[Federal Register Volume 68, Number 105 (Monday, June 2, 2003)]
[Notices]
[Pages 32766-32768]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-13689]


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INTERNATIONAL TRADE COMMISSION

[Inv. No. 337-TA-469]


In the Matter of Certain Bearings and Packaging Thereof; Notice 
of Commission Determination to Review-in-Part a Final Initial 
Determination Finding a Violation of Section 337; Schedule for Filing 
Written Submissions on the Issues Under Review and on Remedy, the 
Public Interest, and Bonding

AGENCY: International Trade Commission.

ACTION: Notice.

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SUMMARY: Notice is hereby given that the U.S. International Trade 
Commission has determined to review-in-part the final initial 
determination (ID) issued by the presiding administrative law judge 
(ALJ) on April 10, 2003, finding a violation of section 337 of the 
Tariff Act of 1930, 19 U.S.C. 1337, in the above-captioned 
investigation. Specifically, the Commission has determined to review 
the issues of registered and common law trademark infringement, false 
representation as to source, and laches. The Commission has also 
determined to affirm ALJ Order No. 95, which disqualified complainant's 
expert witness on the issue of quality control.

FOR FURTHER INFORMATION CONTACT: Jean Jackson, Esq., Office of the 
General Counsel, U.S. International Trade Commission, 500 E Street, 
SW., Washington, DC 20436, telephone (202) 205-3104. Copies of the 
ALJ's IDs and all other nonconfidential documents filed in connection 
with this investigation 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, SW., 
Washington, DC 20436, telephone 202-205-2000. General information 
concerning the Commission may also be obtained by accessing its 
Internet server (http://www.usitc.gov). The public record for this 
investigation may be viewed on the Commission's electronic docket 
(EDIS-ON-LINE) at http://edis.usitc.gov. Hearing-impaired persons are 
advised that information on this matter can be obtained by contacting 
the Commission's TDD terminal on 202-205-1810.

SUPPLEMENTARY INFORMATION: The Commission instituted this investigation 
on April 16, 2002, based on a complaint filed by SKF USA, Inc. (SKF) of 
Norristown, PA against fourteen respondents. 67 FR 18632 (2002). Four 
respondents remain in the investigation, ten respondents have either 
settled with complainant or have been found in default. The complaint, 
as supplemented, alleged violations of section 337 of the Tariff Act of 
1930 in the importation into the United States, sale for importation, 
and sale within the United States after importation of certain bearings 
by reason of infringement of registered and common law trademarks, 
dilution of trademarks, various acts in violation of the Lanham Act, 
and passing off. A count concerning ``unfair pecuniary benefits'' was 
dismissed by the Commission on September 23, 2002.
    On April 10, 2003, the ALJ issued his final ID on violation and his 
recommended determination (RD) on remedy. The ALJ found a violation of 
section 337 by reason of infringement of SKF's registered and common 
law trademarks by each of the four remaining respondents, viz., 
Bearings Limited, Bohls Bearing and Transmission Service, CST Bearing 
Company, and McGuire Bearings Company, and recommended the issuance of 
a general exclusion order and cease and desist orders to the 
respondents found in violation. All parties remaining in the 
investigation, including the Commission investigative attorney, filed 
petitions for review on April 21, 2003, and replies to the petitions on 
April 28, 2003.
    Having examined the record in this investigation, including the 
ALJ's final ID, the petitions for review, and the responses thereto, 
the Commission has determined to review the issues of registered and 
common law trademark infringement, false representation as to source, 
and laches. On review, the Commission requests briefing based on the 
evidentiary record on the issues under review and is particularly 
interested in receiving answers to the following questions:
    1. In view of the fact that the parties have cited only one 
district court case finding gray market trademark infringement based 
solely on non-physical material differences,\1\ please discuss any 
legal and policy bases for finding gray market trademark infringement 
and false representation of source where no physical differences

[[Page 32767]]

