Thomson Licensing SAS v. International Trade Commission , 527 F. App'x 884 ( 2013 )

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
THOMSON LICENSING SAS, AND THOMSON
LICENSING, LLC,
Appellants,
v.
INTERNATIONAL TRADE COMMISSION,
Appellee,
AND
QISDA CORPORATION, QISDA AMERICA
CORPORATION, QISDA (SUZHOU) CO., LTD.,
BENQ CORPORATION, BENQ AMERICA
CORPORATION, AND BENQ LATIN AMERICA
CORPORATION,
Intervenors,
AND
AU OPTRONICS CORPORATION, AND AU
OPTRONICS CORPORATION AMERICA,
Intervenors,
AND
CHIMEI INNOLUX CORPORATION, INNOLUX
CORPORATION, AND CHI MEI
OPTOELECTRONICS USA INC.,
2 THOMSON LICENSING SAS v. ITC
Intervenors.
______________________
2012-1536
______________________
Appeal from the United States International Trade
Commission in Investigation Nos. 337-TA-741 and 337-
TA-749.
______________________
Decided: June 19, 2013
______________________
STEVEN C. CHERNY, Kirkland & Ellis, LLP, of New
York, New York, argued for appellant. With him on the
brief were TODD M. FRIEDMAN and JAMES E. MARINA; ERIC
R. LAMISON, of San Francisco, California; DENNIS J.
ABDELNOUR, of Chicago, Illinois; JOHN C. O’QUINN and
WILLIAM H. BURGESS, of Washington, DC. Of counsel was
DANIEL S. TRAINOR, of Washington, DC.
JIA CHEN, Attorney, Office of General Counsel, United
States International Trade Commission, of Washington,
DC, argued for appellee. With her on the brief were
DOMINIC L. BIANCHI, Acting General Counsel, and WAYNE
W. HERRINGTON, Assistant General Counsel.
LAWRENCE J. GOTTS, Latham & Watkins, LLP, of
Washington, DC, argued for intervenors, AU Optronics
Corporation, et al. On the brief were RON SHULMAN, of
Menlo Park, California; JULIE HOLLOWAY, of San Francis-
co, California; and ELIZABETH M. ROESEL and KATHERINE
I. TWOMEY, of Washington, DC. Of counsel were CLEMENT
J. NAPLES, of Latham & Watkins, LLP, of New York, New
York and LISA K. NGUYEN, Menlo Park, California.
THOMSON LICENSING SAS v. ITC 3
WARREN S. HEIT, White & Case LLP, of Palo Alto, Cal-
ifornia, argued for intervenors, Chimei Innolux Corpora-
tion, et al. With him on the brief were JEANNINE YOO
SANO; JACK Q. LEVER and FRANK H. MORGAN, of Washing-
ton, DC.
SUSAN M. COOK, Hogan Lovells US LLP, of Washing-
ton, DC, for intervenors, Qisda Corporation, et al. With
her on the brief were STEVEN P. HOLLMAN and REBECCA C.
MANDEL.
______________________
Before NEWMAN, LOURIE, and WALLACH, Circuit Judges.
LOURIE, Circuit Judge.
Thomson Licensing SAS and Thomson Licensing, LLC
(“Thomson”) appeal from the final determination by the
United States International Trade Commission (“Com-
mission”) that the importation and sale of certain liquid
crystal display (“LCD”) products do not violate § 337 of
the Tariff Act of 1930 as amended, 19 U.S.C. § 1337. The
Commission determined that the asserted claims of U.S.
Patent 5,978,063 (the “’063 patent”) and 5,648,674 (the
“’674 patent”) were invalid as anticipated or obvious.
Specifically, the Commission: (1) denied Thomson’s re-
quest for an exclusion order on products infringing the
’063 and ’674 patents; (2) held claims 1, 2, 3, 4, 8, 11, 12,
14, and 18 of the ’063 patent invalid as obvious over two
references; and (3) found claims 1, 7, 8, 9, 11, 13, 14, 16,
17, and 18 of the ’674 patent invalid as anticipated or
obvious over one reference. In re Certain Liquid Crystal
Display Devices, Nos. 337-TA-741, -749 (ITC June 14,
2012) (“Commission Opinion”). Because the Commission
did not err in finding the asserted claims anticipated or
obvious, we affirm.
