831 F.2d 1017 (Fed. Cir. 1987), 86-1077, Tandon Corp. v. United States Intern. Trade Com'n

Docket Nº:86-1077.
Citation:831 F.2d 1017
Party Name:5 Fed. Cir. (T) 129 TANDON CORPORATION, Appellant, v. U.S. INTERNATIONAL TRADE COMMISSION, Appellee, and Mitsubishi Electric Corporation, and Mitsubishi Electronics America, Inc., Intervenors-Appellees.
Case Date:September 30, 1987
Court:United States Courts of Appeals, Court of Appeals for the Federal Circuit

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831 F.2d 1017 (Fed. Cir. 1987)


Fed. Cir. (T) 129





Mitsubishi Electric Corporation, and Mitsubishi Electronics

America, Inc., Intervenors-Appellees.

No. 86-1077.

United States Court of Appeals, Federal Circuit

September 30, 1987

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Steven E. Lipman, Lupo, Lipman & Lever, Washington, D.C., argued, for appellant. With him on the brief, were R.V. Lupo, Jack Q. Lever, Jr. and Sandra A. Sellers. Also on the brief, were Raymond A. Bogucki, Louis A. Mok, Bogucki, Scherlacher, Mok & Roth, James A. Hamilton, Thomas K. Bourke, Riordan & McKinzie, and Norman H. Kirshman and Michael Harris, Kirshman & Harris, Los Angeles, Cal.

Marcia H. Sundeen, Office of the General Counsel, U.S. Intern. Trade Com'n, Washington, D.C., argued, for appellee. With her on the brief, were Lyn M. Schlitt, General Counsel and Michael P. Mabile, Asst. Gen. Counsel.

Robert M. Taylor, Jr., Lyon & Lyon, Costa Mesa, Cal., argued, for intervenors-appellees. With him on the brief, were Samuel B. Stone, Gary M. Anderson and David B. Murphy. Also on the brief, were Thomas P. Ondeck and Kevin M. O'Brien, Baker & McKenzie, Washington, D.C.

Before FRIEDMAN, NEWMAN, and ARCHER, Circuit Judges.

PAULINE NEWMAN, Circuit Judge.

Tandon Corporation appeals the final decision of the United States International Trade Commission, which held that Tandon's U.S. Patent No. 4,151,573 ("the '573 patent") was not infringed by certain imported double-sided floppy disk drives and therefore that there was no violation of section 337 of the Tariff Act of 1930 as

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amended, 19 U.S.C. Sec. 1337. In re Certain Double-Sided Floppy Disk Drives and Components Thereof, 229 USPQ 968 (USITC 1986). We affirm, on the basis that substantial evidence supports the Commission's finding of noninfringement.

Standard of Review

In this case that turns on the factual question of infringement, which in turn requires decision of factual questions of technological equivalency as well as the factual underpinnings of claim interpretation, we once more remark on the standard of appellate review that is set by the governing statutes. 19 U.S.C. Sec. 1337(c) provides for appellate review "in accordance with chapter 7 of title 5". 5 U.S.C. Sec. 706, subparagraph (2)(E), imposes the "substantial evidence" standard of review on Commission findings and conclusions. There is a significant difference between the standards of "substantial evidence" and of "clearly erroneous", and in close cases this difference can be controlling. See, for example, R.L. Stern, Review of Findings of Administrators, Judges and Juries: A Comparative Analysis, 58 Harv.L.Rev. 70, 80-89 (1944), in which was stated, "Policy, authority and history all thus show that the 'clearly erroneous' rule gives the reviewing court broader powers than the 'substantial evidence' formula," at pages 88-89. See also Consolo v. Federal Maritime Commission, 383 U.S. 607, 619-20, 86 S.Ct. 1018, 1026, 16 L.Ed.2d 131 (1966).

It was the intent of Congress that greater weight and finality be accorded to the Commission's findings as compared with those of a trial court. See S.Rep. No. 466, 96th Cong., 1st Sess. 26 (1979). Indeed, the Senate Report criticized the Court of Customs and Patent Appeals' use of a more rigorous standard of review on the question of obviousness (i.e., was the decision "clearly contrary to the weight of the evidence") in Solder Removal Company v. U.S. International Trade Commission, 582 F.2d 628, 199 USPQ 129 (CCPA 1978). Id.

