Certain Ink Cartridges and Components Thereof II; Inv. No. 337-TA-1452 (Violation)

The Commission affirmed, with modified analysis, the ALJ's summary determination that Epson satisfied the economic prong of the domestic industry requirement, and so affirmed a section 337 violation as to claims 1 and 7 of the '172, '934, '038, '248 and '249 patents. It issued a general exclusion order and cease and desist orders against Mountain Peak and Straightouttaink, with a 100 percent bond. The GEO bars imports of infringing ink cartridges and components regardless of source, which reaches the many anonymous online sellers of Epson-compatible cartridges. The domestic industry analysis rejects the ID's value-add reasoning and relies on a holistic review of qualitative and quantitative factors, which may guide future economic prong showings. All sixteen respondents defaulted, so appeal prospects appear limited, though the document does not discuss appeal. Domestic industry economic prong under 337(a)(3)(A) and (B) was found satisfied, affirmed with modified analysis. The technical prong and infringement findings were not reviewed. The Commission rejected the ID's assumption that the Materials and Other line items were foreign investments, and found the record lacked adequate information for a value-add analysis. Instead the Commission relied on a holistic review: the DI products are a significant part of Epson Portland's business, and the vast majority of manufacturing and packaging of the DI products occurs in Oregon, with significant shares of COGS, G&A, plant and equipment, and labor. The Commission took no position on whether Insurance expenses were properly counted as plant and equipment. Commissioner Karpel would include them, and Commissioner Kearns would rest only on subsection (B). A GEO under 337(g)(2) is warranted under both (d)(2)(A) and (B), with CDOs against the two domestic defaulting respondents, no public interest bar, and a 100 percent bond because of pricing variations among the infringing products.