4 THOMSON LICENSING SAS v. ITC
BACKGROUND
Thomson owns the ’063 and ’674 patents, which per-
tain to LCD panel components and manufacturing meth-
ods for those components. ’063 patent col. 2 ll. 36–44; ’674
patent col. 1 ll. 16–42. The basic components of an active
matrix LCD consist of a thin layer of liquid crystal sand-
wiched between a pair of glass substrates, each substrate
having a polarizer and a set of electrodes affixed to its
surface. Commission Opinion at 26. Spacers made of
glass or plastic are employed to keep the gap between the
two glass substrates uniform. Id. at 26–27. These spac-
ers can be placed or formed in the non-transmissive or
non-active area of the glass substrate. Id. at 27. During
the LCD assembly process, the bottom substrate is me-
chanically rubbed to align the liquid crystal molecules.
’063 patent col. 4 ll. 30–32, fig 9. This rubbing process can
be harsh enough to damage spacers that are already on
the bottom substrate. Id. col. 4 ll. 34–35.
The ’063 patent claims spacers that can withstand the
mechanical rubbing process, which is done after they are
formed and in the direction of the long axis, because they
are anisotropically shaped (i.e., their length is greater
than their width). Id. col. 4 ll. 30–37.
Exemplary claim 11 recites:
A method of forming a display cell comprising:
providing a first substrate which has been parti-
tioned into an active and a non-active area and
has a front surface and a rear surface;
forming a plurality of spacing elements separate
from one another on the front surface and non-
active areas of said first substrate, the spacing
elements being anisotropic in shape;
THOMSON LICENSING SAS v. ITC 5
mechanically rubbing over the first surface hav-
ing the plurality of spacing elements formed
thereon; and
attaching a second substrate on the front surface
of said first substrate, said second substrate
being kept at a substantially uniform distance
from said first substrate by said spacing ele-
ments.
Id. col. 6 ll. 11–24 (emphases added).
The ’674 patent claims thin-film transistors used in
the bottom glass substrate of an LCD to control the volt-
age applied to the liquid crystal. The disclosed transistor
has a structure in which a drain electrode and a supple-
mental capacitor electrode are on a single metal layer
allowing for decreased manufacturing costs and thinner
LCD panels. See ’674 patent col. 3 ll. 32–37.
On October 18, 2010, the Commission instituted two
§ 337 investigations based on complaints filed by Thom-
son which alleged violations of § 337 owing to infringe-
ment of claims of various patents, including the ’063 and
’674 patents. In re Certain Liquid Crystal Display Devic-
es, 75 Fed. Reg. 63856 (Oct. 18, 2010). These investiga-
tions were consolidated in December 2010. Commission
Opinion at 4. With the ’063 and ’674 patents, the investi-
gation proceeded against: Qisda Corp., Qisda America
Corp., Qisda Ltd., BenQ Corp., BenQ America Corp., and
BenQ Latin America Corp. (collectively “Qisda”); AU
Optronics Corp. and AU Optronics Corp. of America
(collectively “AUO”); and ChiMei Innolux Corp., Innolux
Corp., and Chi Mei Optoelectronics USA, Inc. (collectively
“CMI”). The investigation focused on whether importa-
tion of those companies’ LCD products and components
infringed the asserted claims of the ’063 and ’674 patents.
Before the Administrative Law Judge (“ALJ”), Qisda,
AUO, and CMI (collectively “Intervenors”) argued that the
6 THOMSON LICENSING SAS v. ITC
asserted claims of the ’063 patent were obvious over U.S.
Patent 4,568,149 (“Sugata”) in view of U.S. Patent
4,775,225 (“Tsuboyama”). Id. at 54. Sugata discloses
anisotropic spacers on an LCD panel’s glass substrate
along the non-active area. Sugata col. 5 ll. 34–40. Sugata
also describes rubbing but does not disclose whether it
occurs before or after the spacers are formed. Id. col. 4 ll.
