13-08-02 Government's Opposition to Microsoft's Motion for Preliminary Injunction

8/22/2019 13-08-02 Government's Opposition to Microsoft's Motion for Preliminary Injunction

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

MICROSOFT CORPORATION, )

Plaintiff, )

)

v. ) No. 13-1063 (RWR))

UNITED STATES, )

)U.S. DEPARTMENT OF HOMELAND )

SECURITY, )

245 Murray Lane, S.W. )Washington, D.C. 20528, )

)

U.S. CUSTOMS AND BORDER PROTECTION, )1300 Pennsylvania Avenue, N.W. )

Washington, D.C. 20229, ))

JANET NAPOLITANO, )U.S. Department of Homeland Security )

245 Murray Lane, S.W. )

Washington, D.C. 20528, )and )

THOMAS S. WINKOWSKI, )

U.S. Customs and Border Protection )1300 Pennsylvania Avenue, N.W. )

Washington, D.C. 20229 )Defendants. )

DEFENDANTS OPPOSITION TO

MICROSOFTS MOTION FOR PRELIMINARY INJUNCTION

Case 1:13-cv-01063-RWR Document 22 Filed 08/02/13 Page 1 of 35


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STUART F. DELERY

Acting Assistant Attorney General

RONALD C. MACHEN JR.

United States Attorney

for the District of Columbia

BRYANT G. SNEE

Deputy Director

PATRICIA M. McCARTHY

Assistant Director

STEPHEN C. TOSINI

SEAN B. McNAMARASenior Trial Counsels

Department of JusticeCivil Division

Commercial Litigation BranchPO Box 480, Ben Franklin Station

Washington, D.C., 20044

Tel: (202) 616-5196Email: [email protected]

August 2, 2013 Attorneys for Defendant



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)

Plaintiff, )

)v. ) No. 13-1063 (RWR)

)

UNITED STATES,ET AL., ))

Defendants. )

ORDER

On consideration of the motion for preliminary injunction filed by plaintiff,

Microsoft Corporation, the governmental defendants response, and all other pertinent

papers, it is hereby

ORDERED that the motion is denied.

______________________

CHIEF JUDGE

Dated: ____________________Washington, DC



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i

TABLE OF CONTENTS

BACKGROUND .............................................................................................................................1

ARGUMENT ..................................................................................................................................3

I. Standard Of Review For Preliminary Injunction .................................................................4

II. Microsoft Is Ineligible For Preliminary Injunctive Relief ...................................................4

A. Microsoft Is Unlikely To Succeed On The Merits...................................................4

1. Introduction ..................................................................................................4

2. The Court Lacks Jurisdiction To Entertain This Case Under The APA ......5

a. Section 337 Remedies Preclude APA Jurisdiction ..........................6

b. The Patent Laws Preclude APA Jurisdiction .................................12

3. This Case Should Be Rejected Because It Falls Within The

ITCs Primary Jurisdiction .........................................................................12

4. Microsoft Will Not Succeed On The Merits ..............................................14

a. CBPs Enforcement Decisions Are Permissible

Under The Correct Standard Of Review ........................................14

b. CBPs Decisions Are Not Arbitrary Or Capricious

And Were In Accordance With Law .............................................16

i. CBPs Ruling Was Not Foreclosed By The

Law Of The Case Or Unreasonable ...................................16

ii. CBP Did Not Shift Any Burden To Microsoft ..................17

iii. CBP Did Not Fail To Provide Fair Notice To Microsoft...18

c. CBP Did Not Ignore Evidence Of Abandonment ..........................21

B. Microsoft Has Not Shown Irreparable Harm Absent Injunctive Relief ................22

C. The Balance Of Hardships Should Preclude An Injunction ..................................24

D. An Injunction Would Not Serve The Public Interest .............................................24



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ii

TABLE OF AUTHORITIES

CASES

Aliotta v. Bair,

614 F.3d 556 (D.C. Cir. 2010) .......................................................................................... 18

Allina Health Servs. v. Sebelius,

756 F. Supp. 2d 61 (D.D.C. 2010) ...................................................................................... 4

Allnet Communication Serv., Inc. v. Nat'l Exchange Carrier Ass'n,

965 F. 2d 1118 (D.C. Cir. 1992) ....................................................................................... 12

American Road & Transp. Builders Ass'n v. E.P.A.,

865 F. Supp. 2d 72 (D.D.C. 2012) .................................................................................. 5, 6

Bowen v. Massachusetts,487 U.S. 879 (1988) .......................................................................................................... 10

Burlington Truck Lines v. United States,371 U.S. 156 (1962) .......................................................................................................... 16

Califano v. Sanders,430 U.S. 99 (1977) .............................................................................................................. 5

Corning Gilbert Inc. v. United States,896 F. Supp. 2d 1281 (Ct. Int'l Trade 2013) ..................................................................... 15

Davis v. PBGC,

571 F.3d 1288 (D.C. Cir. 2009) ........................................................................................ 22

Dorfmann v. Boozer,414 F. 2d 1168 (D.C. Cir. 1969) ......................................................................................... 4

Eaton Corp. v. United States,395 F. Supp. 2d 1314 (Ct. Int'l Trade 2005) ..................................................................... 23

Enercon GmbH v. Int'l Trade Com'n,

151 F. 3d 1376 (Fed. Cir. 1998)........................................................................................ 12

FDIC v. Meyer,

510 U.S. 471 (1994) ............................................................................................................ 5

First Nat. Bank of Chicago v. Steinbrink,

812 F. Supp. 849 (N.D. Ill. 1993) ..................................................................................... 11



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Fornaro v. James,

416 F. 3d 63 (D.C. Cir. 2005) ......................................................................................... 6, 9

Fuji Photo Film Co., Ltd. v. Benun,

463 F. 3d 1252 (Fed. Cir. 2006).......................................................................................... 6

Fuji Photo Film Co., Ltd. v. Jazz Photo Corp.,

394 F. 3d 1368 (Fed. Cir. 2005)........................................................................................ 12

Funai Elec. Co., Ltd. v. United States,

645 F. Supp. 2d 1351 (Ct. Int'l Trade 2009) ................................................................. 7, 23

Harrison v. PPG Indus., Inc.,

446 U.S. 578 (1980) ............................................................................................................ 8

Heckler v. Chaney,

470 U.S. 821 (1985) .......................................................................................................... 15

Historic Eastern Pequots v. Salazar,--- F. Supp. 2d ----, 2013 WL 1289571 (D.D.C. 2013) ..................................................... 4

Jazz Photo Corp. v. United States,439 F. 3d 1344 (Fed. Cir. 2006).................................................................................... 7, 11

Kyocera Wireless Corp. v. Int'l Trade Comm'n,545 F. 3d 1340 (Fed. Cir. 2008).......................................................................................... 6

Lane v. Pena,

518 U.S. 187 (1996) ............................................................................................................ 5

McNutt v. Gen. Motors Acceptance Corp. of Indiana,

298 U.S. 178 (1936) ............................................................................................................ 5

Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co.,463 U.S. 29 (1983) ...................................................................................................... 16, 21

Munaf v. Geren,553 U.S. 674 (2008) ...................................................................................................... 3, 23

