474 F.3d 1281 (Fed. Cir. 2007), 04-1618, Fuji Photo Film Co., Ltd. v. International Trade Com'n
|Docket Nº:||04-1618, 05-1274.|
|Citation:||474 F.3d 1281|
|Party Name:||FUJI PHOTO FILM CO., LTD., Appellant, v. INTERNATIONAL TRADE COMMISSION, Appellee. Jack Benun, Appellant, v. International Trade Commission, Appellee.|
|Case Date:||January 11, 2007|
|Court:||United States Courts of Appeals, Court of Appeals for the Federal Circuit|
Appealed from: United States International Trade Commission
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Lawrence Rosenthal, Stroock & Stroock & Lavan, LLP, of New York, NY, argued for appellant Fuji Photo Film Co., Ltd. With him on the brief were Matthew W. Siegal and Angie M. Hankins.
George W. Thompson, Neville Peterson LLP, of Washington, DC, argued for appellant
Jack Benun. With him on the brief were John M. Peterson and Michael T. Cone.
Mark B. Rees, Attorney, Office of the General Counsel, United States International Trade Commission, of Washington, DC, argued for appellee. With him on the brief were James M. Lyons, Deputy General Counsel, Andrea C. Casson, Assistant General Counsel, and Jonathan Engler, Attorney. Of counsel were Rodney G. Maze and Timothy P. Monaghan, Attorneys.
Before LOURIE, SCHALL, and DYK, Circuit Judges.
DYK, Circuit Judge.
Appellants Fuji Photo Film Co., Ltd. ("Fuji") and Jack Benun ("Benun"), one of the principals of Jazz Photo Corp. ("Jazz"), separately appeal the International Trade Commission's ("Commission") final determination concerning civil penalties for violation of a cease and desist order issued to Jazz and "its principals, stockholders, officers, directors, employees, [and] agents." The cease and desist order barred Jazz from importing (or selling, marketing, advertising, distributing, etc. previously imported) disposable cameras that infringed fifteen of Fuji's patents. The central questions before the Commission were whether: (1) the cameras were first sold abroad (making their refurbishment infringing regardless of whether they were repaired or reconstructed); and (2) whether the processes Jazz used to refurbish the cameras first sold in the United States constituted permissible repair or impermissible reconstruction. Fuji challenges the order on the ground that the Commission erred in finding that certain of Jazz's lens-fitted film packages ("LFFPs" or "cameras") were permissibly repaired. On appeal Benun, the principal consultant and later Chief Operating Officer ("COO") of Jazz, challenges the order insofar as it imposes civil penalties.
We conclude that Fuji lacked standing to bring this appeal. With respect to Benun's appeal, we conclude that the Commission had the authority to issue an order against Benun; that the order applied to Benun; and that adequate notice was provided that the order applied to Benun. We also hold that substantial evidence supports the finding that the majority of the cameras were first sold abroad and that, while the Commission did not err in finding impermissible reconstruction with respect to most of the cameras first sold in the United States, the Commission erred in ruling that the replacement of the full backs constituted impermissible reconstruction.
We therefore affirm-in-part, reverse-in-part, and remand to the Commission for a recalculation of the appropriate civil penalty.
Cases arising from the same factual background have been before this court four other times. See Jazz Photo Corp. v. United States, 439 F.3d 1344 (Fed. Cir. 2006) ("Jazz II"); Fuji Photo Film Co. v. Jazz Photo Corp., 394 F.3d 1368 (Fed. Cir. 2005) ("Fuji II"); Fuji Photo Film Co. v. Int'l Trade Comm'n, 386 F.3d 1095 (Fed. Cir. 2004) ("Fuji I"); Jazz Photo Corp. v. Int'l Trade Comm'n, 264 F.3d 1094 (Fed. Cir. 2001) ("Jazz I"). We will therefore only recite the facts most relevant to the present appeal.
Fuji is the owner of fifteen patents directed at LFFPs", popularly known as disposable, single use, or one time use cameras. Fuji and its licensees, Eastman Kodak Co. and Konica Corp., manufacture and sell LFFPs. The LFFP consists
of a plastic shell that is encased in a cardboard cover and equipped with a button-activated shutter, a lens, a viewfinder, a film advance mechanism, and optional flash units and buttons. The LFFP is preloaded with both film and a film cartridge into which the exposed film winds. The typical consumer of these inexpensive cameras brings the entire LFFP to a film processor to be developed and receives back only the negatives and prints, but not the LFFP itself. During the period in question Jazz collected used LFFP shells originally made by Fuji or its licensees, inserted new film and otherwise refurbished the shells, and sold them in the United States. Some of the shells that Jazz collected were originally sold by Fuji and its licensees in the United States, while others were first sold abroad.
