[Federal Register Volume 62, Number 73 (Wednesday, April 16, 1997)]
[Notices]
[Pages 18651-18653]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-9845]


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INTERNATIONAL TRADE COMMISSION

[Investigation No. 337-TA-372 Enforcement Proceeding]


Certain Neodymium-Iron-Boron Magnets, Magnet Alloys, and Articles 
Containing Same; Notice of Commission Determination Concerning 
Violation of Consent Order; Denial of Request for Oral Argument; and 
Schedule for the Filing of Written Submissions on Remedy, the Public 
Interest, and Bonding

AGENCY: U.S. International Trade Commission.

ACTION: Notice.

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SUMMARY: Notice is hereby given that the U.S. International Trade 
Commission has determined that the respondents in the above-captioned 
formal enforcement proceeding have violated the Commission consent 
order issued to them on October 11, 1995.

FOR FURTHER INFORMATION CONTACT: Jay H. Reiziss, Esq., Office of the 
General Counsel, U.S. International Trade Commission, telephone 202-
205-3116.

SUPPLEMENTARY INFORMATION: On October 11, 1995, the Commission issued a 
consent order in the above-captioned investigation. The consent order 
provides that respondents San Huan New Materials High Tech, Inc., 
Ningbo Konit Industries, Inc., and Tridus International, Inc. 
(collectively the ``San Huan respondents''):

shall not sell for importation, import into the United States or 
sell in the United States after importation or knowingly aid, abet, 
encourage, participate in, or induce the sale for importation, 
importation into the United States or sale in the United States 
after importation of neodymium-iron-boron magnets which infringe any 
of claims 1-3 of [U.S. Letters Patent 4,588,439 (the ``'439 
patent'], or articles or products which contain such magnets, except 
under consent or license from Crucible.

    On March 4, 1996, complainant Crucible Materials Corporation 
(``Crucible'') filed a complaint seeking institution of formal 
enforcement proceedings against the San Huan respondents for alleged 
violations of the consent order. On May 16, 1996, the Commission issued 
a notice instituting this enforcement proceeding based on Crucible's 
enforcement complaint. The following were named as parties to the 
formal enforcement proceeding: (1) Crucible Materials Corporation, 
State Fair Boulevard, P.O. Box 977, Syracuse, New York 13201-0977 
(complainant in the original investigation and requester of the formal 
enforcement proceeding); (2) San Huan New Materials High Tech,

[[Page 18652]]