National Treasury Employees Union v. Helfer,53 F. 3d 1289 (D.C. Cir. 1995) ......................................................................................... 17

Nat'l Treasury Employees Union v. Whipple,636 F. Supp. 2d 63 (D.D.C. 2009) .................................................................................... 10



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Nat'l Wrestling Coaches Ass'n v. Dep't of Educ.,

366 F. 3d 930 (D.C. Cir. 2004) ........................................................................................... 5

Norton v. Southern Utah Wilderness Alliance,

542 U.S. 55 (2004) ............................................................................................................ 15

Paleteria La Michoacana, Inc. v. Productos Lacteos Tocumbo S.A. de C.V.,

901 F. Supp. 2d 54 (D.D.C. 2012) .................................................................................. 3, 4

Pennsylvania Mun. Authorities Ass'n v. Horinko,

292 F. Supp. 2d 95 (D.D.C. 2003) ...................................................................................... 5

Reiter v. Cooper,

507 U.S. 258 (1993) .......................................................................................................... 13

Salmon Spawning Recovery Alliance v. United States,

532 F. 3d 1338 (Fed. Cir. 2008)........................................................................................ 15

Sampson v. Murray,415 U.S. 61 (1974) ............................................................................................................ 22

Sierra Club v. Jackson,648 F.3d 848 (D.C. Cir. 2011) .......................................................................................... 14

Spansion, Inc. v. ITC,629 F. 3d 1331 (Fed. Cir. 2010)........................................................................................ 23

Stanley v. Univ. of S. Cal.,

13 F. 3d 1313 (9th Cir. 1994) ............................................................................................. 3

Steel Co. v. Citizens for a Better Env't,

523 U.S. 83 (1998) .............................................................................................................. 5

Swan v. Clinton,100 F. 3d 973 (D.C. Cir. 1996) ........................................................................................... 5

Town of Sanford v. United States,140 F. 3d 20 (1st Cir. 1998) .............................................................................................. 11

United States v. L.A. Tucker Truck Lines,344 U.S. 33 (1952) ............................................................................................................ 24

United States v. Mead Corp.,533 U.S. 218 (2001) .......................................................................................................... 19



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United States v. Western Pac. R. Co.,

352 U.S. 59 (1956) ............................................................................................................ 12

Univ. of Tex. v. Camenisch,

451 U.S. 390 (1981) ............................................................................................................ 3

U.S. Assn of Importers of Textiles & Apparel v. U.S. Dept of Commerce,

413 F. 3d 1344 (Fed. Cir. 2005) ......5

VastFame Camera, Ltd. v. Int'l Trade Comm'n,

386 F. 3d 1108 (Fed. Cir. 2004).................................................................................passim

Vermont Yankee Nuclear Power Corp. v. Natural Res. Def. Council,

435 U.S. 513 (1978) .......................................................................................................... 20

Washington Legal Found. v. Alexander,

984 F. 2d 483 (D.C. Cir. 1993) ........................................................................................... 5

Winter v. Natural Resources Def. Council, Inc.,555 U.S. 7 (2008) ................................................................................................................ 3

STATUTES AND REGULATIONS

5 U.S.C. 552 ............................................................................................................................... 21

5 U.S.C. 701(a)(2) ...............................................................................................................passim

5 U.S.C. 702 ........................................................................................................................passim

5 U.S.C. 704 ........................................................................................................................passim

5 U.S.C. 706 ........................................................................................................................passim

18 U.S.C. 1905 ........................................................................................................................... 20

19 U.S.C. 1337 ....................................................................................................................passim

19 U.S.C. 1337(a)(1)(B) .............................................................................................................. 6

19 U.S.C. 1337(b) ...................................................................................................................... 13

19 U.S.C. 1337(c) ........................................................................................................................ 7

19 U.S.C. 1337(d)-(f) ................................................................................................................. 13

19 U.S.C. 1337(d)(1) ............................................................................................................... 2, 7



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19 U.S.C. 1337(d)(2) ................................................................................................................... 6

19 U.S.C. 1337(f)(1) .................................................................................................................... 8

19 U.S.C. 1337(f)(2) .................................................................................................................... 8

19 U.S.C. 1514(a) ........................................................................................................................ 7

19 U.S.C. 1516 ........................................................................................................................... 21

28 U.S.C. 1295(a)(6) .................................................................................................................... 7

28 U.S.C. 1331 ............................................................................................................................. 5

28 U.S.C. 1581(a) ........................................................................................................................ 7

35 U.S.C. 281 et seq................................................................................................................... 12

35 U.S.C. 284 ............................................................................................................................. 12

19 C.F.R. 103.2(b) ..................................................................................................................... 21

19 C.F.R. 103.23(b)(6) ............................................................................................................... 21

19 C.F.R. 177 et seq.. ................................................................................................................. 19

19 C.F.R. 210.75 .................................................................................................................passim

19 C.F.R. 210.75(a)...................................................................................................................... 8

19 C.F.R. 210.75(b)(1) ................................................................................................................. 8

19 C.F.R. 210.75(c)...................................................................................................................... 8

19 C.F.R. 210.76 .................................................................................................................... 8, 24

19 C.F.R. 210.77 ........................................................................................................................ 24

19 C.F.R. 210.77(a)...................................................................................................................... 8

19 C.F.R. 210.79 .................................................................................................................... 8, 24



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FEDERAL RULES

Fed. R. Civ. P. 12(b)(6)................................................................................................................. 14

MISCELLANEOUS

Attorney Generals Manual on the Administrative Procedure Act 108 (1947) ........................... 15



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)

Plaintiff, )

)v. ) No. 13-1063 (RWR)

)

UNITED STATES,ET AL., ))

Defendants. )

DEFENDANTS OPPOSITION TO

MICROSOFTS MOTION FOR PRELIMINARY INJUNCTION

The governmental defendants (collectively United States) respectfully respond to the

motion for preliminary injunction filed by plaintiff, Microsoft Corporation (Microsoft). As we

demonstrate below, this Court should deny Microsofts motion. The Court lacks jurisdiction to

entertain this case, and Microsoft entirely fails to establish entitlement to the extraordinary

remedy of compelling Government to action.

BACKGROUND

This case arises from a patent dispute before the United States International Trade

Commission (ITC). Microsoft filed a complaint at the ITC alleging that Motorola Mobility, Inc.

(Motorola) Android smartphones had infringed U.S. Patent No. 6,370,566 (the 566 patent),

owned by Microsoft. As a result, the ITC issued a limited exclusion order pursuant to 19 U.S.C.

1337 (section 337), ordering that unlicensed mobile devices, associated software, and

components covered by claims 1, 2, 5, or 6 of the 566 patent and manufactured abroad or

imported by or on behalf of Motorola were, with limited exception, excluded from entry for

consumption into the United States. Certain Mobile Devices, Associated Software, and

Components Thereof, Inv. No. 337-TA-944, Limited Exclusion Order, 1 (May 18, 2012) (Pl.



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Mem. Ex. H). Pursuant to 19 U.S.C. 1337(d)(1), United States Customs and Border Protection

(CBP) administers ITC exclusion orders at the border.

On May 25, 2012, Motorola requested that CBP allow it to import certain redesigned

mobile devices that Motorola asserted were not covered by the ITCs exclusion order.