38–45. Tsuboyama is directed to spacers formed on a
glass substrate followed by mechanical rubbing of that
substrate. Tsuboyama col. 2 ll. 34–46.
Regarding the ’674 patent, CMI argued that the as-
serted claims were anticipated by and obvious over a
Japanese patent application, JP 06-130415A (“Fujitsu”),
which discloses a method for manufacturing components
of an LCD device. Fujitsu discloses manufacturing these
components using staggered thin film transistors created
on three metal layers. Fujitsu at 2, fig. 3 (translation
available at J.A. 22421, J.A. 22430 fig. 3).
After an evidentiary hearing, the ALJ issued an ini-
tial determination finding: (1) no violation of § 337 as to
the ’063 patent and that all of the asserted claims but
claim 17 of that patent were obvious over Sugata in view
of Tsuboyama. Commission Opinion at 5. Regarding the
’674 patent, the ALJ found CMI and Qisda in violation of
§ 337 due to infringement of ten asserted claims. Id.
On review the Commission found no violation as to ei-
ther patent. Regarding the ’063 patent, the Commission
ruled that: (a) AUO and Qisda infringed claims 11, 12, 14,
17, and 18 but not claims 1, 2–4, and 8, id. at 44–54; (b)
CMI did not infringe any claims, id.; and (c) all ten as-
serted claims were obvious over Sugata in view of Tsubo-
yama, id. at 63. The Commission agreed with the ALJ
that Sugata discloses every limitation of the ’063 patent’s
asserted claims, including anisotropic spacers and me-
chanical rubbing during the manufacturing process, but
concluded that Sugata did not specify when the mechani-
THOMSON LICENSING SAS v. ITC 7
cal rubbing occurred. Id. at 56. The Commission further
found that Tsuboyama discloses anisotropic spacers that
are mechanically rubbed along their long axis after for-
mation. Id. Finally, the Commission found that “one of
ordinary skill in the art would be motivated to combine
the references to arrive at the claimed invention” based
on their common goal of providing spacing elements in a
liquid crystal display. Id. at 59.
Regarding the ’674 patent, the Commission found that
CMI and Qisda infringed asserted claims 1, 7–9, 11, 14,
16, 17, and 18, but found claims 1, 7, 8, 14, 16, 17, and 18
to be invalid as anticipated by Fujitsu, and claims 9, 11,
and 13 to have been obvious over Fujitsu in view of the
demonstrated knowledge of those skilled in the art. Id. at
81.
Thomson timely appealed. We have jurisdiction un-
der 28 U.S.C. § 1295(a)(6).
DISCUSSION
We review the Commission’s final determinations un-
der the standards of the Administrative Procedure Act
(the “Act”). See 19 U.S.C. § 1337(c) (providing that “[a]ny
person adversely affected by a final determination of the
Commission” may appeal to this court “for review in
accordance with chapter 7 of Title 5”). Under the Act,
rulings of law are reviewed de novo, and findings of fact
are reviewed for substantial evidence. Ajinomoto Co. v.
Int’l Trade Comm’n, 597 F.3d 1267, 1272 (Fed. Cir. 2010);
Osram GmbH v. Int’l Trade Comm’n, 505 F.3d 1351, 1355
(Fed. Cir. 2007). Substantial evidence is “‘such relevant
evidence as a reasonable mind might accept as adequate
to support a conclusion.’” Osram GmbH, 505 F.3d at 1355
(quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 217
(1938)).
A claim is invalid under 35 U.S.C. § 102 if a prior art
document discloses every element of the claimed inven-
8 THOMSON LICENSING SAS v. ITC
tion, either expressly or inherently. Adv. Display Sys.,
Inc. v. Kent State Univ., 212 F.3d 1272, 1282 (Fed. Cir.
2000). Anticipation under § 102 is a question of fact,
which we review for substantial evidence. Vizio, Inc. v.
Int’l Trade Comm’n, 605 F.3d 1330, 1342 (Fed. Cir. 2010).
