reliable measurements. 	.
Fujifilm’s experts instructed EAG to measure the surface roughness values of the prior
art IBM 3592 Generation 1 and Sony AIT-3 tapes by stretching the tape samples between two
pieces of double-sided tape. Sony and Staff point to evidence that indicates this specific
mounting procedure can produce unreliable measurements, and that it likely did produce
umeliable measurements in this case. Fujifilm does not sufficiently rebut this evidence, and
accordingly does not clearly and convincingly establish that that values produced by its
measurements of the prior art tapes are reliable.
Sony and Staff argue that Fujifil'm’s smface roughness measurements of the prior art.
tapes are not reliable because the samples were “moimted onto a glass slide that had two pieces
of double-sided tape affixed at two ends, so that the sample was stretched taut between the two
pieces of double-‘sidedtape . . . .” SIB at 54-55 (quoting RX-0188 1[38 (purportedly Appendix 6
to Dr. Wang’s expert report), which not in evidence (see Respondents‘ Final Exhibit List at 7
(May 25, 2018) (listing RX-0188 at “withdrawn”)), and citing CX-0012C at Q/A 136-140, which
is Dr. Bogy’s rebuttal witness statement where he quotes and characterizes RX-0188 1]38); id. at
55 (quoting CX-1544 1] 17 (Dr. Raeymaekers’ expert report)); CIB at 42; Tr. at 831:l4-834:9
(testimony of Dr. Bogy); contra RX-0003C (Dr. Wang’s direct witness statement, where he uses
the phrase “gently laid” to replace the “stretched taut” language he used in his expert report).
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Staff an l Sony also pointout that Raeymaekersplaced a metal vasheron top of the magnetic
tape afier it was tap rdto the slide. SIB at 55; CIB at 4 2;see RX-0 103Cat Q/A 660 (embedding
RDX-0002C at ss). 	A
Sony and St tff contend that this mounting met rod is not r aiiable because (1) stretching
the sam vletaut couli subject the sample to mechanical strain that iaterially changes the suiface
roughneas characteristics, and (2) using double-sided ape could zause the mechanical tape to
float or cmve above the slide that prevents a proper measurement. SIB at 55; CEBat 42-43; CX
00l2C at Q/A 141-151. Sony’s expert, Dr. Bogy, testified that pr -persmface measurements of
magneti : tapes requires the tape sample to lie flat witho it curvature or deformations, and without
being subject to tension or force. CX-0012C at Q/A 132-133. This is particularly the case here,
according to Dr. Bo gy,because the measurements are on the nano .eter scale. Tr. 834:2!-835:6.
He expl tins that usi 1gdouble-sided tape, which at a thi zkness of 5 1pm is thicker than magnetic
tape at 8.9 um, can zausethe measured part of the tape to be “not flat.” CX-0012C at Q/A 144.
He opines that the picture of Dr. Wang’s sample, which is em redded below, shows “some
curvature in the samole.” Id.
' 	Iii
* 	xi;
Id. (embedding RD I-0002C at 96); see RX—0003Cat Q’A 660 (sa .e).
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In addition to testimony by Dr. Bogy, Sony and Staff cite to admissions by Fujif1lm’s
expert that this motmting method can lead to unreliable results. At the deposition of Dr.
Raeymaekers, which was read into the record during the cross-examination of Dr. Wang, he
testified that “it’s possible in the general context” that the mounting method “may have caused
local defect[s] that would have caused some outliers.” Tr. at 696:11-697210. Dr. Raeymaekers
further declared that certain measurements “were, in my opinion, outliers, possibl[y] caused by a
local surface defect due to tape cutting, mounting, or handling and shipping.” CX-0012C at Q/A
149‘(Dr. Bogy testifying about CDX-0006C at 1, which embeds Table 1 and paragraph 92 from
CX-1760, a declaration from Dr. Raeymaekers that is not in evidence); see id. at Q/A 150 (Dr.
Bogy testifying about CDX-0006C at 2, which embeds lines 99:17-100:17 from the deposition
transcript of Dr. Raeymaekers that is not in evidence). Dr. Bogy points out that these outliers
resulted in measurements that were more than 1000% and more than 2000% different than other
measurements for the same characteristics. Id. 	.
Fujifilm responds that Sony and Staffs criticism is mere speculation because Dr. Bogy
did not observe the tests performed by Dr. Wang and Dr. Raeymaekers, and that Sony did not
test the tapes itself. RIB at 31-32. But Sony was not required to observe Fujif1lm’s
measurements or perform its own measurements as Fujifilm’s burden to prove invalidity never
shifts to Sony to prove validity. Tech. Licensing,*545 F.3d at 1327. Sony’s and -Staffs
arguments about the curvature in the tape samples and resulting outliers is based on the evidence
presented by Fujifilm, and is not mere speculation by Sony’s expert.
Fujifilm also points to Dr. Wang’s testimony on redirect that the results of the nine
measurements from three different regions of the tape “are very consistent,” which, according to
Fujifilm’s attorneys, contradicts Sony’s and Staffs “speculation.” Id. at 31 (citing Tr. at
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PUBLIC VERSION
718119-719:l3). However, Dr. Wang’s testimony that the measurement values “are very
consistent” does not indicate whether the values are consistently correct or consistently incorrect.
Dr. Wang’s testimony is also of limited value because he admitted that, outside this
investigation, he never “personally used any device to measure surface roughness of the backside
of a magnetic tape.” Tr. at 697:20-698:4.
Finally, Fujifilm argues that its expert’s use of double-sided tape was appropriate because
a different expert for Sony in the -1012 investigation testified that he mounted the magnetic tape
using “scotch tape,” and another of Sony’s experts in this investigation, Dr. Bhushan, testified
that he has previously used double-sided tape to mount tape samples. Id. at 13 (citing Tr. at
824:3-825:2, 357:25f358:3). But Sony’s expert in the -1012 investigation testified that he used
scotch tape, not double-sided scotch tape, and Fujifilm does not explain how the different
mounting method applied to different products for measuring properties claimed by different
patents informs the mounting method of the products in this investigation for the properties
claimed by the ’774 patent. And Dr. Bhushan’s testimony does not help Fujifilm’s arginnent.
He testified: “So using double-sticky adhesive tape, in my opinion, is less desirable. Although
I’ve used it, I would prefer to use water, but I love the Vacuum Chuck [used by Sony’s experts].
That’s a perfect way to mount a sample.” Tr. at 357: 1-358:3. Dr. Bhushan never testified that he
used double-sticky adhesive tape to measure the prior art products for the properties claimed by
the "774 patent, or that doing so would create reliable results.
I find that Sony and Staff have pointed to sufficient evidence to establish that Fujifilm’s
mounting procedure for the prior art magnetic tapes was not clearly and convincingly reliable.
The evidence shows that the tape samples were stretched and/or positioned to float above the
slide, instead of lying flat against the slide. The experts are in general agreement that this
69

PUBLIC VERSION
mounting procedure can lead to unreliable results, and Dr. Raeymaekers’ measurements indeed
shows outliers. Even if outliers were corrected for, the evidence shows that this mounting
procedure is not one that producesreliable results, particularly where the measurements are taken
on the nanometer scale.
d) Fujifilm did not establish that its measurements and
calculations of the surface roughness values of the IBM 3592
Generation I and Sony AIT-3 tapes result in reliable values.
Fujifilm’s two experts-Dr. Wang and Dr. Raeymaekers—directed BAG to measure the
same properties of different physical tapes for both the IBM 3592 Generation 1 and Sony AIT-3
products, and to measure some of the same properties in different ways. Sony and Staff assert
that the same measurements of different tapes for the same product should result in the same or
similar values, but Fujifilm’s measurements resulted in significantly different values. They
argue that these different values “indicate a serious, potentially systematic flaw with [Fujifilm’s]
testing.” SIB at 57-59; see CIB at 45.
Sony and Staff first point -out that Dr. Wang measured skew and kurtosis three different
ways, and they argue that.these measurements are not reliable because the values resulting from
the respective measurements should be, but are not, substantially equivalent. CIB at 44; SIB at
56. The evidence shows that Dr. Wang measured skew as Rsk,which is a 2D measurement, once
according to the ISO 4287 standard and once according to the ASME B46.1 standard, and as Ssk,
which is a 3D measurement. RX-0003C at 674~678; CX-0012C at Q/A 170. He also measured
kurtosis as Rh, which is a 2D measurement, once according to the ISO 4287 standard and once
according to the ASME B46.l standard, and Sm,which is a 3D measurement. RX-0003C at Q/A
685-686; CX-0012C at Q/A 170. He reported his result of measurements from samples from
eight different tapes as follows:
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PUBLIC VERSION
Sn 	I Rah“sol 	l Rsk(ASMEI
‘IBM 3592 Gen 1 	l 0.352005 	02020.03 	o.2uo.o4
[Sony soxa-1 one 	o.141o.1e o.so¢o.us 0.40w.oa
Y
sh, 	l Rm,uso) | R,“,(ASME)
l IBM 3592 Gen 1 . 	a.4uo.12 	23010.04 	a.19:o.oa
isony snxa-1ooc 7 :s.ssw.e9 3.061040 s.eam.ss	._.._... _. -~. _...______a._.'
RX-0001C at Q/A 679, 682, 689, 691 (embedding RDX-0002C at 52-55).
Sony and St rff next point out that Dr. Raeymaekers measured five Sony AIT~3 (SDX3
100C) tapes, and th :y argue that these measurements are not reliable because the values are not
substant ally equivalent.“ CIB at 44-45; SIB at 56-57. Dr. Bogy’s testimony compared some of
the meamrements t iken by Dr. Raeymaekers, embedd 5Clbelow, t >highlight the discrepancies.
CX-001 ZCat Q/A 183 (embedding CDX-0006C at ll (excerpting CX-1761, which is not in
evidence but is desc ‘ibedby Dr. Bogy as Appendix D to Dr. Raeyrnaekers’ expert report)).
Tape Typo 	Tape ID 	g 	lo: 	Rpm lath} 	[um] 	fipmlliz 	flak 	Rim 	S_s|x 	Stu
ISony$0X3-100C {rum 	1 at 	lam] 	o.sz| ass] |1491,Eo.o_i] [mi
" 	lSLySDX3-100C 	_|w.a1z-not-1 	1 	at 	0.62] 	0.49] 	psi] 	10.401 	}4.ee|'
Tlpl Yypn 	‘tape ID 	lo: 	Rpm [um] 	R: [um] 	Rpm/R1 	Rah 	Rku 	Stk 	Sku
LgySOX3-100C 	|R67Z~BUT-2 I 	al 	Izisl 	0.021 	0.491 	4.31] 	110.-ml 	|4.se|
|s<mysomooc 	|osoz-s 	I 1| 	11111 	|rso| 	dsil . o.:s| 	4.14] {[1102] |s.ss]
ll Sony and Staff also rely on Dr. Bogy’s testimony regarding discrepancies in Fujifi1m’s
measure nents of Sony LTO-1 and HP LTO-1 tapes. IIB at 44 (citing CX-0012C at Q/A 171
177); S13 at 56-57 (ziting CX-0012C at Q/A 168-177). Even though those tapes are not asserted
as prior art against tie ’774 patent, Dr. Bogy concludes that “the discrepancies, regardless of the
product tested, indi >ateto me that there are problems with their testing methodology.” CX
0012C at Q/A 173. Without more explanation or evidence, I fail to see how measurements of
non-prior art tapes informs the reliability of the mea :uremerits of the prior art tapes. I will
therefor : only consi ler the evidence relating to the prior art tapes for this issue.
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PUBLIC VERSION
Dr. Bogy concludes that discrepancies from 50% to over 100% undermine Dr. Wang’s
conclusions regarding reliability. Id. at Q/A 184-185. Dr. Wang reaches the opposite
conclusion, that these measurement values are “remarkably consistent, as evident from the tight
distribution of measurements and the low standard deviation values.” RX-0003C at Q/A 664.
Unfortunately, neither expert provides any credible evidence to back up their opposite
conclusions about the reliability of the data. Dr. Bogy’s explanation that the 3D measurement is
just a collection of 2D measurements and therefore should result in substantially equivalent
values makes sense. CX-0012C at Q/A 174. But so does Dr. Wang’s explanation that 2D and
3D measurements might result in different values because the averaging of the individual
measurements occur at different stages. RX-0583C at Q/A 151. The evidence on this issue
therefore consists of competing conclusory statements by both experts.
Dr. Bogy’s conclusion that the values resulting from the ISO and ASME standard should
be substantially‘ equivalent also makes sense, but he does not provide any reliable evidence
backing up his assertions that (1) the values should be substantially equivalent or (2) the
resulting values are not substantially equivalent. To support his conclusion, he refers to the
documentation for the machine used by Fujifi1m’s experts used to obtain measure and calculate
their values. CX-0012C at Q/A 174-177. This document contains a chart, embedded below that
illustrates the results of measurements performed by the manufacture under different
measurement and calculation standards. Tr. at 839:2-22; CX-0276 at 25. Dr. Bogy testified that
this chart shows that the surface roughness values should be “substantially equivalent” between
the ISO (yellow) and ASME B46 (dark blue) standards. CX-0012C at Q/A 174-177.
72

PUBLIC VERSION
R11
0.2 	- 	_
0.5 	H ____ 	_ ___ ” '”'"' 	i
0.5 	M 	—
iI 	It" 10.1 	. 	- --—
,, 	. 1 	. 1 	!|i"i|||||||Cos 	EDM 	Ground Groumfl 	Mill 	Polish
Sample
i CINPL QPTB ONIST (ISO) DV1£i0n64 bi (ISO) IViSiOn 64 bi (ASME} nV|si0r|i32 DR INIST IASME B46) I
lowever, Dr. Bogy failed to explain how the c tart showing Rq in tenths-of-micrometers
translates to skew a rd kurtosis. He only testified that Rq appears i 1the denominator outside the
summation for ske I and kurtosis, but he did not explain how the units for Rq (micrometers)
translates to the unlts for skew and kL1I‘1ZOS1S,	or how equivalence between Rq measurements
would inform equiv tlence between skew or kurtosis calculations. Tr. at 835213-21, 840:6-22.
I1 its reply b rief, Fujifilm responds that the mea lurements b 1its experts show differences
that are less than t te measurements between Sony, as reported in the complaint filed in this
investig ttion, and the measurements of Sony’s expert. RRB at 6-9. This response, however, is
waived )6C3LlS€	Fujifilm did not allude to this argument in its pre-h zaring brief or its initial post
hearing brief. See r.R. 8.2, 11.1. Sony therefore did not have an opportunity to respond to this
argument in order ll) disagree with or explain such di ferences. For example, in compiling its
complai 1t, Sony may have measured different tapes using differe 1t equipment than its expert,
unlike F 1jifilm’s ex ierts who measured the same tapes ising the sa ne equipment.
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PUBLIC VERSION
As a result, I am lefi with competing expert testimony that different measurements and
calculations of the same products are either “remarkably consistent” or unreliable because they
are “not substantially equivalent.” The raw data, however, leans against Dr. Wang’s conclusion
that the results are remarkably consistent. For example, his Sskmeasurements of the eight IBM
3592 Generation l tapes range from 0.30 to 0.40, and his measurements for all three skew values
range tiom 0.17 to 0.40. RX-0003C at Q/A 679 (showing Sskmeasurements of 0.35 :t:0.05, Rsk
(ISO) measurements of 0.20 i 0.03, and R51,(ASME) values of 0.27 i 0.04). Dr. Raeymaekers’
Sskmeasurements of five Sony AIT-3 (SDX3-100C) tapes range from -0.04 to 0.32, and his
measurements for all three skew values range from -0.04 to 0.48. Id. at Q/A 682 (showing Ssk
measurements of 0.14 i 0.18, R5,,(ISO) measurements of 0.30 i 0.06, and Rik(ASME) values of
0.40 i 0.08). The kurtosis measurements have similar variance.” 	A
' Fujifilm has therefore not met its burden to establish that the prior art products invalidate
the claims of the ’774 patent because I am uncertain whether or not Fujifih.n’s measurements and
calculations resulted in reliable v'alues. Tech. Licensing, 545 F.3d at 1327 (“the risk of
decisional rmcertainty stays on the [respondent]” such that “if the fact trier of the issue is left
uncertain, the [respondent] loses”).
e) Fujifilm did not establish that the LTO-1 specification
discloses an appropriate methodology for measuring the IBM 3592
Generation 1 tapes for skSNR and small error rate. <
Claims 8 and l0 of the ’774 patent require that the values of skirt signal-to—noiseratio
(“skSNR”) and small error rate fall within the "claimed limits. Fujifihn only relies on
-.-_.._-it---_ii—
'2 Fujifihn argues that docmnents reflecting Sony’s own testing of the AIT-3 tapes in August
2003 shows values for peak-to-valley roughness that falls within the claimed range. RIB at 34
36. Even if this evidence is persuasive, it does not address Fujitihn’s measiuements for the other
claimed characteristics of the magnetic tapes, such as skew and lcmtosis.
74

PUBLIC VERSION
measurements of the IBM 3592 Generation 1 tapes, not the Sony AIT-3 tapes, as directly
disclosing these limitations. To establish that the IBM 3592 Generation l tapes satisfy the
limitations, its expert, Dr. Wang, relied on measurements performed by a Fujifilm engineer who
used an LTO-1 drive head and reference tape. Sony and Staff argue that the use of the LTO-1
drive head and reference tape was improper for measuring the IBM 3592 Generation 1 tapes
because the IBM 3592 Generation 1 tapes do not comply with the LTO-1 specification.
As explained above in response to Fujifilm’s assertion that Sony’s measurement of the
accused products was inappropriate because Sony measured the tapes according to their
respective specifications, “[a] person of ordinary skill in the art at the time of the invention
would understand that the [skSNR and small error rate] values would have to be measured in a
way appropriate for the specific tape at issue, as different types of tapes may require different
measurement methodologies.” Section IV.D, supra. I held that Sony established that the LTO-4
and LTO-6 specifications disclosed appropriate methodologies for measuring the respective
LTO-4 and LTO-6 products. Id. Sony now poses the reverse question: whether the LTO-1
specification discloses an appropriate methodology for measuring the non-LTO-1 IBM 3592
Generation 1 tapes. 	i
I Fujifilm’s expert justifies his use of the LTO-1 specification to measure characteristics of
the IBM 3592 Generation l tapes because, as he concludes, “a [person of ordinary skill in the
art] would understand to be appropriate given the guidance in the patent specification and
ECMA-319 itself.” RX-O_OO3Cat Q/A 720. I rejected Fujifilm’s similar assertion regarding
infringement that the ’774 patent teaches such a person that all magnetic tapes should be tested
according to the LTO-1 specification. Section IV.D, supra.
75

PUBLIC VERSION
Sony presen:s convincing evidence that meas ring the IBM 3592 Generation l tapes
according to the LTO-l specification was not appropriate. Its expert, Dr. Bogy, testified that
measuri lg skSNR a id small error rate requires reading and writing data fiom data tracks on the
magneti: tape. C-X-0012Cat Q/A 197. He explained that perfor ning this measurement on an
[BM 3592 Generation 1 tape using an LTO—l drive head “would result in improper and
inaccurate measure ients” because the LTO-l drive h fad has larger dimensions relative to the
tracks 0 Tthe IBM 3592 Generation l tape. Id. at Q/A 197-198 (embedding CDX-0006C at l6
(excerptng and an rotating IX-0128 at 60 (LTO-1 s xecification) and JX-0099C (IBM 3592
Generation 1 specification», which is reproduced in relevant part below and shows relevant
properti as of the E {MA-319 / LTO-l specification on the left and the same properties of the
IBM 35 '2 Generation l specification on the right).
)1‘. Bogy iuther explained that Fujifilm’s unexpectedly low small en'or rate
measurement of 0.008 errors/m for the IBM 3592 Generation l tapes is “consistent with the
improper use of an incompatible drive head” because “the measure l signal would be expected to
be stronger than ift re tapes were measured using their appropriate read and write heads.” Id. at
Q/A 198-199 (“Tl1i: [small error rate] is far lower than later generations of tape of the same
format”); see RX-0 )03C at Q/A 739. As to skSNR, Dr. Bogy explained that the errors are
76

‘ 	PUBLIC VERSION
compounded because the values measured from an IBM 3592 Generation 1 tape are compared
the values measured fi'0n1an LTO-1 reference tape to compute a final skSNR value. CX-0012C
at Q/A 200. According to Dr. Bogy, the only proper way to measure skSNR is to compare the
tape being tested against “a reference tape corresponding to the type of magnetic tape being
tested.” Id. at 201-202.
Fujifihn’s expert testified on redirect that the “plated test” that he used to measure skSN'R
did not create issues with the track being aligned because the writing and reading are “essentially
performed simultaneously.” Tr. at 719114-720112. However, he did not directly address Dr.
Bogy’s criticisms regarding small error rate, or explain how the “plated test” values for a
reference tape with different dimensions than the tape being tested results in a reliable skSNR
value.
Fujifilm attempts to justify its expe1t’s use of the LTO-1 specification for the IBM 3592
Generation l tapes by arguing that Sony’s measurements of the IBM 3592 Generation 2, 3, and 4
products for its domestic industry had the same alleged deficiencies. RRB at 12-13. Fujifilm
contends that Sony’s testing finn, MAC, could not have matched the tapes with an LTO drive
head	1>'=¢a“S=
at 13 (citing IX-0096C at 65 (IBM 3592 Generation 4 specification». But Fujifilm does not
contend that Sony’s measurements of its domestic industry products were deficient for this
reason. See R113at 26; RRB at 30. Nor does Fujifihn sufficiently rebut Dr. Bogy’s testimony
that MAC chose an appropriate drive head and “adjust[ed] parameters in the testing system, such
as to make it equal to what’s in the [BM 3592 head.” Tr. at 279:l9-280:22.
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PUBLIC VERSION '
In view of Sony’s evidence, Fujifilm’s evidence that the IBM 3592 Generation l tapes
disclose the skSNR and small error rate values required by claims 8 and 10 is not clear and
convincing. 	’
Fujifilm then argues, in the alternative, that the IBM 3592 Generation 1 and Sony AIT-3
tapes render claims 8 and 10 obvious because the skSNR and small error rate values in those
claims “would have been obvious based on the backside roughness” values and the knowledge of
a person of ordinary skill in the art. RIB at 36-37. As evidence, Fujifilm relies on the deposition
testimony of one of the inventors of the ’774 patent, Dr. Ebner, who stated that he was not aware
of anything else that contributes to the claimed skSNR and small error rate properties other than
achieving the skew, kurtosis, peak height mean, and peak-to-valley roughness values that are
claimed by the ’774 patent. JX-0026C at 99:17-100:7. Fujifihrfs expert also testified that a
person of ordinary skill in the alt would have known that embossment “can lead to decreased
skirt SNR” and would have been motivated to achieve skSNR values that “are significantly
higher than the minimum requirements of the tape specification.” RX-0003C Q/A 785-793.
As explained above, Fujifilm did not meet its burden to establish that the IBM 3592
Generation 1 and Sony AIT-3 tapes had the backside roughness values claimed by the ’774
patent at the time of the invention. Fujifi1m’s assertion that the claimed backside roughness
values would obviously result in the claimed skSNR and small error rate values therefore lacks
its antecedent reliance. 	- 	i
Further, Fujifilm’s obviousness arguments are presented as inherency arguments: that
satisfying the claimed skew, kurtosis, peak height mean, and peak-to-valley roughness values
will necessarily satisfy the claimed skSNR and small error rate values. The testimony of its
expert and the ’774 patent inventor, however, only indicate that the claimed skew, kurtosis, peak
78

. 	PUBLIC VERSION
height mean, and peak-to-valley roughness values may result in the claimed skSNR and small
error rate values. This is not sufficient. Continental Can C0. USA v. Monsanto C0., 948 F.2d
1264, 1269 (Fed. Cir. 1991) (“The mere fact that a certain thing may result from a given set of
circumstances is not sufficient”) (citations omitted); see Ecolab, Inc. v. Paraclzpse, Inc, 285
F.3d 1362, 1375 (Fed. Cir. 2002) (“each claim in a patent is presumptively different in scope”).
Fujifilm does not brief this issue in the framework provided by KSR or Graham, but the
testimony of its expert (which Fujifilm does not cite to in its opening post-hearing brief) uses the
language from KSR that “a combination of familiar elements according to known methods is
likely to be obvious when it does no more than yield predictable results.” RX-0003C at 788; see
KSR Int’! C0. v. Teleflex Inc., 550 U.S. 398, 417 (2007); Graham v. John Deere C0., 383 U.S. 1,
17-18 (1966). Fujif1lm’s expert, however, only testifies generally that a person of ordinary skill
in the art would have known that decreasing backside protrusions would have led to increased
signal output which would have resulted in higher skSNR, and therefore would have been
motivated to adjust those parameters affecting backside protrusions to achieve higher skSNR.
RX-0003C at Q/A 788-789; see id. at 792-793 (corresponding testimony for the small error rate
limitation). Its expert does not explain why the specific values claimed in the ’774 patent would
have been obvious, or that a person of ordinary skill in the art would have been motivated to
achieve those specific values, instead of skSNR and small error rate values that were improved
but were still outside of the claimed values. 	'
Fujifrlm has therefore failed to prove by clear and convincing evidence that the lBM
3592 Generation 1 tapes anticipate claims 8 and 10 of the ’774 patent, or that the IBM 3592
Generation 1 or Sony AIT-3 tapes render obvious those claims.
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PUBLIC VERSION
2. Fujifilm did not prove by clear and convincing evidence that Sasaki
renders obvious the asserted claims. 	A
Japan Unexamined Patent Application‘Number P2002-121324 published on November 7,
2003, as JPA2003-317228 (“Sasaki”), and lists Sony Corporation as the applicant and Futoshi
Sasaki as the inventor. RX—0ll7 at 1. Fnjifilm contends that Sasaki renders the asserted claims
of the ’774 patent obvious in view of the knowledge of a person of ordinary skill in the art. RIB
at 37-40 (citing evidence). FujifiIm’s expert, Dr. Wang walked through the evidence to provide
a limitation-by-limitation obviousness analysis for the asserted claims. RX-0003C at Q/A 798
827 (citing to and explaining documentary evidence). 	.
Sony and Staff do not contend that Sasaki was considered by the _PTO during the
prosecution of the ’774 patent. See JX-0003 at cover page. Sony and Staff also do not contest
that Sasaki qualifies as prior art to the ’774 patent under the relevant provisions of 35 U.S.C. §
102. 	» 	I
Sasaki is directed to improving the durability of a magnetic tape by specifying limits for
the size and frequency of “excessively large protrusions.” RX-0003C at Q/A_800-801 (quoting
RX—00l7at [0014]-[00l5]). Sasaki teaches that these limits will reduce the damage to the
magnetic layer and “minimize the amount of structural imprints of the protrusions from the back
coat imprinted onto the magnetic layer when wound.” la‘.at 6.
Sony and Staff point out that Sasaki does not mention the skew, lantosis, peak height
mean, peak-to-valley roughness, plateau ratio, skSNR, or small error rate characteristics that are
claimed by the "774patent, nor values within the claimed limits for those characteristics. CIB at
52; SIB at 63. Fujifilm does not argue that Sasaki directly discloses any parameter otherthan
peak height mean. RRB at 18 (citing Tr. at 818:23-819:1 (Sony‘s expert admitting that “the
average height of all the backside peaks for the magnetic tape taught by Sasaki is less than 100
80

