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`UNITED STATES INTERNATIONAL TRADE COMMISSION
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`_ WashingtOH’D-C: _
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`Investigation No. 337-TA-929
`(Enforcement and Rescission Proceeding)
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`In the Matter of
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`BEVERAGE '
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`BREWI G
`CERTAIN
`CAPSULES, COMPONENTS THEREOF,
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`AND PRODUCTS CONTAINING THE
`SAME
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`COMMISSION OPINION
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`I".
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`BACKGROUND
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`The Commission instituted the original investigation on September 9, 2014, based on a
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`complaint filed by Adrian Rivera and Adrian Rivera Maynez EnterpriSes, Inc. (collectively,
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`“ARM”). 79 Fed. Reg. 53445-46. The complaint alleged that several respondents, including
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`Eko Brands, LLC (“Eko”), Evermuch Technology CO., Ltd. and Ever Much Company Ltd.
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`(together, “Evermuch”), Solofill, Inc. (“Solofill”), and DongGuan Hai Rui Precision Mould Co.
`(“DongGuan”), violated sectiOn 32,7 ofthe Tariff Act of 1930, as amended, 19 U.S.C. § 1337, by
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`infringing claims 5-8 and 18-20 ofU..S. Patent NO. 8,720,320 (“the ’320 patent”). Id, Eko and
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`Evermuch did not respond to the complaint and notice of investigation, and were found in
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`default. Notice (May 18, 2015).1
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`The investigation continued with respect to Solofill and DongGuan. ARM withdrew its
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`allegations that SolOfill and DongGuan infringed claims 8 and 19, but maintained that Eko and
`Evermuch infringed those claims. See Notice (Apr. 21, 2015). On March 17, 2016, the
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`.Commissionfiound n.0,vi91ati9n9f_s¢9ti9n.337,by,Srolofilland DongGuanbecause. itfeundfihat. __
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`1 The remaining respondents were all terminated by consent Order or settlement
`agreement, and-are not relevant to the issue presently before the Commission.
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`claims 5-7, 18, and 20 of the ’320 patent are invalid for a lack of written description2 and that
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`. claimsS and6 are invalid as anticipated. '81 Fed. Reg.‘1'5'74'2-43. The Commission, however,
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`presumed that the remaining allegations in the complaint against the defaulted parties Eko and
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`Evermuch were true pursuant to section 337(g)(1), and thus concluded that they violated section
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`337 with respect to claims 8 and 19. Certain Beverage Brewing Capsules, Components Thereof
`and Products Containing the Same, USITC Inv. No. 337‘—TA-929, Comm’n Op. at 83 (Mar. 17,
`2016). The Commission issued a limited exclusion order prohibiting Eko and Evermuch from
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`importing certain beverage brewing capsules, components thereof, and products containing same
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`that infringed claims 8 or 19 of the ’320 patent, and also issued cease and desist orders against
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`Eko and Evermuch prohibiting the sale and distribution within the United States of articles that
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`infringe claims 8 or 19. Id; 81 Fed. Reg. 15742-43.
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`On June 1, 2016, ARM filed a complaint requesting that the Commission institute a
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`formal enforcement proceeding under Commission Rule 210.75(b) to investigate violations of
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`the limited exclusion order and cease and desist order by Eko and Espresso Supply, Inc., the
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`entity that subsequently purchased. Eko (together, “Eko”).3 Complaint for Enforcement
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`Proceeding Pursuant to Commission Rule 21075 (Jun. 1, 2016) at 11 4 and Ex. 5. The
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`Commission instituted a formal enforcement proceeding on July 1, 2016. 81 Fed. Reg. 43242-
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`2 CommissiOner Kieff dissented from the Commission’s determinatiOn that the asserted
`~ claims ofthe ‘3 20 patent were shown by-clear and. convincing evidence to be invalid for "a lack of‘
`written description under 35 U.S.C. § 112, first paragraph. See Certain Beverage Brewing
`Capsules, Components Thereof, and PrOducts Containing the Same, USITC Inv. No. 337-TA-
`929, Separate Opinion Dissenting-ln-Part of Commissioner Kieff (Apr. 5, 2016) (Pub. Vers.).