A claim is invalid for obviousness if, to one of ordinary
skill in the pertinent art, “the differences between the
subject matter sought to be patented and the prior art are
such that the subject matter as a whole would have been
obvious at the time the invention was made.” 35 U.S.C. §
103(a) (2006); see also KSR Int’l Co. v. Teleflex Inc., 550
U.S. 398, 406–07 (2007). “Obviousness is a question of
law based on underlying factual inquiries, and thus we
review the Commission’s ultimate determination de novo
and factual determinations for substantial evidence.”
Vizio, 605 F.3d at 1342.
A. ’063 PATENT
Thomson argues that the Commission erred by com-
mitting “hindsight error” and improperly combined
Sugata and Tsuboyama. Thomson contends that Tsubo-
yama discloses only a rubbing direction, not a rubbing
sequence, but the Commission erroneously used the ’063
patent as a guide to bridge this gap. Finally, Thomson
argues that the Commission engaged in improper burden
shifting with respect to the obviousness inquiry contrary
to In re Cyclobenzaprine, 676 F.3d 1063 (Fed. Cir. 2012).
The Commission and Intervenors respond that the
Commission correctly found that a person of ordinary skill
would have been motivated to combine Sugata’s teaching
of anisotropic spacers with Tsuboyama’s teaching of
mechanical rubbing. They further argue that the Com-
mission properly relied on expert testimony to determine
how one of skill in the art would have combined the
references to arrive at the claimed invention. Intervenors
argue that the Commission did not improperly shift the
THOMSON LICENSING SAS v. ITC 9
burden of proof and correctly evaluated all the evidence of
obviousness before coming to an ultimate conclusion.
We discern no error in the Commission’s obviousness
determination. Sugata teaches the use of anisotropic
spacers in an LCD substrate’s non-active area. E.g.,
Sugata fig. 4(a), col. 5 ll. 34–40. Sugata also discloses
mechanical rubbing, but does not specify whether this
rubbing occurs before or after the spacers are formed. Id.
col. 4 ll. 38–45. Tsuboyama discloses anisotropic spacers
that are rubbed in their long axis direction after for-
mation. Tsuboyama fig. 3B, col. 2 ll. 46–50, col. 4 ll. 49–
51. Tsuboyama states that anisotropic spacers are on an
insulating film that is later “subjected to a uniaxial orien-
tation treatment (rubbing, etc.) in the [long axis direc-
tion].” Id. col. 4 ll. 43–51. Although the direction of the
rubbing is specified, the patent discloses that the spacers
are present when the rubbing occurs and thus that the
rubbing occurs after the spacers are formed. All of the
limitations of the claimed invention are thus disclosed.
Further, one having ordinary skill in the art would
have been motivated to combine the references. The
Supreme Court has held that “any need or problem known
in the field of endeavor at the time of invention and
addressed by the patent can provide a reason for combin-
ing the elements in the manner claimed.” KSR, 550 U.S.
at 420. Both Sugata and Tsuboyama relate to LCD panel
manufacturing and the formation of spacers. They share
the common goal of providing spacing elements that do
not disturb the orientation or alignment of liquid crystal
molecules. Sugata col. 2 ll. 54–57 (stating that its object
is “provid[ing] a liquid display panel in which alignment
or orientation of liquid crystal molecules is not disturbed
on an image display surface”); Tsuboyama col. 2 ll. 35–38
(stating that its invention provides a liquid crystal device
“which is free of orientation or alignment defects over the
whole area of the device despite spacers which are pre-
sent” within the liquid crystal). The Commission thus
10 THOMSON LICENSING SAS v. ITC
correctly determined that one having ordinary skill in the
art would have had reason to combine the two references
to arrive at the claimed invention.