PUBLIC VERSION
nanometers”)). Based on Sasaki’s supposed disclosure of peak height mean, Pujifilm’s expert
concludes that a person of ordinary skill in the art would have understood that reducing the peak
height mean would also reduce the peak-to-valley roughness. RX-0003C at Q/A 809. However,
he provides no support that Sasaki’s teachings would make it obvious to reduce the peak-to
valley roughness below the claimed value. RX-0003C at Q/A 809., Since no asserted claim of
the ’774 patent requires only the peak height mean limitation, Fujifilm has not met its burden to
prove that Sasaki clearly and convincingly discloses all of the characteristics for any claim even
if it discloses the peak height mean.
Regarding the other limitations, Fujifilm argues that a person of ordinary skill in the art
would have found it obvious to follow the teachings of Sasaki to produce a magnetic tape with
values within the claimed limits because Sasaki is directed to addressing the same problem as the
’774 patent. RIB at 38 (citing RX-0003C at Q/A 800, 803). Fujifilm’s support for this statement
comes from the deposition of one of the inventors of the ’774 patent, Dr. Ebner, who testified
that “there’s nothing unique about the materials and the manufacturing process” described in the
’774 patent. RX-0003C at Q/A 803; JX-0026C at 117:6-10, 148:1-8; see JX-0026C at 37:9-22
(Dr. Ebner testifying that “the novelty was the tape construction —the tape itself, the roughness
of the backside, regardless of the formulation or process used, that structure”). Fujifilm then
concludes, without explanation, that “a [person of ordinary skill in the art] could have followed
the teachings of Sasaki to make a tape with reduced larger surface protrusions, resulting in lower
skew, kurtosis, peak height mean, and peak-to-valley roughness.” RIB at 38 (citing RX-0003C
at Q/A 800-804). As to the skSNR and small error rate characteristics being obvious, Fujifilm
relies on the same arguments it made with regards to the prior art tapes, which was rejected
abovc. RIB at 39.
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. 	PUBLIC VERSION
Fujifihrfs inapt extrapolation of Dr. Ebner’s statement and the resulting conclusory
testimony of its expert do not satisfy its burden to prove by clear and convincing evidence that
Sasaki, which fails to teach or disclose every characteristic of any asserted claim, renders the
asserted claims of the ’774 patent obvious. Nor has Fujifrhn established that a person of
ordinary skill in the art. would be motivated to modify the teachings of Sasaki to make the
magnetic tape claimed by the ’774 patent. Sasaki teaches the “excessively large protrusions" on
the backside of the tape should be reduced to prevent damaging the magnetic tape, whereas the
’774 patent teaches how to decrease embossment and improve signal-to-noise ratios and small
error rates by creating a magnetic recording medium with a.number of specific values for various
backside surface roughness characteristics. Compare RX-0117 at [0015], [0018]-[0019] with
JX—O003at 3:33-67; see CX-OOOZCat Q/A 57-60; CX-0012C at Q/A 269-294. Sasaki’s
teachings are simply different than what is claimed by the ’774 patent. 	\
r 	3. Fujifilm did not prove by clear and convincing evidence that the
asserted claims are not enabled.
Fujifilm contends that the asserted claims “are not enabled for their full ranges.” RIB at
4l. Specifically, Fujifilm argues that “a skew less than about 0.5” is not enabled for values less
than zero, “kurtosis less than about 4.0" is not enabled for values less than about three, “greater
than about 0.2 relative dB” is not enabled for values greater than about one relative dB, and
“peak height mean less than about 200 um” and “peak to valley roughness less than about
[325/300] um” is not enabled for a perfectly flat surface. Id_
The evidence Fujifilm relies on for its argument comes from the testimony of Sony’s
expert, Dr. Bogy, who Fujifilm cross-examined at the hearing. See RIB at 41-43. Dr. Bogy
testified that a person of ordinary skill in the art would understand that the claimed values
approach “approximately a Gaussian distribution, which has a skew of zero and a kurtosis of
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PUBLIC VERSION 	_
three.” CX-0012C at Q/A 338. Fujifilm then elicited testimony from Dr. Bogy that the
specification does not enable skew values below about Zero. Tr. at 809:15-17.
Fujifilm does not cite the testimony of its expert witness, Dr. Wang, in its initial post
hearing brief, but Dr. Wang’s testimony on this issue focuses on the embodiments in the
specification. See RX-0003C at Q/A 866-877. Specifically, Dr. Wang testified that the skew
limitation is not enabled because “the smallest skew value achieved by the inventors . . . is 0.30”
and the ’774 patent “does not disclose what modifications would be needed to obtain a skew
value of less than 0.30.” Id. at Q/A 866 (citing JX-0003 at Table 1, 10:1-15).
The basic test for detennining whether a claim is enabled is to ask whether a person of
ordinary skill in the art can practice the invention without undue experimentation. In re Wright,
99§ F.2d 1557, 1561 (Fed. Cir. 1993). “The boundary between a teaching sufficient to enable a
person of ordinary skill in the field, and the need for undue experimentation, varies with the
complexity of the science.” Storer v. Clark, 860 F.3d 1340, 1350 (Fed. Cir. 2017). V
Fujifilm did not present any evidence as to what experimentation a person of ordinary
skill in the art would have to engage in to practice the invention. For example, neither the
testimony of its expert or its cross-examination of Sony’s expert steps through any of the “Wands
factors” that “may be considered when determining if a disclosure requires undue
experimentation.” See Cephalon, Inc. v. Watson Pharma., Ina, 707 F.3d 1330, 1336 (Fed. Cir.
2013) (citing In re Wands, 858 F.2d 731, 737 (Fed. Cir. 1988) (enumerating the factors as: “( 1)
the quantity of experimentation necessary, (2)_theamount of direction or guidance presented, (3)
the presence or absence of working examples, (4) the nature of the invention, (5) the state of the
prior art, (6) the relative skill of those in the art, (7) the predictability or unpredictability of the
art, and (8) the breadth of the claims.”)). In its reply post-hearing brief, in response to this
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criticism, Fujifilm attempts to shoehorn its expert’s testimony into the Wands factors. However,
the gloss put on the expert’s testimony by Fujifilm’s attorneys belies that his actual testimony
does not address how much experimentation would be needed to practice the invention, and
whether such experimentation is imdue. See RX-0003C at Q/A 866-877.
Fiuther, “[o]pen-ended claims are not inherently improper . . . {and] may be supported if
there is an inherent, albeit not precisely known, upper limit and the specification enables one of
skill in the art to approach that limit.” Andersen Corp. v. Fiber Composites, LLC, 474 F.3d
1361, 1376-77 (Fed. Cir. 2007) (quoting Scripps Clinic & Research Found. v. Genentech, Inc.,
927 F.2d 1565, 1572 (Fed. Cir. 1991)). Both experts here recognize that a person of ordinary
skill in the art would understand that “[t]he claimed ranges for these parameters approach
Gaussian dist1ib11tions.’?RX-0003C at Q/A 809 (Dr. Wang); CX-0012C at Q/A 338 (Dr. Bogy).
Fujifihn does not address whether the specification enables such a person to approach Gaussian
distributions for the claimed parameters, or what amount of experimentation might be needed to
do so.
Some amount of routine experimentation is permitted, but whether the experimentation is
undue or not is Fujifilm’s burden to prove by clear and convincing evidence. Cep/‘mlon,707
F.3d at I336. Fujifihn does not satisfy its burden here.
4. Fujifilm did not prove by clear and convincing evidence that the
specification of the ’774 patent does not adequately describe the asserted
claims.
Fujifihn’s arguments that the claims do not satisfy the written description requirement are
premised on the same arguments that it makes for why the claims are not enabled; that the
inventors did not have possession of the full scope of the claimed ranges. RIB at 44-45. The
Federal Circuit has made clear, however, that “[a] claim wilt not be invalidated on section 112
grounds simply because the embodiments of the specification do not contain examples explicitly
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covering the full scope of the claim language.” Falko-Gunter Falkner v. Inglis, 448 F.3d I357,
1366‘(Fed Cir. 2006) (quoting Lizardfech, Inc. v. Earth Resource Mapping, Ina, 424 F.3d 1336,
1345 (Fed. Cir. 2005)). " "
Fnjifihn has not presented any non-conclusoiy evidence that the embodiments in the
specification are not sufficient to reasonably convey to one of ordinary slcill in the art that the
inventors had possession of the claimed invention. Its expert simply testifies that the inventors
did not describe lower values than those disclosed in the specification. See RX-0003C at Q/A
878-887 (“As Table 1 of the ’774 Patent shows, the species disclosed by the ’774 Patent do not
support the broad ranges recited in the claim”). This evidence is not sufficient to prove by clear
and convincing evidence that the inventors did not possess the claimed invention. See Moba,
B. V.v. Diamond Automation, Inc., 325 F.3d 1306, 1320 (Fed. Cir. 2003).
5. The asserted claims are directed to patentable subject matter.
Fujifilnfs final argument is that the claims of the ’7_74patent. are directed to an abstract
idea and are, therefore, nnpatentable. Specifically, Fujifilm asserts that the claims “are directed
to the abstract idea of magnetic media with a.normal back smface distribution and beyond”. and
that the claims “recite no significant structures or manufacnlring methods.” RIB at 46. Fujifihn
is incorrect. The claims are plainly directed to an article of manufacture, which is patent-eligible
subject matter. 35 U.S.C. § 101; Diamond v. Chakrabizrty, 447 us. 303,‘308 (1980).
The specific structures of the claims include “a substrate,” “a.magnetic side formed over
the first surface of the substrate, defining a recording surface,” and “a backside coated on the
second surface of the substrate . . . the backside defining a backside surface opposite the
recording surface.” JX-0003 at 12:51-61. Indeed, entire sections of the patent, entitled “The
Substrate,” “The Magnetic Side,” and “The Backside,” are devoted to describing the different
portions of the claimed structure. Id. at 3:63-6:62.
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The backside surface of the claimed s_tn1c'tm'ealso has certain physical characteristics that
the patent teaches must be specifically configured, for example using certain manufacturing
methods and compositional factors,"including the selection of the type and specific size of
particles, to produce a backside surface of the magnetic tape that has a distribution approaching a
Gaussian or nomial service. Id. at 4:65-6:62. Thus, a magnetic tape with the claimed backside
surface structure is not a result of random chance, or a naturally occurring phenomenon. It must
be specifically manufactured, and the ’774 patent discloses to those skilled in the art how to do
so. Id. 	'
Accordingly, the asserted claims of the ’774 patent recite an article of mannfactllre that is
eligible for patent protection rmder 35 U.S.C. § 1.01.
V. U.S. PATENT NUMBER 6,979,501
United States Patent Number 6,979,501, entitled “Magnetic Recording Medium Having a
Smooth Biaxially Tensilized Film Substrate,” issued to Christopher A. Merton on
December 27, 2005. JX-0002 at cover page (’50l patent). The patent issued from Application
Number 10/822,885 filed on April 13, 2004. Id. The patent is assigned on its face to Imation
Corporation. Id. The evidence indicates that Imation assigned this patent to Sony on August 3,
2015. CX-0007C at Q/A 58-67 ‘(d-irectwitness statement of Hiroshi Kamitani); CX_-1081at 3;
JX-0139C.
y The invention disclosed in the ’50l patent concerns the “dimensional stability” of
magnetic tapes. JX—(_)002	at 2:3-9. If the dimensions of a tape fluctuate by expanding or
shrinking, the tracks on the tape shift so that the recording head fails to properly align to the data
tracks. CX-0001C at Q/A 97 (direct witness statement of Dr. Bhushan). The patent explains that
due to “increases in track density and the like, dimensional stability of the tape has become an
issue.” IX-0002 at 5:2-7. In other words, as data track density increases, small fluctuations in
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tape dimension can result in the head being off-track. CX-OOOICat Q/A 97. To mitigate these
problems, the ’50l patent postulates that it would be beneficial if the dimensions of a tape do not
shrink o‘ expand due to changes in temperature or humidity. JX-0002 at 2:5-9; CX-0001 at Q/A
84-95. 	i
'0 achieve limensional stability in the tape, the ’50l patent teaches using a ‘.‘biaxially
tensilizei substrate. ’ JX-0002 at 5:8-ll. To understand that ter n as it is used in the patent,
some background a >outa typical tape structure will be helpful. The patent lists as prior art a
“Magnetic Tape Storage Roadmap,” published by the National St irage Industry Consortium in
February 2002. Id. at cover (“NSIC Roadmap”). The \lSIC Road nap illustrates the layers of a
typical magnetictap: as follows: _ 	'
' 	Magnetic cuailng (0.15 um)
— —Non-magnetic coating (1.5 pm)
' PE'l'(6t0 |1m)IPEN (4.4 um) Mremid (3.8 pm)
_ base filmwith particulates
_._.__..~ __ ‘ ‘ Baekcoat(O.5p.n1)
JX-0115 at 13 (Figu"e 18).
In the prior 1rt figure above, the layer with the label begi ming “PET” is the substrate.
The ’50l patent tea :hes the substrate is a non-magneti : layer. JX-0002 at 1:53-54. The patent
lists ex nnplary su Jstrate materials for tapes, inclu ling “poly :sters such as polyethylene
terephth ilate (PET), polyethylene naphthalate (PEN). a mixture >fpolyethylene terephthalate
and polyethylene ‘naphthalate; polyolefins (e.g., polypropyl me); cellulose derivatives;
polyami les; and pol yimides.” JX-0002 at 1:54-59. I
~ ‘he ’501 patent calls the layer on top of the substrate the iront coating. Id. at 1:28-39.
The front coating may itself comprise two layers: a su )port layer 'ormed on the substrate and a
thin magnetic layer brmed on the support layer. Id. T .e support layer is typically non-magnetic
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and generally comprised of a non-magnetic powder dispersed in a binder. Id. The magnetic
layer comprises a metal particle powder or pigment dispersed in a binder. Id. Data is recorded
on the tape by using electromagnetic fields to configure the position of particles in the magnetic
layer. See RX-0003C at Q/A 83. Magnetic tapes may also have a backside coating applied to
the opposing side of the substrate. Id. at 1:43-46.
With this background in mind, I return to the patent’s teachings about a biaxially
tensilized substrate. The patent teaches that substrate films traditionally have been tensilized——
or stretched—in the down-web, or machine direction, in order to improve the ability of the film
to handle the accelerations and decelerations of linear tape drives. Id. at 4:65-5:2. The patent
proposes to improve the dimensional stability of the tape by stretching the substrate in two
directions (biaxially), not just one. The patent teaches that biaxial tensilization decreases the
coefficient of thermal expansion of the substrate and decreases the coefficient of hygroscopic
expansion of the substrate. Id. at 5:8-11. In other words, a tape that has been stretched in two
‘directionswill hold its shape better through changes in temperature and humidity.
The ’501 patent describes at least one embodiment in which a substrate film is stretched
in two directions. See"id. at 5:18-31. In the embodiment, the substrate film is preheated and then
passed through two sets of nip rolls, which operate at different speeds to stretch the film
longitudinally. Id. at 5:22-24. The substrate film is then stretched in the cross-web direction by
holding the outer edges of the film 'm gripping devices and moving the gripping devices apart by
about 325% or more. Id. at 5:25-31. The substrate film is heated as the width increases. Id. at
5:29-31. ' I
The patent teaches using biaxial tensilization to match the dimensional stability of a tape
to the dimensional stability of the magnetic recording head. Id. at 4:13-14, 11:5-18. The patent
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describes an embodiment in which the substrate is biaxially tensilized to such an extent that the
resulting composite mapetic tape “has a thermal expansion similar or equal to the thermal
expansion of the magnetic head, generally from about 5 ppm/C to about 10 ppm/C.” Id. at
4:44-50; see also id. at 2:43-47. In comparing the thermal expansion of the inventive tape to that
of a magnetic head, the patent teaches that “[m]ost magnetic recording heads are manufactured
on A120;-TiC wafers, which have a thermal expansion of 7 ppm/C.” Id. at 4:49-51; see also id.
at 2:48-49. 	_
The patent also discloses a range of conditions in which the invention should exhibit
dimensional stability. It explains that the cross-web dimensional difference between the
magnetic and recording head should be less than 900 microns per meter over a 35 degree
temperature range and over a 70% relative humidity range. Id. at 4:30-33.
A. The Asserted ’501 Patent Claims 	I -
Sony asserts independent claim I and dependent claims 2, 4, 5, 6, and 8 of the ’50l
patent. The assertedeclaims are reproduced below: V
- 1. A magnetic recording medium comprising a biaxially tensilized substrate .
having a front side and a backside, a longitudinal direction and a crossweb
direction, said substrate having a magnetic layer formed over said fiont
side of said substrate comprising magnetic pigment particles, and a binder
system therefor; said magnetic recording medium having a cross web
dimensional difference from a substrate wafer of an Al‘2O;——TiC	bi-phase
ceramic formed from aluminum oxide and titanium carbide of less than
900 microns/meter over a temperature range of about 35 degrees, and over
a relative humidity range of about 70%, and a coefficient of thermal
expansion having a value said magnetic recording medium having a
coefficient of thermal expansion of from about 5 ppm/C to about 10
ppm/C, said coefficient of thermal expansion being from about 50% to
about 150% of the coefficient of thermal expansion for the substrate
wafer. $#=¥#*
2. A magietic recording medium according to claim 1 having a Wyko
surface roughness of less than 10 nm.
=l= * * 	1!! =5‘
4. A magnetic recording mediiun according to claim 1 wherein said biaxially
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tensilized substrate is selected from the group consisting of polyesters,
polyolefins, cellulose derivatives, polyamides, and polyimides.
=l= # * * >l=
5. A magnetic recording medium according to claim 1 wherein said biaxially
tensilized substrate comprises a substrate subjected to film tensilization, '
said substrate being selected from the group consisting of polyethylene
naphthalate and polyethylene tirighihglate.
6. A magnetic recording medium according to claim 1 wherein said substrate
has a.thickness of from about 1 to about 10 microns.
$ =1!* * *
8. A magnetic recording medium according to claim 1 wherein the magnetic
recording medium has a hygroscopic expansion coefficient of less than
about 7 ppm/% RH.
IX-0002.
B. Level of Ordinary Skill.in the Art
Sony, Fujifilin, and Staff all agree that with respect to the ’50l patent, a person of
ordinary skill in the art would have a bachelor’s degree in materials science, physics, electrical
engineering, mechanical engineering, chemistry, or a closely related field, and at least five years
of experience in the magnetic recording media field or a master’s degree or higher in materials
science, physics, electrical engineering, mechanical engineering, chemistry, or a closely related
field, with an emphasis in magnetic recording media, and at least three years of experience in the
magnetic recording media field. CIB at 66; RIB at 50; SIB at 77. Based on the evidence of
record, I adopt the level of skill proposed by the Sony, Fujifilm, and Staff. CX-0001C at Q/A
206; RX-0003C at Q/A 120-22.
C. Claim Construction and Indefmiteness
The private parties and Staff have agreed to the construction of the following terms in the
asserted claims of the ’501 patent:
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Claim V Term " 	A Agreed Construction
Number . - 5'
1, 4, 5 	biaxially tensilized 	having been subjected to tensilization in both the
machine direction and the crossweb direction
35 degrees 	35 degrees Celsius
longitudinal direction machine direction (MD)
crossweb direction transverse direction (TD)
Wyko smface roughness surface roughness measured by an optical
interferometer, such as a_Wyko optical interferometer
Joint Motion for Leave to File Second Amended Joint List of Proposed Claim Terms, Exhibit A
at 1 (May 25, 2018); Order No. 39 (June 29, 2018) (granting motion). Accordingly, I adopt the
agreed-upon constructions for the purposes of this investigation.
There are three disputed claims relevant to the asserted claims of the ’50l patent:
1. tensilized/tensilization;
2. dimensional difference from a substrate wafer of an A120;-TiC bi—phaseceramic formed
from aluminum oxide and titanium carbide of less than 900 microns/meter over a
temperature range of about 35 degrees, and over a relative humidity range of about 70%;
and
3. said coefficient of themial expansion being from about 50% to about 150% of the
coefficient of thermal expansion for the substrate wafer.
Id. at 4-5_
1. “tensilized” / ”tensilization”
The words “tensilized” and “tensilization” appear in claims l, 4, and 5 of the ’50l patent.
Fujifilm and Staff argue that Sony has not timely preserved a construction of these terms beyond
the agreed construction of “biaxially tensilized” noted in the chart above. Sony argues that
“tensilized” should be interpreted according to its plain and ordinary meaning, which Sony
contends means “subjected to a process of heating and stretching, followed by heat setting or
stabilization.”
I find that Sony has forfeited any arginnent that “tensilized” requires any additional
construction beyond the interpretation the parties agreed to for the phrase “biaxially tensilized.”
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When the parties exchanged proposed constructions according to the deadlines in the procedural
schedule, no party argued that “tensilized” required a separate construction outside of the phrase
“biaxially tensilized.” Later, the parties jointly moved for leave to amend their constructions,
and leave was granted. See Order 25. But even at that late stage no party argued that
“tensilized” required a separate construction. Fujifihn and Staff formulated their positions and
defenses based on Sony’s representations in the claim construction phase. Sony, the
complainant, has not explained why it could not have timely alerted the other parties to the
specialized interpretation it now seeks. In these circumstances, I find Fujifihn and Staff are
entitled to hold Sony to the agreed upon construction of “biaxially tensilized” without further
interpretation of the term “tensilized-.” And in any event, I find that the construction of “biaxially
tensilized" originally agreed by the parties is not erroneous. ‘
2. ' “dimensional difference from a substrate wafer of an A1103-TiCbi
phase ceramic formed from aluminum oxide and titanium carbide of less
than 900 microns/meter over a temperature range of about 35 degrees, and
over a relative humidity range of about 70%”
The limitation “dimensional difference from a substrate wafer of an AIQO3-TiCbi-phase
ceramic formed from altuninum oxide and titanium carbide of less than 900 microns/meter over
a temperature range of about 35 degrees, and over a relative humidity range of about 70%”
appears in asserted claim 1, and is incorporated by dependency into asserted claims 2, 4, 5, 6, an
8. The parties propose the following constructions for this tenn:
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Sony 	Fujifilm 	Staff
plain and ordinary meaning, indefinite 	. indefmite
i.e., difference in dimensional 	.
change from a A120;-TiC K 	'
substrate wafer having Y
7ppm/C coefficient of thermal 1
expansion and 0 ppm/%RH
coefficient of hygroscopic
expansion of less than 900 =
microns/meter over:a
temperature range of about 35 V
degrees, and over a.relative 5
hrunidity range of about 70% 	r
Joint Motion for Leave to File Second Amended Joint List of Proposed Claim Terms, Exhibit A
at 4-5 (May 25, 2018).
The dispute with respect to this limitation turns on the aluminum oxide titanium carbide
(Al;O3-TiC) term. All parties agree the claim requires a comparison between the expansion of
the claimed magnetic recording medium and a ceramic substrate wafer made from Al;O3—'l"iC.
Fujifilm and Staff recognize that the coefficient of hygroscopic expansion (CHE) property of an
Al;O;—TiCsubstrate wafer “is known to be 0,” but they contend that the coetificient of thermal
expansion (CTE) property can vary “from about 6 to about 8 ppm/C.” RIB at 80; SIB at 94.
Without knowing the specific coefficient of thermal expansion in question, Fujifilrn and Staff
argue that claim l is indefinite because it is impossible for one skilled in the art to determine
whether a.product falls within the scope of the claimed invention with reasonable certainty.
Sony, on the other hand, contends that this limitation should be interpreted according to
its plain and ordinary meaning. Sony asserts that the plain meaning of the aluminum oxide
titanium carbide term requires an A120;-TiC wafer with a CTE of 7 ppm/C. CIB at 68-71.
Sony’s assertion is supported by the intrinsic record. The ’50l patent teaches that an
A12O;~TiCwafer has a CTE of 7 ppm/C: “Most magnetic recording heads are manufactured on
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Al;Q;-TiC wafers. which have a thermal expansion of 7 ppm/C.” JX-0002 at 4:49-51 (emphasis
added).
Fujifilm and Staff point to extrinsic evidence indicating that a person of ordinary skill in
the art may have known that an “A1203-TiCbi-phase ceramic” can have “different proportions of
the alumina phase and the titanium carbide phase” resulting in an “A1203-TiC substrate [with]
CTE values at least ranging from about 6 ppm/°C to about 8 ppm/°C._” RX-0003C at Q/A 102.
However, even if some substrate wafers of an A1203-TiC bi-phase ceramic could have CTE
values that are slightly above or below 7 ppm/C, the evidence shows that a person of ordinary
skill in the art would have known that an A1203-TiC substrate has standard properties that
include a CTE of 7 ppm/C. CX-0001C at Q/A 263-275 (Dr. Bhushan testifying that the “CTE of
Al2O3~TiCbi-phase ceramic is a known, standard value to a person of ordinary skill”). For
example, the inventor of the ’5Ol patent testified that the A1203-TiCsubstrate were “known” by
a person of ordinary skill in the art, and could be “looked up.” JX-0027C at 96:97-113
(deposition transcript of Dr. Merton). The NCIS Roadmap also states that the thermal expansion
ofa tape drive head substrate is 7 ppm/°C. JX-0005 at 39; JX-0115 at 13-14.
The ’501 patent makes clear that the claims refer to the well-known “substrate wafer of
an A1203-TiC bi-phase ceramic,” not an outlier or theoretical A1203-TiC bi-phase ceramic
substrate wafer. The specification states that the CTE of the “most commonly used magnetic
recording heads is about 7 ppm/C,” and that “[m]ost magnetic recording heads are manufactured
on A1203-TiC wafers, which have a thermal expansion of 7 ppm/C. JX-0002 at 2:48-49,
4:49-51. The specification also compares the thermal expansion of one embodiment of the
invention to other tapes that have not been tensilized. The right column (with the heading “Gen
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1 PEN Biaxially tensilized (balanced)”) reflects one embodiment of the invention incorporating a
substrate that has been biaxial tensilized:
Tape type 	Gen 1 Gen 1 Gen 1
Substrate type 	PEN PEN PEN '
Tensilization 	MD Semi-MD Biaxially
tensilized tensilized tensilized
(balanced)
thickness substrate microns 6.0 6.0 6.0
MD modulus substrate GPa 	8.8 7.8 6.9
TD modulus substrate GPa 	5.9 6.4 7.2
TD thermal substrate ppm/C . 12.9 8.7 2.9
TD hygroscopic ppm/% RH . 12.6 10.6 8.7
substrate
thickness tape microns 8.9 8.9 8.9
TD thermal tape ppm/C 14.0 12.0 7.2
i TD thermal relative ppm/C 7.0 5.0 0.2.
head 	'
TD hygroscopic tape ppm/% RH 8.9 8.6 6.8
Id. at 11:5-19. The table reproduced above shows “TD thermal relative head” for each of three
examples, and in each case the values in the row labeled “TD thermal relative head” are 7 ppm/C
loss than the values in the row labeled “TD thermal tape.” JX-0002 at 11:5-18. This indicates
that the dimensional change per degree Celsius for the magnetic recording head used in all three
examples was 7 ppm/C. CX-0001C at Q/A 219, 262. Therefore, the ’501 patent indicates that a
person of skill in the art would know that the claimed “substrate wafer of an A1203-TiCbi-phase
ceramic” has a CTE of 7 ppm/C.
The prosecution history is consistent with the disclosures of the specification. During
prosecution, the applicant originally presented an independent claim reciting, inter alia, a
magnetic recording medium “j’0r use with a magnetic recording head,” wherein the magnetic
recording medium had “a cross web dimensional difference from said magnetic recording head”
of certain claimed amounts. See JX~0005 at 20, claim 1 (emphasis added). The examiner
rejected the original claim for various reasons and noted that the claim was “directed to a
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magnetic recording medium” and therefore the phrase “for use with a magnetic recording head”
would be “considered a statement of intended use and not a claim limitation.” The examiner also
noted that “limitations to the magnetic head do not further limit the medium.” Id. at 45. ‘
In response to examiner’s statements, the applicant disagreed with the examiner’s
decision “not to give any weight” to the features of the recording head recited in the claim. Id. at
75. The applicant explained that the invention included a discovery that a more stable magnetic
tape can be made “by equalizing certain physical properties such as thermal and hydroscopic
expansion of the magnetic recording tape to similar physical properties present in the magnetic
recording head.” Id. The applicant presented a new claim 12 and stated that the new claim
“relates the properties of the magnetic recording tape to the properties of the material of which
the industry standard magnetic recording head is formed.” Id. (emphasis added). Claim 12 was
then allowed and issued as claim 1. 	_
Viewing the applicant’s statement in the prosecution history -that the issued claims are
directed to “the industry standard magnetic recording head” together with the specification’s
teachings that “most” heads in the industry “are manufactured on A1203-TiCwafers, which have
a thermal expansion of 7 ppm/C,” it is clear that a person of skill in the art would understand that
claim 1 is directed to the standard “substrate wafer of an A1203-TiC bi-phase ceramic,” which
has a CTE of7 ppm/C. See JX-0002 at 4:49-51. 	_
Fujifilm next argues that a person of ordinary skill in the art would not know with
reasonable certainty how to measure the “dimensional difference” because the “claims, the
specification, and the prosecution history are silent on the instruments, methods, and conditions
to measure the CTE or CHE of a given sample.” RIB at 83-85. Specifically, claim 1 requires a
“difference in dimensional change . . . over a temperature range of about 35 degrees, and over a
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relative humidity range of about 70%,” and Fujifilm contends that a person of ordinary skill in
the art would not know the starting and ending temperature and humidity values to perform this
differential analysis, or what instrument to use. Id.
Different tapes have different operating ranges, as Sony recognizes, but the claims inform
a person of ordinary skill in the art that they cover a magnetic recording medium with an
operating range “over a temperature range of about 35 degrees, and over a relative humidity
range of about 70%.” JX-0002 at cl. 1; CIB at 71. The patent further teaches such a person that
a magnetic recording medium with a “dimensional difference from a substrate wafer of an
A1203-TiCbi-phase ceramic formed from aluminum oxide and titanium carbide of less than 900
rnicrons/meter” over this operating range “will provide superior smoothness and recording
medium.” JX-0002 at 2:22-30. 	'
Tapes with an operating range “over a temperature range of about 35 degrees, and over a
relative humidity range of about 70%” were (and are) well-known in the art, and are referenced
in the ’5Ol patent. For example, the LTO-1 specification, also known as the ECMA—319
specification, specifies that the operating range is over a temperature range from 10-45°C, and
over a relative humidity range from 10-80%. JX-0128 (LTO-1 specification); CX-0001C at Q/A
98-104, 111. Sony‘s expert, who “published a number of peer-reviewed papers” on CTE, CHE,
and the dimensional stability of magnetic tape media, testified that “[g]iven how long magnetic
recording media, particularly LTO, has been around, a person of ordinary skill in the art” would
know that “typical” operating conditions for these tapes describes “a range of 10 to 45 C and 10
to 80% relative humidity.” CX-0001C at Q/A 98-100, 111 (citing JX-0114). The ’501 patent
also used the “Ultrium® Generation l [tape], commercially available from Imation Corp.,”
which is an LTO-1 tape, to record and disclose the decrease in the “thennal and hygroscopic
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expansion coefficients . . . when there is an increase in the cross web modulus of the substrate.”
JX-0002 at 10:60-11:19. 	'
A person of ordinary skill in the art would therefore understand with reasonable certainty
that the claims cover magnetic recording media with an operating range “over a temperature
range of about 35 degrees, and over a relative humidity range of about 70%,” of which the
LTO-1 tapes referenced in the specification are an example. The starting and ending
temperatures and humidity values of these tapes are well known, as are the instruments and
parameters to test the tapes. See CX—000lCat Q/A 98-116, 142-188.
Accordingly, claim 1 is not indefnrite because a person of ordinary skill in the art would
understand with reasonable certainty that the claim covers the standard Al2O3—TiCsubstrate with
a CTE of 7 ppm/C. Sony’s proposed construction of the “dimensional difference from a
substrate wafer of an A1203-TiC bi—phaseceramic formed from aluminum oxide and titanium
carbide of less than 900' microns/meter over a.temperature range of about 35 degrees, and over a
relative humidity range of about 70%” limitation as “difi‘erence in dimensional change from a
A110;-TiC substrate wafer having 7ppm/C coefficient of thermal expansion and 0 ppm/%RH
coefficient of hygroscopic expansion of less than 900 microns/meter over a.temperature range of
about 35 degrees, and over a relative humidity range of about 70%” is thereby adopted.
3. “said coefficient of thermal expansion being from about 50% to about
150% of the coefiicient of thermal expansion for the substrate wafer”
The limitation “said coefficient of thermal expansion being from about 50% to about
l50% of the coefficient of thermal expansion for the substrate wafer” appears in asserted claim
1, and is incorporated by dependency into asserted claims 2, 4, 5, 6, and 8. The parties propose
the following constructions for this term:
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Sony 	Fujifilm 	Staff
plain and ordinary meaning, indefinite 	indefinite
i.e., the coefficient of thermal
expansion of the medium
being from about 3.5 to l0.5
m/C
Joint Motion for Leave to File Second Amended Joint List of Proposed Claim Terms, Exhibit A
at 5 (May 25, 2018).
Fujifilm and Staff both contend that this limitation “suffers from the same indefniteness
defects discussed” with the “dimensionai difference from a. substrate wafer of an A1203-TiCbi
phase ceramic formed from aluminum oxide and titanium carbide of less than 900 microns/meter"
over a temperature range of about 35 degrees, and over a relative humidity range of about 70%”
limitation, above. RIB at 85; SIB at 97.
Accordingly, for the same reasons as set forth above, claim 1 is not indefinite because a
person of ordinary skill in the art would imderstand this limitation with reasonable certainty.
Sony’s proposed construction of the “said coefficient of thermal expansion being from about
50% to about 150% of the coefficient of thermal expansion for the substrate wafer” limitation as
“the coefficient of thermal expansion of the medium being from about 3.5 to 10.5 ppm/C” is
thereby adopted.
D. Infringement
Sony alleges that Fujifihn’s LTO-4, LTO-5, and LTO-6 tape products infringe claims 1,
2, 4, 5, and 6 of the ’50l patent, and that Fujifihn‘s LTO-5 and LTO-6 tape products infiiuge
claim 8. CIB at 72. Sony relies on measurements of the physical characteristics of the products,
specifications for the accused products, Fujifilm’s documents, admissions of Fujifilm witnesses,
and its expert’s opinions to support its allegations. Ia’.at 72-83 (citing evidence). Sony’s expert,
Dr. Bhushan, provided his opinions on the evidence and set forth a limitation—by-limitation
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PUBLIC VERSION 	V
infringement analysis for the asserted claims. CX-0001C at Q/A 310-590 (citing to and
explaining evidence).
Sony’s measurements of the accused products were conducted by MAC under the
direction of its expert, Dr. Bhushan, on a “Universal Tape Evaluation System” (UTES) using
laser scanning microscopy (LSM), following the relevant LTO specifications for measuring
CTE. CX-0001C at Q/A 103-104, 142-159 (citing JX-0134C (surmnary report created by
MAC); CX-0045C), 174-188. Dr. Bhushan testified that he used the same instrument and
method that MAC uses in its regular course of business to “certify that the various LTO-1 tapes
made by different manufacturers met the TDS [transverse dimensional stability] requirements of
the LT_O-1specification,” and that Fujifilm and Sony also use in the ordinary course of their
businesses to test the later generations of LTO tapes. Id. at Q/A 112-116 (citing CX-0052C; 3X
0131C), 142, 164-188. Dr. Bhushan concluded that a person of ordinary skill in the art “would
have considered an LSM-based method to be appropriate, accurate, and reliable for determining
the TDS, CTE, and CHE of magnetic recording media.” Id. at Q/A 170. Staff agrees that the
UTES instrument and LSM method used by Sony’s expert was appropriate for measuring the
CTE values of the accused products. SIB at 76-78.
Fujifilm responds that Sony failed to meet its burden to prove that the accused products
infringe the asserted claims because the UTES instrument “was neither the type of instrument
that the inventor used, nor was it a commonly accepted instrument for measuring CTE at the
time of the alleged invention,” and accordingly, it “yield[ed] materially different results from
then-commonly accepted instrument used by the inventor.” RIB at 54-56. Fujifilm points out
that the inventor of the ‘S01 patent used a “Thermomechanical Analysis” (TMA) instrument, not
a UTES instrument, and “held the TMA chamber at constant dew point or constant humidity and
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measured the CTE over a temperature range of 23 °C to 45 °C.” RX-0583C at Q/A 60-62 (citing
JX-0027C). Fujifilm’s expert, Dr. Wang, testified that the difference between the ‘UTES and
TMA instruments is significant because they apply different types and amounts of tension to the
tape: UTES applies tension in the machine direction while measuring dimensional differences in
the transverse direction, while TMA applies tension in the direction being measured. Id. at Q/A
64. For support, Dr. Wang measured the same IBM 3592 Generation 3 tape using both MAC’s
UTES instrument and a TMA instrument, and found that the UTES measurement resulted in a
CTE of 9.1 ppm/C whereas the TMA measurement resulted in a CTE of 2.7 ppm/C. Id. at Q/A
66.
The claims of the ’50l patent do not require a specific instrument or method be used for
measuring the CTE values of the magnetic recording media. Nor docs the specification inform a
person of ordinary skill in the art of a specific measurement instrument or.method. Fujifilm’s
only evidence of the instrument and method used by the inventor comes from the deposition of
the inventor, but this was not knowledge within the realm of information available to a person of
ordinary skill in the art. See Tr. at 657:5-659:24 (Dr. Wang agreeing that his knowledge of the
instrument, method, conditions, and tension to be applied when measuring the tape examples in
the specification of the ’50l patent came from the deposition of the inventor). Instead, as Dr.
Wang testified, the ’5Ol patent “presumed [that a person of ordinary skill in the art] knows how
to do CTE measurements.” Id. f
A person of ordinary skill in the art would recognize that the CTE values required by the
claims would be measured in a way appropriate for the specific magnetic tapes. Here, the LTO
specifications associated with the accused products specify how CTE should be measured, and
the evidence shows that MAC’s UTES instrument and method is the industry standard for
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measuring the CTE values of the accused products. Fujifilm notes that the ’50l patent is not
limited to LTO tapes, which is true. However, a person of ordinary skill in the art may recognize
that different types of tapes may require different types of instruments and methods to measure
CTE values, such that a person measuring a non-LTO tape may not follow the guidance of the
LTO specification to determine whether the tape fell within the scope of the claim. Whether
CTE is measured in a way appropriate for the specific tapes is a factual question of infringement.
Cf ADC Telecommunications, Inc. v. Switchcrafi, lnc., 281 Fed. Appx. 989, 992-993 (Fed. Cir.
2008) (nonprecedential) (holding that, because the claims did not require any particular testing
method for the disputed limitations and the specification lacked clear guidance of a particular
testing method, “[t]he parties’ dispute over the proper testing method is therefore a factual
question that the district court properly submitted to the jury”).
I Regarding Fujif1lm’s contention that the UTES instrument and a TMA instrument apply
different types and amounts of tension to the tape, Dr. Bhushan explained that the “tension at
which you make a measurement, as long as it’s below or equal to the drive tension, should have
no bearing on the value of thermal expansion or dimensional stability or hygroscopic expansion.”
Tr. at 328:3-8. And there is no evidence that the amount of tension applied by MAC to the
accused products was not below or equal to the drive tension. See CRB at 35 (citing to JX-0134
at 3, JX-0128 at 21, 59, JX-0104C at 22, 65, CX-0029C at 22, 65 and CX-0030C at 25, 66, to
explain that the tension magnitude and direction applied by MAC to the accused products was
“well-within the tension used in the normal operation . . . as evidenced by the tension tolerances
set forth in the LTO specifications”). Further, Dr. Wang’s criticisms of the UTES instrument are
of questionable credibility in part because Dr. Wang had “never used a MAC instrument” and
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“never observed a MAC instrument being operated by someone else” prior to this investigation.
Tr. at 6ll:20-612217.
As evidence that the UTES instrument used by Sony produced incorrect CTE values,
Fujifilm put forth its own measurements of the accused products using a TMA instrument that
resulted in values outside of the asserted claims. RIB at 56; RX-0583C at Q/A 115-116, 118 (Dr.
Wang testifying that the Fujifilm LTO-4, LTO-5, and LTO-6 were measured using the TMA
instrument to have CTE values of 2.7 ppm/C, 1.4 ppm/C, and 3.3 ppm/C, respectively).
However, as Staff notes, Fujifilm’s measurements if its own products are of questionable
reliability because “the testing was perfonned by a Fujifilm employee[,] Fujifilm’s expert
omitted key information about the testing protocol[,] sample preparations are not documented or
provided[,] Fujif1lm’s expert did not observe the testing in person[, and] Fujifilm’s expert did not
have extensive experience using the thermomechanical analyzer used for the measurements.”
SIB at 78 (citing CX-0001C at Q/A 457-479). Sony further points to evidence that the TMA
instrument used by Fujifilm was not properly calibrated. CIB at 77-78 (citing CX-0011C at Q/A
778-781; RX-0202C; Tr. at 366:6-367223, 623:4-625:l6).
The conclusion above that the measurements from the MAC UTES instrument were
reliable further supports Sony’s argmnent that Fujifilm’s measurements from the TMA
instrument were not reliable. Both experts agree that the UTES and TMA instruments, if used
correctly, should produce similar CTE values for the same tape,-yet the values generated by the
Fujifilm employee using the TMA instrument were significantly different than those of the
professional independent testing firm using the UTES instrument. Tr. at 328:3-8 (Dr. Bhushan),
598:11-17 (Dr. Wang); CX-0001C at Q/A 105-107 (“CTE and CHE are material properties that
are determined by the material itself. It would be like saying that the boiling point of water was
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different depending on if you used a digital thermometer or a mercury thennometen”), 171-173.
Dr. Wang further agreed that a person of ordinary skill in the art could use the MAC UTES
instrument and method to measure the CTE of a magnetic recording medium. Id. at 611:10-25.
The evidence therefore supports Sony’s contention that the UTES instrument and method was
appropriate for measuring CTE values of the accused products.
Based on the evidence and arguments of the parties, I find that Sony has established by a
preponderance of the evidence that Fujifilm’s LTO-4, LTO-5, and LTO-6 tape products infringe
claims 1, 2, 4, 5, and 6 of the ’50l patent, and that Fujifilm’s LTO-5 and LTO-6 tape products
infringe claim 8, so long as those claims are valid.
E. Domestic Industry Technical Prong
_ Sony asserts that its LTO-5 tape products and the IBM 3592 Generation 3 (JY, JC) tape
products practice claims l, 2, 4, 5, 6, and 8 of the ’501 patent, and that its LTO-6 tape products
practice claims 1, 2, 4, 5, and 6. -CIB at 83-87; SIB at 79-80. Sony’s expert, Dr. Bhushan, cites
to and explains the evidence to provide a limitation-by-limitation analysis of how the domestic
industry products practice the asserted claims. CX-0001C at Q/A 608-907.
Fujifilm argues that Sony failed to prove that the Sony LTO-5 and LTO-6 tapes and the
IBM 3592 tapes do not practice the claims of the ’50l patent because “Dr. Bhushan used the
same inappropriate instrument and high stress conditions to measure CTE” and “Dr. Wang used
a TMA to measure the CTE of an IBM 3592 Gen 3 tape at 2.7 ppm/C, which is outside the
claimed range of ‘from about 5 ppm/C to about l0 ppm/C.’” RIB at 57. These arguments mirror
Fujifilm’s non-infringement arguments and are therefore rejected for the same reasons as
discussed above. See Section V.D, supra; RRB at 35-36 (“Sony’s DI arguments are
unpersuasive for the same reasons as their infringement analysis”); SRB at 18 (“Fujifilm relies
on the same arguments that it made in connection with Sony’s infringement analysis . . _.these
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PUBLIC VERSION '
arguments fail because the evidence shows that Sony’s testing was appropriate and reliable,
whereas Fujif1lm’s testing was not.”).
For the IBM 3592 tapes, Fujifilm argues that the tapes have an operating range of
16-32°C, which does not satisfy the 35-degree temperature range of claim 1. RIB at 57 (citing
Tr. at 338:3-14; CX-0011C at Q/A 404). As Staff notes, Fujifilm failed to assert this argument in
its pre-hearing brief, and it is therefore waived. G.R. 8.2; SRB at 18; see RPB at 86-87.
Accordingly, based on the evidence and the arguments of the parties, I find that Sony
established by a preponderance of the evidence that its LTO-5 tape products and the IBM 3592
Generation 3 (JY, JC) tape products practice claims 1, 2, 4, 5, 6, and 8 of the ‘S01 patent, and
that its LTO-6 tape products practice claims 1, 2, 4, 5, and 6. The technical prong of the
domestic industry is therefore satisfied, so long as those claims are valid. See 19 U.S.C. §
1337(a)(2) and (3); Certain Microsphere Adhesives, Process for Making Same and Prods.
Containing Same, Including Self-Stick Repositionable Notes, Inv. No. 337-TA-366, Cornm’n
Op., 1996 WL 1056095, at *8 (U.S.I.T.C. Jan. 16, 1996).
F. Invalidity
Fujifilm contends that (1) the Imation 984013tape cartridge renders asserted claims 1, 2,
4, 5, 6, and 8 invalid under 35 U.S.C. § 102; (2) the Meguro reference renders asserted claims 1,
2, 4, 5, 6, and 8 invalid under 35 U.S.C. § 102; (3) the Meguro-2 reference renders asserted
claims 1, 2, 4, 5, and 6 invalid under 35 U.S.C. § 102; (4) the Imation LTO-1 tape medium
13Fujifilm refers to this product as “Imation 9840” whereas Sony and Staff refer to this product
as “St0rageTek 9840.” Sony assigns the “St0rageTek 9840” label to the product apparently in an
attempt to distinguish a product measured in 2002 from a product measured within the past year,
which it labels the “Imation BlackWatch 9840” tape. For the reasons discussed below, I reject
Sony’s distinction. I will therefore refer to the product as “Imation 9840,” as that is the label that
the party with the burden of proof has chosen to assign.
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PUBLIC VERSION.
renders asserted claims 1, 2, 4, 5, 6, and 8 invalid under 35 U.S.C. § 103 in view of the
knowledge and experience of a person of ordinary skill in the art and/or the NSIC Roadmap;
(5) the Imation 9840 tape cartridge renders asserted claims 1, 2, 4, 5, 6, and 8 invalid under
35 U.S.C. § 103 in view of the knowledge and experience of a person of ordinary skill in the art
and/or the NSIC Roadmap; (6) the Imation 9840 tape cartridge renders asserted claim 2 invalid
under 35 U.S.C, § 103 in view of the knowledge and experience of a person of ordinary skill in
the art and Imation LTO-1; and (7) the Takahashi reference renders asserted claims 1, 2, 4, 5, 6,
and 8 invalid under 35 U.S.C. § 103 in view of the knowledge and experience of a person of
ordinary skill in the art and/or the Kobayashi reference. RIB at 58-79. Fujifilm further contends
that the asserted claims are invalid under 35 U.S.C. § 112 for failing to satisfy the written
description and enablement requirements. 14 Id. at 86-89.
- As an initial matter, Sony contends that Fujifilm is estopped from proffering Megura,
Megura-2, Takahashi, Kobayashi, and the NSIC Roadmap as invalidating references in this
investigation because it relied on, or could have reasonably raised, those references when it filed
an inter partes review (IPR) challenge to the ’501 patent at the U.S. Patent Office. Under the
estoppel provisions for IPR proceedings in 35 U.S.C. § 315(c)(2), Sony asserts that Fujifilm is
prohibited from asserting these prior art references in this investigation. ClB at 87-88 (noting
14Fujifilm also contends that the claims are invalid as indefinite under 35 U.S.C. § 112 because a
person of ordinary skill in the art would not understand, with reasonably certainty, the meaning
of the limitations (1) “dimensional difference from a substrate wafer of an Al2O3—TiCbi-phase
ceramic formed from aluminum oxide and titanium carbide of less than 900 microns/meter over
a temperature range of about 35 degrees, and over a relative humidity range of about 70%” and
(2) “said coefficient of thermal expansion being from about 50% to about 150% of the
coefficient of thermal expansion for the substrate wafer.” RIB at 52-54, 79-85. These
contentions are addressed in the claim construction section above. See Sections V.C.2 and 3,
supra. 	‘
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that “the PTAB recently issued a Final Written Decision rejecting Fujif1lm’svalidity challenge in
Fujifi1m’s IPR proceeding on the ’501 patent, finding Claims 1-10 patentable”); id. at 88 n.35
(citing the public version of the final written decision from the PTAB). Staff argues that 35
U.S.C. § 315(c)(2) only estops the “petitioner in an inter partes review,” and Staff notes that it
was not a petitioner or even a party to the IPR. SRB at 19. Staff is correct. Regardless of
whether 35 U.S.C. § 315(c)(2) estops Fujifilm, as contended by Sony, the statute does not
prevent Staff from raising the references in this investigation, which it did. Staffs contentions
that these references invalidate the asserted claims of the ’501 patent must therefore be
addressed.“
Regarding the substance of Fujifi1m’s invalidity contentions, Sony disagrees with
Fujifihn. CIB at 87-100. Sony’s main response regarding anticipation and obviousness appears
to be that the lmation 9840 product, Megura reference, Meguro-2 reference, and Takahashi
reference all fail to expressly or inherently disclose (1) “a biaxially tensilized substrate,” (2) “a
cross web dimensional difference” over the claimed conditions, (3) “a coefficient of thermal
expansion” over the claimed conditions, and (4) “said coefficient of thermal expansion” required
by claim 1. CIB at 88-89. ‘As an initial matter, Sony’s expert appears to rely at least in part on a
construction for “tensilized” that was rejected. See Section V.C.1, supra. Sony also appears to
assert that the prior ‘artmust disclose CTE and CHE over the entire “a temperature range of about
35 degrees and over a relative humidity range of about 70%” in order to satisfy claim 1. CIB at
89 (citing CX-0011C at Q/A 178-185, 260-271, 346-357, 410-421). Sony is correct that claim 1
I5Additionally, 1 find below that the ’501 patent is invalid based on the sale and use of a prior art
product before the priority date for the ’501 patent. Argtunents based on the on-sale bar are not
allowed in IPR proceedingsand no estoppel applies to such arguments. See 35 U.S.C. §§ 311(b),
3 15(e)(2).
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PUBLIC VERSION 	_
requires a “cross web dimensional difference from a substrate wafer . . . of less than 900
microns/meter over a temperature range of about 35 degrees, and over a relative humidity range
of about 70%.” However, neither the claims nor the specification requires that test
measurements be taken at each degree of temperature or at each percentage point of humidity. If
the prior art discloses representative CTE or CHE measurements that would be understood by
person of ordinary skill in the art to demonstrate the claimed range, it is enough. Cf Clearl/alue,
Inc. v. Pearl River Polymers, 1nc., 668 F.3d 1340, 1345 (Fed. Cir. 2012) (holding that a prior art
range of “150 ppm or less” disclosed the claimed “50ppm” limitation because there was “no
evidence demonstrating any difference across the range”); In re Peterson, 315 F.3d 1325, 1329
(Fed. Cir. 2003) (recognizing that a prior art reference discloses a claim limitation “when the
claimed range and the prior art range do not overlap but are close enough such that one skilled in
the art would have expected them to have the same properties”); see JX_-0027Cat 73:23-82:5
(Dr. Merton, the inventor of the ’501 patent, testifying that CTE of the magnetic recording
medium disclosed in the specification is uniform between 25 to 35 to 45 degrees, and down to 10
degrees, when measured using a constant dew point or humidity level). Sony’s overarching
argument is therefore rejected, and its specific arguments for each prior art product or reference
will be addressed below.
Based on the evidence and arguments of the parties set forth above, and in detail in the
following subsections, I find that Fujifilm presented clear and convincing evidence that (1) the
Imation 9840 product renders claims 1, 2, 4, 5, 6, and 8 of the ’5Ol patent invalid as anticipated;
(2) Meguro renders claims 1, 2, 4, 5, 6, and 8 invalid as anticipated; (3) Meguro-2 renders claims
1, 2, 4, 5, and 6 invalid as anticipated; (4) the Imation LTO-1 product in combination with the
knowledge and experience of a person of ordinary skill in the art and/or the NCIS Roadmap
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PUBLIC VERSION
renders claims 1, 2, 4, 5, 6, and 8 invalid as obvious; and (5) Takahashi in combination with the
knowledge and experience of a person of ordinary skill in the art renders claims 1, 2, 4, 5, 6, and
8 invalid as obvious. I also find that Fujifilm did not present clear and convincing evidence that
the asserted claims of the ’50l patent are not enabled or adequately described in the
specification.
1. The Imation 9840 product anticipates claims 1, 2, 4, 5, 6, and 8.
Fujifilm asserts that Imation exclusively manufactured the magnetic recording media and
cartridges for the 9840 product, which was sold to the public starting in the late 199.05. RIB at
58 (citing RX-0003C at Q/A 156; Tr. at 662:19-22). For evidence of the relevant properties of
the 9840 product, Fujifilm relies on a June 2002 presentation by Dr. Merton, the inventor of the
’50l patent, that documents his measurements of the tape, the testimony of Dr. Merton, and
testing done by Fujifilm’s expert within the last year.“ Id. (citing RX-0003C at Q/A 158-160).
Fujifilm’s expert, Dr. Wang, stepped through the evidence to provide a limitation-by-limitation
explanation of how the 9840 product he tested satisfies each limitation of the asserted claims.
RX-0003C at Q/A 296-341.
Sony first asserts that Fujifilm failed to prove that the 9840 product was commercially
available during the relevant time such that it qualifies as prior art. CIB at 90. However,
Fujifilm presented overwhelming evidence to show that the 9840 product was commercially
{aim-i
Unlike the measurements of the accused products that Staff noted were “performed by a
Fujifilm employee[,] Fujifilm’s expert omitted key information‘ about the testing protocol[,]
sample preparations are not documented or provided[,] Fujifi1m’s expert did not observe the
testing in person[, and] Fujifilm’s expert did not have extensive experience using the
thermomechanical analyzer used for the measurements,” the measurements of the Imation 9840
product were performed by “a well-known independent lab, EAG Laboratories” under Dr.
Wang’s direction. SIB at 78; RX-0003C at Q/A 305.
16
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PUBLIC VERSION
available at the relevant time. JX-0002C at 120212-21,230:8-24, 261:1-262:l4; Tr. at 661:6-25;
RX-0003C at Q/A 156-157; RX-0328; RX-0330; RX-0337; RX-0338; RX-0360; RX-0379; RX
0397; RX-0398; RX-0399; RX-0400. .
Second, Sony asserts that Fujifihn failed to prove that the “Imation BlackWatch 9840”
tapes tested by Dr. Wang for this investigation are the same as the “StorageTek 9840” tape
measured by Dr. Merton, and therefore have the same relevant properties. CIB at 90-91. Again,
the evidence shows that Imation only produced one type of 9840 tape media, all with the same
features, and Sony does not present convincing evidence to show otherwise. Tr. at 662:19-22;
663:7-ll.
Third, Sony asserts that Fujifilm failed to show that the 9840 product had a biaxially
tensilized substrate. CIB at 91. The evidence here shows that the 9840 product used a Q11
substrate, which is the samesubstrate used in the inventive embodiment of the ’50l patent and is
therein described as having a biaxially tensilized substrate, and Sony did not present convincing
evidence to call Fujifi1m’s evidence into doubt. LIX-0027C at l2O:12-21, 145:2O-22, 213:13
215:17, 230:25-231; RX-0003C at Q/A 299. 	.
Fourth, Sony asserts that Dr. Merton’s measurements of the 9840 products depicted in his
June 2002 presentation were unreliable because the instrument he used to obtain those
measurements was later replaced by a more reliable instrument. CIB at 91-92. Although
modern instrtunents are more reliable, the evidence shows that the instrument used by Dr.
Merton was sufficiently reliable to perform the ‘relevant measurements, and the measurements,
even after applying the margin of error, satisfy the claim limitations. RX-0034C at 8 (showing
the measurement accuracy of Dr. Merton’s machine as 15 ppm, resulting in a measurement of
518 ppm i 15 ppm, which falls below the 900 microns/meter limit of claim 1); RX-0003C at
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PUBLIC VERSION
Q/A 309-314; compare RX-0003C at Q/A 308 (Dr. Merton’s measurements showing CTE of 8.4
ppm/C and CHE of 6.7 ppm/%RH) with id. at Q/A 321 (Dr. Wang’s measurements showing
CTE of8.6 ppm/C and CHE of 6.6 ppm/%RH).
Fifth, Sony asserts that Fujifilm’s measurements of the 9840 product for this
investigation are not reliable because Dr. Wang failed to apply a correction factor to the resulting
measurements. CIB at 91. However, Dr. Wang explained that he did apply a correction factor,
which was less than 0.1%. Tr. at 621:12-622:7, 65O:21-25.
For claim 2, Sony argues that Fujifilm has not met its burden to establish that the 9840
products satisfy the surface roughness limitation because the product measured by Dr. Wang
“does not demonstrate surface roughness for the StorageTek 9840 tested in 2002 at Imation.”
CIB at 93. As I found above, the evidence shows that the 9840 product measured by Fujifilm for
this investigation reliably infonns theicharacteristics of the 9840 product. Sony makes no
assertion that Dr. Wang’s measurements do not satisfy the “Wyko surface roughness of less than
10 nm.” Because I have credited Dr. Wang’s measurements, I need not address Fujifilm’s
contention that “the knowledge and experience of a [person of ordinary skill in the art and/or the
NSIC Roadmap” or the Imation LTO-1 product can be combined with the 9840 product to arrive
at an invention with the requisite Wyko surface roughness. See RIB at 75-76.
For the foregoing reasons, Fujifilm showed by clear and convincing evidence that the
lmation 9840 product anticipates claims 1, 2, 4,15,6, and 8 of the ’501 patent.
2. Meguro anticipates claims 1, 2, 4, 5, 6, and 8.
Japanese Patent Application Number P2001-3412160 published on May 16, 2003, as
Publication Number 2003-141708 (“Meguro”), and lists Katsuhiko Meguro and Masatoshi
Takahashi as the inventors. RX-0124 at 1. Fujifilm and Staff assert that Meguro anticipates
claims 1, 2, 4, 5, 6, and 8 of the ’501 patent. CIB at 62-66; SIB at 87-88. Fujif1lm’s expert, Dr.
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PUBLIC VERSION
Wang, stepped through the evidence to provide a limitation-by-limitation explanation of how
Meguro satisfies each limitation of the asserted claims. RX-0003C at Q/A 138-140, 214-256.
Sony first argues that Meguro does not disclose a “biaxially tensilized substrate,” but
Sony’s argument relies on a construction of “tensilized” that has been rejected. CIB at 93. Sony
next argues that Meguro only discloses CTE between 23-50°C, not the 35°C range required by
claim 1, and a CHE of 50-80 %R[-I, not the 90% range required by claim 1. Id. at 94. As
discussed above, the prior art need not disclose measurements at every degree or percentage of
humidity in the claimed range, as long as a person of ordinary skill in the art would understand
that the cross web dimensional difference of the disclosed tape remains linear over those ranges.
See Section V.F, supra. Dr. Wang testified that the temperature and relative humidity ranges
disclosed in Meguro would be understood by a person of skill in the art to demonstrate that the
disclosed tape demonstrates CTE and CHE across the ranges in claim 1, and Sony did not
present any compelling contrary evidence. RX-0003C at Q/A 239-240.
Regarding claim 2, Sony argues that Meguro’s disclosure of “center-line surface
roughness average of 0.1 _to4.0nrn” does not disclose the “Wyko surface roughness of less than
10 nm” limitation. CIB at 94. Sony explains that the surface roughness of claim 2 is that of the
recording medium, Whereas the surface rouglmess of Meguro is only of the nonmagnetic
supporting member. Id.; CX-0011C at Q/A 286-288. Sony’s expert concludes that “the surface
roughness of the supporting member does not necessarily indicate anything about the surface
roughness of the magnetic recording medium.” CX-0011C at Q/A 289. Although Sony’s expert
may be correct in the abstract, the full quote from Meguro that Sony excerpted is that “[t]he
magnetic recording medium according to the present invention is preferable because the surface
has extremely superior smoothness, as indicated by the center-line surface roughness average of
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0.1 to 4.0 nm with the cutoff value of 0.25 mm but preferably within the range of 0.5 to 3.0 nm.”
RX-0124 110082 (emphasis added). Meguro therefore discloses the limitation of claim 2.
Regarding claim 6, Sony argues that the thickness of the substrate in Meguro for example
9, which Fujifilm relies on for the disclosure of claim 2, is 62 microns, which does not satisfy the
“about 1 to about 10 microns” limitation. CIB at 94. Fujifilm, on the other hand, relies on the
teaching of Meguro that the “thickness of the nornnagnetic supporting member used for a
computer tape is within the range of 3.5 to 7.5 um (preferably 3 to 7 um)?’ RX-0124 110075.
Meguro’ s “computer tape” teaching relied on by Fujifllm is different than the teaching in relation
to example 1 relied on by Sony that a “floppy® disk” has a thickness of 62 microns, and a person
of ordinary skill in the art would have recognized that the 62 micron substrate of example 1 did
not inform the thickness of the substrate in example 9. Id. 1]94. Although Meguro states that
example 9 was “fabricated through the same method as that was used for the working example
6” with some caveats, and that example 6 was “fabricated through the same method used for
working example 1,” nothing in Meguro suggests that examples 6 or 9 use the same 62 micron
substrate as example 1. Id 1111	0101, 0104. As Dr. Wang testified, a person of ordinary skill in
the _art“would have understood that a magnetic tape medium is much thinner than a magnetic
floppy disk,” that 10 microns was “very thick for the early 20005,” and that a thickness greater
than 50 microns would have been impossible. RX-0003C at Q/A 254. Meguro therefore
discloses the limitation of claim 6.
Accordingly, for the foregoing reasons, Fujifilm showed by clear and convincing
evidence that the Meguro anticipates claims 1, 2, 4, 5, 6, and 8 of the ’501 patent._
3. Meguro-2 anticipates claims 1, 2, 4, 5, and 6.
United States Patent Application Number 10/413,510 was published on December 4,
2003, as Publication Number 2003/0224213 (“Meguro-2”), and it lists Katsuhiko Meguro and
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Masatoshi Takahashi as the inventors. RX-0366 at cover page. Fujifilm and Staff assert that
Meguro anticipates claims l, 2, 4, 5, and 6 of the ’501 patent. CIB at 66-68; SIB at 88-89.
Fujifilm’s expert, Dr. Wang, stepped through the evidence to provide a limitation-by-limitation
explanation of how Meguro satisfies each limitation of the asserted claims. RX-0003C at Q/A
147-149, 257-295.
For the same reasons as with Meguro, Sony argues that Meguro-2 does not disclose a
“biaxially tensilized substrate” or CTE and CHE values across the entire ranges cl-aimedby the
’50l patent. CIB at 95-96. These same arguments have been rejected above.
Accordingly, for the foregoing reasons, Fujifilm showed by clear and convincing
evidence that the Meguro anticipates claims l, 2, 4, 5, and 6 of the ’50l patent.
4. The Imation LTO-1 product in combinatiorrwith the knowledge and
experience of a person of ordinary skill in the art and/or the NCIS Roadmap
renders claims 1, 2, 4, 5, 6, and 8 invalid as obvious.
The Imation LTO-1 product, also referred to as the Ultriuin Generation 1 product, is
identified in the ’501 patent as a prior art magnetic recording medium manufactured by Imation.
IX-0002 at l0:60-66. The NCIS Roadmap is a document titled “Magnetic Tape Storage
Roadmap February 2002” that was published by National Storage Industry Consortium
(“NSIC”), as noted above in the background description of the ’50l patent. JX—0l15; RX-0003C
at Q/A I50. NCIS was, at the time of the Roadmap, “a leading consortium of more than 50
companies and universities in the field of magnetic tape.” RX-0003C at Q/A 151-I55. Fujifrlm
specifically relies on the section of the NSIC Roadmap titled “Recording Media Technology”
that discusses optimizing linear density, track density, and layer density of magnetic media to
increase tape capacity and performance. Id. at Q/A 154. Fujifihn’s expert, Dr. Wang, stepped
through the evidence to provide a limitation-by-limitation explanation of how the Imation LTO-1
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product in combination with the knowledge and experience of a person of ordinary skill in the art
and/or the NSIC Roadmap satisfies each limitation of the asserted claim. Id. at Q/A 352-386.
As explained in the ’501 patent, the ‘inventor changed “the substrate used in a magnetic
recording medium, Ultrium® Generation 1, commercially available from lmation Corp., from a
tensilized polyethylene naphthalate to a polyethylene naphthalate film having been biaxially
tensilized.” JX-0002 at 10:60-66. In other words, the ’50l patent teaches that the LTO-1
product was not biaxially tensilized as required by claim 1. See CX-0001C at Q/A. 511.
According to Dr. Wang, the NSIC Roadmap discloses the same biaxially tensilized substrate
used by the inventor of the ’501 patent for the invention. RX-0003C at Q/A 359 (citing JX-0115
at Table 12 (NSIC Roadmap); JX-0027 at 198:5-199:l2 (deposition transcript of Dr. Merton);
JX-0002 at Table 1). ‘
Sony does not appear to dispute the disclosure of the NSIC Roadmap, but does dispute
that a person of ordinary skill in the art would motivated-to use the disclosure of the NSIC
Roadmap to change_the medium in the lmation LTO-1 product in a way to make the claimed
invention. CIB at 98. Sony’s expert, Dr. Bhushan, explains that such a combination would
make the LTO-1 tape inoperable for its intended purpose of “interchangeability and performance
with LTO-1 certified drives” because of the “strict and numerous requirements . . . as -setforth in
the LTO-1 format specification.” CX-0011C at Q/A 506-514. Dr. Bhushan’s explanation
presupposes that a person of ordinary skill in the art would not alter an LTO-1 product if such an
alteration would make the product non-compliant with the LTO-1 format specification.
However, there is no evidence that a person of skill in the art motivated to “improve the
dimensional stability of a magnetic recording medium” (see RIB at 73) would only consider the
LTO-1 format specification to the exclusion of a different or new format specification. Indeed,
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the NSIC Roadmap appears fonnat-agnostic. See JX-0115 at 2 (referring generally to “linear
tape recording formats”). The evidence therefore shows that a person of ordinary skill in the art
would be motivated to combine the biaxially tensilized substrate disclosed in the NSIC Roadmap
with the LTO-l product to improve the dimensional stability of the tape. See RIB at 73 (citing
RX-0003C at Q/A 353).
Sony next argues that Dr. Wang improperly relies on the inventor’s testimony,
impermissible hindsight, and incorrect claim interpretation. CIB at 98. Sony, however, fails to
identify the supposed error in Dr. Wang’s evaluation of the inventor’s testimony. Sony also
never states what impermissible hindsight or incorrect claim construction Dr. Wang applied.
Similarly, Sony asserts that “Dr. Wang fails to demonstrate how this combination renders [the
dependent] claims obvious and [that] Dr. Wang’s proposed combinations are improper” without
explaining the shortcomings in Dr. Wang’s analysis. Id Fujifilm has put forth clear and
convincing evidence, and'I decline to make Sony’s rebuttal arguments for them. As the Seventh
Circuit observed in its now familiar maxim, “[i]udges are not like pigs, hunting for truffles
buried in briefs.” United States v. Dunkel, 927 F.2d 955, 956 (7th Cir.1991).
Accordingly, the evidence shows that the combination of the Imation LTO-l product
with the NSIC Roadmap discloses each limitation of the asserted claims, and that a person of
ordinary skill in the art would have been motivated to make this combination. 	t
Sony argues that secondary considerations of non-obviousness preclude finding that the
combinationtof the Imation LTO-1 product with the NSIC Roadmap renders the asserted claims
obvious. CIB at 100. Sony specifically asserts that the “knowledge at the time taught away from
the ’50l invention” such that a person of ordinary skill in the art would not -“considermatching
CTE and CHE of composite recording media to standard Al-TiC, as required by the ’5Ol
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PUBLIC VERSION
invention.” Id. (emphasis in original). Sony explains that the knowledge at the time was that
“substrate properties dominate tape properties” so that “it was desirable to match the CTE of the
smite to the standard Al-TiC substrate CTE (7ppm/C)” instead of matching the CTE of the
tape to the Al-Tic substrate. Ia’. (emphasis added). To support its assertion, Sony points to the
NSIC Roadmap, which states that “it is desirable to match thermal expansion of the tape
substrate with that of the head substrate.” Id. (citing CX-0011 at Q/A 675 (citing JX-0115 at 13
14)). However, the NCIS Roadmap also states that the “physical properties of both the substrate
and the magnetic/nonmagnetic layers affect the properties of a tape and should be taken into
account” and that “the goal is to match thermal expansion of the tape in the TD to that of the
head substrate.” JX-0115 at 13, 14 (emphasis added).
Sony also points to the “Richards” publication that states that “mechanical properties of
tapes are dominated by substrate properties.” Id. (citing CX-001-1at Q/A 676 (citing RX-0127 at
5)). The Richards publication states that “the best that a.tag designer can do is t1y_tomatch the
thermal expansion of the head.” RX-0127 at 5. Sony’s evidence is not a “clear discouragement”
of matching the CTE and CHE of the tape to the Al-TiC substrate. See Scmtarus, Inc. v. Par
Pharm., Inc, 694 F.3d 1344, 1356 (Fed. Cir. 2012).
Accordingly, Fujifilm has shown by clear and convincing evidence that the combination
of the Imation LTO-1 product with the knowledge and experience of a person of ordinary skill in
the art and/or the NSIC Roadmap renders invalid as obvious claims l, 2, 4, 5, 6, and 8 of the
’50l patent.
5. Takahashi in combination with the knowledge and experience of a
person of ordinary skill in the art renders claims 1, 2, 4, 5, 6, and 8 invalid
as obvious. 	‘
Japanese Patent Application Number P2000-311769 published on April 26, 2002, as
Publication Number P2002-123928 (“Takahashi”)_and lists Takahashi Masatoshi and Doshita
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PUBLIC VERSION
Hioaki as inventors. RX-0123 at l. United States Patent Application Number l0/203,346
published on June 12, 2003, as Publication Number 2003/0108775 (“Kobayashi”) and lists
Ieyasu Kobayashi, Shinji Muro, and Hirofumi Murooka as inventors. RX-0378 at cover page.
Fujifilm only asserts that Kobayashi is part of an invalidating combination in the event that
Sony’s proposed construction of “tensilized” is adopted, which it is not. RIB at 78-79; see
Section V.C.l, supra. Therefore, only the combination of Takahashi with the knowledge and
experience of a person of ordinary skill in the art is effectively asserted as an invalidating
combination. Fujifilm’s expert, Dr. Wang, stepped through the evidence to provide a limitation
by-limitation explanation of how the Imation LTO-1-product in combination with the knowledge
and experience of a person of ordinary skill in the art satisfies each limitation of the asserted
claims. RX-0003C at Q/A 165-213, 449-456.
Sony argues that a person of ordinary skill in the art would not modify Takahashi to use
Kobayashi’s “biaxially oriented polyester film” because such a person would not “merely swap”
substrates because substrate selection can affect performance. CIB _at99.’ However, Sony does
not dispute that Takahashi discloses a “biaxially tensilized substrate” ifits untimely construction
of “tensilized” is rejected. CRB at 42-43. Thus, there is no need to rely on Kobayashi for that
limitation.
Sony also argues that Takahashi does not disclose CTE and CHE values that compass the
entire ranges claimed by the ’50l patent, but this argument has been rejected above. Id. at 43;
see Section V.F, supra.
To the extent that Sony intends its statement that “Takahashi fails to disclose all the
limitations of the Asserted Claims” to preserve arguments not articulated, it does not. I decline
to make Sony’s arguments for them. See Independent Towers, WAv. Washington, 350 F.3d 925,
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929 (9th Cir. 2003) (“We decline, however, to sort [through] the noodles in search of [the
plaintiffs] claim.”).
Finally, as explained above, Sony’s argument that secondary considerations of non
infiringementteach away fiom the combination has been rejected See Section V.F.4,-supra.
Accordingly, Fujifihn has shown by clear and convincing evidence that the combination
of Takahashi with the knowledge and experience of a person of ordinary skill in the art renders
invalid as obvious claims 1, 2, 4, 5, 6, and 8 of the ’50I patent.
6. Fujifilm did not prove by clear and convincing evidence that the
specification of the ’501 patent does not adequately describe the asserted
claims. 	,
Fujifilm advances two arguments that all of the asserted claims of the ’501 patent are
invalid for lack of written description. CIB at 86. ‘
First, Fujifilm asserts that claim 1 and dependent claim 8 include limitations drawn to
broad ranges, but that the specification describes only a single example within those claimed
ranges. See id. From that assertion, Fujifilm summarily concludes, without any supporting
citation, that a person of ordinary skill in the art “would have understood that a single example is
insufficient to support that the inventor had possession of the entire claimed range." Fujifilm’s
conclusion is flatly at odds with controlling precedent from the Federal Circuit, which states that
“[a] claim will not be invalidated on section 112 grounds simply because the embodiments of the
specification do not contain examples explicitly covering the full scope of the claim language.”
Falko-Gunter Falkner v. Inglis, 448 F.3d 1357, I366 (Fed Cir. 2006) (quoting LizardTech, Inc.
v. Earth Resource Mapping, 1nc., 424 F.3d 1336, 1345 (Fed. Cir. 2005)). Fujifilm’s attempt to
distinguish Falko-Gunter Falkner based on comparing the particular claims at issue there from
the claims of the ’50l patent is unpersuasive._See CRB at 44. Fujifilm cannot, by presenting an
imdeveloped written description argument, shifl onto Sony a burden to show that the asserted
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PUBLIC VERSION
claims satisfy the written description requirement of § 112. The asserted claims are presumed to
be valid, and thus to satisfy all the requirements of § 112. Here, the conclusory assertions in
Fujifilm’s briefing, and the single conclusory question and answer pair of its expert, Dr. Wang,
do not amount do not amount to clear and convincing evidence that any of the asserted claims
fail to satisfy the written description requirement of § 112. RIB at 86 (citing RX-0003C at Q/A
527).
Fujifilm’s second Written description argument appears to be contingent in nature.
Particularly, Fujifilm argues that, “under Dr. Bhushan’s interpretation of the claim, the ’5Ol
Patent discloses no embodiments that meet the claim limitations and fails to describe the claimed
invention in sufficient detail that a POSA can reasonably conclude that the inventor had
possession of the claimed invention.” RIB at 86 (citing RX-0003C at Q/A 528). The underlying
reasoning is that, during the deposition of the inventor of the ’50l patent, he disclosed that the
“single embodiment example disclosed in the ‘S01 Patcnt was not measured under” testing
conditions that Sony’s expert, Dr. Bhushan, indicated were necessary to determine infringement.
See id. (citing JX-0027, 73-75, 78; CX-0011C at Q/A 337, 734). Fujifilm then appears to reason
that, because the inventor did not measure the properties that appear in the table presented with
example 1 of the ’5Ol patent according to the protocol presented by Dr. Bhushan, example 1
cannot provide written description support for the asserted claims. See id.
Fujifilm’s second written description argument, like its first, is unpersuasive.
Particularly, Fujifilm’s argument strays from the relevant test for written description, which asks
“whether the disclosure of the application relied upon reasonably conveys to those skilled in the
art that the inventor had possession of the claimed subject matter as of the filing date.” Ariad
Pharms, Inc. v. Eli Lilly & C0., 598 F.3d 1336, 1351 (Fed. Cir. 2010) (en banc). Instead,
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Fujifi-lm presents extrinsic evidence, in the form of inventor testimony, that the properties
reported for example 1 in the ‘S01 patent were obtained via a method that might not be suitable
to establish infringement. In so doing, Fujifilm, and its expert, fail to address what a person of
ordinaly skill would understand from the ‘S01 patent’s actual disclosure. Moreover, Fujifilm’s
argument erroneously suggests that, because the inventor’s measurement methods may not
suffice to show infringement, the embodiment he disclosed in the ’50l patent would not indicate
to a.person of ordinary skill that he possessed the invention claimed therein. That conclusion
simply does not follow. Accordingly, Fujifihn has also failed to prove, by clear and convincing
evidence, that any asserted claim of the ’501 patent lacks written description based on its second
argument.
7. Fujifilm did not prove by clear and convincing evidence that the
asserted claims are not enabled. ' ‘
Fujifilm argues that all asserted claims of the ’50l patent are invalid for lack of
enablement. RIB at 87. However, Fujifilm’s biiefmg falls well short of establishing invalidity
due to lack of enablement by clear and convincing evidence. Particularly, neither Fujifihn in its
briefing, nor its expert in his testimony, address the underlying factors that govem the
enablement inquiry. Compare In re Wands, 858 F.2d 73}, 737 (Fed. Cir. 1988) with RIB at 87
88 and RX—0003Cat Q/A 529-531. While it is possible that some portion of the two pages of
Fujifihn’s briefing and three question and answer pairs from Fujifi1m’s expert may read on one
or more of the eight factors that inform whether a disclosure would require mdue
experimentation, the Commission is not in the business of completing a party’s arguments for
them. As Staff correctly notes, “{a] patent is presumed valid, and, as the challenger, it is
Fujifilnfs ‘burden to show by facts supported by clear and convincing evidence that the patent
was not enabling.”’ SIB at 98 (citing U.S. v. Telectronics, Inc., 857 F.2d 778, 785 (Fed. Cir.
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1988);)Cephalon, Inc. v. Watson Phannaceuticals, Inc, 707 F.3d 1330, 1339 (Fed. Cir. 2013)
(“Watson had the burden to show by way of testimony or documentary evidence the amount of
experimentation needed”)). Here, the conclusory assertions in Fnjifilrn’s brief and its expert’s
witness statement, which are ambiguous at best in their relation to the factors underlying a proper
undue experimentation determination, donot amount to clear and convincing evidence of a lack
of enablement. Accordingly, I find that Fujifilm has failed to establish, by clear and convincing
evidence, that any of the asserted claims are invalid for lack of enablement.
VI. U.S. PATENT NUMBER 6,674,596
United States Patent Number 6,674,596 is entitled “Memory In Cassette Has Use
Restriction Recorded In Read-Only Memory.” JX-0001 at cover page (’596 patent). The patent
issued from Application Number 09/524,909, and claims priority to Japanese Patent Application
Number Pll-072042 having a date of March 17, 1999. Id. It issued on January 6, 2004, and
ListsYoshihisa Takayama as the sole inventor and Sony Corporation as the assignee. Id.
The ’596 patent claims a tape drive for reading from and writing to a specific type of tape
cassette that has solid-state memory in addition to a magnetic tape. Id. at Abstract. The solid
state memory, which is also referred to as nonvolatile memory on remote memory chip 4 shown
in figure 3A of the ’596 patent, below, can store management information such as “manufacture
information and serial number information of each tape cassette, the tape width and length, the
tape material, information relevant to a record of using recorded data in each partition, user
information, and the like,” which “are used for management of the writing/reading to/fiom the
magnetic tape 3.” Id. at 4:6-30, figure 3A; see also id. at 4:48-55, figlue 3B (showing the
nonvolatile memory on a contact chip instead of a remote chip). 	'
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PUBLIC VERSION
1
!A as
MEMORY.
CHIP 	4
r Tls , 	_
recording t - the ’596 patent, the solid-state memory can r-[lowthe recording media to
function as a write-once read-many (“WORM”) storage device. Id. at 1:35-37, 17:19-18:65.
The ’59 3patent des zribes other WORM storage device : that existe 1at the time of the invention,
such as compact disks, but asserts that it was not p rssible to prevent re-writing of data on
magneti : tapes befo 'e the invention. Id. at 1:12-43.
r. The ksserted ’596 Patent Claims
Sony asserts claims 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, I1, 12, and l3 of the ’596 patent in this
investig ttion. Asserted claims 2, 3,6, 7, and 8 depend on independent claim 1, asserted ctaim 4
depends on claim 3,,and asserted claim 5 depends on cl im 4. Asse .ted claims 10, 11, 12, and 13
depend in independ mt claim 9. These claims provide: '
l. A tape drive apparatus comprising:
tape d ive means for running a magnetic tape and writing/reading
information to/fitom the magnetic tape, w erein the m rgnetic tape is
enclosed in a tape cassette;
memo .y drive means for reading and writing manage nent information by
perfonning a predetermined communication process rith a memory,
wherein the memory is included in the tape cassette for storing the
management information.for managing th :w1iting/re lding of information
to/fro 1the magretic tape by the tape driv 2means;
a use-recognition information detector for detecting from the memory use
recog ition information designating a use for the tape cassette; and
a cont oller for controlling an operation of the tape drive means based on
the use-recognition information detected by the detector, i
wherein the use-recognition information i : stored in a read-only area in
said memo ry. 1 1|‘ ill * 1!
2. The tape drive apparatus according to claim 1, wherei 1,when said
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controller controls the tape drive means for writing data to the magnetic
tape, said controller controls said tape drive means to use a last writing
position on the magnetic tape as a writing start position.
* * * * *
The tape drive apparatus according to claim 1, wherein said controller
controls the tape drive means to write an identification information of the
tape cassette stored in said memory together with write data on the
magnetic tape. >1= * 	* 	>1< *
The tape drive apparatus according to claim 3, further comprising:
an identification-infonnation comparator for comparing the identification
information stored in said memory and the identification information
written on the magnetic tape. * * >l=* *
The tape drive apparatus according to claim 4, wherein said controller
controls the operation of the tape drive means based on a result of a i
comparison of the identification information comparator.
=l= =14 * 	* 	>l<
The tape drive apparatus according to claim 1, wherein said controller
performs data reading based on the use-recognition information detected
by the detector. >l< * 	>1‘ >l< *
The tape drive apparatus according to claim 1, wherein said memory
comprises a read-only area and a rewritable area.
* 	=1< >l< * 	>l<
The tape drive apparatus according to claim 1, wherein said memory drive
means comprises interface means for transmitting data between the
memory and the memory drive means.
, 	* >t< * * *
A tape drive apparatus comprising:
tape drive means in which, when a tape cassette including a magnetic tape
is loaded, said tape drive means runs the magnetic tape and writes/reads
information to/from the magnetic tape;
memory drive means in which, when the tape cassette includes a memory
for storing management information for managing the writing/reading of
information to/from the magnetic tape, said memory drive means reads or
writes the management information by performing a predetermined
communicating process with the memory;
a first identification-information detector for detecting first identification
information of said tape cassette stored in said memory; 	1
a second identification-information detector for detecting second ‘
identification information of said tape cassette stored on the magnetic
tape; 	'
identification-information determining means for detennining whether the
first and second identification information detected respectively by the
first and second identification-information detectors coincide with each
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other;
a controller for executing only a particular operation based on a result of a
determination by said identification-information determining means.
* * * * =l< 	'
10. The tape drive apparatus according to claim 9, wherein when said
controller controls the tape drive means for writing data to the magnetic
tape and said controller further controls said tape drive means to -usea last
writing position on the magnetic tape as a writing start position.
* * >l<* *
11. The tape drive apparatus according to claim 9, wherein said controller
controls the tape drive means to write on the magnetic tape an
identification information of the tape cassette stored in said memory, as
well as to write data on the magnetic tape.
* * * * *
12. The tape drive apparatus according to claim 9, wherein said controller '
performs data reading based on the use-recognition information.
* * * * >l<
13. The tape drive apparatus according to claim 9, wherein said memory
- comprises a read-only area and a rewritable area.
JX-0001 at 21:21-22:43.
. B. Level of Ordinary Skill in the Art‘ 	_
Sony, Fujifilm, and Staff largely agree on the level of a person of ordinary skill in the art
as of the date of-the ’596 invention, with only slight differences in their proposals that do not
affect the substantive analysis in this investigation. CIB at 105 (citing CX-0003C at Q/A 132
138); RIB at 90 (citing RX-0004C at Q/A 60-66; CX-0003C at Q/A 136); SIB at 99 (citing CX
OOO3Cat Q/A 132-133; RX-0004C at Q/A 63). Given the evidence of the record cited by the
private parties and Staff, and that the parties’ positions would not be changed or materially
altered under either of the proposed definitions, I find that a person of ordinary skill in the art can
be either of the following:
1. A person with “a bachelor’s degree in mechanical engineering,‘ electrical engineering, or
a closely related field, and at least two to three years of experience in the field of
magnetic tape systems. A person with less education but more relevant practical
experience (or vice versa) may also meet this standard.” CX-OOO3Cat Q/A 133.
2. “[A] person with a bachelor’s degree in mechanical engineering, electrical engineering,
or a closely related field, and two to three years of experience in the field.of magnetic
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tape systems. A person with less education but more relevant practical experience may
also meet this standard.” RX-0004C at Q/A 63.
C. Claim Construction and Indefiniteness
The parties agreed upon the constructions of the following terms:
1. “management information” as “[m]anufacture infonnation, serial number information,
the tape width and length, the tape material, information relevant to a record of using
recorded data in each partition, user information, and other information that can be used
in the managing of the writing/reading of data to/from the magnetic tape”;
2. “identification information” as “[i]nformation that can be used to identify”; and
3. “identification-information determining means [for determining whether the first and
second identification infonnation . . . coincide with each other]” as “Function:
determining whether first and second identification information coincide with each other
/ Structure: system controller 15, and equivalents.”
Joint Motion for Leave to File Second Amended Joint List of Proposed Claim Terms, Exhibit A
at 1-2 (May 25, 2018); Order No. 39 (June 29, 2018) (granting motion). Accordingly, I adopt the
agreed-upon constructions for the purposes of this investigation.
The parties also agree that the following limitations are not governed by 35 U.S.C.
§ 112, 1]6:
“a controller for controlling an operation of the tape drive means based on the use
recognition information detected by the detector”;
“controller [that] controls the tape drive means for writing data to the magnetic tape [and
said controller ftuther] controls said tape drive means to use a last writing position on the
magnetic tape as a writing start position”;
“controller [that] controls the tape drive means to write an identification infonnation of
the tape cassette stored in said memory together [as Well as to / with] write data on the
magnetic tape”;
“controller [that] controls the operation of the tape drive means based on a result of a
comparison of the identification information comparator”;
“controller [that] performs data reading based on the use-recognition information
[detected by the detector]”; and
“a controller for executing only a particular operation based on a result of a determination
by said identification-information determining means.”
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Id. at 2-4. Accordingiy, these limitations will not be treated as means-plus-function limitations
for the purposes of this investigation.
The parties assert a dispute over seven claim terms in the ’596 patent:
1. tape cassette;
2. use-recognition information;
3. read-only area;
4. wn'ting/reading, writes/reads and to/from;
5. a) tape drive means for running a magnetic tape and writing/reading information to/from
the magnetic tape [claim 1],
b) said tape drive means runs the magnetic tape and writes/reads information to/from the
magnetic tape [claim 9];
6. memory drive means [for reading and writing/that reads or writes] management
information by performing a predetermined cornnnmication process with a memory; and
7. interface means for transmitting data [between the memory and the memory drive
means/of the management information]. 	~
Id. at 5-9. 	..
Notwithstanding the parties’ assertions, only three groups of terms require construction
for resolution of this investigation: (I) “tape cassette,” (2) “writing/reading,” “writes/reads,”
“to/from,” and (3) “memory drive means [for reading and writing/that reads or writes]
management information by performing a predetermined communication process with a
memory.” The construction of the other terms do not affect any issue in this investigation, and
therefore the terms need not be construed. See VividTechs., Inc. v. American Sci. & Eng ’g,Inc.,
202 F.3d 795, 803 (Fed. Cir. 1999); VcmderlandeIndus. Nederland BV v. Infl Trade Comm,
366 F.3d 1311, 1323 (Fed. Cir. 2004).
I27

