H326291

HQ H326291 August 5, 2022 OT:RR:BSTC:EOE H326291 JW CATEGORY: 19 U.S.C. § 1337; Unfair Competition Mr. Bas de Blank Orrick, Herrington & Sutcliffe LLP 1000 Marsh Road Menlo Park, CA 94025 VIA EMAIL: bdeblank@orrick.com RE: Ruling Request; U.S. International Trade Commission; Limited Exclusion Order; Investigation No. 337-TA-1191; Certain Audio Players and Controllers, Components Thereof, And Products Containing the Same Dear Mr. de Blank: This is in response to your submission on behalf of Sonos, Inc. (“Sonos”), dated July 7, 2022, which included Exhibits A to D (collectively, “Sonos Submission”). In that submission, you “request that Customs enforce the Commission’s Limited Exclusion Order . . . and Customs’ own Part 177 determination and exclude from entry Google controllers, such as Pixel smartphones, tablets and computers.” Sonos Submission at 1. The Exclusion Order Enforcement Branch (“EOE Branch”) has construed this submission as a request for a ruling whether the action that Google LLC (“Google”) has taken with respect to the removal of its Device Utility Application (“DUA” or “application”), as described below, is sufficient to permit entry or whether, as in Sonos’s view, “Google controllers should be immediately excluded from entry until and unless Google proves they do not infringe.” Id. Accordingly, the limited question to address in this ruling is whether Google’s undisputed removal of the DUA from its U.S. Play Store as of June 6, 2022, comports with HQ H324813 (dated June 3, 2022) to satisfy one of the options provided that would permit Google to enter future shipments of the articles at issue in that ruling. As discussed below, we find that (i) Google has removed the DUA from its U.S. Play Store as of June 6, 2022, thereby making it unavailable for U.S. consumers to download from Google as of that date, (ii) Google has complied with the option provided in HQ H324813 to disable the DUA, as it is no longer available for use with future shipments of the “relevant articles at issue,” and (iii) Google provided sufficient notice of that disabling. BACKGROUND The EOE Branch presumes familiarity with its prior ruling that resulted from an inter partes proceeding addressing application of this exclusion order and the facts underlying this dispute. See HQ H324813 at 3-35. As an overview, on January 6, 2022, the U.S. International Trade Commission (“ITC” or “Commission”) issued a limited exclusion order (“LEO”) in the underlying investigation. Certain Audio Players and Controllers, Components Thereof, and Products Containing Same, Inv. No. 337-TA-1191, EDIS Doc. 759897, Limited Exclusion Order (Jan. 6, 2022) (“1191 LEO”). On March 24, 2022, Sonos requested a ruling from CBP under 19 C.F.R. Part 177 “that audio players, controllers, components thereof, and products containing the same currently imported by Google, LLC [] are not the same as the redesigned products that were adjudicated as not infringing” at Commission such that they “have not been adjudicated as non-infringing [and] should be excluded until and unless Google seeks a ruling of non-infringement from the Commission or obtains a Part 177 ruling from CBP that such products are outside the scope of the Limited Exclusion Order.” HQ H324813 at 16 (citing Sonos Ruling Request at 1 (quotation omitted)). The EOE Branch handled Sonos’s ruling request on an inter partes basis with Sonos, the complainant from the underlying investigation and Google, the respondent from the same. Id. at 2 (citation omitted). On June 3, 2022, the EOE Branch issued a ruling under 19 C.F.R. Part 177 in response to Sonos’s ruling request and held, in particular, that: CBP’s position is that the relevant articles at issue are subject to exclusion from entry for consumption on the basis of the 1191 LEO until Google either: (1) disables or renders inoperable the Device Utility app addressed in this ruling such that it can no longer be used with the relevant articles at issue and provides notice as to that disabling or inoperability; or (2) receives a non-infringement determination pursuant to an ancillary proceeding at the Commission or a ruling in an inter partes proceeding from CBP under 19 C.F.R. Part 177 that addresses operation of the Device Utility app on the articles at issue. Google may concurrently pursue options (1) and (2) above. HQ H324813 at 2. On July 7, 2022, Sonos submitted the request at issue in this ruling, alleging that Google had not disabled or rendered inoperable the DUA and taking the position that “Customs should immediately enforce the Commission’s exclusion of Google’s infringing controllers.” Sonos Submission at 11. On July 12, 2022, Google responded, noting that “Google has disabled all legitimate and authorized methods through which a user in the US can obtain the DUA and install it on a newly-imported Pixel device.” Google Response Submission at 3. ANALYSIS The primary dispute between the parties is whether Google’s uncontested removal of