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`3 Complaint for Enforcement Proceeding Pursuant to Commission Rule 210.75 (Jun. 1,
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`2016).
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`On September 12, 2016, Eko petitioned the Commission to rescind its limited exclusion
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`Orderand cease and desist order based: on changed circumstances, and to terminatethe
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`enforcement proceeding. On September 22, 2016, ARM opposed the petition, and OUII -
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`supported the petition. On November 25, 2016, the Commission instituted a rescission
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`proceeding, delegated the proceeding to the presiding administrative law judge (“ALJ”), and
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`‘ consolidated the rescission proceeding with the enforcement proceeding. 81 Fed. Reg. 85264-65
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`(Nov. 25, 2016).
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`_In its answer to the enforcement complaint, Eko argued that,- because the Commission’s
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`final determination in the original investigation found that claims 5—7, 18, and 20 of the ’320
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`patent are invalid for a lack of written description, claims 8 and 19 must also be invalid because
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`they are not materially different from claims 5-7, 18, and 20, so ARM is collaterally estopped
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`from asserting claims 8 and 19 against Eko in this enforcement investigation.4 On October 7,
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`2016, ARM moved for a summary determination that Eko cannot prove its collateral estoppel
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`defense as a matter of law.5 ARM argued that, because that same Commission final
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`determination presumed that claims 8 and 19 are valid and issued remedial orders with respect to
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`those claims,
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`is not collaterally estopped from seeking enforcement of those orders as a
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`matter of law. ARM Mot. at 3-4.
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`On October 20, 2016, Eko opposed ARM’s motion.6 Eko argued that, although the 1
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`Commission presumed that claims 8 and 19 are valid because of Eko’s default, the claims are
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`4 Respondent Eko Brands LLC’s Response to Complaint at 12 (Jul. 18, 2016).
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`j5- Complainants Adrian Rivera and ARM Enterprises, Inc.’s Motion for Summary ~
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`Determination That Respondents Cannot Prove Its Collateral E‘stoppel Defense as a Matter of
`Law (Oct. 7, 2016) (“ARM Mot”).
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`6 Respondents Eko Brands LLC’s and Espresso supply, Inc.’s Opposition to _
`Complainants’rMotion for Sumrhary Determination Related to the Collateral Estoppel Defense ,
`(Oct. 20, 2016) (“Eko Op.”).
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`necessarily invalid as a matter of law because they depend from claims that the Commission
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`foun'd'inv'ali‘d.7 ‘ Eko op. at
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`5-6. Also member 20, 2016, 'OUII responded, arguing that
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`collateral estoppel may apply to claims8 and 19, but that resjudicata prevents Eko from
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`contesting the validity of claims 8 and 19. 8 On October 27, 2016, ARM moved for leave to file
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`a reply in support of its mOtion.
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`On December 1,2016, the presiding ALJ issued the subject Initial Determination (Order
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`No. 33) (“ID”),9 which granted ARM’s motion for a summary determination that Eko cannot
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`prove its collateral estoppel defense as a matter of law, and denied ARM’s motion for leave to
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`file a reply. On December 8, 2016, Eko timely filed a petition for review.10 On December 16,
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`2016, ARM and OUII filed untimely responses to Eko’s petition.11 The Commission declines to
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`consider these untimely responses. On January 12,2017, the Commission determined to review
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`the ID, and on review to affirm the ID under modified reasoning. Notice (Jan. 12, 2017).
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`7 In addition, Eko argued that collateral estoppel also applied based on a subsequent
`district court ruling that Eko did not infringe the ’320 patent. Eko, however, abandoned this
`argument by failing to include it in its petition for review of Order No. 33.
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`8 Commission Investigative Staffs Response to Complainants’ Motion for Sunimary
`Determination That Respondents Cannot Prove Its Collateral Estoppel Defense as a Matter of
`Law (Oct. 20, 2016).
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`9 Initial Determination Granting Complainants’ Motion for Summary Determination That
`Respondents Cannot Prove Its Collateral Estoppel Defense as a Matter of Law (Dec. 1, 2016).
