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`UNITED STATES INTERNATIONAL TRADE COMMISSION
`Washington, D.C.
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`In the Matter of
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`CERTAIN WEARABLE ELECTRONIC
`DEVICES WITH ECG FUNCTIONALITY
`AND COMPONENTS THEREOF
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`Investigation No. 337-TA-1266
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`COMMISSION OPINION
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`Table of Contents
`Introduction .................................................................................................................. 3
`I.
`II. Background ................................................................................................................... 4
`A.
`Procedural History................................................................................................. 4
`B. Overview of the Technology ................................................................................. 8
`C.
`The Accused Products ........................................................................................... 9
`D. Domestic Industry Products ................................................................................ 10
`III. Commission Review of the ID ................................................................................... 10
`IV. Analysis ...................................................................................................................... 11
`A.
`Economic Prong of the Domestic Industry Requirement.................................... 11
`1.
`Legal Standard ................................................................................................. 11
`2.
`Economic Prong of the Domestic Industry Requirement Under
`Subsection (C) ................................................................................................. 15
`Economic Prong of the Domestic Industry Requirement Under
`Subsection (B) ................................................................................................. 23
`The ID’s Patent Eligibility Findings Under 35 U.S.C § 101 .............................. 27
`B.
`Legal Standard ................................................................................................. 27
`1.
`2. Whether the ID Erred in Finding Claim 12 of the ’941 Patent Patentable
`Under Alice ...................................................................................................... 28
`3. Whether Claims 16 and 17 of the ’499 Patent Are Patentable Under Alice ... 35
`C.
`The ID’s Findings with Respect to Obviousness Under 35 U.S.C § 103 ........... 40
`1.
`Legal Standard ................................................................................................. 40
`2. Analysis ........................................................................................................... 42
`V. REMEDY ................................................................................................................... 47
`A.
`Limited Exclusion Order ..................................................................................... 48
`1
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`3.
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`B. Cease and Desist Order ....................................................................................... 51
`C.
`The Public Interest .............................................................................................. 52
`1. Apple Submission ............................................................................................ 54
`2. AliveCor Submission ....................................................................................... 63
`3. OUII Submission ............................................................................................. 67
`4. Analysis ........................................................................................................... 70
`D. Bond .................................................................................................................... 82
`E.
`Suspension of Remedial Orders .......................................................................... 85
`VI. CONCLUSION .......................................................................................................... 87
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`2
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`I.
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`INTRODUCTION
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`On September 22, 2022, the Commission determined to review in part the final initial
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`determination (“ID”) issued by the presiding administrative law judge (“ALJ”) on June 27, 2022.
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`87 Fed. Reg. 58819-21 (Sept. 28, 2022). On review, the Commission has determined to affirm,
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`with modifications, the ID’s finding that there has been a violation of section 337 of the Tariff
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`Act of 1930, as amended, 19 U.S.C. § 1337. Having found a violation of section 337, the
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`Commission has determined to issue a limited exclusion order and a cease and desist order as set
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`forth below. The Commission finds that the public interest does not preclude the issuance of
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`remedial orders. The Commission has determined that a bond in the amount of $2 per imported
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`article is required for infringing products imported during the period of Presidential review.1
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`The Commission, however, has determined to suspend enforcement of the orders, including the
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`bond provision, pending final resolution of the U.S. Patent and Trademark Office, Patent Trial
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`and Appeal Board’s (“PTAB”) Final Written Decisions finding all asserted patent claims
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`unpatentable. See Apple, Inc. v. AliveCor, Inc., IPR2021-00970, Patent 9,572,499, Final Written
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`Decision Determining All Challenged Claims Unpatentable (Dec. 6, 2022); Apple, Inc. v.
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`AliveCor, Inc., IPR2021-00971, Patent 10,595,731, Final Written Decision Determining All
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`Challenged Claims Unpatentable (Dec. 6, 2022); Apple, Inc. v. AliveCor, Inc., IPR2021-00972,
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`Patent 10,638,941, Final Written Decision Determining All Challenged Claims Unpatentable
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`(Dec. 6, 2022) (collectively, “Final Written Decisions” or “FWDs”).
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`This opinion sets forth the Commission’s reasoning in support of that determination. The
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`Commission adopts the remainder of the ID that is not inconsistent with this opinion.