PUBLIC VERSION
1. “tape cassette” 	_
The term. “tape cassette” appears in asserted independent claims 1 and 9 and dependent
claims 3 and ll, and is incorporated by dependency into asserted claims 2, 4, 5, 6, 7, 8, l0, 12,
and 13. The parties propose the following constructions for this term:
Sony Fujifilm 1, Staff , V V
housing with magnetic tape housing with magnetic tape Construction of this term is
wound around two reels 	unnecessary. If construction is
_ 	required, however, this term
should be construed as
“housing with magnetic tape.”
Joint Motion for Leave to File Second Amended Joint List of Proposed Claim Terms, Exhibit A
at 5 (May 25, 2018). 	\
The core dispute between the parties is whether a “tape cassette” must have two reels, or
if a tape with a single reel can satisfy the limitation. The language of the claims only requires the
tape cassette to enclose the magnetic tape, and does not specify a.limit to the number of reels the
cassette may or may not contain. See JX-0001 at 21:24. Nor does any party argue that the
specification limits a tape cassette to two reels. RRB at 48; CIB at 106,;CRB at 47; SIB at 102.
Fujifilm’s argument instead starts with the premise that the plain and ordinary meaning of
“tape cassette” requires two reels, and that the specification does not expand the ordinary
meaning of “tape cassette” to encompass a.single-reel housing. RRB at 48. To establish that the
plain and ordinary meaning of “tape cassette” requires two reels, Fujifilm attempts to
differentiate the term “cartridge” from the term “cassette.” Fujifilm argues that “cartridge” is a
reel-ambiguous genus whereas “cassette” is a specific two-reel species. RIB at 92; RRB at 48.
As evidence, Fujifilm points to the hearing transcript from the 337-TA-1050 investigation, which
is not part of the record in this investigation, the testimony if its expert on direct and cross
examination, technical books and articles, and dictionary definitions. RIB at 92-93 (citing Tr. at
128

