PUBLIC VERSION
`
`UNITED STATES INTERNATIONAL TRADE COMMISSION
`
`Washington, D.C.
`
`In the Matter of
`
`CERTAIN DIGITAL VIDEO
`RECEIVERS AND HARDWARE AND
`SOFTWARE COMPONENTS THEREOF
`
`Investigation N0. 337-TA-1001
`.
`
`COMMISSION OPINION
`
`This investigation is before the Commission for a final determination on the issues under
`
`review, and to detennine the appropriate remedy, the public interest, and bonding. The
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`Commission has detennined to affinn that respondent Comcast violated section 337 of the
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`Tariff Act of 1930, as amended (19 U.S.C. 1337) (“section 337”), in connection with claims 1,
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`2, 14, and 17 of U.S. Patent No. 8,006,263 (“the ’263 patent”) and claims 1, 3, 5, 9, 10, 14, and
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`18 ofU.S. Patent No. 8,578,413 (“the ’4l3 patent”).
`
`The Commission has determined to affirm the final initial detennination (the “Final ID”)
`
`in part, affirm the Final ID with modifications in part, reverse the Final ID in part, vacate the
`
`Final ID in part, and take no position as to certain issues under review. More particularly, the
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`Commission affirms the Final ID’s detennination that Comcast imports the accused X1 set-top
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`boxes (“STBs”), and takes no position as to whether Comcast is an importer of the Legacy
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`STBs. The Commission also takes no position on whether Comcast sells the accused products
`
`after importation.
`
`The Commission concludes that there is no section 337 violation as to the Legacy STBs.
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`Regarding the X1 STBs, the Commission affirms the Final ID’s conclusion that Comcast’s
`
`1
`
`Comcast, Exhibit-1013
`Comcast v. Rovi
`IPR2017-00742
`
`

`

`PUBLIC VERSION
`
`customers directly infringe the ’263 and ’4l3 patents. Thus, the Commission affmns the Final
`
`ID’s conclusion that complainant Rovi has established a violation by Comcast as to those
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`patents and the X1 STBs.
`
`'
`
`The Commission also takes the following actions. The Commission vacates the Final
`
`ID’s conclusion that Comcast’s two alternative designs infringe the ‘263 and ’413 patents and
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`instead concludes that those designs are too hypothetical to adjudicate at this time. The
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`Commission modifies and affirms the Final ID’s claim construction of the claim term “cancel a
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`function of the second tuner to permit the second tuner to perform the requested tuning
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`operation” in U.S. Patent No. 8,621,512 (“the ’5l2 patent”) and affirms the Final ID’s
`
`infringement determinations as to that patent. The Corrnnission modifies and affirrns the Final
`
`ID’s conclusion that the asserted claims of the ’5l2 patent are invalid as obvious. The '
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`Commission takes no position as to whether the ARRIS-Rovi Agreement provides a defense to
`
`the allegations against ARRIS, and as to whether Rovi established the economic prong of the
`
`domestic industry requirement based on patent licensing. The Commission adopts the
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`remainder of the Final ID to the extent that it does not conflict with this opinion or to the extent
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`it is not expressly addressed in this opinion.
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`Having found a violation of section 337 in this investigation by Comcast, the
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`Commission has determined that the appropriate fonn of relief is a limited exclusion order
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`(“LEO”) and cease and desist orders (“CD05”). The Commission has determined to issue an
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`LEO as to Comcast’s infringing digital video receivers and hardware and software components
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`thereof. The CDOs prohibit, among other things, the importation, sale, and distribution of
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`infringing products by Comcast.
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`2
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`