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`10 A petition for review of an ID granting a summary determination motion must be filed
`within five business days from service of the ID. Commission Rule 210.43(a)(1). An additional
`day is added when the ID is served by express delivery, as it was here. See Commission Rule
`’ 201.16(e), 19 CPR. § 201.16(e). Eko’s petition was filed one day early on December 8, 2016,
`which is the fifth business day after service of the ID.
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`' “ 'A' respense toe petition fer reviewer an ID granting a summary determination must" be 4
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`'filed within five business days from the service of the petition. Commission Rule 210.43(c).
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`Eko’s petition was electronically served on ARM and OUII, so no additional time was added for
`service. See Commission Rule 201.16(f), 19 C.F.R. § 201.16(f). ARM’s and OUII’s responses
`are untimely because they were filed on December 16, 2016, which is the sixth business day after
`the filing of the petition. No request for leave to file out of time was filed.
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`11.
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`DISCUSSION
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`A; ’
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`' The ID '
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`The ALJ granted ARM’s motion for a summary determination that Eko cannot establish
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`its collateral estoppel defense as a matter of law. He stated that collateral estoppel requires four '
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`elements: “(1) the issue is identical to one decided in the first action; (2) the issue was actually
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`litigated in the first action; (3) the resolution of the issue was essential to a final judgment in the
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`first action; and (4) plaintiff had a fiill and fair opportunity to litigate the issue in the first action.”
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`ID at 22 (quoting In re Freeman, 30 F.3d 1459, 1465 (Fed. Cir. 1994)). He also noted that he
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`previously ruled that Eko is barred by resjudicata from asserting that claims 8 and 19 are invalid
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`in the enforcement proceeding. Id. at 24 (citing Order No. 30 (Sept. 19, 2016)). He concluded
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`that Eko cannot establish collateral estoppel’s first element, identity of the issues, because he
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`already ruled that invalidity is not an issue in the enforcement proceeding. Id. at 24-26. He also
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`found that Eko cannot establish the remaining three elements of collateral estoppel for similar
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`reasons. Id. at 26. Finally, he reasoned that he. could not contradict the Commission’s final
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`determination that claims 8 and 19 of the ’320 patent are presumed valid. Id. at 28-31.
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`'B.
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`Eko’s Petition
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`Eko’s petition contends that the ALJ erred for two main reasons. First, Eko argues that
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`the ALJ erred by failing to find that claims 8 and 19 are invalid by collateral estoppel. Eko Pet.
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`at 12—13. According Eko, invalidating a claim for a lack of written description also necessarily
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`invalidates all of its dependent claims, so the Commission’s final determination that claims 5-7,
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`.18, and 20 are invalid foralackofwritten description necessarily means that dependentclaims8, _
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`and 19 are also invalid. 71d Second, Eko argues that the-ALJerred by ruling that Eko could not
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`raise the invalidity of claim 8 and 19 in the enforcement and rescission proceedings. Id. at 13-
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`C.
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`Analysis
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`' The CothissiOn grants summary'det'erminations When “there is no genuine issue'as to '
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`any material fact and .
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`. the moving party is entitled to a summary determination as a matter of
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`law.” 19 C.F.R. § 210.18(b). Here, the Commission affirrns the ALJ’s determination that ARM
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`is entitled to a summary determination that Eko cannot establish its collateral estoppel defense,
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`but does sounder the modified reasoning set forth below.
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`1. Collateral Estoppel
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`The Commisison finds that Eko cannot establish its defense that claims 8 and' 19 ofI
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`the ’320 patent are invalid by collateral estoppel. The Federal Circuit has held that “once the
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`‘ claims of a patent are held invalid in a suit involving one alleged infringer, an unrelated party
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`who is sued for infringement of those claims may reap the benefit of the invalidity decision
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`under principles of collateral estoppel.” Mendenhall v. Barber—Greene C0. ,_26 F.3d 1573, 1577
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`(Fed. Cir. 1994) (citing Blonder-Tongue Labs, Inc. v. Univ. ofIllinois Foundation, 402 US. 313
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`(1971)). Here, however, no tribunal has held that claims 8 and 19 are invalid.