At the same time, the Senate Report accompanying the Trade Act of 1974 made clear that the Commission's primary responsibility is to administer the trade laws, not the patent laws:

[I]n patent-based cases, the Commission considers, for its own purposes under section 337, the status of imports with respect to the claims of U.S. patents. The Commission's findings neither purport to be, nor can they be, regarded as binding interpretations of the U.S. patent laws in particular factual contexts. Therefore, it seems clear that any disposition of a Commission action by a Federal Court should not have a res judicata or collateral estoppel effect in cases before such courts.

S.Rep. No. 1298, 93d Cong., 2d Sess. 196, reprinted in 1974 U.S.Code Cong. & Admin.News 7186, 7329. Thus, our appellate treatment of decisions of the Commission does not estop fresh consideration by other tribunals. See Lannom Manufacturing Co., Inc. v. U.S. International Trade Commission, 799 F.2d 1572, 1577-78, 231 USPQ 32, 36 (Fed.Cir.1986).


Tandon alleged unfair practices based on importation by the respondents of certain double-sided floppy disk drives in infringement of certain claims of the '573 patent; the sale of the accused devices was asserted to have the effect or tendency to destroy or substantially injure an efficiently and economically operated industry in the United States. 50 Fed.Reg. 4276 (1985). The respondents were Mitsubishi Electric Corporation, Mitsubishi Electronics America, Inc., TEAC Corporation, TEAC Corporation of America, Sony Corporation, and Sony Corporation of America. Following a twelve-day hearing the Commission issued a temporary exclusion order. In re Certain Double-Sided Floppy Disk Drives and Components Thereof, 227 USPQ 982, 991 (USITC 1985). Before trial on the question of permanent relief Tandon settled with and granted licenses to all respondents except the two Mitsubishi companies (hereinafter "Mitsubishi").

The '573 patent is entitled "Magnetic Recording Device for Double Sided Media",

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and lists inventors Sirjang L. Tandon, Alfred C. Hackney, and Roy A. Applequist. The claimed invention is an apparatus whereby a pair of magnetic heads, also called transducers, receive and transfer information from and to both sides of a floppy disk. 1 A drive mechanism moves the transducers along the disk radius to access its concentric data tracks as the disk rotates. The Tandon device was illustrated in the '573 patent as:


Tandon's first or lower transducer is shown at (14) as a "button head" transducer. As described in the specification, this transducer is fixed to the carriage, and the upper transducer is gimballed.

Early floppy disks stored information on only one side, using a single rigidly mounted transducer for data transfer. Opposite the single transducer was a pad that pressed the disk against the transducer and absorbed disk irregularities. The first double-sided floppy disk drive was introduced in 1976 by the International Business Machines Corporation. The IBM disk drive had two symmetric cantilevered transducers, one for each side of the disk, both supported on spring suspensions referred to as gimbal 2 springs. The gimbal springs enabled the heads to rotate around the X, and Y axes, and move in the normal direction along the Z axis 3. The heads thus followed the irregularities of the disk.

The Tandon disk drive of the '573 patent was stated to solve certain technological problems that inhered in the IBM drive, particularly misalignment between the heads and disk tracks due to the weak suspension that was designed to compensate for waviness of the disk in the Z direction. Tandon describes its invention as the first successful solution to use of double-sided floppy disk drives, a major factor in the computer revolution, and widely licensed. The Tandon drive uses, as described in the specification, a fixed transducer on one side of the disk and a movable transducer mounted on a gimbal spring on the other side. The movable transducer forces the magnetic disk against the fixed transducer, thus reducing the Z-direction movement of the disk and improving the accuracy of reading/writing to the disk.

The accused Mitsubishi devices are double-sided disk drives which contain two gimballed transducers that, according to the findings of the Administrative Law Judge ("ALJ"), are more stiffly mounted than the IBM transducers, but neither of which is as rigidly fixed as the lower transducer of Tandon. Mitsubishi's lower transducer has a load point which, according to the findings of the ALJ, somewhat limits its movement in the Z-direction. Tandon asserts that the stiffness of the gimballed transducers and the limitation on Z-axis

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movement brings the Mitsubishi device within the scope of the '573 claims.

Following the trial on permanent relief, in which Tandon, Mitsubishi, and the Commission's investigative staff participated, the ALJ found that the Mitsubishi disk drives did not infringe claims 1, 5, and/or 12 of the '573 patent, which were all of the independent claims at issue, and that injury had not been proven. The Commission affirmed the ALJ's determination of non-infringement, and expressly took no position on the question of injury.

Claim Interpretation

The principal issue in the Commission's infringement analysis was the degree of "fixedness" of the Mitsubishi lower transducer. Tandon argues that the claims are infringed because the Mitsubishi lower head is...

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