The Commission has the authority to conduct investigations into imported goods that allegedly infringe United States patents and impose remedies if products are found to be infringing. 19 U.S.C. § 1337(a)(1)(B), (b)(1), (d), (f) (2004). When conducting an investigation of allegedly infringing products, the Commission in general considers the same liability issues as a district court would in a private infringement suit.
The Commission may impose two remedies if an imported product is found to be infringing. First, it may issue either a general or limited exclusion order directing U.S. Customs and Border Protection ("Customs") to bar entry of infringing products. Limited exclusion orders only apply to the specific parties before the Commission in the investigation. 19 U.S.C. § 1337(d). General exclusion orders bar the importation of infringing products by anyone, regardless of whether they were a respondent in the Commission's investigation. Id. a general exclusion order may only be issued if: 1) necessary to prevent circumvention of a limited exclusion order; or 2) necessary to prevent a pattern of violation where it is difficult to identify the source of infringing products. Id. Exclusion orders are directed solely to Customs. Id.
Second, the Commission may issue a cease and desist order to a specific party barring importation and other activities, such as sales and distribution of imported products that infringe. 19 U.S.C. § 1337(f)(1). If the Commission finds that a party covered by a cease and desist order has violated the order, the Commission may impose civil penalties. 19 U.S.C. § 1337(f)(2).
On March 25, 1998, the Commission instituted an investigation against twenty-seven respondents that imported and sold LFFPs, including Jazz, to determine whether they were violating one or more claims of Fuji's fifteen patents. The Commission found that Jazz and other respondents were infringing the patents unless the respondents' activities involved permissible repair. Thus, a central issue was whether cameras first sold in the United States were permissibly repaired or impermissibly reconstructed. The Commission held that the respondents had the burden of proof on this issue. To some extent, the Commission found that the respondents had failed to satisfy their burden because they had not supplied complete information about their refurbishment processes, which occurred abroad. However, the Commission also identified eight common steps that Jazz and some additional respondents admitted utilizing. The Commission concluded that these eight common steps constituted impermissible reconstruction.1
On June 2, 1999, the Commission imposed a general exclusion order barring entry of cameras that infringed Fuji's patents. The exclusion order was written in general terms, simply barring importation of LFFPs "covered by one or more" of the identified claims of the fifteen Fuji patents. On the same day the Commission issued a cease and desist order barring Jazz from importing infringing cameras or engaging in a variety of activities related to imported LFFPs, including selling, marketing, and advertising infringing imported LFFPs. By its terms, this order was applicable to Jazz's "principals, stockholders, officers, directors, employees, agents, licenses [sic], distributors, controlled (whether by stock ownership or otherwise) and/or majority owned business entities, successors, and assigns, and to each of them, insofar as they are engaging in conduct . . . for, with, or otherwise on behalf of [Jazz]." J.A. at 2661-62. Like the exclusion order, the cease and desist order was general, merely prohibiting importation, sale, marketing, etc. of LFFPs "that infringe one or more" of the identified claims of Fuji's fifteen patents. Cease and desist orders were also issued to other importers.
Jazz and some other respondents appealed the imposition of the general exclusion and cease and desist orders to this court. We first concluded that the eight steps considered by the Commission constituted permissible repair and therefore reversed "[f]or those respondents [whose] activities . . . were shown to be limited to those steps considered by the [Administrative Law Judge ("ALJ")]." See Jazz I, 264 F.3d at 1109. We held that the "record contain[ed] insufficient basis on which to reverse the Commission's rulings" for "those respondents who refused to provide discovery or access, or proffered incomplete or 'bench' evidence (a partial display created for litigation purposes)." Id. Finally, we declined to rule on what processes beyond the eight considered by the Commission would constitute permissible repair, stating that "[w]e can not exculpate unknown processes from the charge of infringing reconstruction." Id.
Following our decision the Commission solicited comments from affected parties as to what action it should take on remand. None of the...
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