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`1 Commissioners Schmidtlein and Stayin disagree with the Commission’s determination
`regarding the amount of the bond required for infringing products imported during the period of
`Presidential review as provided in section (V)(D) of the Commission’s Opinion concerning
`bond. See infra note 41.
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`3
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`
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`II.
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`BACKGROUND
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`A.
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`Procedural History
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`On May 26, 2021, the Commission instituted this investigation based on a complaint filed
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`by AliveCor, Inc. of Mountain View, California (“AliveCor” or “ALC”). 86 Fed. Reg. 28382
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`(May 26, 2021). The complaint, as supplemented, alleged violations of section 337 of the Tariff
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`Act of 1930, as amended, 19 U.S.C. § 1337, in the importation into the United States, the sale for
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`importation, or the sale within the United States after importation of certain wearable electronic
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`devices with ECG2 functionality and components thereof by reason of infringement of one or
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`more of claims 1-30 of U.S. Patent No. 10,595,731 (“the ’731 patent”); claims 1-23 of U.S.
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`Patent No. 10,638,941 (“the ’941 patent”); and claims 1-4, 6-14, 16-20 of U.S. Patent No.
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`9,572,499 (“the ’499 patent”). Id. The Commission’s notice of investigation named Apple Inc.
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`of Cupertino, California (“Apple”) as the sole respondent. The Office of Unfair Import
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`Investigations (“OUII”) is named as a party in this investigation. Id.
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`On February 23, 2022, the ALJ issued an initial determination granting AliveCor’s
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`motion to terminate the investigation as to (1) claims 1-4, 6-14, and 18-20 of the ’499 patent;
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`(2) claims 2, 4, 6, 7, 11, 13, 14, and 17-30 of the ’731 patent; and (3) claims 1-11, 14, 15, 17, and
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`18 of the ’941 patent based upon withdrawal of allegations from the complaint as to those
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`claims. Order No. 16 (Feb. 23, 2022), unreviewed by Notice (Mar. 18, 2022).
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`The ALJ held an evidentiary hearing from March 28-April 1, 2022, and received post-
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`hearing briefs thereafter.
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`2 ECG stands for electrocardiogram.
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`4
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`On June 27, 2022, the ALJ issued the final initial determination (“ID”), finding a
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`violation of section 337 as to the ’941 and ’731 patents, and no violation as to the ’499 patent.3
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`The ID found that the parties do not contest personal jurisdiction, and that the Commission has in
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`rem jurisdiction over the accused products. ID at 18. The ID further found that the importation
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`requirement under 19 U.S.C. § 1337(a)(1)(B) is satisfied. Id. (citing CX-0904C (Apple stipulating
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`that it imports the accused products into the United States)). Regarding the ’941 patent, the ID
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`found that AliveCor has proven infringement of the asserted claims, claims 12, 13, 19, and 20-
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`23, and that Apple failed to show that any of the asserted claims are invalid. Id. at 30-45, 60-98,
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`187-88. For the ’731 patent, the ID found that AliveCor has proven infringement of the asserted
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`claims, claims 1, 3, 5, 8-10, 12, 15, and 16, but that Apple has proven that claims 1, 8, 12, and 16
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`are invalid for obviousness. Id. at 105-108, 113-127, 188. For the ’499 patent, the ID found that
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`AliveCor failed to prove infringement of the asserted claims, claims 16 and 17, and that claim 17
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`is invalid for lack of patentable subject matter under 35 U.S.C. § 101. Id. at 129-138, 140-152,
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`188. Finally, the ID found that AliveCor has proven the existence of a domestic industry that
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`practices the asserted patents as required by 19 U.S.C. § 1337(a)(2). Id. at 152-180, 188. The ID
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`included the ALJ’s recommended determination on remedy and bonding (“RD”). The RD
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`recommended that, should the Commission find a violation, issuance of a limited exclusion order
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`and a cease and desist order would be appropriate. ID/RD at 190-193. The RD also
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`recommended imposing no bond for covered products imported during the period of Presidential
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`review. Id. at 194-95.
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`On July 11, 2022, Apple filed a petition for review of the final ID and AliveCor filed a
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`3 The ALJ issued a corrected final ID on July 26, 2022, correcting the table of contents.