Inc., No. 8 South 3rd Street, Zhong Guan Cun Road, Beijing, Peoples 
Republic of China 100080 (enforcement proceeding respondent); (3) 
Ningbo Konit Industries, Inc., Ningbo Economic and Technical 
Development Zone, Zhejiang Province, People's Republic of China 
(enforcement proceeding respondent); (4) Tridus International, Inc., 
8527 Alondra Boulevard, Suite 205, Paramount, California 90723 
(enforcement proceeding respondent); and (5) a Commission investigative 
attorney to be designated by the Director, Office of Unfair Import 
Investigations.
    On July 1, 1996, the Commission referred the formal enforcement 
proceeding to an administrative law judge (``ALJ'') for issuance of a 
recommended determination (``RD'') regarding whether respondents 
violated the consent order and what enforcement measures, if any, are 
appropriate in light of the nature and significance of any such 
violations. The ALJ conducted an evidentiary hearing in the enforcement 
proceeding from November 4 through November 8, 1996. Post-hearing 
briefs were submitted, and closing arguments were made before the ALJ 
on December 12, 1996. On December 24, 1996, the ALJ issued his RD in 
which he recommended that the Commission find that the San Huan 
respondents have violated the Commission's consent order, and that a 
penalty of $1,625,000 be assessed against them. In order to allow the 
parties to express their views concerning the RD prior to Commission 
action, the Commission provided the parties with the opportunity to 
file exceptions to the RD and proposed alternative findings of fact and 
conclusions of law. Exceptions and proposed alternative findings of 
fact and conclusions of law were filed by all parties.
    Having considered the RD, the exceptions thereto, and proposed 
alternative findings of fact and conclusions of law, as well as the 
entire record in this proceeding, the Commission determined that the 
San Huan respondents had violated the Commission's consent order by 
importing and selling infringing neodymium-iron-boron magnets on thirty 
one (31) days between October 11, 1995, and September 10, 1996. The 
Commission adopted the RD with respect to the ALJ's determinations 
concerning (1) whether to rely on Crucible's in-house testing to 
determine whether respondents'' sales of imported magnets infringed 
Crucible's patent; (2) whether respondents'' sales of certain magnets 
containing cobalt infringed Crucible's patent and therefore violated 
the consent order; and (3) whether Crucible met its burden of proving 
that certain other magnets in evidence in this proceeding were imported 
and sold in violation of the consent order.
    The Commission declined to adopt the RD with respect to the ALJ's 
determinations concerning (1) the effect that the Federal Circuit 
decision in Maxwell v. J. Baker, 86 F.3d 1098 (Fed. Cir.), reh'g 
denied, suggestion of reh'g in banc declined, petition for cert. filed 
(1996), should have on the enforcement proceeding and on the 
Commission's outstanding remedial orders in this investigation; (2) 
whether respondents'' sales of certain magnets with elevated levels of 
rare earth elements infringed Crucible's patent and therefore violated 
the consent order; and (3) the date from which it is appropriate to 
find that respondents'' importations and sales of magnets that infringe 
under the doctrine of equivalents violated the consent order. Finally, 
the Commission denied complainant's request for an oral argument.
    The Commission issued its determination on violation concurrently 
with issuance of this notice. A Commission opinion concerning certain 
issues addressed in the RD will be issued shortly.
    In connection with final disposition of this investigation, the 
Commission may revoke the consent order and issue (1) an order that 
could result in the exclusion of the subject articles from entry into 
the United States, and/or (2) cease and desist orders that could result 
in respondents being required to cease and desist from engaging in 
unfair acts in the importation and sale of such articles. Accordingly, 
the Commission is interested in receiving written submissions that 
address the form of remedy, if any, that should be ordered. If a party 
seeks exclusion of an article from entry into the United States for 
purposes other than entry for consumption, the party should so indicate 
and provide information establishing that activities involving other 
types of entry either are adversely affecting it or are likely to do 
so. For background, see the Commission Opinion, Certain Devices for 
Connecting Computers via Telephone Lines, Inv. No. 337-TA-360.
    If the Commission contemplates revoking the consent order and 
issuing some other form of remedy, it must consider the effects of that 
remedy upon the public interest. The factors the Commission will 
consider include the effect that an exclusion order and/or cease and 
desist orders would have on (1) the public health and welfare, (2) 
competitive conditions in the U.S. economy, (3) U.S. production of 
articles that are like or directly competitive with those that are 
subject to investigation, and (4) U.S. consumers. The Commission is 
therefore interested in receiving written submissions that address the 
aforementioned public interest factors in the context of this 
investigation.
    If the Commission orders some form of remedy other than the consent 
order, the President has 60 days to approve or disapprove the 
Commission's action. During this period, the subject articles would be 
entitled to enter the United States under a bond, in an amount 
determined by the Commission and prescribed by the Secretary of the 
Treasury. The Commission is therefore interested in receiving 
submissions concerning the amount of the bond that should be imposed, 
if remedial orders are issued.

Written Submissions

    The parties to the investigation, interested government agencies, 
and any other interested persons are encouraged to file written 
submissions on the issues of remedy, the public interest, and bonding. 
Complainant and the Commission investigative attorney are also 
requested to submit proposed remedial orders for the Commission's 
consideration in the event it determines to revoke the consent order. 
Written submissions shall not exceed 35 pages in length. Parties are 
requested not to repeat any arguments made to the Commission in their 
exceptions to the RD and proposed alternative findings of fact and 
conclusions of law. The written submissions and proposed remedial 
orders must be filed no later than the close of business on April 22, 
1997. Reply submissions shall not exceed 20 pages in length and must be 
filed no later than the close of business on April 29, 1997. No further 
submissions will be permitted unless otherwise ordered by the 
Commission.
    Persons filing written submissions must file the original document 
and 14 true copies thereof with the Office of the Secretary on or 
before the deadlines stated above. Any person desiring to submit a 
document (or portion thereof) to the Commission in confidence must 
request confidential treatment unless the information has already been 
granted such treatment during the proceedings. All such requests should 
be directed to the Secretary of the Commission and must include a full 
statement of the reasons why the Commission should grant such 
treatment. See 19 CFR 201.6. Documents for which confidential treatment 
is granted by the Commission will be

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treated accordingly. All nonconfidential written submissions will be 
available for public inspection at the Office of the Secretary.
    Copies of the public version of the Commission's opinion in support 
of this determination and all other nonconfidential documents filed in 
connection with this enforcement proceeding are or will be available 
for inspection during official business hours (8:45 a.m. to 5:15 p.m.) 
in the Office of the Secretary, U.S. International Trade Commission, 
500 E Street, S.W., Washington, D.C. 20436, telephone 202-205-2000. 
Hearing-impaired persons are advised that information on this matter 
can be obtained by contacting the Commission's TDD terminal on 202-205-
1810.
    This action is taken under the authority of section 337 of the 
Tariff Act of 1930, as amended (19 U.S.C. 1337), and section 210.75 of 
the Commission's Rules of Practice and Procedure (19 C.F.R. 210.75).

    Issued: April 8, 1997.

    By order of the Commission.
Donna R. Koehnke,
Secretary.
[FR Doc. 97-9845 Filed 4-15-97; 8:45 am]
BILLING CODE 7020-02-P