We further agree with Intervenors that the Commis-
sion did not impermissibly shift the burden of proof
during its obviousness analysis. In Cyclobenzaprine, we
reversed a district court’s determination of obviousness
because it occurred before any analysis of secondary
considerations. 676 F.3d at 1075 (finding that the “prem-
ature nature of the [district] court’s obviousness finding is
apparent. . . . It was not until after the district court
found the asserted claims obvious that it proceeded to
analyze the objective considerations, or what it called the
‘secondary considerations’”). Additionally, we recognized
that it is not error when panels use “prima facie” and
“rebuttal” language yet determine obviousness only after
considering all the evidence put forth by the parties. Id.
at 1077 (“[E]ven panels that have used the ‘prima facie’
and ‘rebuttal’ language have generally made clear that a
fact finder must consider all evidence of obviousness and
nonobviousness before reaching a determination.”). Here,
the Commission did just that. After evaluating Sugata,
Tsuboyama, and the expert testimony, the Commission
found that “respondents have shown a prima facie case of
obviousness.” Commission Opinion at 62. The Commis-
sion then evaluated Thomson’s secondary considerations
before finding the asserted claims of the ’063 patent to
have been obvious. Id. at 63. The Commission thus did
not engage in impermissible burden shifting and did not
err in finding the ’063 patent’s asserted claims obvious.
Because we find no error in the Commission’s obviousness
determination, we hold that the Commission correctly
concluded that claims 1–4, 8, 11, 12, 14, 17, and 18 of the
’063 patent were obvious over Sugata in view of Tsubo-
yama.
Thomson also argues that the Commission erred by
finding that CMI’s LCD modules do not infringe the ’063
THOMSON LICENSING SAS v. ITC 11
patent. Because we have found the asserted claims of the
’063 patent obvious, we do not need to reach that issue.
B. ’674 PATENT
Thomson argues that the Commission erred in finding
that the Fujitsu reference alone anticipates or renders
obvious, in combination with the knowledge of one skilled
in the art, the asserted claims of the ’674 patent. Thom-
son’s only contention is that Fujitsu never expressly
discloses a drain bus line and electrode wiring formed in
the same layer as the source, drain, and opposing elec-
trodes.
The Commission responds that substantial evidence
supports the Commission’s finding that Fujitsu discloses
the asserted claim limitations. It argues that both the
figures and text of Fujitsu clearly show that the drain bus
line is formed on the same metal layer as the source and
drain electrodes. According to the Commission, expert
testimony at trial further showed that the cross-stitching
on the figures indicated that those components were
located on the same layer.
We agree with the Commission that substantial evi-
dence supports the finding that Fujitsu discloses all of the
asserted claim limitations. When discussing Fujitsu, the
Commission found that the reference discloses the drain
bus line in the same layer as the source and drain elec-
trodes in both: (1) Fujitsu’s Figure 1 along with accompa-
nying expert testimony, id. at 82, and (2) Figure 3
accompanied by the supporting text, id. at 83. The Com-
mission relied on the cross-sectional shading of Figure 1
and Intervenor’s expert testimony to come to this conclu-
sion. Id. at 82–83 (“Dr. Hatalis testified that when ele-
ments such as the drain bus lines and drain electrodes are
disclosed as being connected to one another, the continu-
ous and consistent shading between those elements in
Figure 1 indicates to one of ordinary skill in the art that
they are connected together in the same layer.”). The
12 THOMSON LICENSING SAS v. ITC
Commission further found that Fujitsu’s textual disclo-
sure and Figure 3 describe the drain bus line and the
drain electrode as being on the same metal layer. Id. at
85.
The Commission’s finding is supported by substantial
evidence, including the figures of Fujitsu, the disclosure of
Fujitsu, and the expert testimony before the Commission.
As the Commission correctly found, the consistent shad-
ing of the Fujitsu reference indicates that the drain bus
line and electrode wiring are formed on the same layer as
the source, drain, and opposing electrode. This finding is
supported by the Intervenor’s expert testimony. Substan-
tial evidence thus supports the finding that Fujitsu dis-
closes a drain bus line and electrode wiring formed on a
single metal layer. Because substantial evidence supports
that determination, and Thomson’s only contention was
that the claimed elements were not on the same metal
layer, we therefore affirm the Commission’s determina-
tion of anticipation and obviousness of claims 1, 7–9, 11,
13, 14, 16, 17, and 18 of the ’674 patent.
CONCLUSION
We have considered Thomson’s remaining arguments
and conclude that they are without merit. Accordingly,
the Commission’s final determination is
AFFIRMED