Google-Sonos War of Words Continues After ITC Hands Down Import Ban
Thursday’s final determination by the International Trade Commission that Google devices infringe at least 17 claims in five Sonos multiroom audio patents (see 2201060065) officially terminated the Tariff Act Section 337 investigation sparked by Sonos' unfair competition complaint filed almost exactly two years ago. But the initial Google and Sonos statements reacting to the ITC’s decision suggest this fight isn’t disappearing anytime soon.
Sonos Chief Legal Office Eddie Lazarus did something of a victory dance, releasing a statement applauding the ITC for exposing “the hollowness of Google’s denials” of infringement. “There is a possibility that Google will be able to degrade or eliminate product features in a way that circumvents the importation ban that the ITC has imposed,” said Lazarus. “But while Google may sacrifice consumer experience in an attempt to circumvent this importation ban, its products will still infringe many dozens of Sonos patents, its wrongdoing will persist, and the damages owed Sonos will continue to accrue. Alternatively, Google can -- as other companies have already done -- pay a fair royalty for the technologies it has misappropriated.”
Though Google disagrees with the ITC’s decision, emailed a spokesperson a few hours later, it appreciates that the commission “has approved our modified designs and we do not expect any impact to our ability to import or sell our products.” Google will “seek further review and continue to defend ourselves against Sonos’ frivolous claims about our partnership and intellectual property,” he said. The spokesperson previously released a more subdued statement saying mostly that Google would work to ensure that customers “have the best experience using our products.” He denied later releasing the more confrontational statement as a reaction to Lazarus.
The ITC instructed Customs and Border Protection, in a letter Thursday to Dax Terrill, chief of exclusion order enforcement, to immediately begin imposing 100% bond on imports of Google goods found to infringe the Sonos patents. The bond will stay in effect for up to 60 days, through March 7, while the Office of the U.S. Trade Representative reviews the ITC decision. USTR by the end of the review can affirm or reject the decision, or take no action.
The 100% bond order applies to Google imports in seven Harmonized Tariff Schedule subheadings, covering goods that the commission found to be infringing. HTS 8471.30.0100, the subheading under which Google imports Chromebooks, is believed to be the largest tranche. U.S. importers sourced $53.44 billion worth of HTS 8471.30.0100 goods in 2021's first 11 months, though Google’s share of those imports couldn’t be discerned. Other major classifications in which Google imports will be assessed the 100% bond are Pixel smartphones (8517.12.0050) and Google Assistant smart speakers (8517.62.0090).
Covered articles under the limited exclusion order “shall not include the Google redesign products that were adjudicated in this investigation and found to be non-infringing,” said the order. Whether any ITC import ban should apply to the Google redesigns was a big dispute between Sonos and Google as the investigation came winding down. Sonos said carving out from the import ban Google devices that contained merely updated source code would make a mockery of the Section 337 process. Google countered that redesigns were the normal course of a tech product’s evolution.
Google is prohibited from importing or selling any devices found to infringe the Sonos patents and is also barred from advertising them, says the ITC’s cease-and-desist order. The commission also ordered Google not to “aid or abet other entities in the importation, sale for importation, sale after importation, transfer, or distribution of covered products.” Google must continue filing annual reports, due at year-end, until it has “truthfully reported, in two consecutive timely filed reports, that it has no inventory (whether held in warehouses or at customer sites) of covered products in the United States,” said the order.