PUBLIC VERSION
741:19-742:7 (“Cartridge is a superset, if you will, more expansive than a cassette. Cassette is
limited to two reels, in my opinion”); RX-0004C at Q/A 163-180 (discussing RX-0214 to RX
0220); CX-0411 at 4 (defining a cassette as having “reels which are driven on their axis”); RRB
at 48-49 (citing RX-0216 at 147, 149). For example, Fujifilm cites a textbook published in 1999
entitled “Magnetic Recording: The First 100 Years” has the section heading “Cassette (Two
Reels) or Cartridge (One Reel).” RX-0214 at 186.
Sony counters that the ‘S96 patent uses “cartridge” and “cassette” interchangeably, not as
a genus and species. CIB at 106 (citing JX-0001 at 9:50-55, 14:23-28, 20:3-18, figure 23; CX
0OO3C at Q/A 273-276; CX-0013C at Q/A 130). Sony then argues that cartridges were
understood to have one or more reels, and by implication so were cassettes. Id. As evidence,
Sony points to the cross-examination testimony of Fujifilm’s expert, an inventor of the ’596
patent, dictionary definitions, Fujifilm’s asserted prior art, and Fujifilm’s patent applications.
CIB at 47-48 (citing Tr. at 742:1-7; JX-0081C at 29:17-30:9, 33:4-37:13; CX-0410; CX-0411;
CX-0412; CX-0413; RX-0211; RX-0212; RX-0224 at 1:16-17; CX-0413 at [0008]). For
example, a U.S. Patent Application listing Fujifilm as the assignee that published as
2003/0025021 states that “magnetic tape cassettes are available in two types . . . the second type
comprisingmagnetic tape wound around a single reel which is also housed rotatably in the case
(this is a so-called one-reel type).” CX-0413 at [0008]. As to Fujifilm’s evidence that shows a
cassette would be understood as limited to two reels, Sony argues that those sources “are largely
irrelevant because they define analog A/V cassettes” instead of cassettes in general. Id. (citing
CX-0013C at Q/A 131-132).
I find the specification uses “cartridge” and “cassette” interchangeably. For example, the
specification states that “when Writing is performed using the tape cassette 1 . . . a cartridge
129

PUBLIC VERSION
serial number stored in the remote memory chip 4 as identification information of the tape
cassette 1 is written in the data area Al . : . .” JX-0001 at 9:50-55 (emphasis added). Similarly,
the specification also states that: “a serial number that is ASCII-based 32-character "information
is stored as a cartridge serial number, and the code number of the manufacturer of the tape
cassette 1, which is a manufacture identifier, is storedas manufacturer ID.” JX-0001 at 14:23-28
(emphasis added). In addition, in the Object and Summary of the Invention section, when
describing this same operation, the specification refers to “tape cassette’s serial number” rather
than “cartridge serial number,” again suggesting the interchangeability of “cartridge” and
“cassette.” JX-0001 at 2:48-56; see id. at 4:21-25, 20:44-749. While Fujifilm is correct that such
language could be'consistent with a definition of cartridge that is a superset of cassette, the better
reading is that the specification does not make such a distinction.
Moreover, the extrinsic evidence and associated expert testimony cuts both ways. The
evidence relied on by Fujifilm largely supports the understanding that the cassette being
discussed had two reels, and the evidence relied on by Sony largely supports the understanding
that a cassette was defined based on it having a magnetic tape within in, not based on the number
of reels.
The invention described and claimed in the ’596 patent is not concerned with the number
of reels in the tape cassette. Nor does the evidence show that a person of ordinary skill in the art
would understand the ’596 patent to be directed to only those housings that have two reels.
Accordingly, the tenn “tape cassette” is construed to mean “housing with magnetic tape” and
does not require a particular number of reels.
130

PUBLIC VERSION
2. “writing/reading,” “writes/reads,” and “to/from”
The tenns “writing/reading,” “writes/reads,” and “to/from” appear in asserted
independent claims 1 and 9, and are incorporated by dependency into asseited claims 2, 3, 4, 5,
6, 7, 8, 10, 11, 12, and 13. The parties propose the following constructions for these terms:
Sony ' 2. Fujifilm . . 	Staff 	.
plain and ordinary meaning, indefinite
i.e., “writing or reading, writes
or reads, and to or from,
respectively”
Construction of this tenn is
rmnecessaiy. If construction is
required, however, this tenn
should be construed with its
plain and ordinary meaning,
which is the claim language
itself. ~
Alternatively, this term should
be construed as “writing or
reading,” “writes or reads,”
and “to or from, respectively.”
Joint Motion for Leave to File Second Amended Joint List of Proposed Claim Terms, Exhibit A
at 6 (May 25, 2018).
Thus, the question is whether these terms are indefinite. Fujifihn argues that the tenns
are indefinite because a person of ordinary skill in the art would not have known what the
forward-slash (“I”) in the term refers to. RIB at 96-97. For example, in claim 1, Fujifilm asserts
that such a person would not have known whether the limitation “tape drive means for running a
magnetic tape and writing/reading information to/fi'om the magnetic tape” requires a tape drive
that can write to and read fi'om a magnetic tape, or a.tape drive that can only write to or read
fiom a magnetic tape. Id.
“Definiteness is to be evaluated from the perspective of someone skilled in the relevant
alt . . . at the time the patent was filed.” Nautilus, Inc. v. Biosig Instruments, Ina, 134 S. Ct.
2120, 2128 (2014). In order to be sufficiently definite, the “claims, viewed in light of the
I31

PUBLIC VERSION
specification and prosecution history, [must] inform those skilled in the art about the scope of the
invention with reasonable certainty.” Id. at 2129. 	.
The specification uses the forward-slash convention to describe reading and writing
functionality. For example, the specification describes an interface for “writing/reading to/from
the nonvolatile memory to a tape streamer drive” and then “writing Ed reading management
information concerning data writing to gt data reading from the nonvolatile memory” so that
“the operations of writing to @ reading from the magnetic tape 3 can be efficiently performed.”
JX-0001 at 4:31-39 (emphasis added). The specification also uses the forward-slash convention
in other contexts as an “and” or an “inclusive or.” For example, the specification describes
“loading/unloading” as “loading and tmloading.” Id at 4:40-47. Indeed, it would make little
sense if a tape drive could perform only one of these functions. The specification similarly
describes a “compression/decompression circuit” that can perform both compression and
decompression functionality. Id. at 7:3-20, 7:50-57. 1 	~
Further, as Sony and Staff point out, the extrinsic record is replete with evidence that a
forward slash was a Well-known and widely-used convention in the magnetic storage field. See
CIB at 112; SIB at 107-108. For example, Fujifilm’s own marketing literature and patent filings,
and the patent filings of Fujifilm’s expert, use the forward slash to indicate reading and writing
capabilities. Tr. at 780:6-19 (Fujifilnfs expert testifying that “full readjwrite capability” in a
Fujifilm document “refers to the tape drive being capable of reading and writing the identified
media”), 783114-25 (Fujifilm’s expert testifying that he used the phrase “read/write chamrel” in a
patent application on which he is listed as an inventor), 784:5-16 (same), 784:14-785:2O
(Fujifilm’s expert testifying that he used the phrase “[t]he controller 42 provides a control signal
to a R/W channel circuit 44 during read/Write operations” in a patent on which he is listed as an
132

PUBLIC VERSION
1
inventor), 787114-788:2 (Fujifilm’s expert testifying that a patent assigned to Fujifilm uses the
phrases “read/write of data” and “read/write controller”), 788:5-789:8 (Fujifilm’s expert
testifying that a patent"assigned to Fujifilm uses the phrases “read/write device” and “the present
invention related to a cartridge memory read/write device reading/writing data signals of a
cartridge memory”), 789:9-791:2 (Fujifi1m’s expert testifying that a patent application assigned
to Fujifilm uses the phrase “reading/writing data from/to said first memory,” although the claims
issued without the slashes).
Fujifilm focuses on the cross-examination testimony of Sony’s expert, Dr. Mowry, to
support its position. RIB at 98-99. Dr. Mowry testified that the best interpretation of the
forward-slash is that it is neither an “and” nor an “or, but it is “an association of writing of
information to the magnetic tape, reading information from the magnetic tape.” Id. at 98
(quoting Tr. at 439:19-23). However, he then went on to testify that “inclusive ‘or’ is probably
the best way to interpret this claim language if we need to replace the slash” and that “inclusive
or . . . [is] very close to the concept.” CX-0003C at Q/A 363; Tr. at 439224-440:2. Fujifilm has
not established that a person of ordinary skill in the art would not understand what a forward
slash means in the context of the ’596 patent. Fujifilm has therefore not met its burden to
establish that claims 1 and 9 are indefinite. See Nautilus, 134 S. Ct. at 2130 n. 10.
Accordingly, Sony’s proposed construction is adapted, with the understanding that the
tenn “or” in Sony’s construction is an inclusive or (sometimes written as “and/or”), not an
exclusive or. See CIB at 113 n.42. “Writing/reading” is construed as “writing or reading,”
writes/reads” is construed as “writes or reads,” and “to/from” is construed as “to orfrom.”
133

PUBLIC VERSION
3. “memory drive means”
The memory drive means limitation appears in asserted independent claims 1 and 9 from
which claims 2-8 and 10-13 respectively depend.” As discussed in more detail below, this term
is relevant to Fujif1lm’s prior art defenses. 	\
All parties agree that the claimed “memory drive means” should be construed as a means
plus-function limitation pursuant to 35 U.S.C. § 112, 1]6, and all parties agree that the function
of the means is reading and writing ‘management information, which is information that can
control whether the tape can be written to or not. The dispute arises over the structure disclosed
in the ’596 patent that corresponds to the function. The parties propose the following
constructions for this tenn:
17Although the memory drive means term is recited differently in each of independent claims 1
and 9, the parties do not contend that the differing recitations affect the determination of whether
SCSI buffer controller is a corresponding structure required for all of the embodiments of the
memory drive means.
134 ‘

PUBLIC VERSION
Sony’s Proposed
Construction I-‘u_iifilm’sProposed
Constructicn -Stat‘i"sProposed
Construction
This limitation is governed
by 35 U.S.C. § 112 ‘,16.
Function: reading and writing
management information by
performing a predetennined
communication process with
a memory
Structure; System Controller
15 ofFigurc 1 with SCSI
Buffer Controlier 26 and
Remote Memory Interface 30
of Figures 1 and 2.(for tape
cassettes with remote
memory chips) or
predetermined connector part
of 9:10-20 (for tape cassettes
with contact memory) and
their equivalents
This limitation is governed
by 35 U.S.C. §112 ‘,16.
Function (claim I 1:reading
and writing management
information
Function (claim 9}: reads or
writes the management
information
Structure: System Controller
15 of Figure 1 with SCSI
Butter Controller 26 and
Remote Memory Interface 30
of Figures 1.and 2 (for tape
cassettes with remote
memory chips) or
predetermined connector part
of 9: 10-20 (for tape cassettes
\vith contact memory) and
their equivalents
This limitation is governed
by 35 U.S.C. § 112 if 6.
_If_1_t_r_1_c_t_i_Qg	reading and writing
rnanagement information by
performing a predetermined
connmtnication process with
a memory
Structure: System Controller
15 of Figure I with SCSI
Buffer Controller 26 and
Remote Memory Interface 30
of Figures 1 and 2 (for tape
cassettes with remote
memory chips) or
predetemtinecl connector part
of 9: 10-20 (for tape cassettes
with contact memory) and
their equivalents
Joint M ition for Le we to File Second Amended Joint .ist of Prop >sedClaim Tenns, Exhibit A
at 7-8 ( lay 25, 201 I).
'0 understa [Clthe dispute over the corresponding structure, it helps to know that all
parties agree the ’596 patent discloses two embodiments of the invention. See CIB at 109; RIB
at 95. In both e ibodiments, the tape cassette has a memor' that contains management
information. In one embodiment, the memory on the cassette is called a “remote memory” and it
communicates with the drive wirelessly. JX-0001 at 7:59-8:9. In another embodiment, the
memory on the cassette is called the “contact memo y” and it communicates with the drive
through contact pins. Id. at 9:10-20. As can be seen from the abo /e table, the parties generally
agree that the stru =ture corresponding to the “mem try drive cans” includes SCSI buffer
‘ 135

PUBLIC VERSION
controller 26. See RIB at 94; see also CIB at 109; SIB at 106. The parties dispute, however,
whether the SCSI buffer controller 26 is corresponding structure in both the remote memory
embodiment and the contact memory embodiment. See CIB at 109; RIB at 95.
Sony and Staff contend that SCSI buffer controller 26 is a corresponding structure for the
memory drive means for both the remote and contact memory embodiments. CIB at 109-110;
SIB at 106; SRB at 23-24. According to Sony and Staff, SCSI buffer controller 26 is directly
involved with the function performed by the memory drive means for both embodiments, i.e.,
reading and writing management information. CIB at 109-110; RRB at 23-24. Sony and Staff
each contend that the SCSI buffer controller 26 is necessary structure and thus corresponds
(along with other components) to the recited memory drive means for all embodiments covered
by the asserted claims. _
Fujifilm asserts that SCSI buffer controller 26 is not part of the memory drive means in
the contact memory embodiment for two reasons. RIB at 95. First, Fujifilm argues that the
contact memory embodiment disclosed in the ’596 patent does not describe or depict the use of
SCSI buffer controller 26 for reading and writing management information. RIB at 95-96; RRB
at 52. Fujifilm contrasts this lack of express disclosure by pointing out that Figure 1 of the ’596
patent expressly illustrates the remote memory embodiment in which remote memory chip 4
corrmiunicates with system controller 15 by way of remote memory interface 30 and SCSI buffer
controller 26:
136

PUBLIC VERSION
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RIB at 95.
Second, Fujifilm points out that the ’596 patent states that system controller 15 may
“directly access” the contact memory in the contact memory embodiment. RIB at 95-96 (citing
IX-0001 at 9:18-20); RRB at 52 (citing same). Fujifilm argues that SCSI buffer controller 26 is
not a co fresponding structure because it is not “required” or “needed” for writing to or reading
from th: memory .n the contact memory embodim :nt given tiat contact memory can be
“directly” accessed wysystem controller 15. RIB at 96; RRB at 52.
Ii assessing means-plus-function claims, “[s]tructure disclosed in the specification
qualifies as ‘corres ronding structure’ if the intrinsic evidence cl :arly links or associates that
structure to the‘func;ion recited in the claim.” Williamson v. Citrix Online, LLC, 792 F.3d 1339,
1352 (F rd. Cir. 201 F). Thus, the issue here is whether Il16’596 patent clearly links or associates
SCSI b ffer controller 26 with the functions perfor red by the memory drive means in the
137
1

PUBLIC VERSION
contact memory embodiment. That issue is difficult to resolve because the ‘S96 patent
disclosure is open to altemative interpretations. 	. 	I
In particular, the ’596 patent explains that in the contact memory embodiment, the
tenninals of contact memory are “electrically connected” to system controller 15 such that
system controller I5 can “directly access” contact memory:
By connecting the connector part to the terminal part. 106, the five
terminals of the contact memory, 105A, 105B, 105C, IOSD, and
~ 105E are electrically connected to the system controller 15. This
enables the system controller 15 to directly access the contact
memory IO4 of the loaded tape cassette 1.
See JX-0001 at 9:10-20. This disclosure is ambiguous. The disclosure could be understood to
mean that system controller l5 is electrically connected to contact memory without the need for
intervening components, but there is no express disclosure of which intervening components
could be eliminated. Fujlifllrn contends that the passage means there is no need for the
intervening SCSI buffer controller 26, but it might just as well mean that there is no need for
remote memory interface 30, for example. 	"
The parties’ experts disagree as to the correct interpretation of this disclosure. Sony’s
expert, Dr. Mowry, testified that SCSI buffer controller 26 is part of the tape drive hardware
irrespective of the memory type. See CX-0003C at Q/A 388-393. Accordingly, “there needs to
be a. SCSI buffer controller, which will deal with the differing data transfer speeds between the
tape drive’s system controller and the host computer, on the one hand, and the system controller
and the memory, on the other.” Ia’. at Q/A 390. Fujifi1m’s expert, Dr. Messner, testified that a
SCSI buffer is only needed for temporary data storage when data is being moved from one
region to another in order to account for speed mismatch. RX-0004C at Q/A 237. According to
Dr. Messner, there would be no speed mismatch, and therefore no need for a SCSI buffer, in the
contact memory embodiment. Id.
138

PUBLIC VERSION
What is disclosed by a patent specification is a question of fact, and I find that the
evidence of record favors interpreting the SCSI buffer controller as corresponding structure_for
the memory device means in the contact memory embodiment.“ See In re Hayes
Microcomputer Pr0ds., 1nc., 982 F.2d 1527, 1541-43 (Fed. Cir. 1992); Rcmpak Corp. v.
Sloropack, Inc., 168 F.3d 1316 (Fed. Cir. 1998) (unpublished) (holding that the determination of
the corresponding structure may include questions of fact). The parties agree that the function
perfonned by the memory drive means relates to reading and writing management information
stored on remote memory chip 4 (in the remote memory embodiment) or in contact memory 104
(in the contact memory ernbodiment).19 The nature of the management infonnation stored does
not differ based upon the type of memory; the only difference is the manner in which the
management information is retrieved from the memory by system controller 15. See, e.g., JX
000l at 4:54-55, 12:4-17:18, 20:31-35. In addition, there is no indication in the ’596 patent that
the use of the management information changes depending upon its source (z'.e.,whether it is
retrieved from remote memory chip 4 or contact memory 104) or the mechanism by which it is
retrieved by system controller 15. The ’596 patent does teach, however, that the management
information from the memory chip is shared with a host computer in order to determine
subsequent read/write operations. Id. at 18:1-12, 48-65; see also CX-0003C at Q/A 390-392.
For example, the ’596 patent explains that management information stored on the
memory chip is used to restrict reading and Writing to the tape media in WORM operations. JX
'8 The parties do not dispute that the SCSI buffer controller is a corresponding structure for the
memory device means in the remote memory embodiment.
'9 The ’596 patent collectively refers to the remote memory chip 4 and contact memory 104 as
“memory-in-cassette” or “MIC.” See JX-0001 at 4:56-58; 12:4-16.
139

PUBLIC VERSION
0001 at 17:20-25; 19:56-62; 20:3-18. In describing these functions, the ’596 patent expressly
indicates that they are performed in both the remote and contact embodiments. Id. at 20:31-35.
In addition, the ’596 patent explains that “when writing is performed, identification information,
such as the serial number of the tape cassette stored in the memory, is written on the magnetic
tape together with write data. This enables the magnetic tape and the memory in the tape
cassette to have common information.” Id. at 20:44-49. Sony’s expert explained that a SCSI
buffer controller is necessary for this type of function to occur where there are different data
transfer speeds between the system controller and host computer and the system controller and
the memory on the cassette. See CX-0003C at Q/A 390; see also RX-0004C at Q/A 237. I find
that the SCSI buffer controller is clearly associated with the reading and writing function
performed by.the memory drive means. The ’596 patent specification links the recited functions
of the memory drive means to the SCSI buffer in relation to communicating with a host
computer and writing information to the tape media. See Williamson, 792 F.3d at 1352.
Accordingly, a SCSI buffer controller shall be considered to be a part of the corresponding
structure of the recited memory drive means for both the remote and contact memory
embodiments.
D. Infringement
Sony alleges that Fujifilm’s WORM LTO-4, LTO-5, and LTO-6 tape products infringe
claims 1-13 of the ’596 patent when used with compatible tape drives, and that Fujifilm’s
\
rewritable LTO-4, LTO-5, and LTO-6 tape products infringe claims 1, 3, and 6-8 when used
with compatible tape drives.” CIB at 118-139; SIB at 112. Sony’s evidence of Fujifilm’s direct	.ii20Allegations that Fujifilm’s LTO-4, LTO-5, .and LTO-6 non-WORM products infringe claims
4, 5, 9, 11, 12, and 13 are foreclosed. Order No. 19.
140

PUBLIC VERSION
infringement activities consists of documents, emails, deposition testimony, and the testimony of
its expert. CIB at 139-140 (citing evidence); CX-0003C at Q/A 773-885 (same). Sony’s
evidence of literal infringement consists of Fujifilm documents, website printouts, deposition
transcripts, format specifications, and its expert’s analysis of the products. CIB at 118-139
(citing evidence); CX-0003C at Q/A 139-176, 423-772 (same). Sony’s expert, Dr. Mowry,
walked through the evidence to provide a limitation-by-limitation infringement analysis for the
asserted claims. Id. at Q/A 29-30, 139-176, 423-772.
Sony also alleges that Fujifilm indirectly infringes claims 1-13 of the ’596 patent by
inducing and contributing to the direct infringement. by others, including customers and users of
the accused Fujifilm products. CIB at 140-144 (citing evidence); CX-0003C at Q/A 30, 808-893
(same). Sony’s evidence of the underlying acts of direct infringement by others consists of
public reports, sales information, emails, test specifications and agreements, deposition
testimony, testimony of a Fujifilm’s witness, and the testimony of its expert. CIB at 140-141
(citing evidence); CX-0003C at Q/A 808-841 (same). Sony’s evidence of induced infringement
consists of documents provided from Sony to Fujifilm, test specifications and agreements,
website printouts, product brochures and presentations, deposition testimony, testimony of a
Fujifilm witness, and the testimony of its expert. CIB at 141-143 (citing evidence); CX-0003C
at Q/A 842-883 (same). Sony’s evidence of contributory infringement consists of documents
provided from Sony to Fujifilm, specifications, deposition testimony, testimony of a Fujifilm
witness, and the testimony of its expert. CIB at 144 (citing evidence); CX-0003C at Q/A 842
866, 884-s93 (same).
Staff agrees with Sony that Fujifilm directly infringes the asserted claims by testing its
accused tapes in compatible tape drives in the United States, but Staff asserts that this infringing
141

PUBLIC VERSION
activity is not a violation of section 337 because the evidence does not show that Fujifilm
imports both the accused tape products and the compatible tape drives together. SIB at 120
(citing Certain Electronic Devices with Image Processing 5)/stems, Components Thereojj "and
Associated Software, Inv. No. 337~TA-724, Comn-r’n Op. at 13-19, USITC Pub. 4374 (Feb.
2013)). Staff further agrees with Sony that Fujifilm induces and contributes to the direct
infringement by others in the United States, and this act of inducement is a violation of section
337. SIB at 120-1'24.
Fujifihn argues that it does not directly infringe the ’596 patent (l) by importing the
accused tapes because the tapes as imported do not meet the claim limitations, or (2) by testing
the accused tapes after importation because it uses either licensed IBM drives or specialized
hardware that does not have the required features. RIB at I02-103. Fujifilm argues that the
accused tapes do not literally infringe the asserted claim because (I) the tapes contain a single
reel instead of two reels, (2) Sony did not prove that the tapes have the required memory drive
means or interface means, (3) the tapes do not store use-recognition»information in a read-only
area of memory, and (4) the tapes do not have identification information at the time of
manufacture and sale by Fujifilm. RIB at 103-112. Fujifihn argues that it does not induce the
direct infringe infringement of others because Sony did not prove that Fujifihu had the specific
intent to induce infringement. RIB at 115-117. Finally, Fujifilm argues that it does not
contribute to the direct infringement by others because -use of the accused tapes with licensed
IBM tape drives constitutes a substantial non-infringing use. RIB at 112-I15.
Based on the evidence and arguments of the parties set forth in detail in the following
subsections, I find that Sony has proven by the preponderance of the evidence that Fujifilm’s
inducement of and contribution to the predicate acts of direct infringement by others can form a
142 A

PUBLIC VERSION
basis for a violation of section 337. I therefore need not reach the question of whether Fujifihn’s
own acts of direct infringement can form a basis for a violation of section 337.
' 	1. The claimed “tape cassette” is not limited to products that have two
reels.
Fujifilm argues that its accused tape cartridges do not satisfy the “tape cassette"
limitations of claims 1, 3, 9, and 11 because they contain a single reel. RIB at 103. Fujifi1m’s
non-infringement argrnnent requires that its proposed construction for “tape cassette" be adopted,
but its proposed construction was rejected. Section V'I.C.1, supra; see RIB at 103; SIB at lI3.
This non-infringement argument is therefore also rejected.
2. Section 112 does not require the LTO CM Reader in the accused
products to have an internal structure that is equivalent to the internal
structure of the remote memory interface described in the specification.
Independent claims 1 and 9 both require a “memory drive means [for reading and
writing/that reads or writes] management information by performing a predetermined
communication process with a memory.” IX-0001 at 21:21-39, 22:1-27. Dependent claim 8
further requires an “interface means for transmitting data [between the memory and the memory
drive means/of the management information].” Id. at 21:64-67. All parties agree that the
“memory drive means” and “interface means" limitations are means-plus-function limitations
governed by 35 U.S.C-. § I12 116. Joint.Motion for Leave to File Second Amended Joint List of
Proposed Claim Terms, Exhibit A at 6-7 (May 25, 2018). All parties also agree that the
corresponding structure for these limitations requires a “remote memory interface 30.” Id.
Figure 1 of the ’596 patent, embedded below, shows the remote memory interface 30 in
the top-left corner of the block diagram of the inventive tape streamer drive:
143

Figure
PUBLIC VERSION
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2 of tne patent, embedded below, shows a block diagram of the internal structure
of the re note memo y interface 30:
recording to the ’596 patent, the remote memo y chip 4 of a tape cassette
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e strea 1er drive, 10 of FIG. 1,” “the remote memory chip is set to be in condition
144

PUBLIC VERSION
capable of performing data input/output with the system controller 15 via the remote m ‘mory
interface 30.” Id. at 7:59-64. 	,
Sony points to the “LTO CM Reader” of an ,TO tape drive as satisfying the remote
memory interface stfucture. CIB at 121-122. Sony’s expert, Dr. lowry, testified that the LTO
CM Reader is depicted in Figure F.5 of the LTO-4, L ‘O-5, and LTO-6 specifications, and that
- 	cx-0003c tr Q/A 507-508(referringto CDX-1030at 319 (embeddingFigureF.5 from
the LTO-6 specifica .ion)). This figure with descriptive I€Xlis embedded below.
JX-0090C at 188.
Sony also points to a Fujifilm marketing brochure that depizts a CM (cartridge memory)
reader. Dr. Mowry lncluded a demonstrative, excerpted below, where he identified the cartridge
memory in the broc lUI'€in green with a green arrow, a 1d where he highlighted the relevant text
from the brochure i 1yellow. Id. at Q/A 512 (embedding_CDX-0003C at 320 (embedding CX
0392)).
145

PUBLIC VERSION
Fujifilrn 1.3.56MHZ LTO Canridgc Memory (L-TO-CM)
LTO Cartridge Memory (LTO-CM) uss Inductive Coupling. An inductive coil in the
drive, library picker or external LTO CM-Reader |.vo'wcrs'and communicates wilh ll\e
LTO CM clccu-onic module (EEPROM/anlenn_a)_i_nsidethe data cartridge shell.
This passive RF interface has o range 	1
of up to 20mm from the reader coil to
the cartridge CM (lhc closer the better). 	~ / 1 	J
The CM stores4K8 of infonnationas . 	. V ' ‘
:22 x 32byteblocksandam tmnsfcls -»§.,1€="it ti ‘ ~
lo and from the cm in sz byte blocks. 	" 	92 	, . \
3 	~\ . A 	~ 1.!
CM for Ultrinml is lhc same as Ultriuml; 	\ ‘-<<.;
however, it is factor)'_|;rg;;g:tm_|11c§y{i;ilI191 _‘ 	\ 1%; 	VM1
: 	\\
_l_Jllrium2parameters.‘ As ampeis loadcd,tl1e t 	= 	-_
;drivc‘s CM-Reader reads the CM and lhe rape i§1 	' -‘
§_idcntified_.;li'nnUl\riiim2 tape is inserted inldhn 	' '~._' ~-N
Ullriuml drive it immcdialcly eiccts without threading. 	' 	"I-.._ ____._________
See also id. at Q/A 513-525 (testifying about JX-OOZKC,CX-O5 11, CX-0562, CX-0564, CX
1149C). l .
Finally, Son ' points to the testimony of Fujifilm’s expert, Dr. Messner, who testified that
“each L TOtape drive has a CM reader in it.” Tr. at 745215-17. Dr. Messner also agreed that the
LTO specifications “include some requirements wit t respect to how the LTO CM reader
cormnunicates with the memory in the cartridge” and that the LT ) CM reader has an antenna.
Id. at 745:4-19. 	u
>espitethis undisputed evidence, Fujifilm argues that Sony did not meet its burden to
show that the accus adproducts have a “memory drive means” bec ause Sony did not identify in
the accused product; the same internal structures of the remote me nory interface 30 depicted in
Figure 2 of the ’59d patent. RIB at 104. In other words, Fujifilm asserts that the remote memoiy
interface structure identified in the accused products must have every internal component as
shown i 1Figure 2 a 1das described in the ’596 patent. Id. at 105-1 )6 (arguing that the following
componmts are necessary structures: “a data interfa -e (I/F) 31; an RF interface 32 (which
includes RF-modulation/amplification circuit 32a), a rectifying circuit 32b, a comparator 32c,
and an mtenna 33”). Fujifilrn then argues that Figu e F.5 of the LTO specifications cannot
146

PUBLIC VERSION
satisfy Sony’s burden because it is a “cartoon”
_ 	Id.	(citing	JX-0090C	at188).
Fujifilm is correct that Sony is required to “point to structure in the accused products that
corresponds to the Remote Memory Interface 30 of Figures 1 and 2,” but Fujifilm is incorrect
that the structure in the accused products must have the same components or internal structure as
the remote memory interface in the ’596 patent. Section 112 does not require a component-by
component equivalence between the relevant structure identified in the patent and the portion of
the accused device asserted to be structurally equivalent. Odetics, Inc. v. Storage Tech Corp,
185 F.3d 1259, 1266-68 (Fed. Cir. 1999) (“The individual components, if any, of an overall
structure that corresponds to the claimed function are not claim limitations. Rather, the claim
limitation is the overall structure corresponding to the claimed functi0n.”). Fujif1lm’s reliance on
Intellectual Sci. & Tech., Inc. v. Sony Elecs., Inc., is misplaced because, in that case, the expert’s
conclusory statement did not pinpoint where the accused structure was found in the accused
devices. 589 F.3d 1179, 1184-85 (Fed. Cir. 2009). Here, Dr. Mowry identified with
particularity where the accused remote memory interface—the LTO CM Readerwwas found in
the accused products.
In sum, Sony pointed to sufficient evidence that the accused products perform the
identical function as the “memory drive means” and “interface means” limitations, and that they
perform that function in relevant part with the LTO CM Reader, which is equivalent to the
remote memory interface as disclosed in the specification. See Kearns v. Chrysler C0rp., 32
F.3d 1541, 1548 n.8 (Fed. Cir. 1994) (quoting Carroll Touch, Inc. v. Electra Mechanical
Systems, Inc., 15 F.3d 1573, 1578 (Fed. Cir. 1993)). Fujifilm’s assertion that Sony did not
establish that the intemal structure of the LTO CM Reader is not the same as the internal
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PUBLIC VERSION
structure of the remote memory interface described in the ’596 patent is premised on an incorrect
legal requirement. 	_
3. The evidence shows that the accused products comprise a read-only
area of memory in which use-recognition information is stored.
Claim l of the ’596 patent requires “use-recognition infonnation” that is “stored in a
read-only area” of the tape cassette memory. JX-0001 at 21:21-39. Dependent claims 7 and i3
require that the tape cassette memory “comprises a read-only area and a rewriteable area.” Id. at
21:61-63, 22:41-43.
Sony identifies the “Cartridge Type” and “Format Type” fields of the accused products as
meeting the “use-recognition information” limitation, and asserts that “the LTO specifications
cna at 121-128 (citing cx-0003c at Q/A 600-646; JX-0090
at 144; JX-0091C at 143; JX-0104C at I40). Staff agrees that these fields satisfy the “use
recognition information” that is “stored in a read-only area” limitations. SIB at 115-I18.
A Sony’s expert, Dr. Mowry, explains that the LTO specifications, excerpted below as
mgmighied by Sony,
CIB at 1-28;cx-0003c at Q/A 601-607 (explaining
Table D-1 fiom the LTO~4, LTO-5, and LTO-6 specifications), 613-622. He further explains
that	the	LTO	specifications	mandate	that	t
—. 	cx-0003c	atQ/A	605-609. 	i
I48

’ 	.- PUBLIC VERSION 	j
tccording to Sony’s expert, the
Id. at Q/A 610, 62;. The 	i
Id. at Q/A 611-612, 6 :4-629; 11 at484111»-4ss;22(Dr.Mow1y
testifying that
Fujifilm argues that Sony did not establish that the accused products store the Cartridge
Type ani Format T rpe data in read-only memory for hree reasons. First, Fujifilm points to at
poition nf the LTO specification that describes the
RIB at 108-109 (citing l*X-0090Cat 145-146; RX-'0584C at Q/A
24s-241,	255;	Tr.	6;1962-7).	Fujifilm	admits	that	it‘
— 	-Id.at >109-110	(citingRX-0581C	atQ/A246-250;	Tr.at 458:1-7-460:4,’
796:2—20)».This argument does not discotmt Sony‘s evidence beca ise Fujifilm does not point to
’ ' 	149 	'