exist between the authorized and unauthorized products. In addition, as 
part of the submission on remedy, please discuss any issues that would 
likely arise in the enforcement of a general exclusion order based 
solely on non-physical differences between the authorized and gray 
market bearings.
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    \1\ Osawa & Co. v. B & H Photo, 589 F. Supp. 1163, 1167-68 
(S.D.N.Y. 1984). The parties also cited Philip Morris, Inc. v. Allen 
Distribs., Inc., 48 F. Supp.2d 844, 853 (S.D. Ind. 1999). That case, 
however, found a physical material difference in that packages of 
authorized cigarettes had a particular Universal Product Code (UPC) 
on their side panel which consumers accumulated and redeemed for 
merchandise, while the gray market cigarette packages lacked this 
UPC label. Philip Morris, 48 F. Supp.2d at 848.
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    2. What types of warranty, product recall procedures, and post-sale 
services accompany sales of authorized SKF USA bearings in the 
following categories: (a) Sales of SKF USA bearings by Chicago Rawhide; 
(b) sales of SKF USA bearings under the Roller Bearing Company/Tyson 
Bearing Company License Agreement; (c) downstream sales of SKF USA 
bearings by unauthorized distributors, e.g., the three entities 
discussed on pp. 32-34 of Respondents' Confidential Joint Petition for 
Review, dated April 21, 2003; (d) sales of SKF USA bearings downstream 
from authorized SKF USA distributors; (e) sales of SKF USA bearings on 
the surplus market, (f) sales of SKF USA bearings by formerly 
authorized distributors, e.g., by Bohls Bearings and Power Transmission 
Service; (g) sales of SKF USA bearings by respondents who have entered 
into settlement agreements with complainant in this investigation; (h) 
downstream sales of SKF USA bearings by original equipment 
manufacturers that have purchased bearings from SKF USA or its 
authorized distributors? Based on the evidence of record, please 
quantify the size of these types of sales to the extent possible. 
Please compare and contrast the warranties, product recall procedures, 
and post-sale services that accompany these categories of sales with 
the warranties, product recall procedures, and post-sale services that 
accompany the sales of gray market bearings by respondents.
    3. In determining what comprises the bundle of services that are 
integral to the authorized bearings originally put into commerce in the 
United States by complainant SKF USA, what basis, if any, exists for 
excluding the categories of bearings listed above in Question 2? In 
order to find trademark infringement and false designation of source, 
is it necessary for the Commission to find that SKF USA's bundle of 
services accompanies sales of substantially all its authorized bearings 
and differs materially from the bundle of services that accompany the 
gray market bearings sold by respondents?
    4. Please discuss the evidence of record that relates to actual 
consumer confusion based on warranties, product recall procedures, and 
post-sale services offered in respect to the authorized and gray market 
bearings.
    5. How does the element of likelihood of consumer confusion factor 
into the legal standard for finding gray market trademark infringement 
based solely on non-physical material differences?
    6. With respect to non-physical material differences based on SKF 
USA's post-sale technical and engineering support services, of what 
relevance is the fact that SKF USA will provide post-sale customer 
support to consumers who buy SKF bearings from SKF USA authorized 
distributors even if the authorized distributors have obtained the 
bearings from the gray market?
    7. Please discuss the material differences, if any, between 
warranties provided by SKF USA and warranties that are express or 
implied under the UCC, as adopted by the relevant states.
    In connection with the final disposition of this investigation, the 
Commission may (1) Issue an order that could result in the exclusion of 
the subject articles from entry into the United States, and/or (2) 
issue one or more cease and desist orders that could result in 
respondents being required to cease and desist from engaging in unfair 
action 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 that either are adversely affecting it or likely to do so. For 
background, see In the Matter of Certain Devices for Connecting 
Computers via Telephone Lines, Inv. No. 337-TA-360, USITC Pub. No. 2843 
(December 1994) (Commission Opinion).
    If the Commission contemplates some 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, 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.
    Written Submissions: The parties to the investigation are requested 
to file written submissions on the issues under review. The submission 
should be concise and thoroughly referenced to the record in this 
investigation. Parties to the investigation, interested government 
agencies, and any other interested parties are encouraged to file 
written submissions on the issues of remedy, the public interest, and 
bonding. Such submissions should address the April 10, 2003, 
recommended determination by the ALJ on remedy and bonding. Complainant 
and the Commission investigative attorney are also requested to submit 
proposed remedial orders for the Commission's consideration. The 
written submissions and proposed remedial orders must be filed no later 
than close of business on June 6, 2003. Reply submissions must be filed 
no later than the close of business on June 13, 2003. No further 
submissions on these issues will be permitted unless otherwise ordered 
by the Commission.
    Persons filing written submissions must file the original document 
and 14 true copies thereof on or before the deadlines stated above with 
the Office of the Secretary. 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 section 201.6 of the Commission's Rules of Practice and 
Procedure, 19 CFR 201.6. Documents for which confidential treatment by 
the Commission is sought will be treated accordingly. All 
nonconfidential written submissions will be available for public 
inspection at the Office of the Secretary.
    The authority for the Commission's determination is contained in 
section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and 
in section 210.43 of the Commission's Rules of Practice and Procedure 
(19 CFR 210.43).

    Issued: May 28, 2003.


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    By order of the Commission.
Marilyn R. Abbott,
Secretary to the Commission.
[FR Doc. 03-13689 Filed 5-30-03; 8:45 am]
BILLING CODE 7020-02-P