`

`‘PUBLIC VERSION
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`The Commission has also determined that the public interest factors enumerated in
`
`sections 337(d) and (f) do not preclude issuance of the orders. Finally, the Commission has
`
`determined that a bond in the amount of zero (i.e., no bond) is required to permit temporary
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`importation and sale during the period of Presidential review (19 U.S.C. 1337(d)) of digital
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`video receivers and hardware and software components thereof that are subject to the orders.
`
`I.
`
`BACKGROUND
`
`A.
`
`Procedural History
`
`1.
`
`Institution
`
`.
`
`The Commission instituted this investigation on May 26, 2016, based on a complaint
`
`filed on behalf of Rovi Corporation and Rovi Guides, Inc. (collectively, “Rovi”), both of San
`
`Carlos, California. 81 FR 33547, 33547 (May 26, 2016) (the “Notice of Investigation”). The
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`complaint, as amended, alleges violations of section 337 of the Tariff Act of 1930, as amended,
`
`19 U.S.C. 1337, by reason of infringement of certain claims of U.S. Patent Nos. 8,006,263 (“the
`
`’263 patent”); 8,578,413 (“the ’413 patent”); 8,046,801 (“the ’801 patent”); 8,621,512 (“the
`
`’5l2 patent”); 8,768,147 (“the_’147 patent”); 8,566,871 (“the ’871 patent”); and 6,418,556 (“the
`
`’556 patent”). Id. at 33547-48. The complaint further alleges that a domestic industry exists.
`
`Id. at 33548.
`
`I
`
`The Notice of Investigation named sixteen respondents. The respondents are Comcast
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`Corporation; Comcast Cable Communications, LLC; Comcast Cable Communications
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`Management, LLC; Comcast Business Communications, LLC; Comcast Holdings Corporation;
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`Comcast Shared Sen/ices, LLC (collectively “Comcast’°);Technicolor SA; Technicolor USA,
`
`Inc.; Technicolor Connected Home USA LLC (collectively “Technicolor”); ARRIS
`
`International plc; ARRIS Group Inc.; ARRIS Technology, Inc.; ARRIS Enterprises LLC;
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`ARRIS Solutions, Inc.; ARRIS Global Ltd., and Pace Americas, LLC (collectively, “ARRIS”)
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`3
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`

`

`PUBLIC VERSION
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`(all respondents collectively, the “Respondents”). Notice of Investigation, 81 FR at 33548; see
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`also 82 FR 38934-36 (Aug. 16, 2017) (the “Notice of Review”). The Office of Unfair Import
`
`Investigations is not a party to this investigation. See Notice of Investigation, 81 FR at 33548.
`
`2.
`
`Non-Final Initial Determinations
`
`On October 21, 2016, the Commission determined not to review an initial detennination
`
`(“ID”) terminating the investigation as to claims 5, 6, 8, 9, 11, 12, and 18 of the ’263 patent;
`
`claims 6-8, 12, and 15-17 of the ’413 patent; claims 2-4, 6-9, 11-14, 16-27, and 29-54 ofthe
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`’801 patent; claims 4, 8, 9, 11, 12, 16, 20, 21, 23, and 24 ofthe ’512 patent; claims 5, 6, 8, 10,
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`15, 21, 22, and 24 ofthe ’147 patent; claims 2, 4, 10, 11, 13, 16, 19-22, 24, 26, 28, 30, 33, 35,
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`36, and 39 ofthe ’556 patent; and claims 1, 2, 6-11, 13, 19-22, 24, and 30-33 ofthe ’871
`
`patent.‘ On December 2, 2016, the Commission determined not to review an ID terminating the
`
`investigation as to claim ‘l5 of the ’263 patent; claim 28 of the ’80l patent; claims 2, 3, 14, and
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`15 of the ’512 patent; claim 16 ofthe ’147 patent; claims 3, 12, and 14 of the ’556 patent; and
`
`claims 23, 28, and 29 of the ’871 patent.2 On December 2-8,2016, the Commission determined
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`not to review an ID tenninating the investigation as to all infringement allegations with respect
`
`to the ’147 patent.3
`
`For sake of clarity regarding the effect of the non-final IDs, the table below presents the
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`remaining claims (and purposes thereof).
`
`1Order No. 17 (Sept. 23, 2016), unreviewed, C0mm’n Notice (Oct. 21, 2016).
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`2 Order N0. 25 (Nov. 14, 2016), unreviewed, Comm’n Notice (Dec. 2, 2016).
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`3 Order No. 27 (Dec. 5, 2016), unreviewed, Comm’n Notice (Dec. 28, 2016).
`
`4
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`