PUBLIC VERSION
any evidence, or even make an assertion, that the
See Tr. at 765:12-766: l3 (Dr. Messner testifying that
a change to the
And, even if it does change, the
evidence shows that it only
See CX-0003C at Q/A/ 633. Fujifihn’s speculation
that the Protected Pages could become writable does not, in view of Sony’s evidence, support an
implication that the Protected Pages ever become writable. See Tr. at 467:3-ll (Dr. Mowry
testifyiI1gthata'1
Further, even if Fujifilin did establish that the Protected Pages on some of the accused
products became writable prior to initialization, there are other accused products where the
Protected Pages remain read-only, and those products meet this limitation. Cf Virnetx,Inc. v.
Cisco Systems, Inc., 767 F.3d 1308, 1322 (Fed. Cir. 2014) (holding that the patent owner does
not bear the burden to show that the accused product “has no non-infringing mode of operation,"
and citing Z4 Technologies, Inc. v. Microsoft Corp, 507 F.3d 1340, E350 (Fed. Cir. 2007)
(“[I]ufi*ingement is not avoided merely because a non—infi'inging mode of operation is
possible.”)). And the evidence shows that the Protected Pages are read-only after initialization
and thus meet this limitation after that point. Tr. at 484112-485:22. There is ample
circumstantial evidence that the accused products are initialized in the United States when users
insert the tapes into compatible drives for the first time, thereby forming the basis for an
underlying act of direct infringement necessary for Sony’s indirect infringement allegations. See
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PUBLIC VERSION
SIB at 121 (citing evidence that “Fujifihn sells — 	of LTO-4, LTO-5 and LTO-6 tape
products in the United States annually” and that its “customers use[] the tapes according to their
intended use”). V . .
Second, Fujifilrn argues that the memory containing the Cartridge Type and Format Type
ismad-only	i 	RIB	at
109-110. Fujifilm’s argument is only relevant if its actions of direct infringement rmder
35 U.S.C. § 271(a) form the basis for a.violation of section 337. As discussed in Section VI.D.4,
infiu, I neednot reach this issue because I find other acts sufficient to support a finding of
infringement and a violation of section 337.
Third,	Fujifilm	argues	thatSonyhasnotestablished	thatthe—
instead of
physically reviewing of the accused products. RIB at l_l0-Ii]. Sony’s reliance on the LTO
specifications, which the accused products undisputedly comply with, is sufficientto establish by
a preponderance of the evidence that the 	See
Spansion, Inc. v. Int’! Trade Comm‘n, 629 F.3d 1331, 1349 (Fed. Cir. 2010). Fujifilm could
have rebutted Sony’s evidence by putting forth contrary evidence, for example, that its products
do not comply with the relevant LTO specifications, but it did not do so. See Tr. at 801:12-802:2
(Fujifilrrfs expert testifying that the accused products comply with the LTO specifications);
Tech. Licensing Corp. v. Videotek,Inc., 545 F.3d l3l6, 1327 (Fed. Cir. 2008).
4. The imported tape cartridges cannot satisfyithe tape drive limitations
of the asserted claims, and therefore are not articles that directly infringe
the claims at the time of importation.
The parties agree that Fujifilm imports the accused LTO-4, LTO—5,and LTO-6 tape
cartridges into the United States. JX-0007C. The parties also agree that the claims require a tape
drive in addition to the tape cartridges, and that Fujifilm does not import the tape drives with the
l 5 I

PUBLIC VERSION
tape cartridges. The question, therefore, is whether Fujifilm’s importation of the tape cartridges
is the importation of an article that infiinges the ’596 patent. 19 U.S.C. § 1337(a)(1)(B)(i).
In Suprema Inc. v. International Trade Commission, the Federal Circuit held that the
importation of an article that infringes under 35 U.S.C. § 271(b) (the inducement statute) can
support a section 337 violation when the predicate acts of direct infringement occur in the United
States. Suprema Inc. v. In1'l Trade Comm ’n, 796 F.3d 1338, 1345, 1352-53 (Fed. Cir. 2015) (en
bane). That is the controlling law. 	_
Sony alleges that third parties directly infringe the asserted claims in the United States by
“offering to sell, selling, and using the accused Fujifilm LTO products in LTO drives in the US.”
CIB at 140. Specifically,Sonyprovidesevidencethat “Fujifilmsells- 	of LTO tapes in
the US each year” to “vendors who re-sell the tapes” and “enterprise customers who either sell or
use them.” Id. (citing CX-0003C at Q/A 809-826, 860-866; CX-0552; CX41326C; CX-1133C;
RX-0014C; JX-0022C; JX-0025C; JX-034C; IX-0043C; JX-0053C; JX-0054C). Sony also
alleges and provides evidence that downstream purchasers of the accused products “infringe by
using them in their intended manner of use (i.e., with drives to store data in an LTO-compliant
n1am1er).” Id. (citing CX-0003C at Q/A 814-27, 837, 860-893; JX-0039, JX—0O40,IX-0041, 1X
0042, JX-0043, JX-0044, JX-0045C). Sony’s evidence does not include proof of actual use or
sales in the United States by Fujifilm’s customers or downstream purchasers of the accused
products; Sony instead relies on circumstantial evidence that the vast amount of accused
products in the United States being used according to their intended purpose, and the
accompanying sales of the accused products, are acts of direct infringement. Id. (citing In re dill
of Lading Transmission and Processing 5)/s. Patent Litig., 681 F.3d 1323, 1336 (Fed. Cir.
20112)).
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PUBLIC VERSION
Staff agrees that Sony’s evidence is sufficient to meet its burden of establishing the
underlying acts of direct infringement. SIB at l20~122 (“[_I]tis a more than reasonable inference
that Fujifilm’s customers used Fujifihn’s LTO-4, LTO-5, LTO-6 products that they purchased
according to their intended use in compatible LTO-4, LTO-5, LTO-6 tape drives . . . .”).
Fujlifilm does not dispute Sony’s evidence of direct infringement by third parties. See
RIB at 112-117. Instead, Fujifilm argues that the accused tape cartridges as imported cannot be
“articles that infringe” under section 337 for the purposes of direct or indirect infringement
because the asserted claims require a tape drive in addition to the tape cartridges. Id. at 102.
Suprema forecloses Fujifilm’s argument. In Suprema, the Federal Circuit affinned the
Cornmission’s finding that the respondent induced infringement of the asserted claims at the time
of importation by importing accused scanners into the United States with the requisite
knowledge and intent, where the underlying act of direct infringement occurred when the
scanners were integrated with software and used in the United States. 796 F.3d at 1342-43,
1352. i
' Here, the evidence shows that third parties more likely than not use the accused products
with compatible LTO drives in a way that infringes the asserted claims of the ’596 patent. As
discussed below, Fujifihn induces that infringement, just as the respondent induced infringement
in Suprema. 	_
5. The evidence shows that Fujifilm had the requisite knowledge of the
’596 patent and of infringement of the patent as required for induced and
contributory infringement, and the specific intent to bring about the
infringement as required for induced infringement.
Liability for both induced and contributory infringement “requires knowledge of the
patent in suit and knowledge of patent inf1ingen1ent.” Commil USA,LLC v. Cisco Sjvs, Irzc., 135
S. Ct. 1920, 1926 (2015) (citing Ara Mfg. C0. v. Convertible Top Replacement C0., 377 U.S.
153

PUBLIC VERSION
476, 488 (1964)). Fujifilm asserts that it did not possess the requisite knowledge because Sony
only accused Fujifilm of infiinging claims 14-19 of the ’596 patent, not the asserted claims, prior
to 2016. RIB at 116. Fujifilm also asserts that knowledge of how the LTO dn'ves operate “is
within the purview of the drive manufacturers, not Fujifi=hn,”so it could not have known that the
drives met the claim limitations. Id.
The evidence shows that Fujifihn 	. See
CIB at 141 (citing evidence); SIB at 122 (same). For example, a deputy manager in Sony’s
Intellectual Property division testified that
CX-0007C at Q/A 51-54 (testimony of Hiroshi
Kamitani). 	_ 	y 	. _
The evidence also shows that Fujifilm knew that its accused tape cartridges infringed the
asserted claims of the ’596 patent when used with a corresponding LTO tape diive, or that
Fujifilm was willfully blind to the infringement. See Warsaw Orthopedic, Inc. v. NuVas1Tve,Inc.,
824 F.3d 1344, 1347 (Fed. Cir. 2016) (“[W]illful blindness can satisfy the knowledge
requirement for active inducement under § 271(1)) (and for contributory infringement under §
27l(c)), even in the absence of actual knowledge.” (citing Global-Tech Appliances, Inc. v. SEB
S.A., 563 U.S. 754 (2011)). In September 2015, Sony provided Fujifilm with a. claim chart
showing how Fujifilm’s accused products infringed non-asserted claims 14-16 of the ‘S96patent,
which	are	directed	only	to	the	tape	ca1tridges,
—. 	cx-0007catQ/A16-25;	cx-0565c(theclaim	chart);	cx-0566c
(letter from Sony to Fujifilm on Febmary 25, 2016, where Sony notified that its LTO tape
I54

‘ PUBLIC VERSION
cartridges practiced the ’596 patent); see CX-0003C at Q/A/ 855-859. Fujifilm is correct that
unasserted claims 14-16 contain limitations directed only to tape cartridges, not tape drives. But
this distinction does not negate Fujifilm’s undisputed knowledge of the ’596 patent and how
relevant claim elements map to Fujifilm products. Tr. at 93:18-24 (Fujifilm’s counsel in opening
statement stating that claims 14-19 of the ’596 patent “are very similar” to the claims at issue
here), 94:6-11 (stating that, in comparison to claim 14, “claim 1 adds, we believe, nothing new,
nothing unique”). For example, unasserted independent claim 14 requires a recording medium
with a memory that stores “use-recognition information” in a read-only area. JX-0001 at 22:44
52. Asserted independent claim 1 requires a tape drive apparatus that reads the memory of the
recording medimn, including the “use-recognition information [that] is stored in a read-only
area” of the memory. Id. at 21:21-39, 22:1-27. Further, as discussed above, the accused tape
cartridges are intended to be used with compatible LTO tape drives that have the functionality
described in the asserted claims, and Fujifilm either knew or was willfully blind to the use by
third parties. See also CX-0003C at Q/A 884-92.
_ Liability for induced infringement, but not contributory infringement, also requires
specific intent to bring about the infringement. Commil, 135 S. Ct. at 1928; Nalco C0. v. Chem
Mod LLC, 883 F.3d 1337, 1357 (Fed. Cir. 2018). Circumstantial evidence can support a_finding
of specific intent to induce infringement. Vanda Pharm. Inc. v. W.-Ward Pharm. Int ’lLtd., 887
F.3d 1117, 1129 (Fed. Cir. 2018). “Inducem_entcan be found where there is ‘[e]vidence of active
steps taken to encourage direct infringement,’ which can in turn be found in ‘advertising an
infringing use or instructing how to engage in an infringing use.’” Takeda Pharm. U.S.A., Inc. 'v.
W.-Ward Pharm. Corp, 785 F.3d 625, 630-31 (Fed. Cir. 2015) (quoting Metro-Goldwyn-Mayer
Studios Inc. v. Grokster, Ltd, 545 U.S. 913, 936 (2005)).
155

PUBLIC VERSION .
To establish Fujifilm’s intent, Sony points to Fujifilm’s product literature, website, and
domestic customer support for the accused products. CIB at 141-142 (citing evidence); see SIB
at 122-123 (same). This evidence shows that Fujifilm instructs and encourages customers to use
the accused products with compatible LTO drives to store and protect data. See CX-0003C at
Q/A 867-883 (Sony’s expert, Dr. Mowry, explaining CX-0135C; CX-0400; JX-0045C»;JX-0092,
JX-0093, JX-0094). For example, a Fujifilm product brochure for the accused products instructs
users on which drive models are compatible with which cartridges. CX-0400. When users use
the accused products with compatible LTO drives, the cartridges are initialized and operate
pursuant to the LTO specifications. CX-0003C at Q/A 561-573, 861-862, 888. In this case,
Fujifilm’s advertising and instructing users how to perform infringing actions evidences that
Fujifilm had specific intent to bring about the infringement. See Vanda Pharm., 887 F.3d at
1129-1133.5
Fujifilm argues that the use of the accused products in licensed tape drives is a substantial
non-infringing use that negates any specific intent that it might have to infringe the patents. RIB
at 115 (citing Warner-Lambert C0. v. Apotex Corp, 316 F.3d 1348, 1365 (Fed. Cir. 2003);
Takeda Pharm., 785 F.3d at 630). Fujifilm’s argument is unavailing to avoid liability for
inducement of infringement. A company that supplies an article that can be used in
noninfringing ways (sometimes called a “staple article”) may yet be liable for infringement when
that company has knowledge of the patent and intends others to use the staple article to infringe.
156

t PUBLIC VERSION
The drafters of the Patent Actzl understood this from the beginning. Giles S. Rich
explained, “There is no reason to construe paragraph (c) [of section 271 of the Patent Act] as in
any way a limitation on paragraph (b), which stands by itself. There have been recent cases of
active inducement wherein the thing sold had non-infringing uses but acts additional to the mere
sale resulted in active inducement and liability for infringement.” Rich, Infringement under
Section 271 ofthe Patent Act 0f]952, 21 Geo. Wash. L. Rev. 521, 539 (1953). Another drafter,
L. James Harris, explained that potential noninfringing uses of a staple article are no defense to
liability for inducement under section 271(b): where one supplies a staple article and induces
others to use that article for infringement, “a person would be guilty of the something more than
merely selling a staple article of commerce. It then would be an infringement whether it
concerned a staple article or not.” Harris, Some Aspects of the Underlying Legislative Intent of
the Patent Act of 1952, 23 Geo. Wash. L. Rev. 658, 696 (1954-55) (citing testimony of Giles S.
Rich before Congress). The Supreme Court has interpreted the Patent Act consistently with the
drafters’ understanding. In Grokster, the Supreme Court explained that “the Patent Act’s
exemption from liability for those who distribute a staple article of commerce, 35 U.S.C.
§ 27l(c),” does not extend “to those who induce patent infringement, § 27l(b).” 545 U.S. 913,
935 11.10(2005). cf Sanofi v. Watson Labs. Inc., s75 F.3d 636, 646 (Fed. Cir. 2017) (noting that
21Congressman Crumpacker stated that “[w]hen the courts, in seeking to interpret the language
of the [Patent] Act, go through the ritual of seeking to ascertain ‘the intent of Congress’ in
adopting same, they would do well to look into the writing of these men--[P.J.] Federico, [Giles
S.] Rich, [L. James] Harris--as they, far more than any member of the House or Senate, knew
and understood what was intended by the language used.” “Symposium on Patents,” Summary“
of Proceedings, Section of Patents, Trademark and Copyright ‘Law (Chicago: American Bar
Center, 1962) 143. The Supreme Court has also heavily relied on Judge Rich's testimony when
interpreting section 271 of the Patent Act. Dawson Chem. C0. v. Rohm & Hass C0., 448 U.S.
176, 204-14 (1980).
157

