Certain Hardware Logic Emulation Systems and Components Thereof; Notice of Commission Decision Not To Review an Initial Advisory Opinion Issued by the Administrative Law Judge

AGENCY:

U.S. International Trade Commission.

ACTION:

Notice.

SUMMARY:

Notice is hereby given that the U.S. International Trade Commission has determined in the above-captioned advisory opinion proceeding (1) not to review the presiding administrative law judge's (“ALJ's”) finding that access from the United States of Mentor Graphics Corporation's (“Mentor's”) foreign design verification centers would not be covered by the Commission's cease and desist order, (2) to take no position on the ALJ's alternate determination concerning the “use” of Mentor's hardware logic emulator in the United States if the term “covered product” in the cease and desist order is interpreted to include infringing hardware and software that has not been imported, (3) affirm the ALJ's Order No. 115, and (4) to grant the motion of Quickturn Design Systems, Inc. (“Quickturn”) to file a reply to the response of the Commission investigative attorney (“IA”) to Quickturn's petitions to the Commission.

FOR FURTHER INFORMATION CONTACT:

Timothy P. Monaghan, Office of the General Counsel, U.S. International Trade Commission, 500 E Street, SW., Washington, DC 20436, telephone 202-205-3152. General information concerning the Commission may also be obtained by accessing its Internet server (http://www.usitc.gov). Hearing-impaired persons are advised that information on this matter can be obtained by contacting the Commission's TDD terminal on 202-205-1810.

SUPPLEMENTARY INFORMATION:

Inv. No. 337-TA-383 was instituted on March 8, 1996, based on a complaint by Quickturn. The respondents named in the investigation were Mentor and Meta Systems (hereinafter collectively “Mentor”). The products at issue were certain hardware logic emulation systems used in the semiconductor industry to debug and test electronic circuit designs for semiconductor devices.

On July 31, 1997, the ALJ issued his final initial determination (“ID”) finding that Mentor had violated section 337 of the Tariff Act of 1930 (19 U.S.C. 1337) by infringing certain claims of U.S. Letters Patent 5,329,470, 5,036,473, 5,448,496, and 5,109,353, all owned by Quickturn. On October 2, 1997, the Commission determined not to review the ALJ's final ID, and on December 3, 1997, issued a limited exclusion order prohibiting the importation of respondents' emulators and components thereof found to infringe one or more of the patent claims in controversy. The Commission also issued a cease and desist order prohibiting, inter alia, the electronic importation and transmission of infringing hardware emulation software.

On August 20, 1999 Mentor filed a petition with the Commission requesting issuance of an advisory opinion pursuant to Commission rule 210.79(a) (19 CFR 210.79(a)). Mentor contended that remote access from the United States of its hardware logic emulation systems housed in “design verification centers” located outside the United States would not infringe Quickturn's patents and, therefore, would not be covered by the Commission's limited exclusion order and/or the cease and desist order. On November 10, 1999, the Commission instituted an advisory opinion proceeding to determine (1) whether Mentor's proposed foreign design verification centers would be covered by the cease and desist order issued in this investigation, and (2) whether the importation of integrated circuits (“ICs”) designed and debugged by IC designers in the United States using Mentor's foreign design verification centers would be covered by the limited exclusion order issued in this investigation. The Commission remanded the advisory opinion proceeding to the ALJ for appropriate proceedings and the issuance of an initial advisory opinion (“IAO”). The ALJ was given the authority to conduct any proceedings he deemed necessary, including taking evidence and ordering discovery.

Quickturn stipulated that ICs designed and debugged by designers in the United States using Mentor's design verification centers would not be covered by the limited exclusion order issued in the investigation. Therefore, only the Commission's cease and desist order remained at issue in the IAO proceeding.

An evidentiary hearing was conducted by the ALJ on June 5 and 6, 2000. On June 23, 2000, the ALJ issued Order No. 115 finding that Quickturn had waived arguments that any Mentor's infringing hardware emulation software would be resident in the United States under the proposed scheme. On August 7, 2000, the ALJ issued his IAO finding that Mentor's proposed access in the United States of Mentor's foreign design verification centers would not be covered by the Commission's cease and desist order issued in the investigation.

The ALJ found in the alternative that if the term “covered product” in the cease and desist order is interpreted to include infringing hardware and software that has not been imported into the United States, then Mentor's U.S. customers would be “using” the “covered product” in violation of the cease and desist order.

On August 18, 2000, Quickturn filed a petition for review of the IAO and a petition for the Commission to review and reverse the ALJ's ruling Order No. 115, and Mentor filed a conditional petition for review of the IAO. The IA did not petition for review of the IAO. On August 25, 2000, Mentor, Quickturn, and the IA filed responses to the petitions for review.

Having examined the record in this investigation, including the briefs and the responses thereto, the Commission determined (1) not to review the ALJ's finding in the IAO that access from the United States of Mentor's foreign design verification centers would not be covered by the Commission's cease and desist order, (2) to take no position on the ALJ' s alternative determination in the IAO concerning the “use” of Mentor's hardware logic emulator in the United States if the term “covered product” in the cease and desist order is interpreted to include infringing hardware and software that has not been imported, (3) to affirm Order No. 115, and (4) to grant Quickturn's motion to file a reply to the response of the IA to Quickturn's petitions to the Commission.

This action is taken under the authority of section 337 of the Tariff Act of 1930, 19 U.S.C. 1337, and Commission rule 210.79, 19 CFR 210.79.