`

`PUBLIC VERSION
`
`Patent
`
`Infringement
`
`X] STBs
`
`7, 18, 40
`
`1, 2, 14, 17
`
`1, 5, 10, 15
`
`12, 17, 18
`
`Legacy STBs
`
`7, 18, 40
`
`1, 2,14,17
`
`1, 5,10,15
`
`(none)
`
`1,3,5, 9, 10, 14,18
`
`1,3,5, 9,10, 14,18
`
`1, 10, 13, 22
`
`1, 10, 13, 22
`
`’556
`
`’263
`
`’801
`
`’871
`
`’4l3
`
`’512
`
`Domestic Industry
`(Technical Prong)
`
`7,18, 40
`
`1, 2, 14, 17
`
`1, 5,1O,15
`
`12,13,17,18
`
`1, 3, 5, 9,10,14,18
`
`1, 10, 13, 22
`
`3.
`
`The Final ID, Petitions Thereof, and the Recommended Determination
`
`On May 26, 2017, the ALJ issued the Final ID, which concludes with forty-nine
`
`conclusions of fact and law (abbreviated herein as “COFL”). Final ID at 610-13. The Final ID
`
`finds a violation of section 337 in connection with the asserted claims of the ’263 and ’413
`
`patents, but not in connection with the asserted claims of the ’556, ’801, ’871, and ’512 patents
`
`Specifically, the Final ID finds that the Commission has subject matter jurisdiction over the
`
`allegations in the complaint, in rem jurisdiction over the accused products, and in personam
`
`jurisdiction over Respondents. Final ID at 610. The Final ID finds that Comcast, ARRIS, and
`
`Technicolor import the accused products, but that Comcast does not sell accused products for or
`
`after importation.
`
`Id. at 9-14.
`
`On June 9, 2017, the ALJ issued his Recommendation on Remedy and Bond (the “RD”)
`
`The RD declares that,
`
`subject to any public interest determination of the Commission, the
`Commission should: (1) issue a [LEO] covering products that infringe
`one or more of the claims as to which a violation of section 337 has been
`found; (2) issue [CD05]; and (3) require no bond during the Presidential
`review period.
`
`5
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`

`

`PUBLIC VERSION
`
`RD at 1.
`
`4.
`
`The C0mmissi0n’s Review of the Final ID
`
`On June 12, 2017, Rovi and Respondents each filed a petition for review of the Final ID
`
`each.challenging a number of the Final ID’s findings and conclusions.4 On August 10, 2017,
`
`the Commission detennined to review some of the petitioned issues. Notice of Review, 82 FR
`
`at 38934-36. Specifically, the Commission determined to review the following issues:
`
`(1) The Final ID’s determination that Comcast is an importer of the
`accused products (Issue 1 in Respondents’ Petition for Review).
`
`(2) The Final ID’s determination that Comcast has not sold accused
`products in the United States after the importation of those products into
`the United States (the issue discussed in section III of Rovi’s Petition for
`Review).
`
`.
`
`(3) The Final ID’s determination that the accused Legacy products are
`“articles that infringe” (Issue 2 in Respondents’ Petition for Review).
`
`(4) . . . [W]hether the X1 products are “articles that infringe” (Issue 3 in
`Respondents’ Petition for Review), the issue of direct infringement of
`the ’263 and ’413 patents by the X1 accused products (Issue 5 in
`Respondents’ Petition for Review), and the issue of “the nature and scope
`of the violation found” (the issue discussed in section X of Respondents’
`Petition for Review).
`
`(5) . . . [W]hether Comcast’s two alternative designs infringe the ’263
`and ’4l3 patents (Issue 4 in Respondents’ Petition for Review).
`
`(6) The Final ID’s claim constnlction of “cancel a ftmction of the second
`tuner to permit the second tuner to perform the requested tuning operation”
`in the ’512 patent, and the Final ID’s infringement determinations as to
`that patent (Issue 26 in Respondents’ Petition for Review).
`
`4Rovi’s and Respondents’ petitions for review of the Final ID are cited herein as “Rovi Pet.”
`and “Resps. Pet.,” respectively; and Rovi’s and Respondents’ replies to the 0ther’s petitions
`are cited herein as “Rovi Pet. (Reply)” and “Resps. Pet. (Rep1y),” respectively. The parties’
`separately-filed summaries of their petitions and/or replies are denoted herein with
`“(Summary)”
`
`"
`
`6
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`