. 	PUBLIC VERSION 	.
“{s]ection 27l(b), on inducement, does not contain the ‘substantial noninfiiuging use’ restriction
of section 271(0), on contributory infiingement,” and that “a person can be liable for inducing an
infringing use of a product even if the product has substantial noninfiinging uses”); see also
Certain Products Containing Interactive Pr0g1'arr1Guide and Parental Control Technology,Inv.
No. 337—TA-845,Comm’n Op, at 18 (Nov. 12, 2013). 	i
Here, the evidence shows that Fujifilm had knowledge of the ’596 patent, had knowledge
of the direct infringement by third parties in the United States, and had the specific intent to
induce that infringement. The potential of non-infiinging uses for some Fujifihn tapes in some
drives does not shield Fujifilm fi'om liability for inducing infringement. I find that Fujifihn
induced infiingement tmder 35 U.S.C. § 27l(b), and that it imported articles that infringe under
section 27l(b) of the Patent Act in violation of section 337 of the Tariff Act of 1930.
6. The authorized sale of IBM tape drives constitutes a substantial non
infringing use to defeat Fujifilm’s liability for contributory infringement.
Liability for contiibutoiy infringement requires, among other things, that the accused
party sells, offers to sell, or imports a component of a patented machine, where the component
constitutes a material part of the invention and is not suitable for substantial non-infringing use.
35 U.S.C. § 27l(c). Fujifilm imports the accused tape cartridges, which are components of the
asserted claims of the ’596 patent that require both a tape drive and attape cartridge. An accused
tape cartridge therefore must constitute a material part of the invention claimed in the ’596
patent, and not be suitable for substantial non-infringing use, in order for Fujifihn to be held
\
liable for contributory infringement.
Fujifilm argues that the accused tape cartridges are suitable for substantial non-infringing
use because the tape cartridges can be used in LTO tape drives manufactured by IBM. RIB at
H2-113. Fujifihn asserts that the use of its cartridges in IBM’s drives do not infringe the
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asserted claims because IBM licenses the ’S96 patent from Sony. 1d.; CX-1044C. Fujifilm relies
on the doctrine of patent exhaustion to argue that “Sony cannot assert its pa-tent rights in the
combination of an IBM LTO drive and a Fujifihn LTO cartridge,” which makes the combination
a noirinfringing use. RIB at 112. All paities appear to agree that IBM’s tape drive constitute
approximatelyI 	the use of Fujifil1n’saccusedtape caitridges in the United States, which
Fujifilm argues is substantial. RIB at 114 (citing RX-0584C at Q/A 326—333);SRB at 71 (citing
RIB at 114).
The doctrine of patent exhausting imposes a limit on the patent owner’s right to exclude.
Impression Pr0d., Inc. v. Lexmark Int’l, Ina, 137 S. Ct. 1523, 1531 (2017) (Lexmark).
Specifically, when a patent owner sells an item, that item _“isno longer within the limits of the
monopoly” and instead becomes the property of the purchaser “with the rights and benefits that
come along with ownership.” Id. 	I 	A
As an initial matter, Fujifilm presents only tenuous evidence to support its assertion that
IBM has a license to the ’596 patent such that a sale of an IBM tape drive is an.authorized sale.
Fujifilm’s initial brief only cites to the Sony-IBM agreement (CX-1044C) and another document
that is not in evidence (CX-1419C) for its assertion. RIB at 112. The Sony-IBM agreement,
h<>w<=v<=1= - 	CX-we	The
agreement on its face appears to be a cross-license between Sony and ]]3M to certain patents and
certain	products,	’ 	but	Fujifihn	does	not	cite	any
evidence that the language of the cross-license includes a license to the ’596 patent or covers the
relevant IBM LTO tape drives. Id.
Fuj.ifilm’s reply brief provides only a general citation to the economic domestic indusny
portion of Sony’s initial post-hearing brief, at pages 174-175, for the proposition that the Sony
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IBM agreement “grants IBM a ‘broad’ right. to ‘sell and otherwise transfer’ products practicing
the ’596 Patent.” RRB at 64. In footnote 50 on page 174 of its reply brief, Sony does state that
IBM LTO drives are “IBM Licensed Products” pursuant to the agreement. SIB at 174-175 n.50
(citing CX-0007C at Q/A 89). And, although Fujifilm does not make this assertion, the Sony
IBM	does	appear	We	L
CX-1°44¢- 	ASPatent
exhaustion is an affirmative defense, Fujifilm bears the burden to prove by a preponderance of
the evidence that IBM’s sale of authorized tape drives exhausts Sony’s rights to the ’596 patent.
Jazz Photo Corp. v. ITC‘, 264 F.3d 1094 (Fed. Cir. 2001), abrogated on other grounds by
Lexmark. Fujifi1m’s post-hearing briefing skated over the predicate requirement that Sony
authorized IBM’s sale of its LTO drives, but the evidence in the record discussed in Sony’s brief
indicates that IBM’s tape drives are more likely than not licensed under the ’596 patent. _
The next question is whether IBM’s sale of its LTO tape drives for use with Fujifihn’s
unlicensed tape cartridges is an authorized sale. If IBM complies with the license when selling
the LTO drives, then Sony has, in effect, authorized the sale, even if purchasers did not comply
with any post—salerestriction imposed by IBM. Lexmark, 137 S. Ct. at 1535. If Sony has not
given IBM the authority to sell the LTO tape drives for use with Fujifihn’s unlicensed tape
cartridges, then such a sale cannot exhaust Sony’s rights. Id. '
Sony points to — 	of the Sony-IBMagreementto argue that “third-party
infringers	likeFujifilm”arespecifically	excluded.SIBat 165'-166.	:1
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CX-1044C- This sectiondoes not restrict IBM’s sale of the LTO tape drives, and therefore
Sony’s right to exclude how a third-party purchaser uses the LTO tape drives appears to be
exhausted. 	'
The remaining question for the issue of patent exhaustion is whether Sony’s rights to
exclude others from practicing a claim that requires both a tape drive and a.tape cartridge can be
exhausted by the authorized sale of the tape drive alone. In other words, does a person have
authority to practice a claim to a system requiring both a tape drive and a tape cartridge if the
person has authority to use the tape drive without restriction?
The facts of Quanta Computer, Inc. v. LG Elecs., Inc., are similar enough to these facts
here for that precedent to be dispositive of this issue. 553 U.S. 617 (2008). Quanta involved
method claims that covered the reading and writing of data between microprocessors and
memory using buses. Id. at 621-623. The accused infringer combined -authorized
microprocessors with unauthorized memory and buses in a way that practiced the claimed
inventions. Id. at 624. The Supreme Court held that the authorized sale of the microprocessors
exhausted the claims that included limitations to the microprocessors as well as limitations to the
memory and buses. Id. at 630-632.
The Court in Quanta first reasoned that the authorized microprocessors substantially
embodied the patent because there was no reasonable use for the microprocessors other than
incorporating them. into computer systems that practice the asserted patents, and a
microprocessor “cannot function until it is connected to buses and memory.” Id. at 632.
Similarly, the Fujifihn tape cassettes have no reasonable use other than incorporating them with
associated LTO tape drives that practice the asserted claims, and vice versa, because there is no
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evidence that the cassettes can function as intended until they are used with the drives, and vice
versa. See RIB at 113 (quoting Sony’s pre-hearing brief).
The Court in Quanta next reasoned that the authorized microprocessors “embodied
essential features of the patented invention” because they “constitute a material part of the
patented invention and all but completely practice the patent.” Quanta, 533 U.S. at 632-633
(“Everything inventive about each patent is embodied in the [micropr0cessors].”). The Court
explained that “the only step necessary to practice the patent is the application of common
processes or the addition of standard parts” to the microprocessors. Id. at 633. The “nature of
the final step” to practice the patent of comiecting the microprocessor to buses and memory was
“common and noninventive.” Id. 	l
Like the claims in Quanta, the asserted claims of the ’596 patent cover the authorized
product—the IBM LTO tape drives—in combination with an unauthorized component—the
accused Fujifilm LTO tape cartridges. For example, claim 1 requires a “tape drive means” for
reading/writing information to/from a magnetic tape in a tape cassette, where the tape drive
comprises a “memory drive means” for reading and writing management information from and
to a memory in the tape cassette, a “use-recognition infonnation decoder for detecting from the
memory use-recognition information designating a use for the tape cassette,” and a “controller
for controlling an operation of the tape drive means based on the use-recognition information.”
IX-0001 at 21:21-39. The magnetic tape, memory, management information, and use
recognition information recited by the claims are all part of the tape cassette. Id. i '
There is no evidence that the limitations directed to the tape cassette comprise only
“standard” or “common” parts. See Quanta, 533 U.S. at 632-633. However, Fujifilm has
established that the limitations directed to the tape cassette are “noninventive.” Id. Fujifilm
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points out that the USPTO invalidated claims 14-19, which only contain limitations to the tape
cassette, not the tape drive, because those claims were known in the prior art, or were obvious.
RIB at 113-114 (citing RX-0128). The limitations directed to the tape cassette in claims 1-13
mirror the limitations in the now-invalid claims 14-19, and are accordingly non-inventive. This
situation is similar to Life-Scar:Scotland, Lid. v. Shasta Techs., LLC, where the Federal Circuit
held that method claims directed to two components were exhausted by the sale of one of the
components because the other component was known in the prior art. 734 F.3d 1361, 1369-70
(Fed. Cir. 2013); see id. at 1372 (“[I]f one item in the patented combination is either unpatented
or if the patent on it is invalid, and the inventive concept resides in the second item, then the sale
of the second item exhausts a product patent in the combina.tion.”).
Accordingly, IBM’s authorized sale of LTO tape drives exhausts Sony’s rights to exclude
others from using those drives in combination with Fujifi1m’s tape cartridges in a way that
practices the asserted claims of the ’596 patent. A third party that uses IBM's LTO tape drives
in combination with the accused products is not a.direct infringer of these claims.
Even though the use of IBM’s LTO tape drives in combination with the accused products
is a non-infiinging use, it must be a “substantial non-infringing use" to escape liability under
35 U.S.C. § 27l(c). Fujifilm argues that such use is substantial because the evidence shows that
IBM’s market share of LTO tape drives averages ar0und- in the United States. RIB at 114
(citing RX-0584 at Q/A 326-333 (Fujifrlm’s expert, Dr. Messner, explaining RX-0263C
RX-0264C
and RX-040 l C
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IX-0140C
see CRB at 59
This use is substantial because it is “not
unusual, far-fetched, illusoiy, impractical, occasional, aberrant, or experimental.” Vita-Mix
Corp. v. Basic Holding, Ina, 581 F.3d l31"7, 1327 (Fed. Cir. 2009). 	I
Accordingly, Sony has not met its burden to prove that Fujifilm contributes to the direct
infringement of third parties in the United States by selling or importing the accused tape
cartridges. I do not find a violation of section 337 based on the importation of articles that
contribute to infringement of the ’596 patent-. 	i l
E. Domestic Industry —Technical Prong
Sony alleges two main categories of products to be articles protected by the ‘S01 patent.
The first category comprises LTO-4, LTO-5, and LTO-6 tape cartiidges manufactured by
Sony_22 The Sony-manufactured cartridges are labeled with the Sony brand or are labeled as
OEMproducts 	SeeComplaint	111	26,87;CIBat9 (citing	cx-oooscat
Q/A 8-13; CX-1229C). The second category of alleged domestic industry articles comprises
IBM 3592 products. Sony contends that IBM produces the 3592 products under a license from
22Section VH.B below discusses the nature and location of Sony’s alleged domestic industry
activities.
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Son)/.23 IBM 3592 tape cartridges have a proprietary format and can only be used in an IBM
3592 drive.24
With respect to the first category of products, Sony contends (1) its LTO-4, LTO-5, and
LTO-6 Read/Write tape cartridges, when used with compatible LTO drives, practice claims 1, 3,
and 6-8 of the ’596 patent, and (2) its LTO-4, LTO-5, and LTO-6 WORM cartridges, when used
with compatible LTO drives, practice all of the asserted claims. CIB at 145. Sony’s evidence
that these products practice the claims when used as intended mirrors the evidence it relies on for
proving that the accused products infringe. Id. at 144-145 (citing CX-0003C at Q/A 159, 177
185, 861, 894-1004, 1286-1300 (citing evidence); CX-0346; CX-0727; CX-0881; CX-0882; JX
0106). Staff agrees. SIB at 124.
Fujifilm’s initial and reply post-hearing briefs simply state that “[f]or the same reasons
the Fujifilm LTO cartridges do not infringe, the Sony LTO cartridges do not practice the
Asserted Claims.” RIB at 117; RRB at 66. As discussed above, I have rejected those arguments.
I found that third parties practice each element of the asserted claims of the ’596 patent by using
Fujifilm tapes in drives in the intended manner. Accordingly, based on the evidence and the
arguments of the parties, I find that Sony established by a preponderance of the evidence that
that (1) its LTO-4, LTO-5, and LTO-6 Read/Write tape cartridges, when-used with compatible
LTO drives, practice claims 1, 3, and 6-8 of the ’596 patent, and (2) its LTO-4, LTO-5, and
LTO-6 WORM cartridges, when used with compatible LTO drives, practice all of the asserted
23Section VII.C below discusses the nature and location of the alleged IBM domestic industry
activities.
24IBM 3592 tape cartridges differ from LTO tape cartridges in this respect. LTO tapecartridges
made by one manufacturer are interoperable with LTO drives made by various manufacturers.
This difference will be discussed in the sections below.
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claims. The technical prong of the domestic industry is therefore satisfied. See 19 U.S.C. §
1337(a)(2) and (3); Certain Microsphere Adhesives, Process for Making Same and Prods.
Containing Same, Including Self-Stick Repositionable Notes, Inv. No. 337-TA-366, Comm’n
Op., 1996 WL 1056095, at *8 (U.S.I.T.C. Jan. 16, 1996). 	V
With respect to the second category of alleged domestic industry products—the licensed
IBM 3592 products—Sony contends that (1) the Generation 1-4 IBM 3592 WORM products
(IA, JB, JC, JD, J], JK, JL, JR, JW, JX, JY, and JZ), when used with compatible IBM 3592 tape
drives, practice claims 1-13 of the “S96patent, and (2) the Generation 1-4 IBM 3592 Read/Write
products practice claims 1, 3, and 6-8. CIB at 145-151. Sony provides evidence that the “3592
products operate in the same way using virtually the same information as LTO products” for the
purposes of the asserted claims. Id. (citing CX-0003C at Q/A 193-212, 1015, 1023-1027, 1301
1313; CX-0406; CX-0580; CX-0849; CX-1152C; CX-1304 at Q/A 25-30, 58-86; CX-1330C;
JX-0028C at 68:21-69:16; JX-0046C at 34:22-35:2, 40:3-10, 41:19-42:14; JX-0095C; JX
0096C; JX-0097C; JX-0098C; JX-0099C; JX-0137; JX-0138; JX-0101C; JX-0138C).
Staff agrees that the evidence shows that “the IBM domestic industry products practice
claims 1-13 of the ’596 patent.” SIB at 124-125 (citing CX-0003C at Q/A 1005-1254).
I Fujifilm argues that S0ny’s evidence regarding the IBM 3592 products “suffer[s] from
the same failure of proof as for the LTO products.” RIB at 117 (citing RX-0584C at Q/A 384
446). I rejected Fujifilm’s arguments that Sony failed to prove .that the Sony LTO products
practice the asserted claims of the ’596 patent, and I similarly reject Fujifilm’s blanket argument
here.
For the IBM 3592 products, Fujifilm further argues that “Dr. Mowry’s analysis for DI is
additionally unreliable, because he uses the LTO Specifications to fill in gaps in the
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documentation for IBM 3592 products.” Id. at 117-118. Fujifil1n’s argument is unpersuasive.
The practice of a patent claim can be inferred through circumstantial evidence. Sony has carried
its burden to show that it is more likely than not that the IBM 3592 products when used with
compatible 3592 drives practice each limitation of each asserted claim of the ’596 patent.
Fujif1lm’s conclusory argument does not overcome Sony’s showing. Sony has satisfied the
technical prong of the domestic industry requirement.
F. Invalidity 	.
1. Fujifilm did not prove by clear and convincing evidence that Platte
anticipates the asserted claims. _
Fujifihn contends that U.S. Patent No. 6,128,148 (“Platte”) anticipates claims 1-13 of the
’596 patent. RIB at 118-127. Platte discloses an electronic memory device for use on a
magnetic tape cassette. RX-0224 at 1:12-.15. The electronic memory device of Platte can
contain information relating to the type of cassette or tape media, or can store information
relating to authorized uses (e._g.,types of playback and protections against unwanted overwriting,
erasure, or copying) of the tape media. Id. at 2:35-45, 3:22-39, 5:41-62." The stored information
in the memory device can beicommunicated to a memory tape device. Id. at 4:39-53. Platte
describes that the memory tape device, such as a camcorder or video recorder, can read and write
data to the magnetic tape cassette based upon the information received from the memory device.
Id. at 2:52-57, 3:33-35, cl. 2. 	' ~ .
_Sonyand Staff argue that Platte does not anticipate claims 1-13 because it fails to teach a
memory drive means that includes a,SCSI buffer controller as a component of the corresponding
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structure. See CIB at 153-154; SIB at 125-126.25 In response, Fujifilm does not identify any
structure or component in Platte that constitutes a SCSI buffer controller but instead asserts that a
SCSI buffer controller is not a corresponding structure required in all of the embodiments of the
asserted claims. See RIB at 121; see also RRB at 70 and SIB a.t I26.
In my claim construction above, I determined that a SCSI buffer controller is a part of the
corresponding structure of the recited memory drive means. Platte discloses a memory drive
means for performing the function of reading and writing management information to and from a
memory chip on a tape cassette, but it does not teachithe structure linked to the claim term
“memory drive means” or any equivalent to that structme. Specifically, Platte does not teach a
SCSI buffer controller, and Fujifilm has not argued that some other structure in Platte is
equivalent to the structure covered by the claim term. Therefore, Platte fails to disclose the
memory drive means of independent claims 1 and 9 as well as claims 2-8 and 10-13 depending
respectively therefrom. Accordingly, I find that Fuj-ifihnhas failed to demonstrate by clear and
convincing evidence that Platte anticipates claims I-13 of the ’596 patent imder 35 U.S.C. § I02.
2. Fujiiilm did not prove by clear and convincing evidence that Sawada
anticipates asserted claims 1, 6, 7, and 8.
Fujifilm contends that Japanese Patent Publication Number H6-60470 (“Sawada”)
anticipates independent claim 1 and dependent claims 6-8 of the ‘S96 patent. See RIB at I27
l32. Sawada discloses a recording medium cassette with a mounted memory and a recording
and playback device for use with the cassette. The mounted memory includes information that
25Sony and Staff also contend that Platte fails to teach other features of the asserted claims. See
CIB at 153-157; SIB at 126. I do not address these additional arguments given my determination
that Platte fails to teach a SCSI buffer controller or equivalent structure as a component of the
structure corresponding to the claimed memory drive means.
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prevents impermissible “dubbing” of sound and data signals recorded on the cassette. See RX
0213 1111[0001], [O008], [OO10]. The mounted memory includes a plurality of terminals that
enable dubbing prohibition and other information to be communicated to the recording and
playback device. Id. 1] [OO10]. Example recording and playback devices include video tape
recorders and video cassette recorders. Id. 11[O001]. The dubbing prohibition information is
stored in a non-rewriteable portion of the memory, which can also include other data pertaining
to the characteristics of the tape and cassette (e.g., type, format, length, and hub diameter) and
manufacturing information (e.g., manufacturer name, manufacture date, country of origin). Id. 1[
[0035]. '
Sony and Staff assert that Sawada does not anticipate claims 1 and 6-8 of the ’596 patent
because Sawada does not disclose “use-recognition information designating a use for a tape
cassette” or a detector for detecting the same. CIB at 159; RIB at 127. Sony also contends that
Sawada fails to teach a memory drive means that includes a SCSI buffer controller as a
component of the corresponding structure for performing the functions of the memory drive
means. CIB at 158.26 I address each of these arguments in turn. 	V
Fujifilm contends that use-recognition information includes the dubbing protection
disclosed in Sawada. See RIB at 130-131 (citing RX-0004C at Q/A 578-580). Fujifilm argues
that this is so because dubbing protection constitutes a use for which a storage tape is adapted.
Id. Sony and Staff respond that the use-recognition information described in the ’596 patent
26Sony also contends that Sawada fails to teach several other features of claims 1 and 6-8. See
CIB at 157-160. I do not address these additional arguments given my determination that
Sawada fails to teach “a controller for controlling an operation of the tape drive means based on
the use-recognition information detected by the detector” or a SCSI buffer controller or
equivalent structure to the structure corresponding to the claimed memory drive means.
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delimits reading and writing activities performed on the loaded tape (e.g., to prevent the
information stored on the tape from being erased or rewritten), where the cassette information in
Sawada controls writing activities on other tapes, not the tape with the memory. CIB at 159;
RlB at 127. Put differently, Sony and Staff argue that the dubbing protection of Sawada does not
affect the reading and writing operations perfonned on the tape itself thereby protecting the
content of the tape.
Even if Fujifilm is correct that the dubbing protection of Sawada constitutes use
recognition information, Sawada would nevertheless fail to anticipate claims 1 and 6-8 because
the dubbing protection of Sawada is not utilized “for managing the writing/reading of
information to/from the magnetic tape,” as required by the claims. JX-0001 at cl. 1. The claims
also require a controller that responds to use-recognition information from the magnetic tape to
control the writing of information to or the reading of information from that same magnetic tape.
Id. at 2:29-34, 21:15-19; see also CX-0013C at Q/A 353, 354. The dubbing protection of
Sawada, however, does not provide information by which the tape drive can be controlled with
respect to the writing of information to or the reading of information from the loaded tape;
instead the dubbing protection places restrictions on reading and writing operations that occur on
other tapes located in other tape drives. Thus, even if the dubbing protection of Sawada
constitutes use-recognition information, it is not information used by a controller to control the
operation‘ of the tape drive whereby information is written to or read from the loaded tape as is
required by independent claim 1 and the claims depending therefrom, including dependent
claims 6-8.
In addition, as discussed above, I have determined that a SCSI buffer controller should be
considered to be a part of the corresponding structure of the memory drive means recited in
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independent claim l. Fujifilm does not identify any structure or component in Sawada that
constitutes or is equivalent to a SCSI buffer controller, and instead asserts that a SCSI buffer
controller is not a corresponding structure required "byindependent claim 1. See RIB at 130;
RRB at 76. Fujifilm has not shown that Sawada teaches structure covered by the “memory drive
means” of the ’S96 patent or equivalents to that structure.
For the forgoing reasons I find that Fujifilrn has failed to establish by clear and
convincing evidence that Sawada anticipates claims 1 and 6-8 of the ’596 patent under 35 U.S.C.
§ 102.
3. Fujifilm did not prove by clear and convincing evidence that Platte in
view of the knowledge of a person of ordinary skill in the art and/or Kano
renders obvious asserted claims 1-13.
Fujifilm contends that Platte renders claims 1-13 of the ’596 patent invalid as obvious in
view of the knowledge of a person of ordinary skill in the art and/or Japanese Patent Publication
Number H09-161451 (“Kano”) (RX-0095). See RIB at 132-137. Kano discloses a data library
system in which writing operations are performed in parallel across multiple tape cassettes where
the tape cassettes have a built-in nonvolatile memory. See RX-O95 at Abstract, W [000l],
[0005]. The nonvolatile memory of Kano stores “volume information and partition information
set for the tape by the system at initialization of the tape, and header information that is
maintenance information related to the tape.” Id. {I[0005]. The data library system of Kano also
includes a SCSI interface by which data can be exchanged with a host computer and which can
be recorded on the tape media. Id. at [0004]. Among other things, Fujitilm relies on Kano as
disclosing the use of a SCSI interface for exchanging information between a nonvolatile memory
4 and a host computer 25. See RIB at I33. Fujifillm contends that the SCSI components of Kano
could be adapted for use with Platte. Id. at 133 and 137.
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Sony and Staff assert that Platte alone or in combination with the knowledge of a person
of ordinary skill in the art and/or Kano would not render claims I-13 of the ’596 patent obvious‘
because Fnjifilm failed to demonstrate by clear and convincing evidence that a person of
ordinary skill in the art would combine the video cassettes disclosed by Platte with the data
library system of Kano. See CIB at 161-165; RIB at 1'28-129. For example, Sony contends that
there is no basis to combine the teachings of Platte and Kano to arrive at the claimed “memory
drive means” that includes a SCSI buffer controller as a component of the corresponding
structure. See CRB at 69-70. I analyze the Fujifihn‘s proposed obviousness combinations in
tum below.
a) Platte in view of the knowledge of a person of ordinary skill in
the art. '
As discussed above, Platte does not teach the memory drive means of claims 1-13 of the
’596 patent because it does not disclose a SCSI buffer controller or equivalent stnrcture for
performing the recited function of the memory drive means. In this regard, Fujifillmhas failed to
adduce evidence that the knowledge of a person of ordinary skill in the art would supply that
deficiency. Instead Fujifilm relies on Kano for that teaching. See RIB at 133; RRB at 79-V80.I
therefore fmd that Fujifihn has failed to demonstrate by clear and convincing evidence that the
combination of Platte and the knowledge of a person of ordinary skill in the would render
claims 1-13 of the ’596 patent invalid as obvious.
b) Platte in view of Kano.
The primary dispute between the parties is whether a person of ordinary skill in the art
would combine the teachings of Platte and Kano. Fujifilm contends that it"is appropriate to
combine the teachings of Platte and Kano because they utilize similar hardware and are also both
directed “to the same field of use and applications for the cassettes and drives.” RIB at I36.
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Fujifilm asserts that combining the features disclosed in Kano (e.g., a SCSI buffer controller)
with Platte would be “trivial” and could be accomplished with a reasonable expectation of
success. Id. at 135. Fujifilm’s expert Dr. Messner testified that Platte and Kano “are each
directed to providing tape cassettes for use in similar fields” and that the ’596 patent “does not
purport to have invented a new technique for communicating between a video recording and
playback device and the memory in a tape cassette, and discloses only known components for
communication between a memory and a tape drive.” RX-0004C at Q/A 933, 945. Dr. Messner
contends that it would have been obvious to combine known components “to communicate
between the tape-cassette memory and the video recording and playback device, so that data
could be transferred back and forth.” Id. at Q/A 945. Dr. Messner also pointed to similarities
between the teachings of Platte and Kano that would motivate their combination, such as they
each “disclose tape cassettes in which magnetic tape is wound around two reels.” Id. at Q/A 934.
Sony and Staff argue that those skilled in the art would not combine Platte and Kano.
CIB at 161-165; SIB at 129. In particular, both argue that those having ordinary skill in the art
would not combine the tape/video cassettes of Platte with the complex data library described in
Kano. CIB at 163; SIB at 129. Sony argues that there would be no expectationof success for
combining Platte and Kano given that there would be significant design and programming
challenges for doing so. _CIB at 164-165.
Sony’s expert Dr. Mowry testified that those skilled in the would not be motivated to
combine Platte and Kano because “Platte is directed to users of camcorders who make home
videos and to video rental stores who lend prerecorded cassettes to customers to take back to
their homes” whereas Kano “relates to enterprise grade tape library systems.” CX-0013C at
Q/A 587. Dr. Mowry asserted that the “technical and practical disconnect” between Platte and
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PUBLIC VERSION . 	,
Kano would prevent those skilled in the art from being motivated to combine their teachings. Id.
Dr. Mowry also explained that “Kano and Platte target different categories of _tape media
products, and are directed to different levels of hardware,” and therefore those skilled in the art
would not have looked to Kano to supply the deficiencies of Platte. Id. at Q/A 593; see also id.
at Q/A 590 (“The attempt to combine Platte, which pertains to prerecorded cassettes for video
rental stores and blank cassettes for use in personal camcorders, and Kano, which pertains to a
large-scale tape library system for enterprise storage, would require substantial design and
programming work”).
. The experts also provided conflicting testimony regarding whether there would be an
expectation of success from combining Platte and Kano. For example, with respect to the tape
cassette of Platte and the tape drive means of Kano, Fujifilm’s expert Dr. Messner opined that
their combination would be successful because “[o]ne of skill in the art would look to Kano to
provide the details of the helical scanning recorder to read from and write to the camcorder and
videocassettes of Platte.” RX-0004C at Q/A 939. Dr. Messner also asserted that “[a]ccessing
the tape-cassette memory of Platte in the tape streamer drive of Kano using the interface of Kano
is a simple use of known elements to achieve a predictable result.” Id. at Q/A 946. In contrast,
Sony’s expert Dr. Mowry stated that there would be no expectation of success from combining
Platte and Kano because “[c]ombining Platte and Kano implicates an array of hardware and
firmware design challenges that, in my opinion, would have been very difficult for one of
ordinary skill in the art to implement.” CX-0013C at Q/A 590; see also id. at Q/A 599. Dr.
Mowry argued that it would be incorrect to assume that Platte and Kano could be successfully
combined. Id. at Q/A 589.
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_ The determination of “whether there is a reason to combine prior art references is a
question of fact.” See Kinetic Concepts, Inc. v. Smith & Nephew, Ina, 688 F.3d 1342, 1367
(Fed. Cir. 2012). Here, the parties have each made arguments as to whether a person of ordinary
skill in the art would combine the teachings of Platte and Kano. Although Fujifilm has offered
evidence that one skilled in the art would and could successfully combine the teachings of Platte
and Kano, there is also evidence of record to the contrary. Cf RX-0004C at Q/A 928-950 and
CX-0013C at Q/A 457-469, 585-594, 597-608. The experts also offered contradictory testimony
regarding other bases purportedly motivating the combination of Platte and Kano. Compare RX
0004C at Q/A 950 with CX-0013C at Q/A 603-605; compare RX-0004C at Q/A 947-949 with
CX-0013C at Q/A 600-602.
“The burden falls on the challenger of the patent to show by clear and convincing
evidence that a skilled artisan would have been motivated to combine the teachings of the prior
art references to achieve the claimed invention, and that the skilled artisan would have had a
reasonable expectation of success in doing so.” Pfizer, Inc. v. Apotex, Inc., 480 F.3d 1348, 1361
(Fed. Cir. 2007); see also Kinetic Concepts, 688 F.3d. at 1360. Given the significant conflicting
testimony, I find that Fujifilm has failed to establish by clear and convincing evidence that one
skilled in the art would combine the teachings of Platte and Kano thus rendering claims 1-13 of
the ’596 patent invalid as obvious. See Technology Licensing Corp. v. Videotek, Inc., 545 F.3d
1316, 1327 (Fed. Cir. 2008) (“Failure to prove the matter as required by the "applicable standard
means that the party with the burden of persuasion loses on that point—-thus,if the fact trier of
the issue is left uncertain, the party with the burden loses”).
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In view of the forgoing, I find that Fujifilin has failed to establish by clear and convincing
evidence that Platte renders the claims 1-l=3of the ‘S96 patent invalid as obvious in view of the
knowledge of a person of ordinary skill in the art and/or Kano. '
4. Fujifilm did not prove by clear and convincing evidence that Sawada
in view of Kano renders obvious asserted claims 1-13.
" Fujifilm contends that Sawada renders the claims 1-13 of the ’596 patent invalid as
obvious in view of Kano. RIB at 137-I41. Sony and Staff disagree. CIB at 165-I66; SIB at
128. The parties’ respective arguments generally parallel those made with respect to the
combination of Platte and Kano discussed above. Namely, the parties dispute whether those
skilled in the art would be motivated to combine the teachings of Sawada and Kano as proposed
by Fujifilm and whether there would be an expectation of success from doing so. _
Fujifihn asserts that those skilled in the art would have been motivated to combine
Sawada and Kano and "would have had a reasonable expectation of success from the
combination. See RIB at l38. Fujifiim contends Sawada and Kano both relate to tape media
cassettes and therefore a person skilled in the art would combine their teachings. Id. Fujifihn
also asserts that the “there is no ‘fundamental incompatibility’ that would prevent such a
combination.” Id. (citing Certain Magnetic Data Storage Tapes, Inv. No. 337-TA-1012,
C0mm’n Op. at 47 (Mar. 8, 2018)).
Sony and Staff contend that Fujifilm has not established a motivation for why a person of
ordinary skill in the art would combine the teachings of Sawada and Kano, or that there would be
a reasonable expectation of success from doing so. For example, Sony contends that “Sawada
and Kano are completely different and non—compatibIesystems each with"their own hardware,
software, and data formats.” CIB at 165. In this regard, Sony posits that the design and
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programming challenges would present significant challenges for combining Sawada and Kano.
Id. Staff agrees. SIB at 128.
As was the case with Platte and Kano, there is competing testimony as to whether those
skilled in the art would combine the teachings of Sawada related to video cassettes with the data
library described in Kano, and whether there would be a reasonable expectation of success from
doing so. Compare RX-0004C at Q/A 804-902 with CX-0013C at 471-533. For example,
Fujifilm’s expert Dr. Messner testified that Sawada and Kano both “both disclose a similar tape
cassette. The tape cassettes in each reference have magnetic tape wound around two reels, and
also have built-in memory for storing operational information (including management
information and identification information).” RX-0004C at Q/A 809; see also id. at Q/A 810
811. Dr. Messner further testified that those skilled in the art would have an expectation of
success from combining the components of Sawada and Kano because doing so would constitute
“nothing more the use of known elements to yield predictable results.” Id. at Q/A 839; see also
id. at 812.
Sony’s expert Dr. Mowry disagreed with each of Dr. Messner’s contentions regarding the
motivation to combine Sawada and Kano. See CX-0013C at 473-475 (addressing RX-0004C at
Q/A 809-811). For example, Dr. Mowry contended that the mere fact that Sawada and Kano
disclose tape cassettes and refer to video tape recorders does not provide sufficient basis to
combine their respective teachings." Id. at Q/A 473; see also id. at Q/A 482-483, 486. ln
addition, Dr. Mowry testified that there are “significant differences between the tape library
system of Kano and the personal entertainment application of Sawada” and that they each
“pertain to different technology and different products and address different market needs.” Id.
at Q/A 477-478. According to Dr. Mowry, Fujifilm and Dr. Messner also failed to explain how
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those skilled in the art would integrate the “disparate technology” described in Sawada and
Kano. Id. at Q/A 478. V ‘ _
‘Although Fujifilm has offered evidence that one skilled in the art would and could
successfully combine the teachings of Sawada and Kano, Sony has offered at least equally
compelling testimony and evidence to the contrary. I therefore find that Fujifilm has failed to
establish by clear and convincing evidence that one skilled in the art. would combine the
teachings of Sawada and Kano thus rendering claims l-13 of the ’596 patent invalid as obvious.
See Tech. Licensing Corp. v. Videotek, Inc., 545 F.3d 1316, 1327 (Fed. Cir. 2008).
In view of the forgoing, I find that Fujifilm has failed to establish by clear and convincing
evidence that Sawada renders the claims 1-l3 of the ’596 patent invalid as obvious in view of
Kano. v
VII. DOMESTIC INDUSTRY —ECONOMIC PRONG
. A. Introduction 	.
Sony argues that it has satisfied the economic prong of the domestic industry requirement
under section 337(a)(3)(B) based upon (i) the -investmentand economic activities of three Sony
Corporation subsidiaries (Sony Latin America Inc. (“SOLA”), Sony DADC US Inc. (“Sony
DADC”), and Sony Services and Operations of Americas (“SSOA”)) and (ii) the maintenance
and research and development expenses of its cross-licensee IBM related to IBM’s 3592
products.” CIB at 9-l0, 166, 174. Sony contends that the combined expenditures of the Sony
subsidiaries	andIBMamountto at least_ 	attributableto the ’596patent,at least
_i—i
27The 3592 products include Generation 1-4 IBM 3592 tapes (JA, JB, JC, JD, JJ, JK, JL, JR,
JW, JX, JY, and JZ) and the TS1120, TSIl30, TSll40, TSll50, and TS1155 tape drives in
which the 3592 tapes operate. Ia’.at 146, 186-187; see also CX-1304C at Q/A 13-I6.
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: 	attributable	tothe’501patent,andatleast_ 	attributable	tothe’774patent.Id.
at 166. Sony also asserts that ‘IBM’s research and development expenditures satisfy the
economic prong under section 337(a)(3)(C)-. Id. at 1864187. Sony argues that the above
expenditures associated with the domestic industry products are quantitatively and qualitatively
significant and substantial. Id. at 187-191. Sony asserts that these expenditmes are significant
and substantial weather considered together or broken apart as follows:
' _ 	., 	’596 Patent ’501 Patent . ’774 Patent
IBM’s R&D Investments 	'
Sony and IBM’s Remaining 	1
Prong(B)Investments 	Y	— 	.
Total 	‘
Id. at 188 (citing CX-0004C at Q/A 235).
Fujifihn disputes that" the investments of either the Sony subsidiaries or IBM are
sufficient to satisfy the economic prong. RIB at I42-E44. With respect to the Sony subsidiaries,
Fujifilm argues that Sony’s activities are akin to those of an ordinary importer given that all of
the Sony domestic industry products are made in Japan. Ia’. Fujifilm contends that the domestic
activities performed by the Sony subsidiaries do not, on their own, show the type of significant
investments required to satisfy the economic prong of the domestic industry requirement. Id. at
I44-150. For example, Fujifilm argues that Sony's domestic labeling activities are not sufficient
to constitute a domestic industry. Id. at I45. Fujifilm also asserts that other of Sony’s expenses,
such as those ascribed to “distribution and logistics” and overhead (e.g., rent, insurance,
utilities), are rmrelated to design, engineering, manufacturing, and assembly; or do not add value
to the imported products and therefore should not be considered for determining whether a
domestic industry exists. Id. at 147-150. Fujifilm frnther contends that the Sony subsidiary costs
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incurred outside of the United States for certain non-teclmical employees (i.e., Mr. Clark and Mr.
Sasaki) should not be considered for establishing a domestic industry. Id. at 150-155.
' As to IBM’s activities and expenditures, Fujifilm primarily argues, as detailed below, that
the Sony-IBM license does not cover the IBM 3592 products. Id. at 156-166. Fujifilm contends
that Sony cannot rely on expenditures associated with the IBM 3592 products to satisfy the
domestic industry requirement. Id. at 157.
Fujifilm also argues that even if the IBM 3592 products were licensed, it would be
improper to impute IBM’s expenditures associated with 3592 tape drives to the ’774 and ’501
patents because they are directed only to tape media. Id. at 167-173. And even if it was
appropriate to consider expenses for the 3592 tape drives with respect to the ’774 and ’501
patents, Sony has nevertheless failed to allocate its expenses to only those portions of the 3592
tape drive that are necessary to exploit those patents. Id. at 172 (citing Certain Video Game
Systems and Wireless-Controllers and Components Thereofi Inv. No. 337-TA-770, Com1n’n Op.
at 67-68 (Oct. 28, 2013)).
Fujifilm additionally argues that Sony cannot rely on IBM’s research and development
expenses to establish the economic prong under section 337(a)(3)(B). Id. at 174-175; RRB at
92-94. Rather, Fujifilm contends that such expenses can only be properly credited under section
337(a)(3)(C), and that Sony has failed to demonstrate the required nexus between those
expenditures and the patented technology. RIB at 174-175. 	'
Finally, Fujifilm asserts that Sony’s and IBM’s expenditures areneither qualitatively nor
quantitatively significant. Id. at 176-180. 	_
Staff contends that the investments of the Sony subsidiaries are insufficient to satisfy the
economic prong. See SIB at 130-141. Staff argues that the activities of the Sony subsidiaries are
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not the type of expenditures that can satisfy the economic prong in the first instance, but even if
they were, Sony has failed to demonstrate that those expenditures are qualitatively and
quantitatively significant. Id. at 131, 140-141. For example, Staff asserts that SOLA and Sony
DADC’s labeling activities may be a qualifying activity, but that Sony failed to adduce evidence
sufficient to demonstrate that those labeling activities are “significant” within the meaning of
section 337. Id. at 134, 136.
Staff asserts that IBM’s maintenance and research and development expenditures do not
satisfy the economic prong under section 337(a)(3)(B) with respect to the ’774 and ’501 patents,
but do satisfy it with respect to the ’596 patent. Id. at 130, 145-152. Staff finds that IBM’s
expenditures for maintenance and research and development associated with articles protected by
the ’596 patent are quantitatively and qualitatively significant. Id. at 150-151.
Finally, Staff asserts that Sony has failed to demonstrate that lBM’s investments satisfy
the economic prong under section 337(a)(3)(C) because Sony has failed to establish a nexus
between IBM’s research and development expenditures and the patented technology. Id. at 152.
B. A Domestic Industry Does Not Exist Based on Sony Subsidiaries
As to its subsidiaries, Sony asserts that they employ labor and capital in support of the
Sony domestic industry products in the United States, and that these “investments relate to
custom labeling, customer service, warehousing and logistics, distribution, and order
management” falling within the scope of section 337(a)(3)(B). CIB at 166. Iconsider the
economic activity of each subsidiary below.
1. SOLA
SOLA, which is based in Miami, Florida, and has facilities in Park Ridge, New Jersey,
through its Americas Media and Energy Group (“AMEG”), supports Sony’s LTO business in the
United States by performing Warehousing, distribution, labeling, packaging and customer
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support activities. CIB at 167. SOLA employees “track "satesand inventory, maintain supply
chains and distribution channels, process orders, respond to customer complaints, provide
customerservice, and package and label products.” Id. Approximately2 	square feet of
SOLA’s facilities are dedicated to LTOQoperations. Id. (citing CX-0004C at Q/A 108-120; CX
0006C at Q/A 20-25$. Sony explains that the “B2B tape group” within AMEG employs
individuals and is responsible for LTO and other storage products. Id.
Sony argues that SOLA incurred both fixed costs (e.g., wages, expenses from business
trips, rent for office space, and some indirect personnel costs) and variable costs (e.g.,
advertising and promotion, logistics, customer service and warranty, commissions, and royalties)
for the domestic B2B tape business. Id. Afler excluding advertising, promotion, and
commission expenses, Sony estimates that the combined fixed and variable costs for SOLA
including fiscal year 2015 through September of fiscal year 2017 were approximately
— 	Id. at 168(citingCX-0004Cat Q/A 118-121;CX-0006Cat Q/A28-60;CX-0862C;
CDX-0004C at 26; JX-0149C; IX-0150C).
Sony also relies on expenses related to SOLA employee Mr. Charlie Clark. Id. Mr.
Clark “leads a team that interfaces with Sony’s OEM customers and serves as a conduit between
Sony’s development team in Japan and its OEM customers in the United States.” Id. According
to Sony, total investments related to Clark for fiscal year 2015 through September of fiscal
year 2017wereapproximately— 	Id. (citingCX-0004Cat Q/A 135-138;CX-0006Cat
Q/A 83-90; CX-0008C at Q/A 53; CDX-0004C at 27; CX-1097C; CX-1098C).
SOLA’s investments and expenditures are not tracked on a per-product basis. Id.
at 169-170. Sony employed a sales-based method to allocate a portion of SOLA’s investments
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and expenditures to the domestic industry products. Id. The results of that allocation method are
reproduced below:
Percent 	Percent FY 2017 Percent
FY 2015 °f B23 FY 2016 °f B23 (through °f B23
Revenue Tape Revenue Tape September) TapeMedia 	Media 	MediaRevenue
Revenue 	Revenue 	Revenue
LTO-6
OEM
Id. at 170 (citing CX—4Cat Q/A £22-130; CX-6C at Q/A 65-81; CDX-4C at 23-25; JX-135C;
JX-l49C; IX-150C; CX-1225C).
Sony conducted a “unit—baseclallocation” with respect to Clark’s expenses because
hedealswithSony’s	OEM	products	— 	Ia‘.Theresults	ofthatanalysis
are reproduced below: 	l
FY 2017
FY 2015 	FY 2016 	(through 	Total
September)
SOLA’s Investments in i 	i 	i
the ’596 and ’774 Patents
(LTO-4, 5, 6)
SOLA’s Investments in
the ’50l Patent (LTO-5,
6) 	I" 	I 	I 	I. 	I
28According to Sony, SOLA handled a portion of Sony’s OEM sales in the United States for a
portion of fiscal year 2015. Id. (citing CX-6C at Q/A 72-74).
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PUBLIC VERSION 	.
Id. at 170-171 (citing CX-4C at Q/A 131, 140; CDX-4C at 22, 26). Sony contends that Fujifilm
has not challenged the above calculations. Id. at 171.
Fujifilm argues that SOLA impo1'ts‘Sonydomestic industry products from SSMS in Japan
and sells the Sony-branded LTO tape products in the United States, Canada, and Latin America,
and that it does not manufacture LTO tape products in the United States. RIB at 7. Fujifilm also
contends that the expenses attributed to SOLA are overstated and should not be considered
because they include “cost of goods” (a/k/a “COGS”) that were manufactured in Japan. Id. at
151 (citing CX-0004C (Prowse WS) at Q/A 121-123, 129-130; CDX-0004C at 0023-0025; JX
0149C, CX-0862C; JX-0150C; JX-0082C (Taniguchi Dep.) at 85:3-12, 105:6-15).
Fujifilm also disputes that the eirpenses associated with Mr. Clark’s activities can be
properly considered. Id. at 153-154. Fujifilm argues that the evidence of record demonstrates
that “no one at SOLA (including Mr. Clark) designs, researches or develops, manufactures, or
assembles LTO products in the United States.” Id. at 153 (citing JX-0074C (Murai Dep.) at
26:20-29:9). Fujifilm points out that Sony’s expert, Dr. Prowse, testified that Mr. Clark merely
“acts as a liaison to Sony’s OEM customers” and “is a contact person between Sony and its
OEM customers and handles negotiations and other tasks related to implementing Sony’s LTO
business plan in the United States.” Id. (citing CX-0004C (Prowse WS) at Q/A 135). Fujifilm
also points out that Mr. Clark has authored intemal Sony documents stating that “all tapc
development and quality control/failure analysis” is performed in Japan. Id. (citing JX-0140C at
4). Fujifilm	alsoarguesthatMr.Clark’scompensation	consists	of_
_ 	unrelated	toproduct	development.	Id.(citing	Prowse,	Tr.l46:20
148:19; CX-0006C (Murai WS) at Q/A 90; CX-1097C; CX-1098C). Fujifilm reasons that Mr.
Clark performs nothing other than sales and marketing activities. Id. at 154.
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Staff reaches the same general conclusion as Fujifilm. SIB at -132-135. Staff asserts that
Sony’s evidence demonstrates the following SOLA expenses:
Appx. Fixed 	. 	% of Total B2B Total
Year 	Costs ‘ 	Vanable Costs Media Sales Investments
2015 ; i
I 	!|I 	_|Total Fixed & Variable Costs Investments
Id. at 133 (citing CX-0004C at Q/A 131-132). Staff also cites to the expenses Sony identified for
Mr. Clark. Id. at'l33-134 (citing CX-0004C at Q/A 135-138; CX-0006C at Q/A 83-90; CX
0008C at Q/A 53; CDX-0004C at 27; CX-1097C; CX-1098C). Staff concludes, however, that
none of the identified expenses are qualifying investments for purposes of satisfying the
economic prong of the domestic industry requirement. Id. at 134-135.
With respect to SOLA’s expenses, Staff contends that they consist of “tracking sales and
inventory, maintaining supply chains and distribution channels, processing orders, responding to
customer complaints and offering customer service, and packaging and labeling products," and
that SOLA employees do not provide technical support. Ia’.at 134 (citing Prowse, Tr. at l43:14
144:9, 145:3-15). Staff also notes that Sony’s expert.admitted that the warehousing, distribution,
and logistics activities performed by SOLA’s B2B tape group are akin to the activities of an
importer. Id. (citing Prowse, Tr. at 144110-24). Staff concludes that “SOLA’s investments are
the type incurred by any importer, and are therefore not qualifying investments under the Section
337 statute.” Id. (citing Certain Male Prophylactic Devices, Inv. No. 337-TA-546, Comm’n Op.
at 39 (August 1, 2017)). 	' ,
Staff reaches a.similar conclusion regarding Mr. Clark’s activities. Id. at 134-135.
According to Staff, the evidence shows that Mr. Clark performs sales and marketing activities,
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such as “interfacing with Sony’s OEM customers” and “developing Sony’s OEM business in the
United States.” Id. at 134 (citing CX-0006C at Q/A 90; Prowse, Tr. at l46:2(]-l48:19). In this
regard, Staff notes that the vice president of SOLA’s AMEG group (Mr. Murai) testified that a
significant portion of the money Mr. Clark was paid was for
1d. at 135. Staff agrees with Fujifilm that Mr. Clark
performs nothing other than non-qualifying sales and marketing activities. Id.
2. Sony DADC
Sony indicates that Sony DADC’s facilities in New York, New York; Agoura Hills,
California; Terre Haute, Indiana; and Bolingbrook, Illinois, support Sony’s OEM LTO business.
CIB at 171. Sony contends that there are four categories of Sony DADC expenses associated
with the Sony domestic industry products: (1) labor related to management distribution,
packaging, and labeling sen/ices for LTO products; (2) facilities costs associated with activities
involving the Sony domestic industry products; (3) customer service activities associated with
the Sony domestic industry products, including Sony DADC’s Global Platform Service (GPS);
and (4) transportation services associated with the Sony domestic industry products. Id. at 171
174; CX-OO04Cat Q/A 47; CX-0005C at Q/A 7-39.
With respect to labor related to distribution, packaging, and labeling services for LTO
products, Sony contends that Sony DADC receives imported shipments of LTO products from
SSMS in Japan, checks for inventory discrepancies, validates label sequences, visually inspects
products, and ships products to Sony’s OEM customer warehouses or end users. Id. at 171-172.
In addition, Sony DADC employs . full-time employees that apply customer-specific bar codes
to LTO tapes pursuant to customer requirements. Id. Sony argues that this custom labeling is a
“value-added step” and a “critical service” because “[m]any DADC customers view LTO tapes
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as unusable ll1].l€SSthey are labeled.” Id. (citing CX-0004C at Q/A 48-51; CX-000-5C at Q/A 18
37; CX-0008C at Q/A 51-52; IX-0043C at l28:3~l8; JX-0054C at202:211-203:1). . l
Regarding facilities costs associated with activities involving the Sony domestic industry
products, Sony contends that Sony DADC’s domestic indusny activities occur in the
approximately — 	square foot Building F at its Bolingbrook facility, and that
“approximately_ squarefeet of BuildingF is specificallyused for LTO operations,such as
shipping, receiving and storage” and include LTO-dedicated equipment. Id. at 172 (citing CX
0004C at Q/A 54-61; CX-0005C at Q/A 37-46). Sony estimates, based on square footage used,
that rent and fixed costs of BuildingF allocable to LTO products is I percent of the rent and
I percent of the fixed costs. Id. at 172-I73 (citing CX-0004C at Q/A 57-62; CX-0005C at Q/A
40-41; CX-0860C; JX—0l44C).
As to customer service activities associated with the Sony domestic industry products,
including Sony DADC"s GPS, Sony asserts that there are - full-time employees in its GPS
division “who perform customer service, interface with OEM customers, and handle finance
activities related to LTO Products.” Id. at 173 (citing CX-0004C at Q/A 63-72; CX-0005C at
Q/A 9, 48-52). 	V
Finally, regarding transportation services associated with the Sony domestic industry
products, Sony states that “Sony DADC employees deal with LTO-rekated transportation issues
and communicate with FedEx and UPS, for example, regarding LTO shipments.” Id.
Sony identifies the following expenses for the Sony DADC activities set forth above:
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’ 	7 	1
Prior to FY 	FY 2017(through
2015 	FY 2015 FY 2016 September) 	Total
Distribution,
Packaging,	and _
Labeling
BuildingF
GPS 1
Transportation
Total 	LTO
Related 	- 	1_y
Expenditures 	, 	V
Id. (citing CX~0004C at Q/A 52-85 CDX-0004C at 18; C-X-0860C, CX-1223C; JX-0132C; IX
0l43C; JX-0l44C)_ Sony perfonned a further allocation of Sony DADC’s expenses as a
function of the number of units processed by Sony DADC related to the Sony domestic industiy
products:
Percent of
l 2015 Total 2016 Total 2017 l Total
LTO-4
LTO-5
LTO-6
Total Units to U.S.
' Customers
Id. Ell 174 (citing CX-0004C at Q/A 93; CDX-0004C at 17; JX-0132C; IX-0146C). Sony
contends that, based on this allocation, “Sony DADC’s domestic investments in labor and capital
for the SonyDI Productstotaled-’ 	all of whichis attributableto the ’596and ’774
patents,andapproximately_ 	of whichis attributableto the ’501patent. Id. (citing
CX-0004C at Q/A 97-107; CDX-0004C at 16, 18).
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Fujifilm offers several arguments disputing that Sony DADC’s expenses can be utilized
to establish a domestic industry. _As an initial point, Fujifilm contends that none of Sony
DADC’s entities design, engineer, manufacture, assemble, or perform any R&D on any Sony
domestic industry product. RIB at 148 (citing JX-0063C (Buchicchio Dep.) at 5:8-6:7; JX
0062C (Buchicchio Dep.) at 21:2-6, 180:3-13; JX-0074C (Murai Dep.) at 26:20-29:2; JX-0082C
(Taniguchi Dep.) at 3111-15, 65:1-5, 66:3-14). In this regard, Fujifilm points out that the
activities in Bolingbrook consist primarily of “shipping, receiving and storage, including
performing the labeling activities” for imported Sony domestic industry products. Id. (quoting
CX-0004C (Prowse DWS) at Q/A 58). Fujifilm also contends that Sony DADC’s GPS labor
relates only to financial and non-technical customer service. Ia’. at 148-149 (citing JX-0062C
(Buchicchio Dep.) at 75:16-76:1, 102:18-103:4). Given that Sony DADC’s GPS labor does not
relate to product design, development, and manufacture, Fujifilm argues that it is inappropriate to
consider any associated overhead expenditures (e.g_, building rent, utilities, and
telecommunications equipment) in determining Whether a domestic industry has been
established. Id. ' 	'
Fujifilm also argues that Sony has failed to establish how, and to What extent, the
activities performed by Sony DADC add value to the imported domestic industry products. Id.
at 149-150. According to Fujifilm, the only “evidence” of an added value came from Sony’s
economic expert who opined that “meeting customer requests adds value.” Id. (citing CX-0004C
(Prowse WS) at Q/A 275; RX-0585C (Vander Veen WS) at Q/A 163-164). Fujifilm contends
that the lack of evidence showing that Sony DADC’s activities add value to the domestic
industry products further demonstrates that Sony DADC’s overhead expenses should not be
considered as domestic industry investments.
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p Fujifilm also levels several criticisms at the analysis performed by Sony’s economic
eXpe1't,Dr. Prowse. First, Fujifilm argues that Dr. Prowse should not have considered pre-2015
expenses when calculating Sony DADC’s expenses. Id. at 150. Fujifilm contends that Sony did
not manufacture products in the United States between 2011 and 2015, and that expenses dating
from 2011 are too remote to be given weight. Id. (citing CX-0004C (Prowse WS) at Q/A 82-85;
RX-0585C (Vander Veen WS) at Q/A 30-35; Certain Video Game Systems & Controllers, Inv.
No. 337-TA-743, 11)at 169-170 (Nov. 2, 2011)).
Next, Fujifilm asserts that Dr. Prowse’s unit-based allocation improperly “accounted for
all LTO-4, LTO-5 and LTO-6 products that were imported from Japan, despite that DADC only
labels a small subset of them.” Id. at 152 (citing CX-0004C (Prowse WS) at Q/A 88-90, 93, 98;
CDX-0004C at 18). Fujifilm argues that this approach failed to differentiate between “the labor
used to perform labeling operations from labor that is simply used to receive and ship the
imported products.” Id. (citing Prowse, Tr. at 131:2-17, 142:3-18, 143:14-144:2, 145:3-15).
According to Fujifilm this distinction is important because Sony DADC’s activities as to tapes
that are not domestically labeled are no different than the actions of a nonnal importer. Id. In
this regard,Fujifilmnotesthat only between- 	percentof all importeddomesticindustry
products in the last two years were labeled by Sony in the United States.
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Labeledas lPereenloIUn|u Sold
n ms FYam nun mu
no-4 	‘ ' 	‘ '
nos
nos
'iI'f£§6i"i?i""["r"ii'	La as as a um
Id. at 147 (citing J I-0145C; RX-0585C (Vander Veen RWS) at 1/A 60-61). In addition, the
appliedlabelsonly :ost -each. 	Id. at 176(citingJX-0062C(BuchicchioDep.) at 63:18
21).
Finally, Fujifihn argues that Dr. Prowse incorrectly included Sony DADC’s
“transportation services” where those activities merely zonsistedof expenses for employees who
“deal with LTO-re .ated transportation issues and commtmicate with FedEx and L_IPS,for
example, regarding JTO shipments.” Id. at 152-153 (citing CX-00 I4C (Prowse WS) at Q/A 73).
Accordiig to Fujifilm, Dr. Prowse testified that sue . expenditu es are those of an ordinary
importer. Id. (citing Prowse, Tr. at 135111-20, l38:20—140:7, 144114-24).
Staff cites the same financial data cited by Sony and discussed above. Staff concludes,
however, that the ata fails to establish a domestic industry. SIB at 135-140. First, Staff
conclud asthat “[t]h: evidence does not show that the expenses for distribution, packaging, and
labeling are qualitatively or quantitatively significant.” Id. at 136. Staff observes that the Sony
domesti : industry products are not manufactured in the United St ttes and points out that Sony
and its expert chara :te1'izedthis subset of investments as only covering checking for inventory
191