Headquarters Ruling (HQ) H226615 (April 25, 2013) (Pl. Mem. Ex. M). In particular, Motorola

requested that CBP issue an administrative ruling pursuant to 19 C.F.R. Part 177. Motorolas

request informed CBP that it had redesigned certain devices to remove the ability to generate

meeting requests when using Microsoft Exchange ActiveSync protocols and described the

features that were removed in the modified devices. Id. at 6-10. According to Motorola, the

devices did not infringe. Id. at 1. CBP issued HQ H226615 in response to Motorolas request.

Microsoft requested revocation of HQ H226615 on two grounds. First, Microsoft

contended that the ITC had found the Google functionality present on the legacy devices to

infringe. Pl. Mem. Ex. A at 1. Second, even absent consideration of Google functionality,

Microsoft contended that the redesigned devices do not successfully avoid infringement. Id.

Motorola opposed. CBP subsequently issued HQ H242025 (Jun. 24, 2013) and HQ H242026

(Jun. 24, 2013) in which it found that the record did not support Microsofts allegations

regarding Google functionality and the redesigned Motorola devices.

In its suit, Microsoft contends that CBPs decision not to exclude Motorolas phones

pursuant to the ITCs order was arbitrary and capricious. Complaint (Cmpl.) 2. Microsoft

asserts that CBP erred by concluding that Microsoft abandoned its claim before the ITC that

Motorolas Google functionality infringed its patent. Cmpl. 8. Microsoft further alleges that

CBP failed to provide Microsoft with proper notice before issuing its decision, and that CBP

inappropriately shifted the burden to Microsoft to prove that Motorolas phones should be



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excluded. Cmpl. 9-10. Microsoft seeks injunctive and declaratory relief compelling CBP to

exclude certain redesigned smartphones from the United States and to order redelivery of certain

merchandise already imported. Cmpl. 15-16.

ARGUMENT

I. Standard Of Review For Preliminary Injunction

A plaintiff seeking a preliminary injunction must establish (1) that it is likely to succeed

on the merits; (2) that it will suffer irreparable harm in the absence of preliminary relief; (3) that

the balance of equities tips in plaintiffs favor; and (4) that an injunction is in the public interest.

Winter v. Natural Resources Def. Council, Inc., 555 U.S. 7, 20 (2008) (citingMunaf v. Geren,

553 U.S. 674, 689-690(2008)). A preliminary injunction is an extraordinary and drastic

remedy; it is never awarded as of right.Munaf, 553 U.S. at 689-90 (citations omitted) (reversing

grant of preliminary injunction in which courts below did not assess whether there was a

likelihood of success on the merits). Microsoft cannot meet any prong here.

When, as in this case, a plaintiff seeks a preliminary injunction compelling an agency to

act, plaintiffs face an additional hurdle. The purpose of a preliminary injunction is merely to

preserve the relative positions of the parties until a trial on the merits can be held. Univ. of Tex.

v. Camenisch, 451 U.S. 390, 395 (1981). If the requested relief would alter, not preserve, the

status quo, the court must subject the plaintiffs claim to a somewhat higher standard. Paleteria

La Michoacana, Inc. v. Productos Lacteos Tocumbo S.A. de C.V., 901 F. Supp. 2d 54, 56

(D.D.C. 2012) (internal quotations omitted);see Stanley v. Univ. of S. Cal., 13 F.3d 1313, 1319

(9th Cir. 1994) (holding that, where a party seeks mandatory preliminary relief that goes well

beyond maintaining thestatus quo pendente lite, courts should be extremely cautious about

issuing a preliminary injunction.). Although this Circuit has neither adopted nor rejected a



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heightened burden as a doctrinal matter . . . it is common practice . . . to proceed with extreme

caution when the injunction would alter thestatus quo. Paleteria, 901 F. Supp. 2d 54, 57 n.1

(citingAllina Health Servs. v. Sebelius, 756 F. Supp. 2d 61, 70 n.5 (D.D.C. 2010));see also

Dorfmann v. Boozer, 414 F.2d 1168, 1173 (D.C. Cir. 1969) (The power to issue a preliminary

injunction, especially a mandatory one [that would alter thestatus quo], should be sparingly

exercised.) (internal quotation marks omitted).

II. Microsoft Is Ineligible For Preliminary Injunctive Relief

Microsofts request for a preliminary injunction should be denied. As demonstrated

below, Microsoft is unlikely to succeed on the merits and suffers no irreparable harm. Moreover,

the balance of equities tips in the Governments favor and an injunction is not in the public

interest.

A. Microsoft Is Unlikely To Succeed On The Merits

1. Introduction

Microsoft is unlikely to succeed on the merits. As an initial matter, this Court lacks

jurisdiction to entertain Microsofts challenge to CBPs decision not to enforce the limited

exclusion order against redesigned devices. Microsoft cites no precedent for what it asks the

Court to do, and we are aware of none. That no district court has ever considered a challenge of

this kind highlights the jurisdictional flaw at the heart of Microsofts case other, well-

established avenues of redress deprive this Court of jurisdiction under the Administrative

Procedure Act (APA). Indeed, Microsoft seeks to short-circuit the detailed statutory and

regulatory procedures that empower the ITC and, ultimately, the United States Court of

Appeals for the Federal Circuit to consider and decide patent infringement claims in the

importing context. Microsoft also ignores the right to remedies under domestic patent law, rights



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that Microsoft is already pursuing. No district court has ever found jurisdiction to entertain this

type of shoe-horned trade complaint. This Court should not be the first. In the same vein, this

Court should dismiss this case because the ITC retains primary jurisdiction to consider

interpretations of its own orders.

Moreover even assuming that jurisdiction exists, Microsoft still could be unlikely to

succeed on the merits of its claim, because CBPs actions in this matter have been reasonable.

2. The Court Lacks Jurisdiction To Entertain This Case Under The

APA __

This Court must consider jurisdiction as a threshold matter. Steel Co. v. Citizens for a

Better Envt, 523 U.S. 83, 94 (1998). Absent jurisdiction, this Court cannot rule on a motion for

a preliminary injunction. U.S. Assn of Importers of Textiles & Apparel v. U.S. Dept of

Commerce, 413 F.3d 1344, 1348 (Fed. Cir. 2005);Pennsylvania Mun. Authorities Assn v.

Horinko, 292 F. Supp. 2d 95, 101 (D.D.C. 2003).

Microsoft bears the burden of demonstrating subject-matter jurisdiction.McNutt v. Gen.

Motors Acceptance Corp. of Indiana, 298 U.S. 178, 188-89 (1936). If Microsoft cannot meet its

burden, the Court must dismiss. Steel Co., 523 U.S. at 94. Sovereign immunity is jurisdictional

in nature,FDIC v. Meyer, 510 U.S. 471, 475 (1994), and any waiver must be express[ed] in

statutory text. Lane v. Pena, 518 U.S. 187, 192 (1996).

Microsoft attempts to invoke the Courts jurisdiction pursuant to 28 U.S.C. 1331 and 19

U.S.C. 1337. Alone, neither statute waives sovereign immunity. Swan v. Clinton, 100 F.3d

973, 981 (D.C. Cir. 1996);Historic Eastern Pequots v. Salazar, --- F. Supp. 2d ----, 2013 WL

1289571 (D.D.C. 2013). The APA, however, when it provides a cause of action, can both waive

sovereign immunity and form a basis for jurisdiction in tandem with section 1331. Califano v.