`The only tribunal ruling concerning the validity of claims 8 and 19 is the Commission’s
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`final determination in the original investigation. There, the Commission presumed that claims 8
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`and 19 are valid because Eko was found to be in default, and pursuant to statute, the Commission
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`was required to presume ARM’s factual allegations in the complaint to be true. Certain
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`Beverage Brewing Capsules, Components Thereof, andProducts Containing the Same, USITC
`Inv. No. 337-TA—929, Comm’n Op. at 83 (Mar. 17, 2016) (citing 19 U.S.C. § 1337(g)(1) and 19
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`. .C.F.R. §_2_10.16(c)(.1)).~ The Commissiontherefore.found that Eko. violated section 337 with _
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`" respect'to thoSe patent claims. Id. " After Eko defaulted, no party asserted that claims '8 andl9.
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`are invalid, a circumstance which prevents the Commission from considering invaldity. See
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`Lannorn Mfg. Co., Inc. v Int’l Trade Comm in, 799 F.2d 1572, 1580 (Fed. Cir. 1986) (holding that
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`the Commission cannot “[determine] patent validity when no defense of invalidity has been
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`I Praised”) The CommiSSion therefore presumed that claims ‘8 and 19 arevalid.‘ Se'e' 35U.S.C. §I '
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`282(a) (“[e]ach claim of a patent .
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`. shall be presumed valid independently ofthe validity of
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`other claims. .
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`. .”).
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`In an attempt to sidestep the Commission’s finding that claims 8 and 19 are presumed
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`valid, Eko argues that claims 8 and 19 are invalid as a matter of law because they depend from
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`claims that the Commission found invalid for a lack of written description. A claim, however, is
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`not necessarily invalid because it depends from a claim that lacks written description. For
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`example, a claim may be found invalid for a lack of written description because it is broader than
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`the specification,12 but its dependent claims must be narrower.13 Thus, even if an independent
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`claim is invalid for overbreadth, its dependent claim may nonetheless be valid because its
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`additional narrowing limitations corrected the overbreadth problem.l4 Furthermore, Eko’s
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`argument is contrary to 35 U.S.C. § 282(a), which provides that each claim of patent is presumed
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`valid and specifies that “dependent .
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`. claims shall be presumed valid even though dependent
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`upon an invalid claim.”
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`While Eko cites three cases that it purports hold that a finding of invalidity for a lack of
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`written description extends to all dependent claims, Eko Pet. at 12, none of these cases address
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`‘2 See, e.g., Gentry Gallery, Inc. v. Berkline Corp, 134 F.3d 1473, 1480 (Fed. Cir. 1998)
`(“claims may be no broader than the supporting disclosure”).
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`13’ See 35 U.S.C. § 112, 4th para (pre-AIA) (“a claim in dependent form shall contain a
`reference to a claim previously set forth and then specify a further limitation of the subject matter
`claimed. A claim in dependent form shall be construed to incorporate by reference all the
`limitations ofthe-claim'towhich-it refers”); -
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`14 The Commission has not substantively assessed whether the additional limitations of
`- claims 8 and 19 correct the Overbreadth problems of the claims upon whichthey depend.
`Although Eko could have challenged the validity of the claims in the original investigation, Eko
`instead chose to default, and therefore did not raise that issue during the original investigation.
`See Lannom Mfg, 799 F.2d at 1580.
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`the situation where the accused infringer had already defaulted, and therefore failed to raise the
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`' issue cfinvalidity, as Eko has here. Moreo‘ier, the Federal CirCuit precedent Cited by Eko does 9
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`not even involve Written description. See Ohio Willow Wood Co. v. Alps South, LLC, 735 F.3d
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`1333 (Fed. Cir. 2013) (obviousness); Amgen, Inc. v. Genetics Institute, Inc., 98 F.3d 1328 (Fed.