`PUBLIC VERSION
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`(7) The Final lD’s conclusion that the asserted claims of the ’5l2 patent
`are invalid as obvious (the issue discussed in section VI.B.4 of Rovi’s
`‘ Petition for Review).
`_
`
`(8) . . . [W]hether the ARRIS-Rovi Agreement provides a defense to the
`allegations against the ARRIS respondents (the issue discussed in section
`XI of Respondents’ Petition for Review).
`
`(9) The Final ID’s conclusion that Rovi did not establish the economic
`prong of the domestic industry requirement based on patent licensing (the
`issue discussed in ‘sectionIV of Rovi’s Petition for Review).
`
`Id. at 389345. The Commission requested briefing on certain topics. The Commission further
`
`concluded that certain of Respondents’ assignments of error were waived:
`
`The Commission has further detennined that Respondents’ petition of the
`Final ID’s determinations is improper as to the following issues: (l) The
`representative accused Xl products for the ’263, ’4l3, and ’8Ol patents;
`(2) the induced infringement of the ’263 and ’4l3 patents; and (3) the
`eligibility under 35 U.S.C. 101 ofthe ’512 patent. See 19 CFR
`2l0.43(b)(2) (“Petitions for review may not incorporate statements,
`issues, or arguments by reference”). Those assignments of error are
`therefore waived.
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`Review,” challenging the Commission’s finding of waiver as to the three issues noted above.j
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`Id. On August 24, 2017, Rovi and Respondents filed their written submissions on the issues
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`under review and on remedy, public interest, and bonding, and on August 31, 2017, the parties
`
`filed their reply submissions.5
`
`g
`
`On August 23, 2017, Respondents filed a “Petition for Reconsideration of the
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`Commission’s Determination of Waiver as to Certain Issues Specified in Respondents’ Petition
`
`for Review or, Alternatively, Application of Waiver to Issues Raised in Rovi’s Petition for
`
`5Rovi’s and Respondents’ initial submissions are cited herein as “Rovi Br.” and “Resps. Br,”
`respectively, and the parties’ reply submissions are cited herein as “Rovi Br. (Reply)” and
`“Resps. Br. (Reply),” respectively.
`
`7
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`

`

`PUBLIC VERSION
`
`On August 30, 2017, Rovi filed a response thereto. Based on the conclusory assertions and
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`incorporation of post-hearing briefing in Respondents’ petition for review, Respondents waived
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`their arguments and failed to demonstrate that any finding or conclusion of material fact was
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`clearly erroneous; that any legal conclusion was erroneous, without governing precedent, rule or
`
`law, or constitutes an abuse of discretion; or that any issue is one affecting Commission policy.
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`19 CFR 2lO.43(b)(1)-(b)(2). Accordingly, we have found the issues waived, and have adopted
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`the ALJ’s fmdings on these issues.
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`B.
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`Patents Related to the Issues under Review
`
`1.
`
`The ’263 and ’4l3 Patents—the “Remote Access Patents”
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`_
`
`The ’263 and ’4l3 patents are each titled “Interactive television program guide with
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`remote access.” The ’263 patent issued on August 23, 201 1, and the ’4l3 patent issued on
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`November 5, 2013. JX-0002 (’263 patent), at cover page; JX-0005 (’4l3 patent), at cover page.
`
`Respondents refer to the ’263 and ’4l3 patents as the “Remote Access Patents.” See Final ID at
`
`178. Each Remote Access Patent claims the benefit of U.S. Provisional Application Nos:
`
`60/097,527, filed August 21, 1998, and 60/093,292, filed July 17, 1998. JX-0002 (’263 patent),
`
`Ra
`
`at cover page; JX-0005 (’4l3 patent), at cover page. Each of the Remote Access Patents shares
`
`essentially the same specification. See generally JX-0002 C263 patent); JX-0005 (’4l3 patent),
`
`at cover page; see also Rovi Post-Hrg. Br.6 at 41 (explaining that the patents “stem from a
`
`common, parent application filed on July 16, 1999”). The Remote Access Patents relate to
`
`6“Rovi Post-Hrg. Br.” refers to the Rovi’s post-hearing brief, which was filed with the AL] .
`Respondents’ post-hearing brief is similarly abbreviated as “Resps. Post-Hrg. Br.,” and the
`parties’ reply post-hearing briefing is cited as “Rovi Post-Hrg. Br. (Reply)” or “Resps. Post­
`Hrg. Br. (Reply),” respectively.
`
`8
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`

`

`PUBLIC VERSION
`
`interactive television guide programs (“IPGs”) that operate on local devices, such as STBs, and
`
`remote devices, such as a laptops or mobile phones. See JX-0002 (’263 patent), at Abstract; JX­
`
`OO05(’413 patent), at Abstract; see also Final ID at 178, 281.
`
`2.
`
`The ’s12 Patent
`
`I
`
`The ’512 patent, titled “Interactive television program guide with simultaneous watch
`
`and record capabilities,” issued on December 31, 2013, and claims.the benefit of several
`
`applications, the earliest of which is U.S. Provisional Application No. 60/089,487, filed on June
`
`16, 1998. JX-0006 (’512 patent), at cover page. The ’512 patent discloses a television guide
`
`that allows a user to record a program while simultaneously watching another program. Id.
`
`C.
`
`Products. at Issue
`
`1.
`
`The Accused Products
`
`The accused products are STBs (and their ancillary remote controls and applications)
`
`that Comcast supplies to customers to enable their television viewing experience. See, e.g.,
`
`Final ID at 7. These products are capable of supporting one of two software-based guides
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`supplied by Comcast to its customers: the X1 Guide or the Legacy Guide. Regarding the
`
`differences between the X1 Guide and the Legacy Guide, the Legacy STBs locally store and
`
`execute the IPG7 software and programming scheduling data “on the box,” and the new X1
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`STBs receive IPG screen views from the “cloud.” See, e.g., id. at 220.
`
`.
`
`In view of certain licensing agreements at issue in this investigation, Rovi declares that it
`
`é—ii
`
`accuses all digital video receivers and hardware and sofiware components
`thereof, including all products capable of supporting Comcast’s X1 or
`
`7An IPG allows, for example, a person viewing a television to select channels for viewing or
`recording.
`_
`
`9
`
`

