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Case: 12-1252 Document: 46 Page: 1 Filed: 08/29/2012 NON-CONFIDENTIAL No. 2012-1252 United States Court Of Appeals For The Federal Circuit MOTIVA, LLC, Appellant, v. INTERNATIONAL TRADE COMMISSION, Appellee, and NINTENDO CO., LTD. AND NINTENDO OF AMERICA INC., Intervenors. _________________ ON APPEAL FROM THE UNITED STATES INTERNATIONAL TRADE COMMISSION IN INVESTIGATION NO. 337-TA-743 _________________ ANSWERING BRIEF OF INTERVENORS NINTENDO CO., LTD. AND NINTENDO OF AMERICA INC. _________________ Joseph S. Presta E. Joshua Rosenkranz Robert W. Faris Peter A. Bicks NIXON & VANDERHYE P.C. Alex V. Chachkes 901 North Glebe Road ORRICK, HERRINGTON & SUTCLIFFE LLP 11th Floor 51 West 52nd Street Arlington, VA 22203 New York, NY 10019 (703) 816-4000 (212) 506-5000 Mark S. Davies Katherine M. Kopp ORRICK, HERRINGTON & SUTCLIFFE LLP 1152 15th Street, N.W. Washington, D.C. 20005 (202) 339-8400 Case: 12-1252 Document: 46 Page: 2 Filed: 08/29/2012 CERTIFICATE OF INTEREST Counsel for Intervenors Nintendo Co., Ltd. and Nintendo of America Inc. certify the following: 1. The full name of the parties represented by us in this case are: Nintendo Co., Ltd. and Nintendo of America Inc. 2. The name of the real parties in interest (if the party named in the caption is not the real party in interest) represented by us are: Nintendo Co., Ltd. and Nintendo of America Inc. 3. The parent companies, subsidiaries (except wholly owned subsidiaries), and affiliates that have issued shares to the public of the parties represented by us are: Nintendo Co., Ltd., whose stock is publicly traded in Japan, owns 100% of Nintendo of America Inc. 4. The names of all law firms and the partners or associates that appeared for the parties now represented by us in the agency or are expected to appear in this Court, are: i Case: 12-1252 Document: 46 Page: 3 Filed: 08/29/2012 Peter A. Bicks Joseph S. Presta E. Joshua Rosenkranz Robert W. Faris Mark S. Davies NIXON & VANDERHYE P.C. Alex V. Chachkes 901 North Glebe Road Elyse D. Echtman 11th Floor Sarah E. Walcavich Arlington, VA 22203 Richard A. Rinkema (703) 816-4000 Jordan L. Coyle Nicholas H. Lam Lauren B. Muldoon Cyrus P.W. Rieck Katherine M. Kopp Steven E. Adkins (no longer with firm) ORRICK, HERRINGTON & SUTCLIFFE LLP 1152 15th Street, NW Washington, D.C. 20005 (202) 339-8400 5. No other appeal involving this civil action was previously before this or any other appellate court. There are no pending cases known to counsel that would directly affect or be directly affected by this Court’s decision in the pending appeal. Date: August 29, 2012 /s/ Mark S. Davies Mark S. Davies Attorney for Nintendo Co., Ltd. and Nintendo of America Inc./Intervenors ii Case: 12-1252 Document: 46 Page: 4 Filed: 08/29/2012 TABLE OF CONTENTS Page CERTIFICATE OF INTEREST ................................................................i TABLE OF AUTHORITIES....................................................................vi STATEMENT OF RELATED CASES ....................................................ix INTRODUCTION..................................................................................... 1 JURISDICTIONAL STATEMENT..........................................................3 STATEMENT OF THE ISSUES..............................................................3 STATEMENT OF THE CASE .................................................................3 STATEMENT OF THE FACTS ...............................................................5 A. Motiva’s Research And Marketing Efforts: The Start And Finish..............................................................................5 B. Motiva’s Patents.....................................................................9 C. Motiva’s Patent Litigation...................................................16 1. Motiva Files An ITC Action Against Nintendo .......... 16 2. The ALJ Grants Nintendo’s Motion For Summary Determination............................................................. 18 3. The ITC Reverses And Remands With Questions ..... 19 4. The ALJ Holds A Hearing, Answers The ITC’s Questions, And Finds No Violation ............................20 5. The ITC Affirms .......................................................... 30 SUMMARY OF ARGUMENT................................................................ 30 STANDARD OF REVIEW...................................................................... 33 ARGUMENT .......................................................................................... 34 iii Case: 12-1252 Document: 46 Page: 5 Filed: 08/29/2012 TABLE OF CONTENTS (continued) Page I. SUBSTANTIAL EVIDENCE SUPPORTS THE ALJ’S FINDING THAT MOTIVA WAS NOT IN THE PROCESS OF ESTABLISHING ANY DOMESTIC INDUSTRY .................. 