Sanders, 430 U.S. 99, 107 (1977);American Road & Transp. Builders Assn v. E.P.A., 865 F.



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Supp. 2d 72, 81 (D.D.C. 2012). Nevertheless, if another statute provides an adequate remedy

in a court, 5 U.S.C. 704, then the APA neither provides a cause of action nor waives sovereign

immunity. Id. (citing Washington Legal Found. v. Alexander, 984 F.2d 483, 486 (D.C. Cir.

1993);Fornaro v. James, 416 F.3d 63, 66 (D.C. Cir. 2005);Natl Wrestling Coaches Assn v.

Dept of Educ., 366 F. 3d 930, 947 (D.C. Cir. 2004)). And if the statute providing the adequate

remedy channels review to the courts of appeals, it eliminates the federal question jurisdiction

that the district courts would otherwise enjoy. Id. (citingHarrison v. PPG Indus., Inc., 446

U.S. 578, 584 (1980)).

Two statutory schemes provide adequate remedies sufficient to bar any claim by

Microsoft that the APA provides a waiver of sovereign immunity in this case. The first is section

337 itself. The second is the patent laws.

a. Section 337 Remedies Preclude APA Jurisdiction

Microsoft possesses a host of remedies under section 337 and the ITCs implementing

regulations, which precludes APA jurisdiction.

Among its duties related to international trade, the ITC investigates and adjudicates

claims that a party is importing or has imported items that infringe a valid United States patent.

19 U.S.C. 1337(a)(1)(B). If the ITC determines that an importer is infringing a patent, the ITC

will issue a limited exclusion order, which governs the parties before the ITC, or it may issue a

general exclusion order, covering a broader range of circumstances. Kyocera Wireless Corp.

v. Intl Trade Commn, 545 F.3d 1340, 1356 (Fed. Cir. 2008). The purpose of both types of

orders is to exclude infringing goods from entering the United States. 19 U.S.C. 1337(d)(2).

The ITC does not, however, directly implement its orders at the border. Rather, the statute

entrusts the Treasury Department (currently through CBP) with that responsibility. 19 U.S.C.



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1337(d)(1). Accordingly, after the ITC issues an exclusion order, the ITC notifies CBP of the

order, and CPB shall, through the proper officers, refuse entry to subject goods. Id.

Judicial review of the ITCs and CBPs actions in section 337 cases may be pursued in

two ways. Most directly, after the ITC makes a determination under section 337, an adversely

affected party may appeal within 60 days to the Federal Circuit. 19 U.S.C. 1337(c); 28 U.S.C.

1295(a)(6). This direct review is happening in this case both Microsoft and Motorola have

appealed the ITCs order to the Federal Circuit, which is scheduled to hear argument on

August 6, 2013. Fed. Cir. Docket Nos. 12-1445 and 12-1535.

The other avenue of judicial review, though more limited, is through the United States

Court of International Trade. Pursuant to 19 U.S.C. 1514(a), an importer may protest a

decision by CBP to exclude entry pursuant to an ITC exclusion order. See, e.g.,Jazz Photo

Corp. v. United States, 439 F.3d 1344, 1347-48 (Fed. Cir. 2006). If CBP denies an importers

protest, the importer may challenge that denial in the Court of International Trade. 28 U.S.C.

1581(a);Jazz Photo Corp., 439 F.3d at 1347. As Microsoft correctly points out, however, only

importers may challenge CBPs exclusion decisions in the Court of International Trade because

of that courts jurisdictional limitations; other parties at the ITC, such as Microsoft, have no

cause of action in the Court of International Trade. Funai Elec. Co., Ltd. v. United States, 645 F.

Supp. 2d 1351 (Ct. Intl Trade 2009).

Despite these statutory limitations, patent holders still possess further administrative and

judicial remedies. The Federal Circuit has held that the ITC possesses the statutory authority to

enforce its own orders. VastFame Camera, Ltd. v. Intl Trade Commn, 386 F.3d 1108, 1113

(Fed. Cir. 2004). Indeed, the ITCs regulations provide a road map for complainants like

Microsoft to pursue their rights before the ITC, and, if necessary, the Federal Circuit. The ITCs



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enforcement regulations offer both informal and formal proceedings. 19 C.F.R. 210.75.

Informal enforcement proceedings may be conducted by the [ITC] with respect to any act or

omission by any person in possible violation of any provision of an exclusion order . . . .

19 C.F.R. 210.75(a). The ITC then may issue such orders as it deems appropriate to

implement and insure compliance with the terms of an exclusion order. Id. The regulation

governing formal proceedings allows a complainant in the original investigation, such as

Microsoft, to file a complaint setting forth alleged violations of any exclusion order . . . .

19 C.F.R. 210.75(b)(1).

The ITCs enforcement proceeding could also result in the issuance of a cease and desist

order, which is enforceable through substantial civil penalties. Id.;see also 19 U.S.C.

1337(f)(1) (entitled [c]ease and desist orders; civil penalty for violation of orders). The ITC

may also bring suit in district court to enforce cease and desist orders against importers. 19

U.S.C. 1337(f)(2); 19 C.F.R. 210.75(c). If Microsoft believed that Motorolas imports were

as flagrant and obvious a violation of the exclusion order as it purports, Microsoft could also

seek temporary emergency relief before the ITC. This relief would function almost exactly like a

preliminary injunction pending formal proceedings. See 19 C.F.R. 210.77(a). Microsoft could

also seek modification of the exclusion order expressly to include the redesigned products it

claims are infringing. See 19 C.F.R. 210.76. Moreover, as it did with respect to the ITCs

initial exclusion order in this case, Microsoft could appeal to the Federal Circuit a decision by

the ITC concerning enforcement. See, e.g., Vastfame, 386 F.3d at 1110 (noting that Fuji filed a

complaint with the [ITC] requesting enforcement and advisory proceedings to determine whether

VastFame and others had violated the general exclusion order). Lastly, Microsoft may seek an

advisory opinion from the ITC concerning the exclusion orders scope. 19 C.F.R. 210.79.