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`5
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`combined petition and contingent petition for review.4 On July 19, 2022, the private parties and
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`OUII’s investigative attorney filed responses to the petitions.5
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`On September 22, 2022, the Commission determined to review the final ID in part. 87
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`Fed. Reg. 58819-21 (Sept. 28, 2022). Specifically, the Commission determined to review the
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`final ID’s invalidity findings, including patent eligibility under 35 U.S.C. § 101 and obviousness
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`under 35 U.S.C. § 103, and the economic prong of the domestic industry requirement for all
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`three patents. Id. The Commission requested briefing on certain issues under review and on
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`remedy, the public interest, and bonding. Id.
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`On October 6, 2022, the parties filed initial submissions in response to the Commission’s
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`request for briefing.6 On October 14, 2022,7 the parties filed reply submissions.8 On October
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`4 See Respondent Apple Inc’s Petition for Review of the Initial Determination on
`Violation of Section 337 (“Apple Pet.”); Complainant AliveCor, Inc.’s Combined Petition for
`Review and Contingent Petition for Review of the Initial Determination (“AliveCor Pet.”).
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`5 See Respondent Apple Inc.’s Response to the Complainant’s Petition for Review of the
`Initial Determination (“Apple Rep.”); Complainant AliveCor Inc.’s Response to Respondent
`Apple Inc.’s Petition for Review of the Initial Determination on Violation of Section 337
`(“AliveCor Rep.”); Combined Response of the Office of Unfair Import Investigations Response
`to the Private Parties’ Petitions for Review of the Final Initial Determination on Violation
`(“OUII Rep.”).
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`6 See Respondent Apple Inc.’s Opening Brief in Response to the Commission’s Request
`for Written Submissions on the Issues Under Review and on Remedy, the Public Interest, and
`Bonding (“Apple Sub.”); Complainant AliveCor, Inc.’s Submission in Response to the
`Commission’s September 22, 2022 Notice of a Commission Determination to Review in Part
`(“AliveCor Sub.”); Brief of the Office of Unfair Import Investigations on the Issues Under
`Review and on Remedy, the Public Interest, and Bonding (“OUII Sub.”).
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`7 On October 12, 2022, the Chair granted the parties’ request to extend the due date for
`their reply briefs by one day. See Commission Letter Granting Request for Extension of Time to
`File Replies to the Commission’s Request for Written Submissions; Certain Wearable Electronic
`Devices with ECG Functionality and Components Thereof, Inv. 337-TA-1266 (Oct. 12, 2022).
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` 8
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` See Respondent Apple Inc.’s Reply Brief to AliveCor and OUII’s Response to the
`Commission’s Request for Written Submissions on the Issues Under Review and on Remedy, the
`6
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`21, 2022, Apple moved for leave to file a sur-reply to AliveCor’s reply submission.9 On October
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`24, 2022, AliveCor filed an opposition.10 OUII filed a response in opposition on November 2,
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`2022.11 The Commission has determined to reject Apple’s motion for leave to file a sur-reply to
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`AliveCor’s reply submission. The Commission finds that Apple has not shown AliveCor’s reply
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`submission contains errors that warrant a sur-reply.
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`On December 7, 2022, Apple filed an emergency motion, asking “the Commission to
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`suspend any remedial orders or, in the alternative, extend the December 12, 2022 Target Date of
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`its Final Determination and stay all proceedings prior to issuance of any Final Determination
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`pending final resolution of any appeal of the PTAB’s decisions.”12 Apple Emergency Motion at
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`Public Interest, and Bonding (“Apple R.Sub.”); Complainant AliveCor, Inc.’s Reply Submission
`in Response to the Commission’s September 22, 2022 Notice of a Commission Determination to
`Review in Part (“AliveCor R.Sub.”); Reply Brief of the Office of Unfair Import Investigations
`on the Issues Under Review and on Remedy, the Public Interest, and Bonding (“OUII R.Sub.”).
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`9 See Respondent Apple Inc.’s Motion for Leave to File Sur-Reply Brief to AliveCor’s
`Reply to the Commission’s Request for Written Submissions on the Issues Under Review and on
`Remedy, the Public Interest, and Bonding.
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`10 See AliveCor’s Opposition to Apple’s Motion for Leave to File Sur-Reply to
`AliveCor’s Reply to the Commission’s Request for Written Submissions on the Issues Under
`Review and on Remedy, the Public Interest, and Bonding.
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`11 See Response of the Unfair Import Investigations to Respondent Apple Inc.’s Motion
`for Leave to file Sur-Reply Brief to AliveCor’s Reply to the Commission’s Request for Written
`Submissions on the Issues Under Review and on Remedy, the Public Interest, and Bonding.
