UNITED STATES INTERNATIONAL TRADE COMMISSION WASHINGTON, D.C. In the Matter of CERTAIN AUDIO PLAYERS AND Investigation No. 337-TA-___ CONTROLLERS, COMPONENTS THEREOF, AND PRODUCTS CONTAINING SAME COMPLAINANT’S STATEMENT ON THE PUBLIC INTEREST Pursuant to Commission Rule 210.8(b), Complainant Sonos, Inc. (“Sonos” or “Complainant”) submits this Statement on the Public Interest regarding the remedial orders it seeks against Respondents Google LLC and Alphabet Inc. (collectively, “Google” or “Respondents”). Sonos seeks a permanent limited exclusion order excluding from entry into the United States certain audio players and controllers, components thereof, and products containing same that infringe any of U.S. Patent Nos. 9,195,258; 10,209,953; 8,588,949; 9,219,959; and 10,439,896 (collectively “the Asserted Patents”). Complainant also seeks a permanent cease and desist order prohibiting Respondents and any of their principals, stockholders, officers, directors, employees, agents, licensees, distributors, controlled (whether by stock ownership or otherwise) and majority-owned business entities, successors, and assigns from conducting any of the following activities in the United States: importing, selling, marketing, advertising, distributing, offering for sale, transferring (except for exportation), soliciting U.S. agents or distributors, or aiding and abetting other entities in the importation, sale for importation, transfer (except for exportation), or distribution of audio players and controllers, components thereof, and products containing the same that infringe the Asserted Patents (the “Infringing Products”). The requested relief will not adversely impact any aspect of the public interest and will provide effective relief in the face of ongoing patent infringement in the United States by the Respondents. Thus, the Commission should not order the Administrative Law Judge to take evidence and hear arguments regarding the public interest in this Investigation. I. THE REQUESTED REMEDIAL ORDERS ACCORD WITH THE PUBLIC INTEREST There is a strong public interest in protecting intellectual property rights. Certain Baseband Processor Chips & Chipsets, Inv. No. 337-TA-543, 2011 ITC LEXIS 2613 at *239 (Oct. 2011). The requested remedial orders accord with the public interest for at least the following reasons: (1) exclusion of the Infringing Products will not have an adverse effect on the public health, safety, or welfare, as those issues are defined by the Commission; (2) Complainant’s audio player products and controller applications directly compete with and are substitutes for Infringing Products in the United States; (3) only a subset of the industry selling or offering for sale audio players and controllers/controller applications in the United States would be barred if the Infringing Products are excluded; and (4) Complainant and third parties are poised to fill any void in the market caused by the requested remedial orders. Accordingly, the public interest in protecting Complainant’s intellectual property rights outweighs any potential adverse impact on the public. A. The Infringing Products Are Used to Play and/or Control the Playing of Music. Pursuant to 19 CFR § 210.8(b)(1), the Infringing Products are audio players, controllers for audio players, components thereof, and products containing same that control and/or play music and other audio content. Each of the Infringing Products infringes Complainant’s patent rights. The Infringing Products are imported into, sold for importation into, and/or sold after importation into the United States by or on behalf of the proposed Respondents. 2 B. Issuance of the Remedial Orders Will Not Implicate Any Public Health, Safety, or Welfare Concerns. The Infringing Products are primarily used in homes or businesses to play and/or control the playing of music or other audio content. Pursuant to 19 CFR § 210.8(b)(2), they do not affect public health, safety, or welfare. Moreover, even if there could be some theoretical impact on public health, safety, or welfare, the exclusion of the Infringing Products would have de minimis impact because, as discussed below, Complainant and third parties are capable of supplying the market with like or competing products. C. Complainant and Others Can Replace the Infringing Products with Like or Directly Competitive Articles If the Infringing Products Are Excluded. Multiple products from Complainant and others satisfy the public interest requirement of 19 CFR § 210.8(b)(3). With respect to the infringing audio players, these replacement products include audio players sold by Sonos, such as Sonos’s One, One SL, Play:5, Move, Beam, Playbar, Playbase, Port, and Amp, as well as audio players sold by Sonos licensees and potential licensees. Other third-party products, such as speakers from Bose Corporation, Harman International, and Yamaha Corporation, may also meet the requirements of 19 CFR § 210.8(b)(3). With respect to the infringing audio player controllers/controller apps, Complainant, its licensees, and potential licensees provide controllers/controller apps that can be used to control audio players. In addition, multiple third parties, such as Motorola Mobility LLC, Nokia Corporation, and HTC Corporation, provide computing devices such as mobile phones, tablets, and computers that include or are capable of downloading and executing controller apps to control audio players. 