`Cir. 1996) (enablement).15
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`2. Res Judicata
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`Eko also argues that the ALJ erred by ruling that res judicata barred Eko from raising
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`invalidity of claims8 and 19 in the consolidated enforcement and rescission proceeding. The
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`Commission finds that the ALJ properly ruled that res judicata bars Eko’s invalidity challenge. ‘
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`The Federal Circuit has stated that an original investigation creates resjudicata for ancillary
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`enforcement and rescission investigations. See VastFame Camera, Ltd. v. Int 7 Trade Comm ’n,
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`386 F.3d 1108, 1115 n.2 (Fed. Cir. 2004) (stating that, although section 337 states that “all legal
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`and equitable defenses may be presented” in all proceedings, this language “should not be read to
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`preclude application of traditional principles of res judicata or collateral estoppel”). Defaults
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`create res judicata. See Morris v. Jones, 329 U.S. 545, 550-51 (1947) (“A judgment of a court
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`having jurisdiction of the parties and of the subject matter operates as res judicata, in the absence
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`of fraud or collusion, even if obtained upon a default”) (quotation omitted).16 Resjudicata
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`therefore bars Eko from raising any defense that it could have raised in the original investigation,
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`including the invalidity of claims 8 and 19. See Nasalok Coating Corp. v. Nylok Corp, 522 F.3d
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`15 Eko cites an unpublished district court case that states that a dependent claim is invalid
`if its independent claim is invalid for a lack of written description. Eko Pet. at 12-13 (citing
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`2016)). That decision, however, cites no Federal Circuit precedent that supports such a holding,
`and does not contemplate the scenario where the dependent claim fixes the overbreadth problem
`of an invalid independent claim.
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`16 See also 18A Charles Alan Wright _et al., Federal Practice & Procedure § 4442 (2d ed.
`2016) (“Judgment by default commands the full effects of claim and defense preclusion”).
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`1320, 1328 (Fed. Cir. 2008) (“When a former defendant attempts to undermine a previous
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`I judgment-by 'asserting'in a subsequent action a'claim or defense that was or could have been
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`asserted in the earlier case, the rules of defendant preclusion will apply”).17
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`Furthermore, neither the enforcement proceeding nor the rescission proceeding
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`encompass the issue of whether claims 8 and 19 are invalid. When the Commission instituted
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`the enforcement proceeding, it expressly excluded defenses barred by claim preclusion, z'.e., res
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`judicata. Commission Order at 3 (June 27, 2016) (emphasis added) (stating that “[a]ll defenses
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`not barred by claim preclusion may be raised in this proceeding”). Additionally, the rescission
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`proceeding is limited to “changed conditions of fact or law, or the public interest,” 19 CPR. §
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`210.76(a), and Eko has failed to present any changed conditiOns relevant to the validity of claims
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`8and 19.
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`III.
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`CONCLUSION
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`For the reasons set forth above, the Commission affirms under modified reasoning the
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`ALJ’s finding that ARM is entitled to a summary determination that Eko cannot establish its
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`collateral estoppel defense as a matter of law.
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`By order of the Commission.
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`Issued: April 4, 2017
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`Lisa R. Barton
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`Secretary to the Commission
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`17 See also 18 Charles Alan Wright et 611., Federal Practice & Procedure § 4414 (2d ed.
`2016) (“The simplest rule of all is that direct enforcement of a judgment cannot be resisted
`merely by raising defenses that might have been raised before the judgment was entered”).
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`CERTAIN BEVERAGE BREWING CAPSULES,
`COMPONENTS THEREOF, AND PRODUCTS
`CONTAINING THE SAME
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`‘ Inv. No. 337-TA-929
`(Enforcement and
`Rescission Proceeding)
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`PUBLIC CERTIFICATE OF SERVICE
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`1, Lisa R. Barton, hereby certify that the attached Commission Opinion has been served
`by hand upon the Commission Investigative Attorney, Monisha Deka, Esq., and the following
`parties as indicated, on April 4, 2017.
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`Lisa R. Barton, Secretary
`US. International Trade Commission
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`500 E Street, SW, Room 112
`Washington, DC 20436
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` On Behalf of Com lainants Adrian Rivera and ARM
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`Enterprises, Inc.:
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`Sudip Kundu, Esq.
`KUNDU PLLC
`1300 Eye Street, NW, Suite 400B
`Washington, DC 20005
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`[1 Via Hand Delivery
`Via Express Delivery
`D Via First Class Mail
`D Other,
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`On Behalf of Respondents Eko Brands, LLC and Espresso
`Supply, Inc.:
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`Andrew F. Pratt, Esq.
`VENABLE LLP
`600 Massachusetts Ave, NW
`Washington, DC 20001
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`D Via Hand Delivery
`Via Express Delivery
`[I Via First Class Mail
`’ D Other:
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