[Federal Register Volume 69, Number 161 (Friday, August 20, 2004)]
[Notices]
[Page 51713]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-19098]



[[Page 51713]]

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DEPARTMENT OF LABOR

Employment and Training Administration

[TA-W-54,708]


Novellus System, Inc., San Jose, CA; Notice of Negative 
Determination on Reconsideration

    On July 19, 2004, the Department issued an Affirmative 
Determination Regarding Application for Reconsideration for the workers 
and former workers of the subject firm. The notice was published in the 
Federal Register on August 4, 2004 (69 FR 47183).
    The petition for the workers of Novellus System, Inc., San Jose, 
California engaged in writing and testing software was denied because 
the petitioning workers did not produce an article within the meaning 
of section 222 of the Act.
    The petitioner contends that the Department erred in its 
interpretation of work performed at the subject facility as a service 
and further conveys that software should be considered a product and 
workers performing software quality assurance should be considered 
workers engaged in production.
    A company official was contacted for clarification in regard to the 
nature of the work performed at the subject facility. The official 
stated that petitioning group of workers at the subject firm is engaged 
in designing and testing of the operational software. The official 
further clarified that the software is not recorded on any media device 
for further duplication and distribution to customers, but is rather 
used in semiconductor equipment manufactured by the subject firm.
    The sophistication of the work involved is not an issue in 
ascertaining whether the petitioning workers are eligible for trade 
adjustment assistance, but rather only whether they produced an article 
within the meaning of section 222 of the Trade Act of 1974.
    Writing, editing and testing software are not considered production 
of an article within the meaning of section 222 of the Trade Act. 
Petitioning workers do not produce an ``article'' within the meaning of 
the Trade Act of 1974. Information electronic databases, software and 
codes, which are not printed or recorded on media devices (such as CD-
ROMs) for further mass production and distribution, are not tangible 
commodities, and they are not listed on the Harmonized Tariff Schedule 
of the United States (HTS), as classified by the United States 
International Trade Commission (USITC), Office of Tariff Affairs and 
Trade Agreements, which describes articles imported to the United 
States.
    To be listed in the HTS, an article would be subject to a duty on 
the tariff schedule and have a value that makes it marketable, fungible 
and interchangeable for commercial purposes. Although a wide variety of 
tangible products are described as articles and characterized as 
dutiable in the HTS, informational products that could historically be 
sent in letter form and that can currently be electronically 
transmitted are not listed in the HTS. Such products are not the type 
of products that customs officials inspect and that the TAA program was 
generally designed to address.
    The investigation on reconsideration supported the findings of the 
primary investigation that the petitioning group of workers does not 
produce an article. However, it was revealed that production of the 
semiconductor equipment occurs at the subject facility and that the 
software designed and tested by the workers is further integrated into 
this equipment. Thus, it was determined that the petitioning group of 
service workers support production of the semiconductor equipment at 
the subject facility.
    The Department conducted an additional investigation to determine 
whether workers can be considered eligible for TAA as workers in 
support of production of the semiconductor equipment. The investigation 
in connection with the semiconductor equipment revealed that criteria 
(I.B) and (II.B) were not met. According to the information provided by 
the company official, sales and production of the semiconductor 
equipment increased at the subject firm during the relevant time 
period. Moreover, the subject firm did not shift production abroad, nor 
did it increase company imports, during the relevant period.
    The petitioner further alleges that because workers lost their jobs 
due to a transfer of job functions, such as software quality assurance 
engineering to India, petitioning workers should be considered import 
impacted.
    The company official stated that some software is electronically 
sent for testing in India, after which all the documents and codes are 
returned to Novellus System, Inc. in San Jose, California facility via 
electronic copies using e-mail.
    Informational material that is electronically transmitted is not 
considered production within the context of TAA eligibility 
requirements, so there are no imports of products in this instance. 
Further, as the edited material does not become a product until it is 
recorded on media device, there was no shift in production of an 
``article'' within the meaning of the Trade Act of 1974.

Conclusion

    After reconsideration, I affirm the original notice of negative 
determination of eligibility to apply for worker adjustment assistance 
for workers and former workers of Novellus System, Inc., San Jose, 
California.

    Signed in Washington, DC, this 10th day of August, 2004.
Linda G. Poole,
Certifying Officer, Division of Trade Adjustment Assistance.
[FR Doc. 04-19098 Filed 8-19-04; 8:45 am]
BILLING CODE 4510-30-P