`

`.
`
`PUBLIC VERSION
`
`Legacy Guide, that are or were: (1) products purchased by Comcast on or
`after April 1, 20168, regardless of when they were imported; (2) products
`installed by Comcast into its customer base on or after April 1, 2016,
`regardless of when they were purchased by Comcast or imported; and (3)
`products that Comcast now holds in inventory and that Comcast will, in
`1 the normal course of business, install into Comcast’s customer base on or
`after April 1, 2016, regardless of when they were purchased by Comcast
`or imported.
`
`'
`
`Rovi Post-Hrg. Br. at 10. Rovi further accuses
`
`all Technicolor and ARRIS products capable of supporting Corncast’s X1
`or Legacy Guide, that are or were: (1) products imported on or afier April
`1, 2016 and sold to Comcast; (2) products sold to Comcast on or after
`April 1, 2016, regardless of when they were imported; and (3) products
`that Technicolor or ARRIS hold in inventory for sale to Comcast,
`regardless of when they were imported. The foregoing includes remote
`controls and applications that operate in conjtmction with any of the
`identified models.
`
`Id. at l0—11.
`
`2.
`
`The DomesticIndustry Products
`
`The domestic industry products in this investigation are Rovi’s i-Guide, Passport, and
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`TotalGuide XD systems. Final ID at 576.
`
`'
`
`II.
`
`ISSUES UNDER REVIEW
`
`A. Whether Comcast Has Imported or Sold Infringing Products after the Importation
`into the United States
`
`1.
`
`The X1 STBs
`
`_
`
`The Commission has determined to affirm the Final ID’s findings and conclusion that
`
`Comcast imports the X1 STBs into the United States. The Commission has determined to take
`
`no position as to whether Comcast has sold the X1 STBs in the United States after the
`
`8April 1, 2016, is the day after patent and software licenses between Rovi (licensor) and
`Comcast (licensee) expired.
`
`10
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`­
`

`

`PUBLIC VERSION
`
`importation of those products into the United States. See Beloit Corp. v. Valet Oy, 742 F.2d
`
`1421, 1423 (Fed. Cir. 1984).
`
`2.
`
`The Legacy STBs
`
`As discussed below, the Commission has determined that Rovi cannot establish a
`
`violation based on any unfair act related to the Legacy STBs. The Commission has thus
`
`determined to take no position as to whether Comcast has imported or sold the Legacy STBs
`
`after the importation into the United States. See Beloit, 742 F.2d at 1423.
`
`B.
`
`Whether Rovi Established a Violation as to the Legacy STBs
`
`1.
`
`The Applicable Law
`
`‘
`
`“An express or implied license is a defense to infringement.” Radar Indus., Inc. v.
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`Cleveland Die & Mfg. C0., 424 F. App’x 931, 933 (Fed. Cir. 2011). “The burden of proving ‘
`
`that an implied license exists is on the party asserting an implied license as a defense to
`
`infringement.” Augustine Med, Inc. v. Progressive Dynamics, Inc., 194 F.3d 1367, 1370 (Fed.
`
`Cir. 1999). “The longstanding doctrine of patent exhaustion provides that the initial authorized
`
`sale of a patented item terminates all patent rights to that item.” Quanta Computer Inc. v. LG
`
`Elecs., Ina, 553 U.S. 617, 625, 128 S.Ct. 2109, 170 L.Ed.2d 996 (2008).
`
`2.
`
`The Final ID
`
`.
`
`The Final ID concludes that “[t]he accused Legacy products infringe claims 1, 2, 14, and
`
`17 of [the ’263 patent]; claims 1, 3, 5, 9, 10, 14, and 18 of [the ’413 patent]; and claims 1, 10,
`
`13, and 22 ofU.S. Patent No. 8,621,512.” Final ID at 611. However, the Final ID finds no
`
`violation by Comcast with respect to the Legacy STBs based on a 2010 Patent License between
`
`Rovi and Comcast. Id. at 553-54. Relevant to the Legacy STBs and regarding Comcast’s
`
`licensing defense, the Final ID declares,
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`11
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`