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`12 See Respondent Apple Inc.’s Emergency Motion to Suspend any Remedy or Extend
`the Target Date and Stay Proceedings Pending Resolution of any Appeal of the Patent Office’s
`Decision that United States Patent Nos. 10,638,941, 10,595,731, and 9,572,499 Are
`Unpatentable (“Apple Emergency Motion”).
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`7
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`1. On December 9, 2022, AliveCor filed an opposition to Apple’s motion.13 On December 16,
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`2022, OUII filed a response to the motion.14
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`B.
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`Overview of the Technology
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`The technology at issue generally relates to systems, devices, and methods for monitoring
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`cardiac health and managing cardiac disease. ID at 3.
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`The ’941 patent entitled, “Discordance Monitoring,” issued on May 5, 2020. ’941 patent
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`(JX-0003). The patent describes systems, devices, and methods that can be used to
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`“conveniently sense the presence of an intermittent arrhythmia in an individual.” ’941 patent,
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`Abstract. The systems, devices, and methods can also “be configured to sense an
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`electrocardiogram.” Id.
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`The ’731 patent entitled, “Methods and Systems for Arrhythmia Tracking and Scoring,”
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`issued on March 24, 2020. ’731 patent (JX-0002). The patent describes “a dashboard centered
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`around arrhythmia or atrial fibrillation.” ’731 patent, Abstract. “The dashboard includes a heart
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`or cardiac health score that can be calculated in response to data from the user such as their ECG
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`and other personal information and cardiac health influencing factors.” Id. “The dashboard also
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`provides to the user recommendations or goals, such as daily goals, for the user to meet and
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`thereby improve their heart or cardiac health score.” Id.
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`The ’449 patent, also entitled, “Methods and Systems for Arrhythmia Tracking and
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`Scoring,” issued on February 21, 2017. ’449 patent (JX-0001). The patent also describes “a
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`13 See AliveCor’s Opposition to Apple’s Emergency Motion to Suspend any Remedy or
`Extend the Target Date and Stay Proceedings (“AliveCor Opposition”).
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`14 See Response of the Office of Unfair Import Investigations to Respondent Apple Inc.’s
`Emergency Motion to Suspend any Remedy or Extend the Target Date and Stay Proceedings
`Pending Resolution of any Appeal of the Patent Office’s Decision that United State Patent Nos.
`10,638,941, and 9,572,499 Are Unpatentable (“OUII Reply to Emergency Motion”).
`8
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`dashboard centered around arrhythmia or atrial fibrillation.” ’449 patent, Abstract. “The
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`dashboard includes a heart or cardiac health score that can be calculated in response to data from
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`the user such as their ECG and other personal information and cardiac health influencing
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`factors.” Id.
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`C.
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`The Accused Products
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`The accused products consist of four generations of Apple smartwatches:
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`Apple Model(s)
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`Category
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`A1975, A1976, A1977, A1978
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`A2092, A2093, A2094, A2095
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`A2291, A2292, A2293, A2294
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`A2473, A2474, A2475, A2477
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`Series 4
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`Series 5
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`Series 6
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`Series 7
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`ID at 6. The parties explained that the “Apple Watch Series 6 is sufficiently representative from
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`a hardware standpoint of all other Accused Products” and they describe the “salient features of
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`the Accused Products via the Series 6 as ‘a motion/activity sensor known as an accelerometer, a
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`photoplethysmography (‘PPG’)15 sensor, an electrocardiogram (‘ECG’) sensor, a display screen,
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`a processor, and memory.’” ID at 6 (citing Hr’g Tr. (Jafari) at 303:19-24; JX-0221C (Waydo) at
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`207:10-14, 208:14-209:11; CX-0107). The ID further found that the “software running on these
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`devices is also important, taking the form of Apple’s operating system, WatchOS” and that “[a]s
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`with hardware, the parties have agreed that version 7.6.2 of WatchOS is representative of all
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`other versions that contain the diagnostic tools implicated by the Asserted Claims.” Id.
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`15 PPG is used to sense the amount of oxygen in the blood.
`9
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`D.
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`Domestic Industry Products
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`The domestic industry products include “wearable electronic devices, being developed,
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`manufactured, and/or sold by AliveCor under the tradenames KardiaBand System, [[
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` ]].” ID at 4. “Each product includes,
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`‘among other things, a smartwatch, activity sensor, PPG sensor, and ECG sensor.’” Id. at 4-5.