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The above remedies under section 337 and the ITCs implementing regulations provide

Microsoft with more than adequate redress for all claims raised in its complaint. These

alternative remedies deprive this Court of jurisdiction to entertain this case. Indeed, this case is

strikingly similar toFornaro, in which the District of Columbia Circuit held that the APA did

not waive sovereign immunity to allow a district court challenge to an Office of Personnel

Management (OPM) decision when review was available at the Federal Circuit. Fornaro, 416

F.3d at 64-66. In that case, law enforcement officers challenged OPMs decision not to notify

members of a prospective class of claimants and provide enhanced retirement benefits resulting

from earlier Federal Circuit case law. Id. at 65. OPMs ruling was appealable to the Merit

Systems Protection Board (MSPB) and ultimately to the Federal Circuit. Id. at 66. The Court

held that allowing plaintiffs to challenge OPMs action in district court would plainly

undermine the whole point of channeling review of benefits determinations to the MSPB and

from there to the Federal Circuit. Id. at 68. This approach, the Court explained, would also: (a)

reintroduce the haphazard arrangements for administrative and judicial review of personnel

action, involving resort to the district courts through various forms of action, including suits for

mandamus, injunction, and declaratory judgment, that Congress sought to replace in the CSRA

[Civil Service Retirement Act]; (b) erode the primacy of the MSPB for administrative

resolution of disputes and the primacy of the Federal Circuit for judicial review; and (c)

impermissibly create a right of access to the courts more immediate and direct than the CSRA

provides, thus fracturing the unifying authority of the MSPB, and undermining the consistency

of interpretation by the Federal Circuit envisioned by the Act. Id. at 68-69 (internal quotations,

brackets, ellipses, and citations omitted). Not all APA district court actions involving the CSRA

are prohibited, but those that are allowed involve limited challenges, for example, to system-



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wide rulemaking. See, e.g., Natl Treasury Employees Union v. Whipple, 636 F. Supp. 2d 63, 69

(D.D.C. 2009).

Like the challenge to OPMs actions under the CSRA inFornaro, allowing Microsofts

challenge here to proceed would upset a carefully crafted statutory mechanism that provides an

adequate remedy for parties like Microsoft. Such a result is impermissible. As demonstrated

above, CBPs implementation of ITC exclusion orders is reviewed by the Federal Circuit. If the

Court considers Microsofts challenge, the Court would be forced to review CBPs interpretation

of the ITCs exclusion order and to construe what that order means, even though the ITC already

has a process in place for such determinations. Review of this Court would be in the District of

Columbia Circuit, when it would otherwise occur in the Federal Circuit, which is certainly an

adequate forum. Such a splitting of review between the regional circuits and the Federal Circuit

similarly ignores the Supreme Courts teaching regarding the APA. See Bowen v.

Massachusetts, 487 U.S. 879, 908 (1988) (declining to split the review of 5 U.S.C. 704 final

agency actions regarding Medicaid between the courts).

Microsoft cannot involve this Court and suddenly create a right of access to judicial

review where none before existed. Allowing Microsoft to do so would circumvent the

longstanding process by which parties return to the ITC and seek clarification, modification, and

enforcement of exclusion orders. This right of access would mean a right to injunctive relief and

declaratory judgments that before were the sole province of the ITC and CBP. The ITC can

clarify and enforce its own rulings, and that power, coupled with available review in the Federal

Circuit, deprives this Court of jurisdiction. Moreover, that Microsofts remedy before the ITC

might inconvenience it because it might obtain injunctive relief more quickly here (which is

questionable given the ITCs ability to grant emergency relief) is of no moment. See Town of



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Sanford v. United States, 140 F.3d 20, 23 (1st Cir. 1998) (explaining that [a] legal remedy is not

inadequate for purposes of the APA because it is procedurally inconvenient for a given plaintiff,

or because plaintiffs have inadvertently deprived themselves of the opportunity to pursue that

remedy.);First Nat. Bank of Chicago v. Steinbrink, 812 F. Supp. 849, 854 (N.D. Ill. 1993)

(Not only is an administrative proceeding pending which addresses the very same issues . . . ,

but a viable opportunity for review exists in the appellate courts once a final enforcement order is

issued. The only inadequacy with this remedy is that the Bank must endure the added expense

and inconvenience of final adjudication in the administrative proceedings and subsequent review

in the Seventh Circuit.).

Indeed, Microsofts correct judicial remedy was pursued by Fuji in the disposable camera

cases. Fuji, like Microsoft, filed a complaint at the ITC against an importer (including Jazz

Photo) that Fuji claimed was infringing its patents. Jazz Photo, 439 F.3d at 1346-47. Just as the

ITC did here for Microsoft, the ITC agreed with Fuji, and issued an exclusion order. Id. at 1347.

Two years later, Fuji returned to the ITC seeking institution of a formal enforcement proceeding

to enforce the Exclusion Order against Jazz Photos and others. Id. The ITC agreed with Fuji

that Jazz Photo had violated the exclusion order. Id.;see also VastFame, 386 F.3d at 1110

(discussing ITC post-exclusion order proceedings). Had it been adversely affected by the ITCs

ruling, Fuji could have appealed, but instead, Jazz Photo sued in the Court of International Trade,

challenging CBPs exclusion of certain disposable cameras stemming from the ITCs

enforcement decision. Id.

In sum, Microsofts remedies before the ITC and the Court of Appeals for the Federal

Circuit are adequate and have been pursued before. This Court accordingly lacks jurisdiction to

entertain this case pursuant to the APA.



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b. The Patent Laws Preclude APA Jurisdiction

The patent laws also provide Microsoft with an adequate remedy one that Microsoft is

already pursuing. 35 U.S.C. 281 et seq. Patent holders may initiate infringement actions for

which they are entitled to seek damages. 35 U.S.C. 284;Fuji Photo Film Co., Ltd. v. Jazz

Photo Corp., 394 F.3d 1368 (Fed. Cir. 2005) (patent remedies sought while section 337 case

before ITC). Microsoft already sued Motorola in the United States District Court for the

Western District of Washington, alleging that Motorola was infringing the 566 patent by,

among other things, making, using, offering to sell or selling in the United States, or importing

into the United States, products and/or services that are covered by one or more claims of the

566 patent . . . W.D. Wash. Cmpl. at 36 (emphasis added). Attachment A. Like Microsofts

available remedies before the ITC and the Federal Circuit, Microsofts pursuit in district court of

a case for patent infringement concerning the devices at issue in this very case demonstrates that

Microsoft possesses adequate remedies sufficient to deprive this Court of jurisdiction.

3. Alternatively, This Case Should Be Rejected

Because It Falls Within The ITCs Primary

Jurisdiction___________________________

The Court should also decline to exercise jurisdiction because the cases subject matter

falls within the ITCs primary jurisdiction. The primary jurisdiction doctrine promotes proper

relationships between the courts and administrative agencies charged with particular regulatory

duties. United States v. Western Pac. R. Co., 352 U.S. 59, 63-64 (1956). No fixed formula

exists for applying the doctrine. Id. at 64. Instead, the doctrine rests both on a concern for

uniform outcomes (which may be defeated if disparate courts resolve regulatory issues

inconsistently) . . . and on the advantages of allowing an agency to apply its expert judgment.

Allnet Communication Serv., Inc. v. Natl Exchange Carrier Assn, 965 F.2d 1118, 1120 (D.C.



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Cir. 1992). Although the doctrine of primary jurisdiction need not deprive the Court of

jurisdiction, this Court may, if the parties would not be unfairly disadvantaged, dismiss a case

without prejudice pursuant to the doctrine. Reiter v. Cooper, 507 U.S. 258, 268-69 (1993).

As explained above, the ITC is charged in section 337 with excluding from import items

that infringe valid patents. The ITC has exclusive jurisdiction to determine whether a violation

of section 337 has occurred, including infringement of asserted patents, and to issue exclusion

orders upon finding a violation of section 337. Pursuant to both section 337 and its

implementing regulations, the ITC also has jurisdiction to enforce compliance with its orders.

