Professional Documents
Culture Documents
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Re:
Certain Electronic Digital Media Devices and Components Thereo Inv. No. 337-TA-796
interest, remedy, and bonding. ACG takes no position on the merits of this investigation. ACG
writes out of concern for the potential market disruption and harm to ACGs member carriers
and end consumers that this investigation poses if the Commission were to issue an overly-broad
exclusion order or one that does not provide suicient guidance to allow ACG members to
ACG was formed in 2005 as a national coalition of regional and rural wireless carriers.
ACGs mission is to benet both its members and consumers by facilitating the efcient
distribution and marketing of mobile devices, as Wellas increased competition. The consortium
enables its members to Workwith manufacturers, suppliers and other vendors to develop and
procure, for its customers, otherwise scarce or unobtainable products in a timely fashion through
ACG members offer consumers cutting-edge smartphones, feature phones, and a variety of voice
and data plans. ACG members typically serve customers in rural areas or in other regions where
the larger, national wireless carriers do not devote sufficient resources of infrastructure. Many of
ACGs members funded the construction of the wireless network infrastructure in their
respective markets and continue to pave the way for the roll-out of the latest technologies,
including 4G infrastructure. ACG members serve customers that otherwise would have little or
no choice in obtaining reliable wireless service. In some cases, ACG members are customers
only resource for obtaining a mobile device and mobile data service.
It is critical that ACG members offer cutting-edge, attractive products to their customers.
ACG members work to erode the digital divide that separates customers in urban areas
dominated by the large, national carriers and more rural areas. Lna major step to bridge this
historical gap, ACGs members began offering Android-powered devices in 2009. Today,
Android-powered smartphones are ACGs best-selling devices. Sainsung is a critical part of this
success; today, Samsung devices account for more than 60% of ACG members totai sales.
II.
design, hardware and software of certain Samsung electronic digital media devices. ACG further
understands that ALJ Pender found, for each category of asserted patents, some Samsung devices
to be infringing and others to be non-ininging. In this respect, under ALJ Penders analysis
devices that avoid all of the asserted patents. It also appears that even the broadest exclusion
order would not be intended to cover all of Samsungs electronic digital media devices.
The mobile device business involves rapid product turnover. Especially with respect to a
supplier with Samsungs popularity and market share, ACG members introduce and sell many
new models each year. Because of this rapid product life cycle, it is likely that ACG members
will no longer sell many of the Samsung devices examined by ALJ Pender at the hearing in May
2012 when the Commission issues its nal determination. It is therefore also likely that many of
the Samsung devices sold by ACG members in August, when the nal determination issues, will
not have been considered by the ALJ or the Commission.
Because neither the ALJ nor the Commission will have considered Whetherthe asserted
patents cover the Samsung electronic digital media devices likely to be sold by ACG members
when any exclusion order would issue, ACG understands that U.S. Customs & Border Protection
will ultimately be tasked with adjudicating whether these devices may be imported and sold.
Should the Commission determine to issue an exclusion order in this investigation, it should
provide substantial and meaningful guidance to Customs and the public on the scope of any
patent claims found to be infringed. This guidance is important for determinations on potential
new products to be applied in a consistent and predictable fashion. Without clear guidance from
the Commission, ACG members could face tremendous business uncertainty in the marketplace
regarding what Samsung devices can be purchased and sold to consumers.
III.
share among ACG-member sales. Samsung provides ACG members with a wide range of
devices, from inexpensive feature phones to high-end Android smartphones. ACG is concemed
that its members could not reallocate purchases 'om Sarnsung to other manufacturers in the
short term because of the volume and variety of Samsungs devices and the lead time required
for other suppliers to increase production. ACG estimates that it could take six months or longer
for its members to replace Samsungs devices, if suitable replacements even exist and are
available (smaller carriers are rarely rst in line). During this transition period, ACG members
risk substantial supply shortages if Samsung cannot reasonably continue to import under bond.
The potential need for Samsung to make technical changes in its products to avoid
infringement of one or more asserted patents would increase ACG members transition period, as
redesigned products may first require testing and approval prior to launch. ACG estimates that
such testing and approval could take an additional two months beyond the time it would take
Samstmg to implement technical changes.
For these reasons, the Commissions traditional sixty-day bonding period is far too short
to allow ACG members to take any necessary steps to shift product lineups to non-ininging
alternatives, whether from Samsungs redesigned devices or from other suppliers. Should the
Commission determine to issues an exclusion order, it should extend the bonding period to 180
In addition, any bond the Commission sets must be reasonable if the bonding period is to
afford any transition time at all to ACG members. ACG members typically sell through
electronic digital media devices to consumers at a subsidized loss. A high bond rate (above ve
to-ten percent) would effectively eliminate any bonding period because neither Samsung nor
ACG members could absorb the additional cost and ACG members would be put at a further
competitive disadvantage with respect to larger wireless carriers who obtain devices at volume
For the reasons stated above, a short or effectively-eliminated bonding period would
prove extremely disruptive to ACG members and, concurrently, end consumers due to
public, ACG respectfully requests that the Commission provide clear guidance to accompany
any exclusion order it may issue, extend the bonding period to at least 180 days, and set a bond
that would not effectively prevent importation during the bonding period.
Thank you for your careful attention to these comments. Please do not hesitate to contact
me with any questions regarding this submission.
Sincerely
Russ Lipinski