PUBLIC VERSION
discrepancies, validating the correct label sequences, dealing with shipping or distribution issues,
and then shipping the product to Sony’s OEM customers or customer warehouses. Id. In Staff”s
view “[t]here appears to be no activities of the type described in the statute—such as engineering
or research and development-—at all.” Id. Staff reasons that there is nothing qualitatively or
quantitatively significant about the distribution and packaging services, and that they are more
like the activities of an importer. Id. With respect to the labeling activities, Staff observes that
Sony failed to identify the expenses solely related to that activity. Id. at l37 (citing Prowse, Tr.
at l30:ll-l31:17; 132210-133:6). Staff also posits that, to the extent Sony DADC’s labeling
expenses may qualify toward establishing a domestic industry, such expenses are not significant
since the evidence shows that only a small percentage of imported tapes are domestically
labeled. Id. (citing Prowse, Tr. at 130:3-8; JX-0145C; RX-0585C (Vander Veen WS) at Q/A 60
61). t
_ Second, with respect to facilities costs associated with Building F activities at the
Bolingbrook facility, Staff asserts that none of the activities in the Bolingbrook facility involve
the types of activities normally considered as part of a domestic industry. Id. at 138. Rather,
they merely relate to shipping, receiving, storage, and labeling. Id.
Third, as to Sony DADC’s GPS, Staff compares them to SOLA’s distribution, packaging,
and labeling activities, and concludes that these activities “are neither qualitatively nor
quantitatively significant” and “are not the types of investments that typically qualify for
purposes of satisfying the economic prong of the domestic industry requirement.” Id. at 138
1 3 9.
Fourth, Staff concludes that the evidence fails to show that Sony DADC’s transportation
expenses are attributable to the Sony domestic industry products in order to satisfy the economic
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PUBLIC VERSION
prong of the domestic industry requirement. Id. at 139. Staff reasons that the transportation
services are the type usually performed by an ordinary importer. Id.
Staff also agrees with Fujifilm that Sony DADC’s pre-2015 expenses should not count
towards satisfying the economic prong. Id. at 139-140. According to Staff, Sony’s expert
testified that the pre-2015 expenses did not relate to technical support “and that it was not
possible to determine how much of the investments were attributable to the labeling activities
alone.” Id. (citing Prowse, Tr. at 140:8-142118).
3. SSOA
Sony indicates that SSOA includes. employees in Laredo, TX who “provide technical
support and quality assurance work related to Sony’s LTO and other tape products.” CIB at 173
(citing CX-0004C at Q/A 141-159; CX-0006C at Q/A 21-26, 91-96). According to Sony, one of
these employees, Mr. Sasaki, “spends approximately I percent of his time supporting Sony’s
OEM LTO business.”29 Id. Based on this estimation and the fact that Mr. Sasaki works on other
non-DI LTO products, Sony estimates that SSOA’s domestic investments totaled approximately
- 	(fromfiscalyear 2015throughSeptember2017),all of whichis attributableto the ‘596
and ’774 patents and approximately- 	of which is attributableto the ’501 patent. Id.
(citing CX-0004C at Q/A 141-159; CX-0006C at Q/A 91-96; CX-0863C; CX-1099C; CX
1173C; CDX-0004C at 28-29). - 	I _
Fujifilm argues that SSOA’s expenses associated with Mr. Sasaki’s salary do not
establish a domestic industry because the evidence fails to show that he handles technical issues
related to the Sony domestic industry products. RIB at 154. For example, Fujifilm points to the
29Sony does not appear to allocate any expenses for the other SSOA employee, Mr. Nakashima.
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PUBLIC VERSION
fact that only a very small number of calls to SSOA were for complaints regarding the Sony
domestic industry products: 	_
- ~ 	“ r‘¢~ = EV *~ ~ * Calls RelatedtoDomesfic
Year 	Total Calls 	Industry Products
2017 I n/a
2016
2015 	,
Id. (citing RX-0089C; RX-0585C (Vander Veen WS)_at Q/A 100-108). Fujifilm also notes that
Dr. Prowse acknowledged that there was no information available to measure Mr. Sasaki-’s
contributions to the development of Sony’s domestic industry products. Id. (citing Prowse, Tr. at
149116-150:l0). Fujifilm also points to evidence demonstrating that when Mr. Sasaki did
provide technical support he did so from outside of the United States. Id. (citing RX-0090C;
RX—0088C;JX-0080C (Sasaki Dep.) at 12:15-13:25, 23:2-24:2, 6l:l0—62:l, 79:9-17).
Staff relies on the same fmancial data cited by Sony and discussed above. SIB at 140
141. Staff acknowledges that “[t]echnicaI support is ordinarily considered an appropriate
domestic industry expense,” but questions whether Mr. Sasa'ki’s work actually qualifies as
“technical support.” Id. According to Staff, the evidence shows that Mr. Sasaki “provides
customer sales support, such as dealing with discrepancies in price or quantity of tapes sold to
customers” and that when a customer does have a technical problem with a product, Mr. Sasaki
refers them to technicians in Japan. Id. Staff also assertsithat Sony’s expert was unable to
identify any contributions made by Sasaki to the development of Sony’s domestic industry
products. Id. at l4l (citing Prowse, Tr. at l49:l6-l50:l0). Finally, Staff notes that Sony’s
expert did not provide testimony that SSOA’s expenditures on their own are quantitatively and
qualitatively significant. Id. 	.
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PUBLIC VERSION
4. Analysis
The Commission has explained that “[t]he economic prong requirement exists to assure
that domestic production-related activities, as opposed to those of a mere importer, are protected
by the statute.” Certain Male Prophylactic Devices, Inv. No. 337-TA-546, Comm’n Op. at 39
(August 1, 2007). This distinction assesses, in part, the qualitative significance of an investment.
See Certain Printing and Imaging Devices and Components Thereofi Inv. No. 337-TA-690,
Comm’n Op. at 27 (Feb. 17, 2011) (explaining that “the magnitude of the investment cannot be
assessed without consideration of the nature and importance of the complainant’s activities to the
patented products in the context of the marketplace or industry in question”). However, such
“qualitative factors alone are insufficient” to show that an investment is significant or substantial.
Lelo Inc. v. Int’l Trade Comm ’n, 786 F.3d 879, 885 (Fed. Cir. 2015). Rather, section 337(a)(3)
“requires a quantitative analysis to detennine whether there is a ‘significant’ increase or
attribution by virtue of the claimant’s asserted commercial activity in the United States.” Id at
883.
In addition, for purposes of section 337(a)(3), the Commission has determined that the
term “significant” requires “an assessment of the relative importance of the domestic activities.”
Certain Concealed Cabinet Hinges and Mounting Plates, Inv. No. 337-TA-289, Comm’n Op. at
11 (Jan. 8, 1990) (emphasis added); see also Certain Printing and Imaging Devices and
Components Thereof, Inv. 337-TA-690, Comm’n Op. at 27 (Feb. 17, 2011) (explaining that in
assessing significance, “[t]he Commission has also assessed the relative domestic contribution to
the protected article by comparing complainant’s product-related domestic activities to its
product-related foreign activities”). _
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PUBLIC VERSION
Within the above framework, I find that the expenditures of the Sony subsidiaries fail to
establish the economic prong of the domestic industry requirement under section 337(a)(_3)(B)
because they are not qualitatively and quantitatively significant.”
First, I agree with both Fujifilm and Staff that the Sony subsidiaries’ activities regarding
the domestic industry products are largely those of an ordinary importer, and are thus not
quantitatively or qualitatively significant. In making this determination I have considered
whether the Sony subsidiaries perform any significant qualifying activities in the United States
sufficient to elevate them from simply being importers of the Sony domestic industry products.
In this regard, I find that the actions of the Sony subsidiaries do not contribute in any significant
manner to the manufacture of, or an increased value for, the Sony domestic industry products.
For example, the evidence clearly shows that the domestic industry products are fully
manufactured in Japan, and that no further steps are required for them to operate upon arrival in
the “United States. See JX-0063C (Buchicchio Dcp.) at 18:20-19:2. The only additional
“manufacturing” Sony does in the United States is labeling a fraction the imported cartridges.
Sony characterizes this work as “a critical service” because “[m]any DADC customers view
LTO tapes as unusable unless they are labeled.” CIB at 170. The evidence shows, however, that
the labelingactivitiesconsistof addinga- 	labelto onlyapproximately	2 	percentof
the imported Sony domestic industry products. See JX-0062C (Buchicchio Dep.) at 63:18-21;
Prowse, Tr. at 128:15-24. Based on these facts, such labeling activities do not have a sufficiently
significant economic and financial impact to demonstrate the type of significant investment that
is required by the economic prong of the domestic industry requirement.
- 	.
30 Sony does not assert that the expenditures of the Sony subsidiaries satisfy either of section
337(a)(3)(A) or section 337(a)(3)(C). 	' V
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I also note that much of Sony’s argument with respect to labeling is not supported by
record evidence. For instance, Sony does not cite to any evidence of record supporting its
assertion that domestic labeling is “a critical sen/ice” or that any, much less many, of Sony
DADC’s customers considered unlabeled LTO tapes to be unusable-. See CIB at 170. Indeed, it
is unclear from the record how the lack of a la-belmakes an LTO tape functionally unusable.
Instead, Sony’s argument appears to conflate “saleable” with “marketable.” See Certain Male
Prophylactic Devices, Inv. No. 337-TA-546, at 42 (“[T]l1e bulk condoms [are] not useable or
saleable as imported, the lubrication added in the United States is directed to the practice of
certain patent claims. ...”). As noted above, there is no evidence that the imported Sony domestic
industry products cannot be used or sold without domestically added labels. Indeed, there is
evidence to the contrary. See JX-0063C (Buchicchio Dep.) at 18:20-19:2 (indicating that that
Sonydomesticindustryproductsfor_ 	are‘shipped	tmlabeled).Moreover,as
notedabove,the evidenceestablishesthat onlybetween_ 	percentof the Sonydomestic
industry products are domestically labeled. See IX-0145C; RX-0585C (Vander Veen RWS) at
Q/A 60-61. It certainly cannot be the case that the remainder of the imported Sony domestic
industry products are not “saleable” to or ‘i1seable” by consumers.
In addition, to the extent Sony contends that domestic labeling is a. ‘W/alueadded”
activity, Sony has failed to quantify the value actually added from that activity. See Lela, 786
F.3d at 883. This point is particularly significant. given that Sony’s own witness testified that
Sony labels just a “small subset” of the imported domestic’industry products. See RX-0585C
(Vander Veen WS) at Q/A 60. Thus, based on the forgoing, I find that the application of a I
- labelon only approximately- 	per cent of the importedSonydomesticindustry
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PUBLIC VERSION '
products does not constitute a quantitatively or qualitatively significant activity or expense alone,
or in conjunction with, any other activity of the Sony subsidiaries.
The majority of the remaining domestic support activities of the Sony subsidiaries consist
of sales, warehousing, and distribution. These activities do not constitute significant “domestic
production-related activities,” and do not have any meaningful bearing on the practice of the
Sony domestic industry products given that those products are manufactured entirely outside of
the United States. See, e.g., Certain Printing and Imaging Devices and Cornponents Thereof
Inv. 337—TA-690,Com1n’n Op. at 30 (Feb. 17, 2011). I note particularly that the evidence fails
to show that Mr. Clark performs anything other than sales and marketing activities. See CX
0006C at Q/A 90; Prowse, Tr. at 146120-148:19; CX-0004C (Prowse WS) at Q/A 135; IX
0140C; CX-0006C (Murai WS) at Q/A 90; CX-1097C; CX-1098C.
' Finally, Sony offered evidence that Mr. Sasaki provides technical support to purchasers
of Sony’s domestic industry products. See CIB at 173 (citing CX-0004C at Q/A 141-159; CX
0006C at Q/A 91-96; CX-0863C; CX-1099C; CX-1173C; CDX-4C at 28-29). Providing
technical support constitutes an activity that can be credited toward satisfying the economic
prong. The evidence shows, however, that when Mr. Sasaki provided technical support that he
did so from outside of the United States. See RX-0090C; RX-0088C; JX-0080C (Sasaki Dep.) at
l2:15-13:25, 23:2-24:2, 61:10-62:1, 79:9-17. The evidence also shows that SSOA fielded very
few calls related to the domestic industry products:
Year Tota! Calls glaéfstgelllfgictg fnomesfic Percent
2017 n/a
2016
2015
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PUBDLICVERSION
See RX-0089C; RX-0585C (Vauder Veen WS) at Q/A 100-108. As can be gleaned fiom the
above data, of the - calls to SSOA during 2015 and 2016, only — percent related to the Sony
domestic industry products. Moreover, no evidence has been cited establishing that any of those
I calls related to a technical issue. Thus, while it may be the case that Mr. Sasaki provided
some domestic technical support regarding the Sony domestic industry products, the evidence
fails to demonstrate that the expenditures associated with his doing so were qualitatively or
quantitatively significant. 	l
In view of the foregoing, I find that the expenditures of the Sony subsidiaries are
quantitatively and qualitatively insignificant and therefore fail to satisfy, alone or in conjunction
with the IBM expenses (discussed below), the economic prong of the domestic industry
requirement under section 33'/(a)(3)(B).
C. A Domestic Industry Exists Relating to IBM 3592 Products
1. The Sony-IBM License. ;
Sony and IBM have entered into two cross-license agreements relevant to this
investigation. The first is dated March 30, -. CX-1058C. The second is dated March 25,
-. CX-1044C. The two licenses are identical in all respectsrelevant to this investigationand
therefore will be referred to as the “Sony-IBM license." See CX-1058C, CX-1044C; CIB at 174
n. 49; SIB at 141. According to Sony, IBM is a licensee of the Asseited Patents and the
economic prong of the domestic industry requirement is satisfied based on IBM’s expenditures
relating to the IBM 3592 products. CIB at 9-10, 174. Staff agrees. SIB at 141. Fujifihn
contends that the Sony-IBM license is defective and does not cover certain IBM 3592 products.
RIB at 178-179. Accordingly, Fujifihn asserts Sony cannot rely on expenditures related to IBM
3592 products to support its domestic industry claim. 	‘
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PUBLIC VERSION
The dispute regarding the Sony-IBM license concerns three sections of the license. First,
- 	of the licensegrantsIBMa licenseto 	CX-1044Cat 6.
5'=<=°*1d»	: 	grams IBM the fight to
_ 	Id.Theparties	callthisthe‘— 	provision.	Finally,	- 	states	that
‘hm ‘he
_Irl. 	(emphasisadded). The sourceof the disputearisesfromthis last section: Whyis
therea reference	totheclaimsof— 	ina section	concerning	thelightto
Sonycontendsthat — 	grantsIBM licenseunderthe AssertedPatents—
—. 	CIBat 175.Staffagrees.SIBat 142-143.	Sonyfurther	assertsthat
allows IBM 	including the 3592 and LTO products
at issue. CIB at 175, 178. Sony argues that, when read in the context of 	the
subsequent recitation in
— 	isacleartypographical	error.Id.at179(citing	CX-1058	at15-16).
According to Sony, any other conclusion is nonsensical and inconsistent with the intent of Sony
and IBM because “Sony has no reason to condition a license to infringe Sony’s patents on
simultaneous infringement of IBM’s patents” and “IBM likewise has no reason to bargain for a
license from Sony that only covers products simultaneously covered by IBM’s own patents.”
Id.; see also CX-1230C; CX-1046C; CX-1047C; CX-0007C at Q/A 71, 85. Staff agrees. SIB at
143. Given their mutual understanding of the operation of the license agreements, Sony and
IBM agree that the licensed products include: “(i) IBM 3592 tape products: JA; JB; JC; ID; JJ;
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PUBLIC VERSION
JK; JL; JR; JW; JX; and JY; and (ii) IBM LTO tape products LTO-1, LTO-2, LTO-3, LTO-4,
LTO-5, LTO-6, and LTO-7” and 3592 tape drives. CX-1046C.
Fujifilm disagrees that Sony can rely on IBM’s 3592 tapes and 3592 tape drive products
to establish the economic prong of the domestic industry requirement. RIB at 156. Fujifilm
argues that the Sony-IBM license——aswritten—does not cover IBM’s 3592 tapes, and therefore
prevents Sony from relying on IBM’s 3592 tapes to establish the economic prong. Id. at 156
166.According	toFujifilm,	: 	oftheSony-IBM	license	allows	IBMto—
covered 3592 tapes but not to have 3592 tapes 	Id. at 159. In Fujifilm’s view,
the_ 	rightsareaddressed	separately	andexclusively	in- 	ofthelicense.Id.at
159-160.	Fujifilm	contends	that	- 	further	limits	IBM’s	—
M 	Putting	it	an	wgeth-i	Wm
that the only productsIBM can have others make are productsthat practice the claims of
that IBM has cross-licensed to Sony under the
agreement. RIB at 160-162; see CX-1058C at 15, 16. Thus, Fujifilm contends that Sony must
demonstrateuthat the IBM 3592 tapes 	before it may assert that
the IBM 3592 tapes are licensed domestic industry products. Id. at 162; see id. at 8 (citing RX
0005C(VanderVeenWS)at Q/A27). Fujifilmarguesthatthereferenceto_
— 	hasa validbusinesspurposeandis nota typographical	error. Fujifilm
further argues that even if the reference to IBM is an error, it was not timely corrected so as to be
applicable in this investigation. Id. at 156-162.
_ Staff contends that the Sony-IBM license covers the IBM 3592 family of products by
of	the	—	gm	to	IBM	M
— 	SIBat142.Staffcontends	that! 	applies	regardless	ofwhodesigns	or
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PUBLIC VERSION
manufactures products for IBM, and that such an interpretation is consistent with the
understanding of Sony and IBM. Id. (citing CX-1046C; CX-1047C; Cyrix Corp. v. Intel C0rp.,
77F.3d1381,1384-s7(Fed.cir. 1996)).Withrespectto—,‘ 	Staffassertsthat
the evidencedemonstratesthat- 	includesa typographicalerrorthat as written“doesnot
make much sense and does not grant anything to IBM.” Id. at 143-144 (citing CX-1230C). Staff
contendsthat the typographicalerror in- 	createsan “ambiguity”leadingto an “absurd
result where IBM gains nothing from a cross-license.” Id. at 144-145. Because the Sony-IBM
license is governed by New York law, Staff asserts that the Sony-IBM license should be
interpretedto carryoutthe intentionof theparties,andthat- 	shouldbe readas referring
” 	Id	at	145	(citing	CX-123
I414 APF, LLC v. Deer Stags, Ina, 834 N.Y.S. 2d 133, 135 (lst Dept. 2007)).
In evaluating Sony’s domestic industry assertions based on lBM’s activities, I begin with
the language of the statute. Section 337 requires that an industry in the United States exist, or be
in the process of being established, with respect to the articles protected by a patent. See 19
U.S.C. § l337(a)(2). The statute also requires certain types of investments in the United States
with respect to such articles. See 19 U.S.C. § 1337(a)(3). Articles protected by the patent
include those articles that practice the claims of the patent under authorization from the patent
owner. See Certain Electronic Imaging Devices, Inv. No. 337-TA-850, Comm’n Op. at 92-95.
(April 21, 2014). Because the test for determining whether an article is protected by the patent
“is essentially same asthat for infringement,” the Patent Act infonns the issue. See Alloc, Inc. v.
Int’l Trade Comm ’n, 342 F.3d 1361, 1375 (Fed. Cir. 2003). In this regard, the Patent Act
describes infringement as action by those who make and use the invention “without authority.”
14. §27l(a).
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PUBLIC VERSION
Notably, the Patent Act does not state that authority to practice a patented invention must
be granted in writing. See Waymark Corp. v. Porta Systerris C0rp., 334 F.3d 1358, 1364 (Fed.
Cir. 2003) (“Only assignments need be in writing under 35 U.S.C. § 261. Licenses may be
oral.”). While a written contract or license may provide evidence of permission to practice a
patented invention, such writing are not the only acceptable form of evidence. Thus, the
question before me is Whether there is adequate evidence in the record establishing that IBM is
practicing the Asserted Patents with Sony’s permission. Sufficient evidence of authorization
from Sony for IBM to practice the patent claims, even if not reduced to writing, can suffice to
bring the IBM 3592 tape products within the umbrella of domestic industry products upon which
Sony may rely.
Here, the evidence shows that since at least as early as 2010, IBM has had Sony’s
authorization to manufacture articles and/or have articles manufactured on IBM’s behalf that are
both protected by the Asserted Patents and that would otherwise be subject to a claim of
infringement but for‘Sony’s authorization. For example,"by letter dated August 21, 2017, Sony
and IBM memorialized that both parties have been operating with the mutual understanding that
ofboththe— 	licenses	grantIBMtherightto
See CX-1230C at 1. Similarly, by letters dated October 25, 2017, and
November 9, 2017, Sony and IBM again confirmedthat - 	of the licenses allows IBM to
theIBM3592productsandthat:
allows IBM to 	See
CX-1046C and CX-1047C. Sony also provided testimony from Mr. Hiroshi Kamitani, a
participant in the license negotiations between Sony and IBM, explaining that the letters
exchanged between Sony and IBM were intended to confirm “the understanding of the
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PUBLIC VERSION
agreement that Sony and IBM have had all along with respect to the language of the agreement.”
cx-00070 at Q/A ss. Mr. Kamitanifurthertestifiedthat- 	of the Sony-IBMlicense(the
— 	section)was alwaysintendedto allowIBMto
—. 	Id.atQ/A	90-95. 	I
The evidence of record establishes that the IBM 3592 products are manufactured with
authority from Sony, regardless of whether the Sony-IBM license fully and accurately reflects
that intention. I conclude, therefore, that Sony can rely on lBM’s 3592 products as domestic
industry products.
Alternatively, to the extent I-am required to interpret the Sony-IBM license to determine
whether it covers IBM 3592 tape products, I find that it does. The Sony-IBM license is governed
by New York law. See CX-1058C at 42_-43;see also CIB at 3, 176; RIB at 158; SIB at 144.
Under New York law, “courts may as a matter of interpretation carry out the intention of a
contract by transposing, rejecting, or supplying words to make the meaning of _thecontract more
clear” when “some absurdity has been identified or the contract would otherwise be
unenforceable either in whole or in part.” Wallace v. 600 Partners, 634 N.Y.S.2d 669, 717
(1995). _
Here, there is no credible evidence or. explanation as to why Sony and IBM would have
entered	intoa contract	inwhichIBMlicensed	itselfto— 	practice	itsown
patents. Although Fujifilm offers a theory explaining how the Sony-IBM licenses could be
interpreted as written, that theory does not square with the weight of the evidence of record. See
RIB at 161. As explained above, Sony has offered evidence regarding Sony’s and IBM’s
intentions when they entered into the license agreements, and Sony has also provided evidence
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PUBLIC VERSION
demonstrating that Sony and IBM have acted in accord with that mutual understanding. See CX
1230C at 1; CX-1046C; CX-1047C; CX-0007C at Q/A 85, 90-95.
The mostlylikelyexplanationhere is that there is a mistakein‘ 	of the license. See,
e.g., Ross v. Shearman, 95 A.D.3d 1100, 1101 (2d Dep’t 2012) (holding that a contract providing
for payment of a losing party’s attorney’s fees was absurd and reading the contract to require
payment of the prevailing party’s attorney’s fees). Therefore, I find that a New York court
would interpret the Sony-IBM license to include products
that are covered by the licensed Sony’s patents regardless of whether those products also practice
IBM patents. For this additional reason, I find that Sony can rely on domestic investments
related to IBM 3592 products when proving a domestic industly.
2. Issues unique to the ’774 and ’501 patents.
As discussed above, Fujifilm and Staff disagree with Sony as to whether IBM’s
maintenance and research and development expenditures can be relied upon to satisfy the
economic prong tmder sections 337(a)(3)(B) or (C) with respect to the ’774 and ’501 patents. "
Fujifilm asserts that the domestic industry for the ’774 and ’50l patents extends at most
to expenditures relating to IBM 3592 tape cartridges and cannot include expenditures relating to
IBM 3592 tape drives. Fujifilm contends that the ’774 and ’501 patent claims are directed to
tape media and that tape drives are not articles protected by the patents. RIB at 167 (citing
Certain Video Game Systems & Wireless Controllers, Inv. No. 337-TA-770, Comm’n Op. at 66
(Oct. 28, 2013)). In support of its position, Fujifilm asserts that magnetic tape cartridges are a
separate article of commerce from tapedrives, and therefore Sony’s ability to rely on IBM’s
expenditures beyond those tape cartridges is limited. la’. at 167-168 (citing Modular Structural
Systems, Com1n’n Op. at 12-13; Cell Culture Microcarriers, Comm’n Action and Order at 37;
Certain Concealed Cabinet Hinges & Mounting Plates, Inv. No. 337-TA-289, ID, 1989 WL
205

PUBLIC VERSION
608804, at *55, *l47 (Sep. 28, 1989)); see id. at 144. Pujifilm argues that it does not matter that
IBM 3592 tapes and 3592 drives are designed to be used together. Id. (citing Modular Structural
Systems, Comm’n Op. at 37; Cell Culture Microcarriers, Comrn’n Action and Order at 37;
Concealed Cabinet Hinges, 1989 WL 608804, at *55, *15O). Fujifilm further argues that the
domestic industry is limited to the article of commerce in which a patented component is
physically incorporated. Id. (citing Personal Computers, Comm’n Op. at 41; Certain Double
Sided Floppy Disk Drives & Components Thereofi Inv. No. 337-TA-215, USITC Pub. 1860, ID
at 56 (May 1986); Certain Kinesiotherapy Devices & Components Thereof, Inv. No. 337-TA
823, Comm’n Op. at 35 (Jul. 12, 2013); Integrated Circuit Chips, Comm’n Op. at 48). Fujifilm
also asserts that the media of the ’774 and ’501 patents can be utilized in non-3592 drives. See
id. at 169-172. Finally, Fujifilm contends that IBM’s expenditures for maintenance and research
and development can only be attributed to 3592 tape drives, and not 3592 tape cassettes or
media. Id. at 173 (citing CX-0004C (Prowse WS) at Q/A 167; RX-0585CX (Vander Veen WS)
at Q/A 122, 124-127). _ I
Staff comes to the same conclusion as Fujifilm. SIB at 145-148. Staff reasons that
because the ’774 and ’5Ol patents claim tape media the articles protected by the patents “at most
extend to tape cartridges, but do not properly extend to tape drive products.” Id. at 146. In this
regard, Staff asserts that Sony’s expert failed to allocate IBM’s expenditures only to 3592 tapes,
and the evidence of record demonstrates that the majority of IBM’s investments were directed to
tape drives, not tape cartridges. Id. at 147 (citing Tr. at 152115-22; RX-0585C at Q/A 126, 127
(citing‘JX-0034C at 90-93; JX-0046C at 108; JX-0028C at 121-125; IX-0037C at 25-27; RX
0454C at 4018; CX-0721C_)). <
206

~ PUBLIC VERSION 	.
_ I return again to the Words of the statute. In section 337 investigations,‘the domestic
industry is defined by “articles protected by the patent.” See 19 U.S.C. § 1337(a)(2)-(3). I have
already determined that the IBM 3592 tapes practice the claims of the ’774 and ’50l patents.
Thus, IBM 3592 tape cartridges are articles protected by the ’774 and ’501 patents. See Alloc,
342 F.3d at 1375.
But that determination is not the end of the question. “The Commission has held that in
certain circumstances, the realities of the marketplace require a modification of the principle that
the domestic industry is defined by the patented article.” Video Game Systems & Wireless
Controllers & Components Thereofl Inv. No. 337-TA-770, Comm’n Op. at 66 (Oct. 28, 2013)
(citing Certain Modular Structural Systems, Inv. No. 337-TA-164, Comm’n Op. at 12 (June
1984).) Thus, I must determine whether the realities of the marketplace for IBM 3592 tapes
indicate that the domestic industry includes investments beyond those directly related to the
patented article. l find that the realities of the marketplace require further analysis in this
investigation.
Sony’s arguments in this regard are similar to those set forth, but ultimately rejected, in
Certain Modular Structural Systems. Inv. No. 337-TA-164, Comm’n Op., 0084 WL 951886
(June 1984). Specifically, Sony contends that the IBM 3592 tapes and 3592 tape drives form a
system despite the fact that neither the ’774 patent nor the ’501 patent is directed to a system.“
CIB at 182. However, Certain Modular Structural Systems is not the only investigation in which
the Commission has addressed this issue. In other investigations, the Commission has explained
3'. Sony also argues that the 3592 tapes and 3592 drives are critical to one another given that
they cannot operate independent of one another. CIB at 181-182 (citing Prowse, Tr. at 166:2-4;
CX-1304C at Q/A 20, 147).
207

PUBLIC VERSION - 	.
that additional components beyond the patented articles can be considered in the domestic
industry analysis where those additional products enable exploitation of the claimed subject
matter. See, e.g., Video Game Systems, Inv. No. 337-TA-770, Comnfn Op. at 68 and 70. An
“important” factor in making that determination is whether the alleged domestic activities “have
a direct relationship to exploitation of the patented technology.” Id. at 67. Activities “far
removed from the technology protected by the patent” should not be included._ Id.; see also
Certain Integrated Circuit Chips and Pr0ducts'C0ntaining The Same, Inv. No. 337-TA-859,
Comm’n Op. at 36 (Aug. 22, 2014).
Although it is possible to exploit the ’774 and ’501 patents through all manner of tapes,
including LTO and other formats, it is not possible to exploit IBM 3592 tape cassettes—artic1es
protected by the patent—without an IBM 3592 drive. It is undisputed that IBM 3592 tapes can
only be used in an IBM 3592 drive. Thus, the reality of the marketplace developed around the
IBM 3592 family of products is that IBM 3592 tape drives are necessary to use IBM 3592 tapes
and vice versa.
The IBM 3592 products present a situation quite similar to that in Video Game Systems.
In that investigation, the Commission found that the domestic industry products included some
non-patented components “which enable [Complainant] to exploit the technology of the claimed
toy wands.” Inv. No. 337-TA-770, Comm’n Op. at 68. The vvandscould not be exploited absent
certain electronic receivers and software of the devices they attached to. Id. at 70. The situation
here is similar. Participants in the memory tape marketplace do not purchase an IBM 3592
memory storage tape if they cannot write or read data from it. And data carmot be written or
retrieved from an IBM 3592 tape without an IBM 3592 drive. Thus, the evidence of record
shows that the “realities of the marketplace” dictate that the IBM 3592 tapes protected by the
208

PUBLIC VERSION 	.
’774 and ’50l patents cannot be “exploited” absent their use in conjunction with [BM 3592 tape
drives that do not themselves practice the ’774 and ’501 patent claims. Accordingly, in
considering whether the economic prong has been satisfied for the ’774 and ’501 patents, I find
that the unique facts of this investigation indicate that expenditures associated with IBM 3592
tapes and IBM 3592 tape drives should be considered. 	'
3. Employment of labor and capital for research and development
relating to articles protected by all asserted patents under section
337(fl)(3)(B)
Sony asserts that it has satisfied the economic prong of the domestic industry requirement
under section 337(a)(3)(B) because “IBM has made significant investments in labor and capital
for maintenance operations and development and commercialization work related to its licensed
3.592 tape and drive products.” CIB at 180-181; see id. at 9-10, 146, 166, 174, 186-187. Sony
ascribes— 	in expensesfor laborassociatedwithmaintenanceandoperationsforthe
3592 family of products between 2014 and September 2017. la’. at 183 (citing CX-0004C at Q/A
176-178;CX-0718C;CX-1304Cat Q/A 167). Sonyalsoascribes— 	in expensesfor
labor associated with research and development for the IBM 3592 family of products since 2012.
Ia’. at 185 (citing CX-0004C at Q/A 210-215; CX-0870C; CX-1304C at Q/A l45). Sony
allocated these expenditures to each Asserted Patent as fo1lows:32
32Sony offered two sales-based allocations for IBM’s investments in maintenance operations.
See CX-0004C at Q/A 177-206.
209

PUBLIC VERSION
Allocation Method 1 Allocation Method 2 	Research and
Maintenance 	Maintenance 	5
operafionsgg 	_ .. =4 	Development’
Id. at 183-184, 186; see also CX-0004C at Q/A 196, 205.
Sony indicates that the labor and maintenance operations allocated to the IBM 3592
products include direct labor costs (zT.e.,account. management, project management, and on—site
maintenance) and indirect labor costs (i.e., infiastructure support, IT, management staff, and
maintenance teclmicians). See CIB at 182-l83. According to Sony, “IBM employed
approximately - full-time equivalents in 2014 for on—sitedirect labor.” Id.
Sony asserts that IBM’s research and development activities for the 3592 products occur
primarily in Tucson, Arizona and Almaden, California. Id. at l84 (citing CX-1304C at Q/A 87).
According to Sony, the Tucson facility utilizes approximately — percent of the space in two
buildings and houses — people (I percent of whom are engineers)’devoted to the development,
testing, and support of 3592 products. Id. (citing CX-1304C at Q/A 88,.90, 93-95; CX-0004C at
Q/A/ 209). The Ahnaden facility includes a pilot line for developing and testing manufacturing
processes and prototype 3592 tape systems. Id. (citing CX-0004C at Q/A/ 209). The
employees at the Almaden facility devote approximately I percent of their time to development
work related to 3592 products. Id. (citing CX-1304C at Q/A 125-129; CX-0004C at Q/A 209).
33Estimated from fiscal year 2014 through September of fiscal 2017. See CX-0004C at Q/A
E96.
34Estimated from fiscal year 2014 through September of fiscal year 2017 based upon North
Arnefican revenue. See CX-0004C at Q/A 205.
35Estimated from fiscal year 2012 to September of fiscal year 2017. See CX-0004C at Q/A 205.
210

PUBLIC VERSION
According to Sony, IBM does not track its research and development expenditures for each
different 3592 system (i.e., TSl 120, TSll30, TS1140, TS! I50, and TSI I55), but IBM was able
to provide an estimate of expenditures devoted to each system between 2012 and 2016:
_l-i.0.'1¥7I 	-TOT1'~3-	-i.fT1§1-12f0.'1Y5-	I'0.'1'.6-;
TS1120/TS1130 I
rs1140 	I 	ITS1150 	I	TS115S
Id. at 185 (citing CX-0004C at Q/A 2l7-218; CDX-0004C at 33; CX-1304C at Q/A 147-154).
Fujifilm argues that IBM’s expenditures relate to tape drives and cannot be considered to
support a domestic industry in tape media practicing the claims of the ’774 and ’501 patents, as
discussed above. See RIB at 173. As to the ’596 patent, Fujifihn contends that Sony camiot rely
on IBM’s tape and drive investments because the Sony-IBM license does not cover the 3592
family of products. Id. at l74. Fujifihn also contends that IBM’s research and development
expenses can only be properly credited under section 337(a)(3)(C), not subparagraph (B), and
that Sony has failed to demonstrate the nexus between IBM’s research and development
expenditures and the patented technology required rmder section 337(a)(3)(C). Id. at 174-175.
In assessing IBM*s 3592 expenditures, Staff concludes that IBM’s maintenance and
research and development expenditures do not satisfy the economic prong under section
337(a)(3)(B) with respect to the ’774 and ’50l patents, as discussed above, but do satisfy
subparagraph (B) with respect to the ’596 patent. Id. at 130, 145-I52. Staff contends that the
’596 patent claims a tape drive apparatus as well as a tape cassette. RRB at 39. Staff reasons
that IBM’s investments related to the 3592 tape drives therefore relate to articles protected by the
’596 patent. Id. For example, Staff observes that “the evidence shows that IBM invested at least
— 	andpossibly	_ 	inlaborandcapital	formaintenance”	forarticles
Z11

PUBLIC VERSION u
covered by ’596 patent.36 RIB at 148 (citing cx-0004c at Q/A 199-205; cox-0004c at 31; 36;
IX-0125C; CX—0718C; CX-1095C; CX-1101; CX-1190;_ CX-1729). Staff also points) to
evidenceof recorddemonstratingthat IBM invested_ 	relatedto the articles
protected by the ’596 patent. Id. at 151 (citing CX-0004C at Q/A 199-205; CDX-0004C at 33,
35, 36; JX-0125C; CX-0718C; CX-1095C; CX-1101; CX-1190; CX-1729). Thus, Staff submits
that 1BM’s expenditures for maintenance and research and development associated with articles
protected by the ’596 patent are quantitatively and qualitatively significant. Id. at 150-151.
5
My previous determinations have resolved many of these issues. As discussed above, I
have determined that the maintenance and research and development expenditures associated
,Withthe IBM 3592 tapes and 3592 tape drives should be considered when determining Whether
the economic prong has been satisfied for the ’774 and ’501 patents. I have also rejected
Fujifilm’s contention that the IBM 3592 products are not authorized by Sony.
The remaining issue is Fujifilm’s contention that research and development expenses are
the exclusive province of subsection (C), and cannot be considered under subsection (B). The
Commission has repeatedly—and again recent1y—made clear that labor expense associated with
research and development can be used to satisfy the economic prong under section (B).
Particularly, in Certain Robotic Vacuum Cleaning Devices, Inv. No. 337-TA-1057, Comm’n Op.
at 11 (August -1, 2018), the Commission noted that it “hasrejected the legal theory that labor
costs from research and development can only be considered under subparagraph (C).” The
Commission explained that this has been the case since the passage of the 1988 Omnibus Trade
and Competitiveness Act that codified sections (A) and (B) and added subsection (C). Id. at 12
36Based upon the two different sales-based allocations Sony offered for IBM’s investments in
maintenance operations. See SIB at 149.
212

t
PUBLIC VERSION
(“Since the 1988 Act, the Commission has permitted expenditures on plant and equipment and
labor and capital employed in engineering and research and development activities to support a
domestic industry under subsections (A) and (B), so long as the asseited expenditures satisfy the
plain language of the statutory text”). This position is consistent with a number of prior
Commission decisions. 	. p
For example, in Certain Ground Fault Current Interrupters, the Commission permitted
research and development expenses to be considered under subsection (B). lnv. No. 337-TA
739, Comm’n Op. at 80 (June ll, 2012). In doing so, the Commission explained that “Leviton
presented domestic industry evidence organized according to ‘articles protected by the patent’
when evaluating plant, equipment, labor, and capital expenses,” that Leviton GFCIs were articles
that practiced the asserted patents, and that “virtually all research and development of the
Leviton GFCls occurs in the United States.” Id. at 78-80.
Citing Certain Ground Fault Current Interrupters, the Commission arrived at a similar
conclusion in Certain Electronic Imaging Devices, lnv. No. 337-TA-850, Comn1’n Op. at 92-95.
(April 21, 2014). In fact, the Commission addressed this issue directly. Id. at 92-93 (“In other
words, Respondents essentially argued that Apple’s research and development investments
should be considered under subsection 337(a)(3)(C) and not under subsection 337(a)(3)(B). The
Commission has made no such requirement in the past”). For example, the Commission
indicated that expenses for labor and capital for research and development could be considered
under subsection (B) where “Flashpoint provided individual head counts for Apple engineers
Working on research and development for the iPhone 4S and iPhone 5 in the United States.” Id.
at 93.
213

PUBLIC VERSION »
The Commission also credited research and development Work under subsection (B) in
Certain Marine Sonar Imaging Devices, Including Downscan and Sidescan Devices, Products
Containing the Same and Components Thereofi Inv. No. 337-TA-921, Comm’n Op. at 54, 64
(Jan. 6, 2016). In that case, the Commission found that Navico’s expenditures from 2009 to
2014 of a confidential amount in the domestic design, development, service, repair, and support
of the LSS-1 products constitute a significant employment of labor and capital under section
337(a)(3)(B). In doing so, the Commission again cited evidence of record indicating that “the
research and development [was] performed on products practicing each of the asserted patents,
[that] resulted in the creation of a new products category that consumers found valuable,” and
expressly noted that “[t]he record also shows that Navico conducts the vast majority of its
research and development in the United States.” Id. at 63-64.
As can be seen, the Commission has consistently allowed research and development
expenses to be included under subsection (B). In some instances, certain research and
development expenses may even qualify as both an investment in a domestic industry product
under subsection (B) and an investment in a patent covering that product under subsection (C).
See, e.g., Certain Electronic Imaging Devices, Inv. No. 337-TA-850, Comm’n Op. at 95-96.
(affirming the ALJ’s finding “that Apple and Motorola made substantial investments in research
and development under subsection 337(a)(3)(C) based on the same facts on which he based his
finding under subsection 337(a)(3)(B)”); see also Certain Integrated Circuit Chips, Inv. No.
337-TA-859, Comm’n Op. at 42 (“Our caselaw demonstrates that a complainanfs evidence of its
investment in a protected article that practices the patent ordinarily also can support the inference
that the investment was itself an exploitation of the patent”).
214