`

`PUBLIC VERSION
`
`The 2010 Patent License permits Comcast (and authorized third parties)
`to [
`
`.
`] products that
`practice Rovi’s Patents. Thus, the license expressly allows Comcast,
`along with its suppliers, to import products before April 1, 2016.
`Accordingly,
`. . . products imported before April 1, 2016 are not unlawful
`imports, and there has been no . . . unfair act which would constitute a
`violation [oi] Section 337 for these products.
`'
`
`Final ID at 553-54 (footnote and citations omitted).
`
`[
`
`].
`
`3.
`
`Commission Determination and Analysis
`
`The Commission hereby supplements the Final ID with the following analysis. Rovi has
`
`not established a violation as to the Legacy STBs imported prior to the expiration of the license
`
`additionally because the sale of all Legacy STBs at issue that was authorized by Rovi exhausted
`
`Rovi’s patent rights as to those products.
`
`,
`
`Patent exhaustion is generally triggered by a patentee’s sale of an item or through a sale
`
`of that item that is authorized by the patentee (such as a sale by a licensee authorized by the
`
`patentee).
`
`Impression Prods.
`
`Inc. v. Lexmark Int ’l,Ina, 137 S. Ct. 1523, 1531, 1534-35
`
`(2017); see also Quanta, 553 U.S. at 625 (“The longstanding doctrine of patent exhaustion
`
`provides that the initial authorized sale of a patented item terminates all patent rights to that
`
`item”); see also Powertéch Tech. Inc. v.Tessera, Inc., 660 F.3d 1301, 1307 (Fed. Cir. 2011);
`
`LG Elecs. Inc. v. Hitachi Lta'., 655 F. Supp. 2d 1036, 1047-48 (N.D. Cal. 2009) (citing U.S. v.
`
`Masonite C0rp., 316 U.S. 265, 278 (1942)). Patent exhaustion
`
`marks the point where patent rights yield to the common law principle
`against restraints on alienation. The Patent Act “promote[s] the progress
`of science and the useful arts by granting to [inventors] a limited
`monopoly” that allows them to “secure the financial rewards” for their
`inventions.
`[Univis Lens, C0. v. U.S., 316 U.S., 241, 250 (1942)]. But
`once a patentee sells an item, it has “enjoyed all the rights secured” by
`that limited monopoly. Keeler v. Standard Folding Bed C0., 157 U.S.
`659, 661, 15 S.Ct. 738, 39 L.Ed. 848 (1895). Because “the purpose of the
`
`'
`
`12
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`

`

`A
`
`PUBLIC VERSION
`
`patent law is fulfilled . . . when the patentee hasreceived his reward for
`the use of his invention,” that law furnishes “no basis for restraining the
`use and enjoyment ofthe thing sold.” Univis, 316 U.S., at 251, 62 S.Ct.
`1088.
`
`Impression Pr0ds., 137 S. Ct. at 1531-32. “The patent exhaustion analysis focuses on the
`
`agreement to which the patent holder is a party” because “[o]nly that agreement reflects what
`
`the patent holder has bargained for” and “reflects the relevant transaction pursuant to which the
`
`patent holder contemplated sales of the patented items, whether through a direct licensee, or
`
`through a subsequent sublicensee.” High Point Sarl v. T-Mobile USA,Ir1c.,53 F.Supp.3d 797,
`
`803, 805 (D.N.J. 2014) (holding that sales by a sub-licensee were authorized by the patentee’s
`
`license agreement with the licensee for purposes of patent exhaustion), cgfi"dper curiam, 640
`
`Fed. Appx. 917 (Fed. Cir. 2016) (unpublished).
`
`Rovi granted Comcast an express license to
`
`_
`
`l
`
`JX-0050C, at § 1(b) (emphasis added). As shown above, the license agreement thus authorized
`
`Comcast to [
`
`] STBs. Also as shown above, that license agreement authorized [
`
`1-
`
`A
`
`0838C (Shank RWS) at QA28-29; ARR1S’s Resp. to the Complaint (June 30, 2016, Rule
`
`21().13(b) Statement); Tr. 465-66, 469-71, 558; IX-0100C (Johnson Dep. Tr.) 48; RX-0781C
`
`]. See, e.g., RX­
`
`13
`
`