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`“The KardiaBand System (‘KBS’) comprises the KardiaBand watch band, and an Apple Watch
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`(Series 1, 2, 3) with Watch OS 5.0 or earlier running a program called KardiaApp.” Id. at 5
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`(citing Hr’g Tr. (Jafari) at 385:16-386:15). Complainant relies on its KBS product for its
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`domestic industry that exists and relies on its [[ ]] products for its domestic industry in
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`the process of being established.
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`III. COMMISSION REVIEW OF THE ID
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`When the Commission reviews an initial determination, in whole or in part, it reviews the
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`determination de novo. Certain Soft-Edged Trampolines and Components Thereof, Inv. No. 337-
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`TA-908, Comm’n Op. at 4 (May 1, 2015). Upon review, the “Commission has ‘all the powers
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`which it would have in making the initial determination,’ except where the issues are limited on
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`notice or by rule.” Certain Flash Memory Circuits & Prods. Containing Same, Inv. No. 337-
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`TA-382, USITC Pub. No. 3046, Comm’n Op. at 9-10 (July 1997) (quoting Certain Acid-Washed
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`Denim Garments & Accessories, Inv. No. 337-TA-324, Comm’n Op. at 5 (Nov. 1992)). With
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`respect to the issues under review, “the Commission may affirm, reverse, modify, set aside or
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`remand for further proceedings, in whole or in part, the initial determination of the administrative
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`law judge.” 19 C.F.R. § 210.45(c). The Commission also “may take no position on specific
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`issues or portions of the initial determination,” and “may make any finding or conclusions that in
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`its judgment are proper based on the record in the proceeding.” Id.; see also Beloit Corp. v.
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`Valmet Oy, 742 F.2d 1421, 1423 (Fed. Cir. 1984).
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`10
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`IV. ANALYSIS
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`A.
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`Economic Prong of the Domestic Industry Requirement
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`The Commission determined to review the economic prong of the domestic industry
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`requirement for all three patents and asked the parties for briefing. 87 Fed. Reg. 58819-20 (Sept.
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`28, 2022).
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`On review, the Commission has determined to affirm the ID’s findings that AliveCor
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`failed to establish the economic prong of the domestic industry requirement as to a domestic
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`industry in the process of being established, and an existing industry under subsections (A) and
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`(B), but proved the existence of a domestic industry under subsection (C). With respect to the
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`industry in the process of being established and an existing industry under subsection (A), the
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`Commission affirms the ID for the reasons stated therein. Regarding subsections (B) and (C),
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`the Commission affirms the ID as modified below.
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`1.
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`Legal Standard
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`In patent-based proceedings under section 337, a complainant must establish that a
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`domestic industry “relating to the articles protected by the patent . . . exists or is in the process of
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`being established.” 19 U.S.C. § 1337(a)(2). Under Commission precedent, this domestic
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`industry requirement consists of an “economic prong” and a “technical prong.” See Alloc, Inc. v.
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`Intl Trade Comm’n, 342 F.3d 1361, 1375 (Fed. Cir. 2003). To satisfy the “technical prong,” the
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`complainant must establish that it practices at least one claim of each of the asserted patents.
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`Certain Point of Sale Terminals and Components Thereof, Inv. No. 337-TA-524, Order No. 40 at
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`17-18 (Apr. 11, 2005). To satisfy the “economic prong,” paragraph (3) of section 337(a)
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`provides:
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`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 –
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`11
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`(A) significant investment in plant and equipment;
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`(B) significant employment of labor or capital; or
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`(C) substantial investment in its exploitation, including engineering,
`research and development, or licensing.
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`19 U.S.C. § 1337(a)(3). Expenditures in each of the above three categories under section
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`337(a)(3) must “pertain to the complainant’s industry with respect to the articles protected by the
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`asserted IP rights.” See, e.g., Certain Television Sets, Television Receivers, Television Tuners,
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`and Components Thereof, Inv. No. 337-TA-910, Comm’n Op. at 68 (Oct. 30, 2015); Certain
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`Marine Sonar Imaging Devices, Including Downscan and Sidescan Devices, Prods. Containing
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`the Same, and Components Thereof, Inv. No. 337-TA-921, Comm’n Op. at 40 (Jan. 6, 2016).