19 U.S.C. 1337(b), (d)-(f); 19 C.F.R. 210.75 et seq. The Federal Circuit has recognized the

ITCs technical expertise. See, e.g.,Enercon GmbH v. Intl Trade Comn, 151 F.3d 1376, 1382

(Fed. Cir. 1998).

Given the clear route of review before the ITC that Microsoft resisted by filing suit here,

the Court should decline to entertain this suit and instead allow the ITC to interpret and enforce

its own order. If the Court creates an avenue for review of CBP rulings on ITC matters, a split of

authority with no uniform mechanism for review in a single court of appeals will become

possible, depending on where a party elects to seek relief.

Further, and as inAllnet, the posture of Microsofts suit as a declaratory judgment action

strengthens the case for primary jurisdiction because Federal declaratory judgments are

available as a matter of judicial discretion, not as of right . . . and are not to be used to pre-empt

and prejudge issues that are committed for initial decision to an administrative body or special

tribunal. 965 F. 2d at 1121 (internal citations omitted).



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4. Microsoft Will Not Succeed On The Merits

Even assuming that the Court possesses jurisdiction to entertain Microsofts complaint,

Microsofts claim still would be likely to fail because CBP acted lawfully and reasonably.

a. CBPs Enforcement Decisions Are Permissible Under The

Correct Standard Of Review_________________________

Microsoft misstates the governing standard in its motion and complaint by attempting to

apply the standard of review for review of final agency actions to what is in fact an attempt to

compel agency action [allegedly] unlawfully withheld. 5 U.S.C. 706(1). Microsoft thus fails

to state a claim pursuant to Fed. R. Civ. P. 12(b)(6), because CBPs decision not to exclude

redesigned smartphones was discretionary and cannot be compelled pursuant to section 706(1).

Sierra Club v. Jackson, 648 F.3d 848, 853-55 (D.C. Cir. 2011) (citing 5 U.S.C. 701(a)(2)

committed to agency discretion exemption from APA review).

Microsoft contends that [t]he case arises from Defendants unlawful and arbitrary

refusal to enforce an order of the United States International Trade Commission, Pl. Mem. at 1,

and that it seeks injunctive and declaratory relief requiring [CBP] to comply with a mandatory

Limited Exclusion Order. Cmpl. at 2. Microsoft then treats CBPs purported non-

enforcement of the ITCs exclusion order as a final agency action under the APA, 5 U.S.C.

702. Pl. Mem. at 16. Microsoft asserts that it may seek to compel enforcement by way of a

Court decision holding CBPs alleged non-enforcement arbitrary and capricious under

5 U.S.C. 706(2)(A),see Pl. Mem. at 16-28 (argument pursuant to section 706(a)(A)), instead of

the correct provision, under which Courts may compel agency action unlawfully withheld only

under very limited circumstances. 5 U.S.C. 706(1).

As the unanimous Supreme Court recognized, and contrary to the premise of Microsofts

suit, the only agency action that can be compelled under the APA is action legally required.



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This limitation appears in 706(1)s authorization for courts to compel agency action

unlawfully withheld. Norton v. Southern Utah Wilderness Alliance, 542 U.S. 55, 63 (2004)

(SUWA) (quoting 5 U.S.C. 706(1)) (emphasis by Court). A claim under 706(1) can proceed

only where a plaintiff asserts that an agency failed to take a discrete agency action that it is

required to take. Id. (emphasis by Court). Indeed, section 706(1) empowers a court only to

compel an agency to perform a ministerial or non-discretionary act, or to take action upon a

matter, without directing how it shall act. Id. (quoting Attorney Generals Manual on the

Administrative Procedure Act 108 (1947) (emphasis by Court);see also Heckler v. Chaney, 470

U.S. 821, 831 (1985) (decisions not to enforce are unreviewable under APA because they are

committed to agency discretion by law under 5 U.S.C. 701(a)(2)); Salmon Spawning

Recovery Alliance v. United States, 532 F. 3d 1338, 1345 (Fed. Cir. 2008) (rejecting attempt to

compel CBP to enforce Endangered Species Act (ESA) against alleged importers of ESA-listed

salmon); Corning Gilbert Inc. v. United States, 896 F. Supp. 2d 1281, 1289 (Ct. Intl Trade

2013) (unlike ministerial actions that courts may compel under section 706(1), CBP may have

to go beyond the mechanical application of [an exclusion order].).

To be sure, we do not contend that CBP possesses unbounded discretion to ignore ITC

exclusion orders. Rather, when faced with containers of redesigned merchandise at the border,

some level of discretion necessarily inures to CBP to deny or allow entry by determining

whether those imports fall within or outside the scope of the ITCs exclusion. Indeed, Microsoft

implicitly recognized this practical reality by not contending that exclusion of redesigned

products is a ministerial or discrete agency action that [CBP] is required to take, SUWA, 542

U.S. at 63 (emphasis by Court), whenever CBP implements an exclusion order. Microsofts

claim thus fails to state a claim for which relief may be granted for that reason alone.



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b. CBPs Decisions Are Not Arbitrary Or Capricious And Were

In Accordance With Law_______________________________

Even if this Court reviews CBPs actions under the (incorrect) arbitrary and capricious

standard that Microsoft advances, Pl. Mem. 16-17, Microsofts claims still must fail. The scope

of review under the arbitrary and capricious standard is narrow and a court is not to substitute

its judgment for that of the agency. Motor Vehicle Mfrs. Assn of U.S., Inc. v. State Farm Mut.

Auto. Ins. Co., 463 U.S. 29, 43 (1983). [T]he agency must examine the relevant data and

articulate a satisfactory explanation for its action including a rational connection between the

facts found and the choice made. Id. (quotingBurlington Truck Lines v. United States,

371 U.S. 156, 168 (1962)). Courts thus consider whether the decision was based on a

consideration of the relevant factors and whether there has been a clear error of judgment. Id.

(citations omitted). CBP was reasonable and thus it more than met this deferential standard.

i. CBPs Ruling Was Not Foreclosed By

The Law Of The Case Or Unreasonable

Microsoft first contends that it will succeed because CBPs ruling was foreclosed by the

ITCs order. Pl. Mem. 18-20. Microsoft is mistaken. CBPs ruling that Motorolas redesigned

devices were not covered by the ITCs exclusion order is entirely reasonable.

Microsofts contentions hinge on a misreading of a two-sentence footnote in the ITCs

opinion. Pl. Mem. Ex. G. As Microsoft notes, Motorola asserted that any exclusion order

should not extend to the accused products use of Googles servers and Googles synchronization

protocol to synchronize calendar objects. ITC Op. 24, n.12. The ITC declined to consider this

issue because it was raised by Motorola for the first time in a responsive brief. Id.

This footnote does not say what Microsoft claims it says. The footnote does not say that

the ITCs exclusion order covers products that use Googles servers and protocol. All the



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footnote says is that Motorola raised the issue only at the conclusion of ITC proceedings, in a

manner that prevented the administrative law judge, Microsoft, and the Commission from

addressing it. So when Motorola and Microsoft brought this issue to CBPs attention, CBP

needed to look beyond the footnote. CBP needed to determine whether, in fact, Motorolas

Google synchronization was at issue before the ITC. The ITCs opinion is silent on the question,

so to make its determination, CBP analyzed the record. Pl. Mem. Ex. A (HQ H242025) at 2-7.