`

`'
`
`PUBLIC VERSION
`
`(Folk RWS) at Q/A 50 ([
`
`]); Technicolor’s Aug. 1, 2016,
`
`Supplemental Rule 21O.13(b)_Statement. Thus, focusing on the “license agreement to which the
`
`patent holder is a party,” see High Point, 53 F.Supp.3d at 805, all sales of Legacy STBs were
`
`sales authorized by the license agreement [
`
`]. Therefore, Rovi’s patent rights have been
`
`exhausted as to those STBs, and none of the import, re-import,9 or any alleged sale after
`
`importation of the Legacy STBs at issue can be the basis of a violation under section
`
`337(a)(1)(B).10
`
`iii__i__i_-ii
`
`9After the ALJ issued the Final ID, Comcast submitted with the Office of the Secretary a letter
`including supplemental disclosures and representations, [
`
`]. The Commission determined to reopen the evidentiary record and
`accept the supplemental disclosure and related submissions. See Notice of Review, 82 FR at
`38934-35.
`I
`
`10
`
`Similarly, any alleged infringing conduct or unfair acts under section 337 regarding X1 STBs
`that were purchased and imported prior to the expiration of the license cannot serve as a basis
`of a violation under section 337(a)(1)(B). In Quanta, the Supreme Court considered whether
`exhaustion can apply when the sold article does not itself fully practice the asserted claims,
`such as if the claims are method claims. See Quanta, 553 U.S. at 628-35. There, the Court
`declared that exhaustion is triggered when the sold article has as its only reasonable and
`intended use to practice the patent and where the article embodies the essential features of the
`patented invention. See Quanta, 553 U.S. at 631-32 (citing Univis, 316 U.S., at 249-51).
`The standard under Quanta is satisfied with respect to both the X1 and Legacy STBs.
`The Final ID’s unreviewed finding declares that the Legacy STBs infringe the ’263 and ’413
`patents, see, e.g., Final ID at 611, and the Commission concludes (as discussed below) that
`the X1 STBs infringe the ’263 and ’413 patents. Furthermore, “the accused products are so
`tailored to Comcast’s system and requirements that they would not function within another
`cable operator’s system.” Final ID at 12. Additionally (as discussed below), the
`Commission concludes that Rovi has shown that Comcast induced the infringement of the
`‘263 and ‘413 patents as to the X1 STBs, and the analogous finding of the Fina] ID as to the
`
`14
`
`

`

`PUBLIC VERSION
`
`C.
`
`Whether Rovi Established that the X1 STBs Infringe the ’263 and ’413 Patents
`
`1.
`
`The Applicable Law
`
`~
`
`a.
`
`Infringement
`
`i.
`
`Direct Infringement
`
`35 U.S.C. 271(a) defines direct infringement and declares, “whoever Without authority
`
`makes, uses, offers to sell, or sells any patented invention, within the United States or imports
`
`into the United States any patented invention during the term of the patent therefor, infringes the
`
`patent.” The complainant in a section 337 investigation bears the burden of proving
`
`infringement of the asserted patent claims by a preponderance of the evidence. Certain
`
`Flooring Prods, Inv. No. 337-TA-443, Cormn’n Notice of Final Detennination of No Violation
`
`of Section 337, 2002 WL 448690, at *59, (Mar. 22, 2002); Enercon GmbH v. Int ’l Trade
`
`Comm ’n, 151 F.3d 1376 (Fed. Cir. 1998).
`
`.
`
`ii.
`
`Indirect Infringement
`
`_
`
`Section 271(b) of the Patent Act also provides that “[w]hoever actively induces
`
`infringement of a patent shall be liable as an infringer.” 35 U.S.C. 27l(b). “To prevail on a
`
`claim of induced infringement, in addition to inducement by the defendant, the patentee must
`
`also show that the asserted patent was directly infringed.” Epcon Gas Sys. v. Bauer
`
`Compressors, Ina, 279 F.3d 1022, 1033 (Fed. Cir. 2002). Furthermore, “[s]ection 271(b)
`
`covers active inducement of infringement, which typically includes acts that intentionally cause,
`
`urge, encourage, or aid another to directly infringe a patent.” Arris Grp. v. British Telecomm.
`
`Legacy STBs was not petitioned. See Final ID at 611. Thus, Comcast had the intent to
`infringe those patents with both sets of STBs. Accordingly, exhaustion applies to all STBs
`imported prior to the expiration of the license.
`
`-
`
`15
`
`