the DUA from its U.S. Play Store as of June 6, 2022, complies with the option in HQ H324813 that Google “disable or render inoperable” the DUA addressed in the ruling, such that it can no longer be used with the relevant articles at issue. HQ H324813 at 2. Sonos argues that removing the DUA from Google’s U.S. Play Store did not disable or render it inoperable as envisioned in the ruling. Sonos Submission at 6. Sonos asserts two reasons for its position: (1) the DUA remains present on any controllers imported before the date of the ruling that already downloaded the application, and (2) the DUA may be downloaded on controllers imported after the date of the ruling using Google’s non-U.S. Play Stores or certain third-party websites. Sonos Submission at 5-9. In its response, Google did not address Sonos’s first point but argued, as to the second, that it does not instruct or induce anyone to access its non-U.S. Play Store to obtain an application that it removed from its U.S. Play Store and that a user in the United States would not be able to download the DUA from a non-U.S. Play Store without violating Google’s Terms of Service. Google Response Submission at 1-2. For the reasons provided below, we find that Google has disabled the DUA such that it has complied with the option provided in the ruling to permit future entry of its controllers. Specifically, this position is consistent with the plain meaning of the key terms in HQ H324813, the context in which they appear, CBP’s authority to enforce Section 337 exclusion orders at the border, and the overarching principle against retroactivity embodied in the law generally and 19 C.F.R. Part 177 specifically. Moreover, we find that Google is not making the DUA available to U.S. customers by directing them to its non-U.S. Play Stores or inducing them or other entities to download or make available that application. Sonos Argues That the DUA Remains Present on Controllers That Have Already Entered the United States Sonos’s first argument focuses on controllers that were imported and that downloaded the DUA before the date of the ruling. Specifically, Sonos argues that “[i]t is undisputed that the DUA app remains fully functional and was not disabled on the devices to which it was installed” such that “Google’s representations that it disabled its Device Utility app are unambiguously false” because “Google conceded that its Device Utility app remained operable on devices to which it had been installed.” Sonos Submission at 3, 5 (emphasis in the original). Significantly, Sonos does not point to any text in the ruling that directs or otherwise requires Google to take action with respect to controllers that were imported and that downloaded the DUA before the date of the ruling. As noted above, HQ H324813 states that “CBP’s position is that the relevant articles at issue are subject to exclusion from entry for consumption on the basis of the 1191 LEO until Google … disables or renders inoperable the Device Util

of the text (such as the meaning of the key terms or the context in which they appear). Instead, it compares this issue to a situation involving a defective device. Under Sonos’s comparison, “[w]hile it is the bare minimum to stop selling additional defective (or infringing) devices, that is a far cry from disabling or rendering inoperable the dangerous feature on existing devices.” Id. Sonos appears to be analogizing this issue to a product recall based on health and safety considerations. However, the analogy falls apart because Sonos cannot point to any mention in the ruling requiring that Google remove the DUA from articles imported before the date of the ruling. A reason for Sonos’s inability here is because such a command to “recall” or take other action with respect to released products misconstrues CBP’s administration of Section 337 exclusion orders and the Customs laws generally. The EOE Branch expressly noted in HQ H324813 that “[a]n exclusion order under § 1337(d)—either limited or general—and a seizure and forfeiture order under § 1337(i) apply at the border only and are operative against articles presented for customs examination or articles conditionally released from customs custody but still subject to a timely demand for redelivery.” HQ H324813 at 36 (emphasis added). Administration of an exclusion order does not extend to articles that fall outside the bounds of these parameters. The U.S. Court of Appeals for the Federal Circuit has confirmed this understand that exclusion orders under Section 337 apply to articles at the border attempting entry. See ClearCorrect Operating, LLC v. Int’l Trade Comm’n, 810 F.3d 1283, 1289 (Fed. Cir. 2015) (“In sum, Section 337 is an enforcement statute enacted by Congress to stop at the border the entry of goods, i.e., articles, that are involved in unfair trade practices.”). Accordingly, Sonos’s position that the ruling directed Google to take action with respect to previously imported and released controllers is n