PUBLIC VERSION
Consistent with the iprecedent reviewed above, I find that 1BM’s research and
development investments can be considered under subsection (B) in order to establish the
economic prong of the domestic industry requirement. 	‘
In sum, I find that all of the maintenance and research and development expenditures
associated with the IBM 3592 products relied upon by Sony shall be considered in determining
whether the economic prong of the domestic industry requirement has been satisfied under
section 337(a)(3)(B).
4. Research and development investments relating to articles protected
by all asserted patents under section 337(a)(3)(C).
Sony also argues that IBM‘s expenditures for labor and capital associated with research
and development of 3592 tapes and drives satisfies the domestic industry requirement under
section 337(a)(3)(C). CIB at I86. Sony contends that atnexus exists between the IBM 3592
products and the technology of the Asserted Patents. Id. In particular, Sony argues that the ’50l
patent is directed to “increased track density and increased performance when media is used with
a drive,” that the ’596 patent enables “increased reliability and security and improves the
interoperation of the cartridge memory, tape media, and drive,” and that the ’774 patent provides
improvements in signal strength and performance. Id. (citing CX-OOOICat Q/A 221-224; CX
0003C at Q/A 74-76, 98-101; CX-0002C at Q/A 60). 	I
Fujifihn and Staff contend that Sony has failed to demonstrate a.nexus between the IBM
expenditures and the patented technology, and thus Sony cannot establish the economic prong
under section (C). RIB at 174-175; SIB at 152. 	~
For the reasons set forth-above, I have determined that research and development
expenditures associated with the IBM 3592 tapes and 3592 tape drives constitute domestic
industry products with respect to the Asserted Patents. That determination includes findings that
' 215

PUBLIC VERSION 	.
(i) 3592 tapes and drives are aiticles practicing the ’596 patent and (ii) 3592 tape drives are
necessary to exploit 3592 tapes practicing the ’774 and ’501 patents. See Certain Integrated
Circuit Chips, No. 337-TA-859, Comn1’n Op. at 36 and Video Game Sfvstems,Inv. No. 337-TA
770, Comm’n Op. at 68). With that in mind, Commission precedent “demonstrates that a
complainant’s evidence of its investment in a protected article that practices the patent ordinarily
also can support the inference that the investment was itself an exploitation of the patent.”
Certain Integrated Circuit Cl1ips,Inv. No. 337-TA-859, Comm’n Op. at 42. Thus, the question
is whether that “ordinary inference” applies here, where the domestic industry products-at least
for some of the patents (i.e., the ’774 and ’50l patents)—include non-patented articles (and their
associated research and development expenses) necessary to “exploit” the asserted patents.
Given that I have determined that investments relating to the 3592 tape drives should be
considered when evaluating the domestic industry relevant to all of the Asserted Patents, it
follows that investments associated with the research and development of those tape drives are
an “investment [that is] itself an exploitation of the patent." Therefore, I find that IBM’s
research and development investments can be considered under subsection (C) in order to
establish the economic prong of the domestic industry requirement.
5. The significance of IBM’s investments. 	_
Sony argues that IBM’s expenditures associated with the 3592 products are quantitatively
and qualitatively significant and substantial. In’.at 187-191. For example, Sony points to IBM’s
3592 research and development expenses:
— 	I}59.6lRat‘ent-	E'50'1IBa"te'-ntI	BZBIBEI
IBM’s R&D Investments
Id. at 188(citing cx-0004c at Q/A 235).
216

PUBLIC VERSION
Sony further asserts that the quantitative significance of IBM’s expenditures is
demonstrated when compared to North American sales revenue:
A 	1 ’596 Patent ’501 Patent ’774 Patent p
IBM’s Maintenance Investments
_(2014 -- Complaint)
Sales Revenue in Practicing
Tape Products
DI as a Percentage of Revenue
‘S96 Patent ’501 Patent "774 Patent 3
IBM’s 	Development
Investments (2014 - Complaint) ;_
Sales Revenue in Practicing
Tape and Drive Products
DI as a Percentage of Revenue
Id. at 189 (citing CX-0004C at Q/A 197-205, 220-221; CDX-0004C at 31, 33, 35, 36; CX
0718C; CX—0870C;JX-0125C).
Finally, Sony asserts that IBM’s domestic industry product expenditrues are qualitatively
significant within the U.S. marketplace. Id. Among other things, Sony cites to the importance of
IBM’s expenditures as a function of initially creating and now maintaining the 3592 line of
products. Id. at 190-191 (citing CX-0004C at Q/A 283-287; CX-0008C at 63-64; CX-1304C at
Q/A 120-122, 166; IX-0046C at 23:12-30: 1, 60:6-22; CX-I729; RX-0450 at 21).
Fujifilm argues that IBM 3592 expenditures lack significance because Sony failed to
demonstrate that those expenditures added any value to the IBM 3592 products. Ia’. at 179.
Fujifilm points out that this lack of significance is further demonstrated by the fact that IBM’s
revenue and expenses associated with the 3592 products constitutes only a very small portion of
IBM’s overall revenue and expenses. Id.
Staff finds that IBM’s expenditures for maintenance and research and development
associated with articles protected by the ’596 patent are quantitatively and qualitatively
217

- PUBLIC VERSION
significant.37 Id. at 150-151. For example, Staff observes that “the evidence shows that IBM
invested	atleast-, 	andpossibly- 	inlaborandcapital	formaintenance”
for articles covered by ’596 patent. Id. at 148 (citing CX-0004C at Q/A 199-205; CX-0718C;
CX-1095C; CX-1101; CX-1190; CX-1729; CDX-0004C at 31, 36; JX-0125C). Staff also points
to evidenceof recorddemonstratingthat IBM invested— 	relatedto the articles
protected by the ’596 patent. Id. at 151 (citing CX-0004C at Q/A 199-205; CX-0718C; CX
1095C; CX-1101; CX-1190; CX-1729; CDX-0004C at 33, 35; 36; JX-0125C).
Based on the evidence of record, I find that IBM’s investments are quantitatively
significant as required by section 337(a)(3)(B) as well as quantitatively substantial as required by
section 337(a)(3)(C). This conclusion is true with respect to the absolute dollar amounts
invested to exploit each of the Asserted Patents and as reflected as a percentage of the IBM
North American revenue attributable to the products exploiting each of the Asserted Patents. See
CX-0004C at Q/A 197-205, 220-221, 235; CDX-0004C at 31, 33, 35, 36; CX-0718C; CX
0870C; IX-0125C. That these investments led to a proprietary storage fonnat for IBM supports
a finding that they are qualitatively significant as well. See CX-0004C at Q/A 283-287; CX
0008C at 63-64; CX-1304C at Q/A 120-122, 166; JX-0046C at 23:12-30:1, 60:6-22; CX-1729;
RX-0450 at 21.
Accordingly, I find that Sony has demonstrated that the identified IBM investments
exploit the inventions protected by ’596, ’501, and ’774 patents and satisfy the economic prong
of the domestic industry requirement under both section 337(a)(3)(B) and section 337(a)(3)(C).
till37In view of Staff‘s determination that IBM’s expenditures did satisfy the domestic industry
requirement under section 337(a)(3)(C) because there was no nexus with the Asserted Patents,
Staff did not address whether such expenses are “substantial” as required in subsection (C). See
SIB at 152.
218

PUBLIC VERSION
VIII. CONCLUSIONS OF LAW 	'
1._ The Commission has personal jurisdiction over the parties, and subject-matter
jurisdiction over the accused products. 	'
2. The importation or sale requirement of section 337 is satisfied as to Fujifilm.
3. Fujifilm’s LTO-4 and LTO-6 tape products infringe claims 1, 5, 6, 7, 8, I0, 16, and 17 of
the ’774 patent.
4. Fujifilm’s LTO—5tape products infringe claim 17 of the ’774 patent.
5. The asserted claims of the ’774 patent. are not invalid and are directed to patentable
subject matter.
6. Fujifihn’s LTO-4, LTO-5, and LTO-6 tape products infringe claims 1, 2, 4, 5, and 6 of
the ’501 patent.
7. Fujifilm’s LTO-5 and LTO-6 tape products infringe claim 8 of the ‘S01 patent.
8. _ The Imation 9840 product anticipates claims 1, 2, 4, 5, 6, and 8 of the ’50l patent.
9. Japanese Patent Publication Number 2003-141708 (“Meguro”), anticipates claims 1, 2, 4,
5, 6, and 8 of the ’50I patent. 	.
10. United States Patent Publication Number 2003/0224213 (“Meguro-2”), anticipates claims
l, 2, 4, 5, and 6 ofthe ’501 patent.
1l_ The combination of the hnation LTO-1 product with the knowledge and experience of a
person of ordinary skill in the art and/or the NCIS Roadmap renders invalid as obvious claims l,
2, 4, 5, 6, and 8' of the ‘S01 patent. 	p
12. The combination of Japanese Patent Publication Number P2002-123928 (“Takahashi”),
with the knowledge and experience ofia person of ordinary skill in the art renders invalid as
obvious claims 1, 2, 4, 5, 6, and 8 of the ’501 patent.
219

PUBLIC VERSION
13. The asserted claims of the ’50l patent are not invalid for lack of written description or
enablement.
14. Fnjifilm induces infringement of claims I-13 of the ’596 patent.
15. The asserted claims of the ’596 patent are not invalid.
16_ The technical prong of the domestic industry requirement for all of the Asserted Patents
has been satisfied.
17. The economic prong of the domestic industry requirement has been satisfied for all of the
Asserted Patents.
IX. RECOMMENDED DETERMINATION ON REMEDY & BOND
The Commission’s Rules provide that the administrative law judge shall issue a
recommended determination concerning the appropriate remedy in the event that the
Commission finds a violation of section 337, and the amount of bond to be posted by
respondents during Presidential review of the Commission action under section 337(j). See
19 C.F.R. § 210.42(a)(l)(ii). 	'
A. Limited Exclusion Order 	i
Under section 337(d), the Commission may issue a.limited exclusion order directed to a
1'esp0ndent’sinfiinging products. See l9 U.S.C. § l337(d). A limited exclusion order instructs
the U.S. Customs Sen/ice to exclude from entry all articles that are covered by the patent at issue
that originate from a named respondent in the investigation. See Fuji Photo Film Ca. Ltd. v. Int’!
Trude Comm ’n, 474 F.3d 1281, 1286 (2007).
Sony argues that an exclusion order and/or a cease and desist order must issue when there
has been a violation of section 337. See CIB at 197-198. Because Fujifi-hn has violated section
337, Sony contends, a limited exclusion order is warranted against Fujifilm, its affiliates, parents,
subsidiaries, and/or other related business entities",and its successors or assigns. See CIB at 198.
220 	"

PUBLIC VERSION
Fujifilm does not dispute that a limited exclusion order should issue if a violation of section 337
has occurred. See RIB at 185. Fujifilm argues, however, that any issued exclusion order should
(i) be delayed by at least six months, (ii) be limited to Fujifilm-branded LTO-4, LTO-5, and
LTO-6 products and components thereof, and (iii) ‘expressly exclude both IBM-branded LTO-4,
LTO-5, and LTO-6 products manufactured by Fujifilm for IBM and LTO-7 products that were
excluded from this investigation. Id. According to Fujifilm, delaying enforcement of the
exclusion order would permit affected U.S. customers sufficient timeto transition to other
storage solutions (e.g., in LTO-7 tapes). Id. at 185-186.
Staff submits that the evidence supports recommending a limited exclusion order without
delay. According to Staff, there are other suppliers who could supply tapes. SIB at 155 (citing
CX-0004C at Q/A 305-309, 313, 344). Staff asserts that Fujif1lm’sproposed exception for IBM
branded products is mmecessary. Id. Staff does support, however, inclusion of a certification
provision because Fujifilm makes other LTO tape products that are not accused in this
investigation and that are provided to a third-party licensed under the Asserted Patents. Id.
(citing Certain Ground Fault Circuit Interrupters and Products Containing Same, Inv. N0. 337
TA-615, Comm’n Op. at 28 (March 26, 2009); Certain MEMSDevices and Products Containing
Same, Inv. No. 337-TA-700. Comm’n Op. at 27 (May 13, 2011)).
In the event the Commission finds a violation, I recommend that a limited exclusion
order issueprohibiting the importation of all the accused products found to infringe the Asserted
Patents. There should be no delay in issuing the order. I do recommend, however, tailoring the
exclusion order to incorporate Fujifilm’s proposed exception for IBM-branded LTO-4, LTO-5
and LTO-6_products and their components given that such products are manufactured and
221

PUBLIC VERSION
imported pursuant to a license granted by Sony. I do not recommend including a provision
regarding LTO-7 products given that they were not a part of this investigation.
I further note that no party has requested an exception for products sold to or used by the
U.S. Government as set forth in 19 U.S.C. § 1337(1),which provides that:
Any exclusion from entry or order imder subsection (d), (e), (f),
(g), or (i), in cases based on a proceeding involving a patent,
copyright, mask work, or design under subsection (a)(1), shall not
apply to any articles imported by and for the use of the United
States, or imported for, and to be used for, the United States with
the authorization or consent of the Government.
l9 U.S.C. § l337(l). Recognizing that such a provision is typically present in the Conm1ission’s
exclusion orders, I recommend inclusion of such a provision.
B. Cease and Desist Order
Under section 337(t)(l), the Commission may issue a cease and desist order in addition
to, or instead of, an exclusion order. See 19 U.S.C. § 1337(t)(l). The Commission generally
issues a cease and desist order directed to a domestic respondent when there is a “commercially
significant" amount of infringing, imported product in the United States that could be sold,
thereby undercutting the remedy provided by an exclusion order. See Certain Cljystalline
Cefadroxil .Mon0hydrat‘e,Inv. No. 337-TA-293 USITC Pub. 2391, C0mm’n Op. on Remedy, the
Public Interest and Bonding at 37-42 (June 1991); Certain Condensers, Parts Thereof and Prods.
Containing Same, Including Air Conditioners for Automobiles, Inv. No. 337-TA-334 (Remand),
Comm’n Op. at 26-28, 1997 WL 817767, at *11-I2 (U.S.I.T.C. Sept. 10, I997).
In the event a violation of Section 337 is found, Sony contends that a cease and desist
order	isappropriate	because	“as	ofSeptember	30,	20
~ 	cw	as	ex
222

PUBLIC VERSION
0004C at Q/A 355-371; JX-0041C at 326:7-327:4; JX-0007C; C-X-0947C). According to Sony,
dining	September	2017,	forexample,	Fuj-ifilm	soldapproxin1ately
_. 	Id. at 199(citingJX-0119C).Similarly,duringMay2017,Pujifilmsold
app1->Ximare1y
—. 	Id. (citingcx-00040 at Q/A364; JX-0119C;JX-Ol20C).Sonyalso pointsto
Fujifilm’s inventory of components and bulk cartridges for manufacturing LTO-4, LTO-5, and
LTO-6 tape products. Id. (citing CX-0004C at Q/A 368-369; CX-0950C; CX-0952C; CX—
0954C; CX-0955C; CX-0956C; JX-0007C). 	‘
Fujifilm contends that Sony has failed to demonstrate that Fujifilm maintains at
commercially significant inventory of infringing products in United States. See RIB at 186.
According to Fujifilm,
Id. (citing RX-0585C at Q/A 216, 217;
RX-0431C). This inventory includes products for licensed sales to IBM. ld._(citing RX-0585C
at Q/A 221-222). 	‘
Staff recommends issuance of a cease and desist order because “[t]he evidence shows
that Fujifilm has a.commercially significant inventory of accused products in the United States as
well as components that are used to manufacture the accused tapes.” SIB at 156 (citing CX
0004C at Q/A 355-371). V
, Should the Commission find a violation of section 337, I recommend that a cease and
desist order issue to Fujifilm from selling its accused products because Fujifilm maintains a
223

PUBLIC VERSION
commercially significant inventory of the accused products and components thereof in the
United States. See CX-0004C at Q/A 355-371. .
C. Bond During Presidential Review
Pursuant to section 337(j)(3), the Administrative Law Judge and the Commission must
determine the amount of bond to be required of a respondent during the 60-day Presidential
review period following the issuance of permanent relief, in the event that the Commission
determines to issue a remedy. See l9 U.S.C. §l337(i)(3). The purpose of the bond is to protect
the complainant from any injury. See l9 C.F.R. § 2l0.42(a)(l)(ii), § 2lO.50(a)(3).
When reliable price information is available, the Commission has often set the bond by
eliminating the differential between the domestic product and the imported, infringing product.
See Microsphere Adhesives, Processes for Making Same, and Prods. Containing Same,
Including Self-Stick Repositionable Notes, Inv. No. 337-TA-366, USITC Pub. 2949, Comm’n
Op. at 24 (Dec; 8, 1995). In other cases, the Commission has turned to alternative approaches,
especially when the level of a reasonable royalty rate could be ascertained. See, e.g., Certain
Integrated Circuit Telecomm. Chips and Prods. Containing Same, Including Dialing Apparatus,
Inv. No. 337-TA-337, Comm’n Op. at 41, 1993 WL 13033517, at *24 (U.S.I.T.C.'June 22,
1993). A l00 percent bond has been required when no effective alternative existed. See, e.g.,
Certain Flash Memory Circuits and Prods. Containing Same, Inv. No. 337-TA-382, USITC Pub.
No. 3046, Comm’n. Op. at 26-27 (July 1997) (imposing a 100% bond when price comparison
was not practical because the parties sold products at different levels of commerce, and the
proposed royalty rate appeared to be de minimus and Without adequate support in the record).
Sony asserts that a 100 percent bond is appropriate. See CIB at 199. Sony argues that
although the Commission usually sets bond rates based on the price differential between the
domestic industry products and the accused products, it will set, a 100 percent bond when
224

PUBLIC VERSION
accurate pricing information is unavailable or unreliable. Id. at 199-200. According to Sony,
accurate pricing information is not available here thus warranting a 100 per cent bond. Id. at 200
(citing CX-0004C at Q/A 372-389; JX-0043C at 88:5-10).
Fujifilm argues that Sony has failed to carry it burden of establishing a bond value and in
doing so has ignored its own pricing data. See RIB at 186-187 (citing CX—0004Cat Q/A 388;
CX-0008C at Q/A 71). In particular, Fujifilm argues that Sony and its expert have failed to
substantiate their claim that it was not possible to determine a price differential. Id.
Staff argues that Sony has not canied its burden to prove that a. 100 percent bond is
warranted given that the parties exchange pricing information and Fujifilm was able to perform a
price comparison. See SIB at 157 (citing RX-0585C at Q/A 227-268).
Should the Commission find a violation of section 337 by Fujifilm, I do not recommend
imposition of a bond. Even though a 100 percent bond may be warranted where price
comparison is not practical, Sony has failed to establish that a price differential cannot be
determined, especially given that Fujifihn was able to perform a. price comparison. See RX
0585C at Q/A 227-268; see also Certain Flash Memory Circuits and Prods. Containing Same,
Inv. No. 337-TA-382, EDIS No. 3046, Conm’n. Op. at 26-27 (July 1997). Given the absence of
any evidence or argument by Sony that an alternatively valued bond is appropriate, I fmd that
Sony has failed to cany its burden that any bond is warranted. Accordingly, I do not recommend
imposition of any bond during the Presidential review period.
X. PUBLIC INTEREST
In connection with this Recommended Determination, and pursuant to Commission Rule
2l0.50(b)(l), 19 C.F.R. § 2l0.50(b)(l), the Commission ordered that the presiding
administrative law judge
225

' PUBLIC VERSION
shall take evidence or other information and hear arguments from
the parties or other interested persons with respect to the public
interest in this investigation, as appropriate, and provide the
Commission with findings of fact and a recommended
determination on this issue, which shall be limitecl to the statutory
public interest factors set forth in I9 U.S.C. §§ l337(d)(1), (t)(1)",
(s)(l)
s2 Fed. Reg. 25334 (Jmie 1, 2017).
Before issuing a remedy for a violation of section 337, the Commission must consider the
effect of the remedy on the following public interest factors: (1) the public health and welfare;
(2) competitive conditions in the U.S. economy; (3) the U.S. production of articles that are like
or directly competitive with those that are the subject of the investigation; and (4) U.S.
consumers. See 19 U.S.C. §§ l337(d)(l), (t)(1). The Commission begins this analysis with the
understanding that the public interest favors the protection of intellectual property rights by
excluding infiinging products. See, e.g., Certain Twe-Handle Centerset Faucets & Escutcheons
& Components 27zereof Inc. N0. 337-TA-"422, Comrn’n Op. at 9 (July 21, 2000). It is rare for
the Coimnission to determine that the public interest considerations outweigh the patent holder’s
rights. See Spansion Inc. v. Int’! Trade Comm'n, 629 F.3d 1331, 1360 (Fed. Cir. 2010). The
Commission can, however, tailor the remedy to minimize the impact on the public interest. See
e.g., Certain Personal Dam and Mobile Commc'ns Devices & Related Software, Inv. No. 337
TA-710, Con1m’n Op. at 83 (delaying the effective date of an exclusion order based on
competitive conditions in the U.S. economy).
A. Public Health and Welfare
Sony submits that exclusion of magnetic tape products that are primarily used for
backing-up and archiving data will not have an adverse efiect on the public health and welfare in
the United States. See CIB at 191 (citing CX-4C at Q/A 296-300); see also IX-43C at 150:1 1
21). 	V
226

PUBLIC VERSION
Fujifilm indicates that the Accused Products do not implicate any critical public health,
welfare or safety concerns of the Commission. See RIB at I81.
A Staff asserts that “[t]here is no allegation that an exclusion order in this investigation
would affect the public health and welfare.” SIB at 153 (citing RPB at 263-268).
The evidence shows that the availability of Accused Products has no critical effect on the
public health, safety and welfare in the United States. Accordingly, I find that there is no
evidence that the public health and welfare will be adversely affected by an exclusion order in
this investigation, and I also find there is no reason to forego or delay issuance of an exclusion
order on this basis. 	.
B. Competitive Conditions in the United States Economy
Sony submits that the requested relief will not diminish competition within the market for
LTO tape products. See CIB at 192 (citing CX-4C at 76-84, Q/A 310-339). Sony contends there
would be little or no impact on the LTO market from the requested relief because (i) Fujifilm
will be able to continue to supply LTO-4, LTO-5, and LTO-6 tape products on an OEM basis to
licensees such as IBM, and (ii) LTO tape sales are shifting away from the accused products. Id.
at 192-193 (citing CX-4C at Q/A 305-309, 324-337, 339; JX-43C at 144:20-145:6; CX-1436 at
141-155; CDX-4C at 49-52; JX-119C; JX-121C; CX-8C at Q/A 33; JX-109C; CX-1326C at Q/A
21-22; CX-552 at 9). Sony also notes that Fuj-ifihn’s own sales projections indicate that by time
a remedial order issued in this investigation, LTO-4, LTO-5, and LTO-6 tape products would
account.forlessthan—Fujifilm’s 	LTOsales.Id. at 193(citingcx-1326c at Q/A22;
1><~1<Ȣ>-	Fmany.	s@nyrh==tFu1-ifihni- 	Seat 193-195.
227

PUBLIC VERSION 	.
Fujifilm argues that it is the lone domestic manufacturer of LTO tapes. See RIB at I81
(citing RX-0005C (Vander Veen DWS) at Q/A 36). Fujifilm accuses Sony of attempting to
monopolize the LTO market in the United States. Id; (citing RX—0078C(SNY-ITC0922829) at
50-51; RX-0005C. (Vander Veen DWS) at Q/A 65). Fujifilm asserts that there will be
“disastrous consequences” in the United States if Sony achieves exclusivity in the LTO market
becausein the past five years Fujifihn has manufacturedmore than— 	LTO-4,LTO—5
and LTO6 tapes in the United States at its Bedford, Massachusetts facility. Id. (citing RX-0431C
(FF-SONY-ITC2_00317973)). Fujifihn asserts that entry of an exclusion order may cause
Fujifilm to close certain of its domestic manufactruing facilities, potentially leaving more than
-U.S. residents withoutjobs. Id. at (citing RX-0001C at Q/A 23, 83). Fujifilm also contends
that an exclusion order would also potentially jeopardize production of other generations of LTO
products (e.g., LTO-7) and would represent “an “existential threat” to FujifiIm’s ability to
continue any domestic marrufacturing, including Fujifi~lm’sability to provide licensed products to
IBM. Id. (citing RX-0005C (Vander Veen DWS) at Q/A 45-47). In contrast, Fujifihn asserts
that Sony currently performs no LTO manufacturing in the United States and instead
manufactures its LTO tape products exclusively in Japan. Id. (citing RX-0005C (Vander Veen
DWS) at Q/A 49; JX-0069C (Kato Dep.) at 81:1-85:4; JX-0062C (Buchicchio Dep.) at 21:2-6;
JX-0082C (Taniguchi Dep.) at 31:1-15). In this regard, Fujifihn notes that Sony closed its last
domestic manufacturing facility in 2009, leaving over 300 employees without jobs. Id. (citing
JX-0069C (Kato Dep.) at 81:1-85:4). Thus, Fujifilm concludes that “[a]n exclusion order that
eliminates domestic manufacturing to reward an outsourcer of manufacturing jobs and importer
of foreign-goods is inconsistent with U.S. trade policy and not in the public interest.” Id.
228

PUBLIC VERSION
Staff submits that an exclusion order would have little to no impact on the LTO market
because Fujifilm would still be able to sell 3592 tapes -to IBM. See SIB at 153 (citing Vander
Veen, Tr. at 574:19-23; CX-0004C at Q/A 305-309, 313). Staff also notes that because the LTO
market follows a trend where newer generation LTO tape products overtake market share from
older generations, the sale of newer generation tapes, such as LTO-7, will overtake sales of the
older LTO-4, LTO-5, and LTO-6 tapes that are the subject of this investigation. Id. (citing CX
0004C at Q/A 332, 335-337; JX-109C; CX-1326C at Q/A 21-22). Thus, Staff concludes that
exclusion of Fujifilrn’s LTO-4, LTO-5, and LTO-6 tapes will have minimal effect as LTO-7
sales increase. Id.
The evidence shows, based on Fujifilm’s own calculations, that a remedial order issued in
2018as to LTO-4,LTO-5,andLTO-6productswouldimpactlessthan- 	of Fujifilrn’s
domestic LTO sales in view of the transition to newer generation LTO products. See CX-1326C
at Q/A 22; IX-109C. Given that there is no evidence to conclude that this trend will not
continue, any immediate impact on Fujifilm with respect to LTO-4, LTO-5, and LTO-6 products
should diminish. See, e.g., CX-0004C at Q/A 332, 335-337; JX-109C; CX-1326C at Q/A 21-22.
Moreover, Fujifilm will still be able to manufacture and sell LTO-4, LTO-5, and LTO-6 products
pursuant to their license with IBM and to manufacture and sell future generation LTO products.
See Vander Veen, Tr. at 574:19-23; CX-0004C at Q/A 305-309, 313, 324-337. I am
unconvinced by Fujifilm’s assertions of dire consequences.
Accordingly, I find that there is no evidence that the competitive conditions in the U.S.
economy will be adversely affected by an exclusion order in this investigation, and I also find
there is no reason to for-egoor delay issuance of an exclusion order.
229

PUBLIC VERSION
_ C. Production of Like or Directly “CompetitiveProducts in the United States
Sony submits that if the requested relief is granted, “production of like or directly
competitive articles with respect to Fujifilm-branded and unlicensed OEM LTO-4, LTO-5, and
LTO-6 tape products will remain robust.” CIB at 195 (citing CX-4C at Q/A 301-309). Sony
argues that not only will it continue to manufacture and supply LTO-4, LTO-5, and LTO-6 tape
products, but that Fujifilm will be able do so also for IBM. Id. (citing JX-43C at 141:23-142:6;
145:1-6; JX-54C at166:1-5). Sony also argues that other manufacturers could enter or re-enter
the market as well, and notes that three other manufacturers have obtained authorization to
manufacture LTO-4, LTO-5, and LTO-6 tape products. Id. (citing CX-8C at Q/A 97-104; CX
4C at Q/A 344; CX-881; CX-882; CX-883; CX-884; CX-1216C).
Sony also asserts that consumers have the option of utilizing non-LTO products as Well
as newer generation LTO products, including those manufactured and sold by Fujifilm, that
would not be subject to an exclusion order‘and which are progressively replacing the LTO-4,
LTO-5, and LTO-6 products. Id. at 195-196 (citing JX-43C at 141123-142:6; Vander Veen, Tr.
at 569:20-570:4,573:25-574110). Sony further argues (i) that their LTO-6 products are
interchangeable with Fujifilm’s LTO-6 products within the marketplace and (ii) that they have
the ability and excess capacity to “increase its production of LTO.-4, LTO-5, and LTO-6 to meet
any shift in demand that results from the exclusion of the Accused Products.” Id. at 196 (citing
CX-4C at Q/A 322, 324-332; CX-8C at Q/A 55-66; CX-1224C; CX-1229C; CX-1084 at 6).
Sony argues that Fujifilm has not correctly estimated the market “shortfall” of LTO-4, LTO-5,
and LTO-6 products that would result from an exclusion order. Id. at 196-197 (citing RX-5C at
Q/A 60,Q63; Vander Veen, Tr. at 561:2-564:3, 567125-568:10; CDX-4C at 52; CX-1132C).
Finally, Sony contends that Fujifilm has not properly assessed whether Sony can meet the
resulting demand. Id. 	'
230

PUBLIC VERSIQN .
Fujifilm contends that although there is a public interest in protecting intellectual
property owners from unfair competition, the public interest requires protecting the domestic
industry. RIBZat 182 (citing Certain Microprocessors, Components Thereof & Products
Containing the Same, Inv. No. 337-TA-781, ID at 369 (Dec. 14, 2012)). Fujifilm asserts that as
the only domestic manufacturer of LTO tape products that it has the only “real” domestic
industry, and that entry of an exclusion order would destroy that industry with respect to not only
the accused of LTO-4, LTO-5, and LTO-6 products, but to all LTO generations. Id. at 182-183.
In making this argument, Fujifilm cites to its argument regarding competitive conditions in the
U.S. economy discussed above. Id.
Staff asserts that an exclusion order would not affect the production of like or directly
competitive articles. See SIB at 153. According to Staff there are several reasons for this
conclusion: (i) Fujifilm will still be able to permissibly supply IBM with LTO tapes; (ii) Sony
will be able to continue production along with three other companies that have been authorized
to sell and manufacture LTO-4, LTO-5, and LTO-6 tapes; and (iii) users can also switch to
newer generation tape products or to other storage media. Id. at 153-154 (citing Vander Veen,
Tr. at 568221-574:23; CX-0004C at Q/A 305-309, 313, 323, 344). 	I
As discussed above, the evidence shows that there will be a diminishing impact, if any, of
an exclusion order with respect to Fujifilm’s LTO-4, LTO-5, and LTO-6 products because of
Sony’s (and others’) ability to supply the same or similar products to the market, including by
Fujifilm by virtue of manufacturing licensed LTO tapes to IBM. See Vander Veen, Tr. at
568:21-574123; CX-0004C at Q/A 305-309, 313, 323, 344; JX-43C at 141:23-142:6; 145:1-6;
JX-54C atl66:1-5; CX-SC at Q/A 97-104; CX-881; CX-882; CX-883; CX-884; CX-1216C).
231

PUBLIC VERSION
In view of the forgoing, therefore, I find that there is no evidence that an exclusion order
would have an adverse effect on the production of likely or directly competitive products in the
United States, and therefore also find there is no reason to forego or delay issuance of an
exclusion order on this basis.
D. United States Consumers
_ Sony submits that an exclusion order will have minimal or no adverse effect on U.S.
constuners. See CIB at 197. Sony contends the evidence shows that the LTO market would
remain robust and competitive were an exclusion order issued. Id. Sony further asserts that “if
anything, the requested remedies will benefit consumers by promoting innovation and increasing
product quality and diversity through enforcement of intellectual property rights.” Id. (citing
CX-4C at Q/A 340-354).
Fujifilm argues that an exclusion order would harm U.S. consumers because it would
likely result in the elimination of domestic companies and jobs. See RIB at_183 (citing RX
0602C (SNY-ITCO371_630)at 20). Fujifilm also contends that an exclusion order would result in
a shortage of LTO-4, LTO-5, and LTO-6 products in-the United States that Sony cannot easily
supply. Id. (citing Complainants’ Responsive Statement of Public Interest Under Section
2lO.8(b), April 28, 2017, EDIS Doc ID 612038, at 5; JX-0086C (Yamaguchi Dep.) at 18:10-l l).
Accordingto Fujifilm,Sonlyhas a capacityof producingonlyI 	LTO- LTO-4,LTO-5,
and LTO-6tapes, and wouldneed to more than- 	that capacityto ensure a sufficientsupply
of such tapes to U.S. consumers. Id. at 184. Fujifilm argues that this issue is particularly acute
because Sony’s tapes are manufactured at Japanese facilities that have previously been damaged
and shut down resulting in worldwide shortages of Sony tapes. Id.
232

PUBLIC VERSION
Fujifilm also requests, in the event an exclusion order is issued, that it be delayed by at
least six months to allow U.S. consumers sufficient time to switch to more current LTO
generations (e.g., LTO-7) so as to minimize any negative impact on those consumers. Id. at 185.
Staff submits that U.S. consumers will not be negatively affected by an exclusion order
because there will still be available competitive LTO products as well as alternative storage
systems. See SIB at 154. According to Staff, the availability of such altemative storage systems
will provide a. “check” against Sony unreasonably raising LTO prices due to the exclusion of
Fujifilm products. Id. (citing.Vander Veen, Tr. at 570,:l7-571122). 	'
I find that the evidence of record demonstrates that U.S. consumers of LTO products will
have ample alternative choices for LTO products, including LTO-4, LTO-5, and LTO-6 products
manufactured by Fujifilm for IBM. I find that there is no evidence U.S. consumers will be
adversely affected by an exclusion order in this investigation. Therefore, there is no reason to
forego or delay issuance of an exclusion order on this basis. _ V '
In view of the forgoing, I find that the evidence shows that the public‘ interest
considerations do not weigh against or warrant tailoring any remedy in this investigation.
XI. "INITIAL DETERMINATION
Based on the foregoing, it is my Initial Determination that the asserted claims of U.S.
Patent No. 7,029,774 are not invalid and are infringed by Fujifihn; that the asserted claims of
U.S. Patent No. 6,674,596 are not invalid and that Fujifilm induces infringement of those claims;
and that the asserted claims of U.S. Patent No. 6,979,501 are invalid I further find that the
domestic industry requirement has been satisfied for U.S. Patent No. 6,674,596 and U.S. Patent
233

PUBLIC VERSION
No. 7,029,774.38 Accordingly, I find that there has been a violation of section 337 in the
importation of articles that infringe U.S. Patent No. 6,674,596 and U.S. Patent No. 7,029,774.
I hereby certify to the Commission’ this Initial Determination and the Recommended
Detennination.
The Secretary shall serve the confidential version of this Initial Determination upon
counsel who are signatories to the Protective Order (Order No. 1) issued in this investigation. A
public version will be served at a later date upon all parties of record.
Pursuant to 19 C.F.R. § 210.42(h), this Initial Determination shall become the
determination of the Commission unless a party files a petition for review pursuant to 19 C.F.R.
§Z10.43(a) or the Commission, pursuant to 19 C.F.R. § 210.44, orders on its own motion a
review of the Initial Determination or certain issues therein. 	_ _
Within seven days of the date of this document, each party shall submit a statement to
Cheney337@ustic.gov stating whether or not it seeks to have any portion of this document
redacted from the public version. Any party seeking to have any portion of this document
redacted from the public version thereof shall attach a copy of this document with red brackets
indicating any portion asserted to contain confidential business information.39 The parties’
ia38I have found that Sony has shown authorized articles practicing the claims of U.S. Patent No.
6,979,501, but those articles are not protected by the ’501 patent because I have found that the
claims practiced are invalid. 	, .
39 If the parties submit excessive redactions, they may be required to provide an additional
written statement, supported by declarations from individuals with personal knowledge,
justifying each proposed redaction and specifically explaining why the information sought to be
redacted meets the definition for confidential business information set forth in Commission Rule
20l.6(a). 19 C.F.R. § 20l.6(a).
234

PUBLIC VERSION
submissions concerning the public version of this document should not be filed with the
Commission _Secretary.
SO ORDERED.
Clark S. Cheney
Administrative Law Judge
235

CERTAIN MAGNETICTAPE CART"Rl[DGE"S‘A'N'D'-‘=: Invi‘ No; 337=T_A-".1058
COMPONENTS THEREOF 	'
- 	PUBLIC CERTIFICATE OF SERVICE
I, Lisa R. Barton, hereby certify that the attached Initial Determination on Violation of
Section 337 and Recommended Determination on Remedy and Bond has been served by
hand upon the Commission Investigative Attorney, Sarah Sladic, Esq., and the following parties
as indicated, on October 2, 2018.
_, W
iLisa R. Barton, Secretary
U.S. International Trade Commission
500 E Street, SW, Room 112
Washington, DC 20436
On Behalf of Complainants Sonv Corporation. Sonv Storage Media Solutions
Corporation. Sonv Storage Media Manufacturing Corporation, Sonv DADC US Inc.. and _
Sony Latin America Inc.:
Jeffrey S. Gerchick, Esq. ' 	U Via Hand Delivery
QUINN EMANUEL IJRQUHART & SULLIVAN LLP 	[ZfVia Express Dehvsry
1300 Street, NW, Suite 900 	U Via First Class Mail
Washington, DC 20005 	'- 	U other
ft
On Behalf of Respondents F-UJIFILMHoldings Corporation. FUJIFILM Corporation,
FUJIFILM Media Manufacturina Co.. Ltd., FUJIFILM Holdings America Corporation,
and FUJIFILM Recordina Media U.S.A..Inc.:
Lisa M. Kattan, Esq. 	- [:1Via Hand Delivery
BAKER BOTTS L-L-R 	iii Via Express Delivery
1299 Pennsylvania Avenue, NW 	U Via First C1aSS.Mai1
Washington, DC 20004 	U Other:
\