`

`g
`
`PUBLIC VERSION
`
`PLC, 639 F.3d 1368, 1379, n.l3 (Fed. Cir. 2011). The Supreme Court held that induced
`
`infringement under § 271(b) requires knowledge that the induced acts constitute patent
`
`.
`
`,
`
`.
`
`infringement. Commil USA, LLC v. Cisco Sys, Inc, 135 S.Ct. 1920, 1926-27 (2015).
`
`1
`
`2.
`
`The Final ID
`
`The Final ID finds direct infringement of claims 1, 2, 14, and 17 of the ’263 patent and
`
`claims 1, 3, 5, 9, 10, 14, and 18 ofthe ’413 patent. See, e.g., Final ID at 399, 610-11.“ The
`
`Final ID also finds that Comcast induces its customers to infringe those patents. E.g., id. at 610­
`
`11. The Final ID further finds that ARRIS and Technicolor do not directly or indirectly infringe
`
`those patents. E.g., id. at 237, 610-11.
`
`3.
`
`Commission Determination and Analysis
`
`The Commission affinns the Final ID’s conclusion that Comcast’s customers directly
`
`infringed the ’263 and ’4l3 patents through their use of the X1 systems in the United States.
`
`See Final ID at 234-38. The Final ID’s unreviewed findings also conclude that Comcast
`
`induced that infringement. See id. at 232-34. The parties dispute whether the Final ID finds
`
`that Comcast itself directly infringed the ‘Z63and ’413 patents through Comcast’s “‘testing and
`
`use’ of the Accused Products in the United States after importation.” Rovi Br. (Reply) at 12
`
`H The Commission agrees with the Final lD’s unpetitioned finding that the parties have
`determined to treat claim 1 of the ’263 patent as representative of the relevant claims for
`infringement purposes. Id. at 228-30, 396-400 (“Neither Rovi nor Comcast present separate,
`substantive argument as to whether Comcast does or does not infringe claims 2, 14, and 17 of
`[the ’263 patent]”) (“Rovi relies on the same evidence and argument presented for claim 1 of
`the ’263 Patent to argue that claims 1, 3, 5, 9, 10, 14, and 18 [of the ’413 patent] are
`infringed”) (“Similar1y, Comcast has not presented any separate, substantive non-infringement
`arguments for the ’413 Patent”). To the extent that there are any pertinent differences
`between the claims, the parties, through their representations and conduct, have waived
`reliance on those differences.
`
`16
`
`

`

`PUBLIC VERSION
`
`(citing Final ID at 211-32); Resps. Br. (Reply) at 33-34, n.12. To the extent that the Final ID so
`
`finds direct infringement by Comcast, we take no position on the issue, which, because of
`
`Comcast’s inducement of its customers’ direct infringement, is unnecessary for our findings of
`
`violation of section 337.12 The Commission finds no section 337 violation by ARRIS or
`
`Technicolor because Rovi failed to demonstrate direct or indirect infringement by ARRIS and
`
`Technicolor.
`
`Claim 1 of the ’263 patent, which is representative of the relevant claims, recites (with
`
`Rovi’s annotations):
`
`l. A system for selecting television programs over a remote
`[lpre]
`access link comprising an Internet commtuiications path for recording,
`COI1'1pI'lS1I1gI
`
`[la] a local interactive television program guide equipment on which a
`local interactive television program guide is implemented, wherein the
`local interactive television program guide equipment includes user
`television equipment located within a user’s home and the local
`interactive television program guide generates a display of one or more
`program listings for display on a display device at the user’s home; and
`
`[lb] a remote program guide access device located outside of the user‘s
`home on which a remote access interactive television program guide is
`implemented, wherein the remote program guide access device is a
`mobile device, and wherein the remote access interactive television
`program guide:
`
`[lc] generates a display of a plurality of program listings for display on
`the remote program guide access device, wherein the display of the
`plurality of program listings is generated based on a user profile stored at
`a location remote from the remote program guide access device;
`
`12Were the Commission to have found direct infringement by Comcast, the parties dispute
`whether section 337 can redress that infringement absent a showing of indirect infringement,
`in view of their differing interpretations of Certain Electronic Devices with Image Processing
`Systems, Components Thereof and Associated Software, Inv. No. 337-TA-724, Comm’n Op.
`(Dec. 21, 2011) and the subsequent Federal Circuit decision in Suprema conceming section
`337’s scope. However, this dispute is moot under the current findings.
`17
`
`­
`

`

`PUBLIC VERSION
`
`[ld] receives a selection of a program listing of the plurality of program
`listings in the display, wherein the selection identifies a television
`program corresponding to the selected program listing for recording by
`the local interactive television program guide; and
`
`[le] transmits a communication identifying the television program
`corresponding to the selected program