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`Under subsection (C), a domestic industry will be found to exist if, “with respect to the
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`articles protected by the patent,” a complainant can show “substantial investment in its
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`exploitation, including engineering, research and development, or licensing.” 19 U.S.C.
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`§ 1337(a)(3)(C) (emphasis added). For this provision, the Federal Circuit has interpreted “its” to
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`mean the patent (or other enumerated IP right in subsections 337(a)(1)(B)-(E)), so there must be
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`a nexus between the domestic investments and the exploitation of the asserted patents, beyond
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`showing that those investments relate to the protected domestic industry (“DI”) articles.
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`InterDigital Communications, LLC v. Int’l Trade Comm’n, 707 F.3d 1295, 1297-1301 (Fed. Cir.
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`2013).16 To establish the nexus, the complainant must show the connection between its
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`16 The ID states that “[u]nlike subsections (A) and (B), where a connection is made
`between an alleged investment and a patent-practicing product, a subsection (C) analysis requires
`a connection between the R&D investment and the asserted patents (i.e., nexus).” ID at 170
`(citation omitted). We clarify that while subsection (C) requires a nexus between the claimed
`investments and the asserted patents, the requirement that investments be “with respect to articles
`protected by the patent” applies with respect to subsections (A), (B), and (C). See 19 U.S.C.
`§ 1337(a)(3); see also InterDigital, 707 F.3d at 1298 (“Thus, just as the ‘plant or equipment’
`12
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`
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`investments and the patented aspect(s) of the invention that it is exploiting. See Certain
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`Integrated Circuit Chips and Products Containing the Same, Inv. No. 337-TA-859, Comm’n Op.
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`at 49-50 (Aug. 2014) (“As a matter of statutory construction, an investment in the article is not
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`automatically an investment in the asserted patent.”). It is not enough for a complainant to assert
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`that it generally conducts research and development, or that its R&D relates to non-patented
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`features incorporated into articles that also practice the patent at issue. Id.
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`Depending on the particular facts of a case, a complainant’s domestic industry with
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`respect to articles protected by the asserted IP rights may extend beyond the protected article, to
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`include those additional parts or components that are necessary to use or exploit the patented
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`invention. See Motorola Mobility, LLC v. Int’l Trade Comm’n, 737 F.3d 1345, 1351 (Fed. Cir.
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`2013) (explaining that “nothing in § 337 precludes a complainant from relying on investments or
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`employment directed to significant components, specifically tailored for use in an article
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`protected by the patent”). However, there may be investments that are too far removed from the
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`articles protected by the asserted intellectual property rights to be considered part of the
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`complainant’s domestic industry. See Certain Video Game Systems and Wireless Controllers
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`and Components Thereof, Inv. No. 337-TA-770, Comm’n Op. at 66 (Oct. 28, 2013) (“[W]e
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`agree with the ALJ that the language of the patent is directed to the toy wand and not the toy
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`wand plus the entire MagiQuest attraction.”). Nevertheless, for subsection (C), the focus
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`remains on whether the claimed investments are related to the exploitation of the patent and
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`whether those investments in the exploitation of the patent are substantial.
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`referred to in subparagraph (A) must exist with respect to articles protected by the patent, such as
`by producing protected goods, the research and development or licensing activities referred to in
`subparagraph (C) must also exist with respect to articles protected by the patent, such as by
`licensing protected products.”).
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`13
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`Whether a complainant satisfies the economic prong is not analyzed according to a rigid
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`mathematical formula. Certain Male Prophylactic Devices, Inv. No. 337-TA-546, Comm’n Op.
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`at 39 (Aug. 1, 2007). The Commission decides the domestic industry requirement has been
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`established in each investigation based on “an examination of the facts in each investigation, the
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`article of commerce, and the realities of the marketplace.” Id. A complainant does not need to
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`show any “minimum monetary expenditure,” and does not “need to define or quantify the
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`industry itself in absolute mathematical terms.” Stringed Musical Instruments, Inv. No. 337-TA-
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`586, Comm’n Op. at 16-17 (May 16, 2008) (“A precise accounting [of the complainant’s
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`domestic investments] is not necessary, as most people do not document their daily affairs in
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`contemplation of possible litigation.”). The burden is on the complainant to show by a
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`preponderance of the evidence that the domestic industry requirement is satisfied. See Certain
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`Multimedia Display and Navigation Devices and Systems, Components Thereof, and Products
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`Containing Same, Inv. No. 337-TA-694, Comm’n Op. at 5 (July 22, 2011).