Indeed, CBP carefully considered the record developed by the parties before the ITC

given that Motorolas failure to raise the issue on a timely basis before the administrative law

judge precluded the ITCs adjudication of the issue. CBP examined the deposition testimony of

both Motorolas and Microsofts expert witnesses. Id. at 10. CBP considered Microsofts

updated claim chart, which did not refer to Googles technology. Id. CBP also considered

Microsofts pre- and post-hearing briefs, which also did not address the issue. Id.

CBPs consideration of the ITCs opinion and the record before the ITC to determine

whether Motorolas smartphones were covered by the ITCs order was reasonable. CBP

considered all relevant factors and its conclusion was logically drawn from the record and

reasonably articulated. In these circumstances, this Court should not substitute its judgment for

that of CBP. National Treasury Employees Union v. Helfer, 53 F.3d 1289, 1292-93 (D.C. Cir.

1995).

ii. CBP Did Not Shift Any Burden To Microsoft

Microsoft next claims that CBP wrongly allocated the burden of proof to Microsoft to

prove that Motorolas smartphones were covered by the ITCs exclusion order. Pl. Mem. 20-22.

This is wrong because CBP expressly ruled that Motorola bore the burden to demonstrate non-

infringement and held Motorola to that standard.



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As Microsoft concedes, CBPs rulings explain that an exclusion order shifts the burden of

proof to would-be importers to prove that their products are not covered by an exclusion order.

Pl. Mem. Ex. M. (HQ H226615) at 6; Pl. Mem. Ex. A (HQ H242025) at 9. Despite CBPs clear

statement, Microsoft maintains that CBPs use of the phrase Microsoft points to at page 10 of

HQ H242025 somehow demonstrates that CBP impermissibly shifted the burden of proof to

Microsoft. This is absurd. CBP first ruled on Motorolas request without consulting Microsoft.

Pl. Mem. Ex. M (HQ H226615). There, CBP considered the evidence provided by Motorola and

found that Motorola had proven that its redesigned smartphones were not covered by the

exclusion order. Id. Microsoft then asked CBP to revoke that ruling. In doing so, Microsoft

made arguments and, in making its arguments, Microsoft pointed to evidence. As a result,

CBP merely noted that Microsoft had pointed to evidence that the agency found unpersuasive.

CBP did not shift any burden; it merely considered Microsofts contentions and found that they

did not overcome Motorolas demonstration that its redesigned smartphones were not covered by

the exclusion order.

Nor did CBP impose an improper standard for claim abandonment. Pl. Mem. at 22.

Microsoft appears to maintain that, because it raised its infringement claim regarding the use of

Google technology in an exhibit to its complaint before the ITC, Microsoft did not abandon that

claim in later filings when it submitted a revised chart that did not address Google technology.

Id. A party may abandon a claim after raising it in a complaint by not pressing for it in a later

motion. Aliotta v. Bair, 614 F.3d 556, 562-63 (D.C. Cir. 2010). CBPs conclusion that

Microsoft abandoned its claim with respect to Google technology was thus entirely reasonable.



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iii. CBP Did Not Fail To Provide Fair Notice To Microsoft

Microsoft erroneously claims that CBP failed to notify Microsoft that CBP was shifting

the burden to Microsoft to prove that Motorola devices should be excluded. Pl. Mem. 23-25.

As an initial matter, Microsoft identifies no authority requiring CBP to provide notice in

the manner that Microsoft claims. Pl. Mem. at 23-25. Microsoft asserts only that notice must be

given for formal proceedings. Id. at 24. The proceedings here were governed by 19 C.F.R.

177 et seq., and were not formal proceedings. Rather, rulings made under Section 177 are far

removed . . . from notice-and-comment process . . . . United States v. Mead Corp., 533 U.S.

218, 231 (2001). CBP had no obligation to provide Microsoft notice before issuing its rulings.

Aside from the issue of required notice, Microsoft also contends that it was harmed

because CBP transformed its revocation request into a request for a new ruling. Microsoft is

wrong. Nothing about how CBP treated Microsofts request was improper.

Motorola initially asked CBP to allow importation of smartphones that it had redesigned

purportedly to avoid the infringement covered by the ITCs order. Pl. Mem. Ex. M (HQ

H226615). In particular, Motorola contended to CBP that it had redesigned its smartphones to

avoid generating emails when scheduling calendar events using Microsofts ActiveSync

Exchange Protocol. Id. at 3, 9. CBP considered Motorolas arguments and agreed. Id. at 9.

After obtaining a copy of the ruling, Microsoft sought revocation on two grounds. Pl. Mem. Ex.

A (HQ H242025). First, Microsoft asserted that Motorolas devices still infringed because they

sent emails using Google technology. Id. at 1-2. Second, Microsoft contended that the

redesigned smartphones continued to infringe by using Microsoft technology. Id. at 2. CBP

addressed these two contentions in separate rulings, both issued on June 24. Id.



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Microsoft does not make clear exactly what wrong CBP allegedly committed. Motorola

did not request that it be allowed to import smartphones that used only Google technology,

presumably because Motorola interpreted the ITCs order not to cover those devices because

Motorola believed that they were not at issue before the ITC. Instead, Motorola requested a

ruling about smartphones using Microsoft technology. CBP ruled that Motorolas redesigned

devices were not covered. Microsoft challenged that ruling by arguing that CBP had missed an

important issue that Motorolas smartphones were still generating email requests using Google

technology. As demonstrated above, CBP examined Microsofts argument carefully,

considering both the ITCs opinion and the record before the ITC. CBP found that the record did

not support a finding that using Google technology was specifically accused and found to

infringe at the ITC. Microsoft disagrees with that conclusion, but it does not successfully

demonstrate that CBPs process in reaching its decision was in any way unlawful.

Microsofts other procedural complaints are equally meritless. There is simply no bar

preventing CBP from communicating with importers and domestic interested parties on an ex

parte basis. Similarly, Microsoft identifies no authority that compels CBP to hold adversarial

proceedings every time an importer or domestic interested party contacts the agency regarding

imports. Rather, it is well established that interested parties are entitled only to those

administrative proceedings that are mandated by statute or regulation. Vermont Yankee Nuclear

Power Corp. v. Natural Res. Def. Council, 435 U.S. 513, 543-44 (1978).

In addition, adversarial proceedings of the sort that Microsoft envisions may very well

require CBP to divulge trade secrets absent authority. In particular, the proceedings sought by

Microsoft would require disclosure of Motorolas proprietary designs to Microsoft, despite the

criminal prohibition upon such disclosure under the Trade Secrets Act. 18 U.S.C. 1905. Other



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customs information, such as the identity of importers, the ports of entry used, and the content of

entries, are also considered proprietary information belonging to the importer. See, e.g., 19

C.F.R. 103.23(b)(6) (barring disclosure if [d]isclosure would improperly reveal confidential

commercial information without the owners consent (e.g., entry information)); 19 C.F.R.