34 A. Motiva’s Stale Licensing Efforts Do Not Demonstrate Any Tangible Steps Toward Establishing A Domestic Industry................................................................................ 35 B. Motiva’s Lawsuit Against Nintendo Is Not A Tangible Step Toward Establishing A Domestic Industry................. 41 C. The Wii System’s Success Does Not Suggest Motiva Has Any Chance Of Establishing A Domestic Industry In The Future....................................................................... 46 II. SUBSTANTIAL EVIDENCE SUPPORTS THE ALJ’S FINDING THAT THE WII SYSTEM DOES NOT INFRINGE MOTIVA’S PATENTS ............................................... 51 A. Substantial Evidence Shows That The Wii System Does Not “Track” Movement Of A User .............................. 51 B. Substantial Evidence Shows That The Wii System Does Not Determine User “Movement”...............................54 1. Three Credible Witnesses Demonstrated That The Wii Sensors Cannot And Do Not Determine Position Or Orientation ..............................................55 2. Motiva’s Hodgepodge Of Movement And Position Information Arguments Are All Meritless ................. 59 CONCLUSION ....................................................................................... 75 iv Case: 12-1252 Document: 46 Page: 6 Filed: 08/29/2012 TABLE OF CONTENTS (continued) Material has been deleted from pages 1, 2, 6, 22, 26, 29, 43, 46-47, 51- 53, 55-64, 68-70, 72 and 73 of the Non-Confidential Answering Brief of Intervenors Nintendo Co. Ltd. and Nintendo of America Inc. This material is deemed confidential business information pursuant to 19 U.S.C. § 1337(n) and 19 C.F.R. § 210.5, and pursuant to the Protective Order entered November 2, 2010. The material omitted from these pages contains confidential deposition and hearing testimony, confidential business information, confidential patent application information, and confidential licensing information. v Case: 12-1252 Document: 46 Page: 7 Filed: 08/29/2012 TABLE OF AUTHORITIES Page(s) FEDERAL CASES Am. Silicon Techs. v. United States, 261 F.3d 1371 (Fed. Cir. 2001) ...........................................................50 Bally/Midway Mfg. Co. v. ITC, 714 F.2d 1117 (Fed. Cir. 1983) ..................................................... 38, 48 Beneficial Innovations, Inc. v. Blockdot, Inc., Nos. 2:07-CV-263-TJW-CE, 2:07-CV-555-TJW-CE, 2010 U.S. Dist. LEXIS 54151 (E.D. Tex. June 3, 2010).....................74 Erbe Elektromedizin GmbH v. ITC, 566 F.3d 1028 (Fed. Cir. 2009) ...........................................................33 Finnigan Corp. v. ITC, 180 F.3d 1354 (Fed. Cir. 1999) ...........................................................60 In re Katz Interactive Call Processing Patent Litig., 07-ml-01816-BRGK, 2008 WL 4952454 (C.D. Cal. Feb. 21, 2008)....................................................................74 In re Nintendo Co., Ltd., 589 F.3d 1194 (Fed. Cir. 2009) ...........................................................16 InterDigital Commc’ns, LLC v. ITC, No. 2010-1093, 2012 U.S. App. LEXIS 15893 (Fed. Cir. Aug. 1, 2012)................................................................. 39, 41 John Mezzalingua Assocs. v. ITC, 660 F.3d 1322 (Fed. Cir. 2011) .......................................... 32, 33,34, 40 Ninestar Tech. Co. v. ITC, 667 F.3d 1373 (Fed. Cir. 2012) ...........................................................33 Nippon Steel Corp. v. United States, 458 F.3d 1345 (Fed. Cir. 2006) ...........................................................50 vi Case: 12-1252 Document: 46 Page: 8 Filed: 08/29/2012 Northrop Grumman Corp. v. Intel Corp., 325 F.3d 1346 (Fed. Cir. 2003) ...........................................................66 Retractable Technologies v. Becton, Dickinson & Co., 653 F.3d 1296 (Fed. Cir. 2011) ............................................... 65, 66, 67 SRAM Corp. v. AD-II Eng’g, Inc., 465 F.3d 1351 (Fed. Cir. 2006) ...........................................................74 St. Clair Intellectual Prop. Consultants, Inc. v. Canon Inc., 412 F. App’x 270 (Fed. Cir. 2011).......................................................74 Tessera, Inc. v. ITC, 646 F.3d 1357 (Fed. Cir. 2011) ................................................34, 71, 72 TianRui Group Co. v. ITC, 661 F.3d 1322 (Fed. Cir. 2011) ........................................................... 33 Vita-Mix Corp. v. Basic Holding, 581 F.3d 1317 (Fed. Cir. 2009) ..................................................... 70, 71 ADMINISTRATIVE CASES Certain Coaxial Cable Connectors and Components Thereof and Prods. Containing Same, Inv. No. 337-TA-650, USITC Pub. No. 4283 (Nov. 11, 2010).............41 Certain Digital Satellite Sys. Receivers and Components Thereof, Inv. No. 337-TA-392, USITC Pub. No. 3418 (Apr. 2011)............