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`To satisfy the domestic industry requirement, section 337(a)(3) requires that a
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`complainant’s asserted investments must be “significant” or “substantial.” The Federal Circuit
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`has held that “qualitative factors alone are insufficient” to show that domestic industry
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`investments are significant or substantial. Lelo Inc. v. Int’l Trade Comm’n, 786 F.3d 879, 885
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`(Fed. Cir. 2015). The statute “requires a quantitative analysis to determine whether there is a
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`‘significant’ [or ‘substantial’] increase or attribution by virtue of the claimant’s asserted
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`commercial activity in the United States.” Id. at 883. “[T]he terms ‘significant’ and ‘substantial’
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`refer to an increase in quantity, or to a benchmark in numbers.” Id. at 885; see also Certain
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`Carburetors & Prods. Containing Such Carburetors, Inv. No. 337-TA-1123, Comm’n Op. at 15-
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`16 (Oct. 28, 2019). While significance may not be established on qualitative evidence alone,
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`
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`14
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`
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`“qualitative evidence may still be relied upon to support a finding that a complainant’s
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`investments are significant.” Carburetors, Comm’n Op. at 24; see also id. at 23 (“There may be
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`facts and circumstances where, based on an assessment of quantitative information, it remains
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`unclear whether a complainant’s investments are significant or not. In such cases, resorting to
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`qualitative factors that may indicate significance could be relevant to the evaluation.”). In this
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`regard, the Commission considers the “nature and significance” of a complainant’s activities
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`with respect to the protected articles. Certain Printing and Imaging Devices, Inv. No. 337-TA-
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`690, Comm’n Op. at 30 (Feb. 17, 2011). The Commission may consider, inter alia, whether the
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`“activities were important to the articles protected by the asserted patents in the context of the
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`company’s operations, the marketplace, or the industry in question, or whether complainant’s
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`undertakings had a direct bearing on the practice of the patent” or “whether and to what extent []
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`domestic activities added value to the imported products.” Id.
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`2. Economic Prong of the Domestic Industry Requirement Under Subsection
`(C)
`
`a)
`
`Background
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`AliveCor is a U.S. company based in California that designs and develops wearable
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`electronic devices to help diagnose heart conditions. See Compl. at ¶ 11; CDX-005C.13; Tr.
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`(Albert) at 53:22-54:20; CDX-005C.29; Tr. (Albert) at 77:24-78:14. AliveCor developed the
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`inventions claimed in the Asserted Patents in the United States and introduced the “technology to
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`consumers through the KBS, a system that included an app and watchband accessory for the
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`Apple Watch,” clearing the KBS with the U.S. Food and Drug Administration (“FDA”) for use
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`in connection with the Apple Watch. ID at 4-5; Tr. (Albert) 83:8-85:19; 199:3-201:21; CDX-
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`0005C.34-36. There is no dispute that the KBS domestic industry product was developed in the
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`United States and the [[ ]] products are also being developed in the United States.
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`15
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`Although AliveCor ceased to manufacture and sell the KBS product in 2018, AliveCor
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`continued to invest in the technology of the patents through the date of the complaint filing.
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`Under Commission precedent, past expenditures in R&D can be counted towards establishing a
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`domestic industry in a product that exists but has been discontinued, like the KBS, if there are
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`continuing investments. See, e.g., Certain Marine Sonar Imaging Devices, Inv. No. 337-TA-
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`921, Comm’n Op., at 59 (Jan. 6, 2016) (crediting “labor and capital expenditures related to . . .
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`software updates” used in a discontinued but practicing product), affirmed, Hyosung TNS Inc. v.
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`Int’l Trade Comm’n, 926 F.3d 1353, 1361-2 (Fed. Cir. 2019) (“[P]ast expenditures may be
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`considered to support a domestic industry claim so long as those investments pertain to the
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`complainant’s industry with respect to the articles protected by the asserted [intellectual
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`property] rights and the complainant is continuing to make qualifying investments at the time the
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`complaint is filed.”).
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`AliveCor Established the Nexus Requirement for Both Past
`b)
`Investments and Continuing Investments
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`AliveCor has established both (1) that its past investments in R&D were directed to each
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`of the asserted patents to develop the KBS and to use the technology of the patents to develop
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`[[ ]]; and (