103.2(b) (applying disclosure provisions of Freedom of Information Act, 5 U.S.C. 552,

subsection (b)(4) of which excludes from disclosure trade secrets and commercial or financial

information obtained from a person and privileged or confidential.). In sum, there is no basis

for CBP to share commercial information with an importers competitors. In that vein, the only

statute that provides for CBP investigations at the behest of domestic interested parties does not

focus on any entries of merchandise. Rather, the investigation focuses solely on how CBP

should classify for tariff purposes imported merchandise identical to that produced or sold by the

domestic petitioner. The particulars of any importation are wholly absent from that provision.

See 19 U.S.C. 1516 (setting forth procedures and standards).

d. CBP Did Not Ignore Evidence Of Abandonment

Lastly, Microsoft contends that CBP ignored evidence submitted by Microsoft. Pl. Mem.

26-27. The authority cited by Microsoft concerns an agencys obligation to consider all

important aspects of a problem. See, e.g.,Motor Vehicle Mfrs., 463 U.S. at 43. Microsoft first

concedes that CBPs ruling demonstrates that CBP did consider Microsofts evidence; CBP just

did not find it persuasive. Pl. Mem. 26. Microsofts next contends that CBP failed to consider

that Motorola did not raise an argument when requesting more time to respond to an expert

report. Id. Microsoft does not explain how Motorolas failure proves anything, let alone how

this failure was somehow an important aspect of the issue before CBP.



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B. Microsoft Has Not Shown Irreparable Harm Absent Injunctive Relief

In addition to no likelihood of success on the merits, Microsoft does not even attempt to

proffer evidence that it would be irreparably harmed absent injunctive relief. Rather, Microsoft

hinges its claim on the fact that sovereign immunity bars APA money judgments against the

United States, allegedly preventing redress of its complaint. Pl. Mem. at 30. Yet Microsoft

currently seeks damages from Motorola in its infringement action in the Western District of

Washington.

Moreover, Microsoft concedes at page 6 of its motion that, [r]ather than exclude others

from using its patented technology, Microsoft has licensed use of the 566 patent under defined

circumstances to most of the industrys leading smartphone manufacturers, including Nokia,

Apple, Samsung, Research In Motion, HTC, AsusTek, Kyocera, Pantech, and Sony. In sum,

the harm that Microsoft alleges does not stem from Motorolas imports. Rather, it stems from

Motorola not licensing the 566 patent in the same manner as most of the industry. That can

easily be redressed should Microsoft prevail in its patent suit. Rather than being irreparably

harmed by a possible delay in recovery of licensing fees from Motorola, the temporary loss of

income, ultimately to be recovered, does not usually constitute irreparable injury. Sampson v.

Murray, 415 U.S. 61, 90 (1974);see also Davis v. PBGC, 571 F.3d 1288, 1294-95 (D.C. Cir.

2009) (explaining that plaintiffs cannot establish irreparable harm. The only alleged injuries in

this case are economic. The pilots complain that they are not getting enough money from the

PBGC. If they succeed in their suit on the merits, the PBGC will have to give them the money

they request.). In fact, Microsofts allegation of harm leads to the perverse result that, even if it

cannot demonstrate harm sufficient to enjoin an alleged infringer, it nevertheless can establish



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irreparable harm in a case against the Government seeking to compel enforcement against the

same alleged infringer.

Similarly, Microsofts reliance on Spansion, Inc. v. ITC, 629 F.3d 1331 (Fed. Cir. 2010)

to reduce its burden to show harm is misplaced. Pl. Mem. at 27-29. In that case, the court held

that a petitioner need not demonstrate irreparable harm to obtain an ITC exclusion order. But

that is not the case here, where Microsoft seeks a preliminary injunction to compel CBP to act.

Spansion did not limit binding Supreme Court precedent requiring courts to apply the four-prong

test before awarding injunctive relief. Munaf, 553 U.S. 674.

Lastly, Microsofts attempt to advance a lightened standard for injunctive relief based on

the Court of International Trades decision inEaton Corp. v. United States, 395 F. Supp. 2d 1314

(Ct. Intl Trade 2005), is misplaced. There, the court issued a preliminary injunction to prevent

an importer from importing redesigned merchandise pending an ITC proceeding on whether the

redesigned merchandise infringed the patent subject to a limited exclusion order. At the time,

the court expressly refused to assess its own jurisdiction. Id. at 1162. Eaton is unavailing

because, first, the Federal Circuit immediately rejected the courts decision and allowed

continued importation of allegedly infringing merchandise. That court held that it was likely

legal error for the trial court to issue an injunction without considering the important

jurisdictional issues in that case. Eaton Corp. v. United States, Fed. Cir. Dkt. No. 05-1565

(October 28, 2005) Order at 5. Attachment B. Second, the Court of International Trade later

concluded that it lacked jurisdiction to entertain the very type of claim asserted in Eaton. Funai,

645 F. Supp. 2d at 1357.



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C. The Balance Of Hardships Should Preclude An Injunction

In contrast to the lack of immediate irreparable harm that Microsoft would suffer absent

injunctive relief, the Governments administration of the customs laws would be significantly

harmed by short-circuiting the regulatory process for administration and enforcement of

exclusion orders before the ITC. 19 C.F.R. 210.75, 210.76, 210.77, 210.79. Indeed,

Congress entrusted the ITC with the authority to determine the need for and the scope of

exclusion orders in the first instance and, under the regulations above, the ITC is a correct forum

for determining whether Motorolas redesigned smartphones infringe on Microsofts patent.

D. An Injunction Would Not Serve The Public Interest

As previously discussed, Microsofts attempt to bypass available avenues for relief harm

the administration of the customs laws. Rather than following the process set forth in the ITCs

regulations, Microsoft seeks an extraordinary remedy of a preliminary injunction under the

assumption that Motorolas redesigned products infringe the 566 patent, without even asking the

agency entrusted by Congress to determine in the first instance whether Microsofts contentions

are meritorious. Although the ITC regulations do not set forth mandatory administrative

prerequisites for filing suit, they do provide explicit administrative remedies, and may result in

decisions appealable as of right to the Federal Circuit. In light of the administrative remedies

that Microsoft elected to eschew, [s]imple fairness to those who are engaged in the tasks of

administration, and to litigants, requires as a general rule that courts should not topple over

administrative decisions unless the administrative body not only has erred but has erred against

objection made at the time appropriate under its practice. United States v. L.A. Tucker Truck

Lines, 344 U.S. 33, 37 (1952). That is the case here because the ITC could have issued decisions

upon redesigned merchandise, resolving Microsofts complaints without burdening this Court.



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For these reasons, we respectfully request that the Court deny Microsofts motion for

preliminary injunction.

Respectfully submitted,

STUART F. DELERY

Acting Assistant Attorney General

RONALD C. MACHEN JR.

United States Attorney

for the District of Columbia

BRYANT G. SNEE

Deputy Director

/s/ PATRICIA M. McCARTHYAssistant Director

/s/ STEPHEN C. TOSINI

(DC Bar No. 470415)

/s/ SEAN B. McNAMARASenior Trial Counsels

Department of Justice

Civil DivisionCommercial Litigation Branch

PO Box 480, Ben Franklin StationWashington, D.C., 20044

Tel: (202) 616-5196

Email: [email protected]

August 2, 2013 Attorneys for Defendant


13-08-02 Government's Opposition to Microsoft's Motion for Preliminary Injunction

Documents