3 D. Complainant And Others Can Replace the Volume of Articles Subject to the Requested Remedial Orders in a Commercially Reasonable Time in the United States. Pursuant to 19 CFR § 210.8(b)(4), on information and belief, Complainant, its licensees, and potential licenses have the manufacturing capacity to readily supply the market for Infringing Products with Complainant’s patented products or competitive products. E. The Requested Remedial Orders Will Not Adversely Impact U.S. Consumers. Pursuant to 19 CFR § 210.8(b)(5), Consumers in the United States would experience little or no impact if the Commission issues the requested remedial orders. Complainant, its licensees, and potential licenses can satisfy demand for the Infringing Products, as discussed above. Even if, arguendo, the remedial orders caused a slight increase in the price of certain products or a slight decrease in consumer choice, such changes do not warrant denying a remedial order. See Certain Lens-Fitted Film Packages, Inv. No. 337-TA-406, Comm’n Op., 1999 ITC LEXIS 202 at *40 (June 29, 1999) (finding that some price increase “does not justify a determination that the public interest in protecting intellectual property rights is in any way outweighed”); Certain Personal Data & Mobile Commc’ns Devices & Related Software, Inv. No. 337-TA-710, Comm’n Op., 2011 ITC LEXIS 2874 at *111 (Dec. 29, 2011) (“[M]ere constriction of [consumer] choice cannot be a sufficient basis for denying the issuance of an exclusion order.”). Given that there are competitive products that could fill the existing demand for the Infringing Products, there would be no void if those products are excluded, and any potential impact on the public interest would be minimal. II. CONCLUSION Granting the requested remedial orders will serve the public interest, and exclusion of the Infringing Products will not adversely affect the public health, safety or welfare. Moreover, an adequate supply of substitute devices will be available from Complainant and others. Therefore, 4 there is no reason to order the administrative law judge to take evidence and to issue a recommended determination on the public interest. Dated: January 5, 2020 Respectfully submitted, /s/ DRAFT Clement S. Roberts ORRICK, HERRINGTON & SUTCLIFFE LLP The Orrick Building 405 Howard Street San Francisco, CA 94105-2669 Tel: (415) 773-5700 Email: [email protected] Bas de Blank ORRICK, HERRINGTON & SUTCLIFFE LLP 1000 Marsh Road Menlo Park, CA 94025-1015 Tel: (650) 614-7343 Email: [email protected] Jordan L. Coyle ORRICK, HERRINGTON & SUTCLIFFE LLP Columbia Center 1152 15th Street, NW Washington, DC 20005 Tel: (202) 339-8400 Email: [email protected] \ Alyssa M. Caridis ORRICK, HERRINGTON & SUTCLIFFE LLP 777 South Figueroa Street Suite 3200 Los Angeles, CA 90017-5855 Tel: (213) 612-2372 Email: [email protected] George I. Lee ([email protected]) Sean M. Sullivan ([email protected]) Rory P. Shea ([email protected]) J. Dan Smith ([email protected]) LEE SULLIVAN SHEA & SMITH LLP 656 W Randolph St, Floor 5W 5 Chicago, IL 60661 Tel: (312) 754-0002 Fax: (312) 754-0003 Attorneys for Complainant Sonos, Inc. 6 UNITED STATES INTERNATIONAL TRADE COMMISSION WASHINGTON, D.C. In the Matter of Investigation No. 337-TA-___ CERTAIN AUDIO PLAYERS AND CONTROLLERS, COMPONENTS THEREOF, AND PRODUCTS CONTAINING SAME VERIFIED COMPLAINT OF SONOS, INC. UNDER SECTION 337 OF THE TARIFF ACT OF 1930, AS AMENDED COMPLAINANT RESPONDENTS Sonos, Inc. Google LLC 614 Chapala Street 1600 Amphitheatre Parkway Santa Barbara, CA 93101 Mountain View, CA 94043 Tel: 1-800-680-2345 Tel: (650) 253-0000 COUNSEL FOR COMPLAINANT Alphabet Inc. 1600 Amphitheatre Parkway Clement S. Roberts Mountain View, CA 94043 ORRICK, HERRINGTON & SUTCLIFFE LLP Tel: (650) 253-0000 The Orrick Building 405 Howard Street San Francisco, CA 94105-2669 Tel: (415) 773-5700 Email: [email protected] Bas de Blank ORRICK, HERRINGTON & SUTCLIFFE LLP 1000 Marsh Road Menlo Park, CA 94025-1015 Tel: (650) 614-7343 Email: [email protected] Jordan L. Coyle ORRICK, HERRINGTON & SUTCLIFFE LLP Columbia Center 1152 15th Street, NW Washington, DC 20005 Tel: (202) 339-8400