[Federal Register Volume 76, Number 83 (Friday, April 29, 2011)]
[Notices]
[Pages 24052-24053]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-10363]


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INTERNATIONAL TRADE COMMISSION

[Investigation No. 337-TA-567]


In the Matter of Certain Foam Footwear; Notice of Commission 
Decision Not To Review a Remand Initial Determination; Finding of a 
Violation of Section 337; Request for Written Submissions Regarding 
Remedy, Bonding, and the Public Interest

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 not to review the presiding administrative 
law judge's (``ALJ'') remand initial determination (``ID'') and has 
found a violation of section 337 in the above-captioned investigation. 
The Commission is requesting written submissions regarding remedy, 
bonding, and the public interest.

FOR FURTHER INFORMATION CONTACT: Clint Gerdine, Esq., Office of the 
General Counsel, U.S. International Trade Commission, 500 E Street, 
SW., Washington, DC 20436, telephone (202) 708-5468. Copies of non-
confidential 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 at 
http://www.usitc.gov. The public record for this investigation may be 
viewed on the Commission's electronic docket (EDIS) 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 May 11, 2006, based on a complaint, as amended, filed by Crocs, Inc. 
(``Crocs'') of Niwot, Colorado. 71 FR 27514-15 (May 11, 2006). The 
complaint alleged violations of section 337 of the Tariff Act of 1930, 
as amended (19 U.S.C. CC1337), in the importation into the United 
States, the sale for importation, and the sale within the United States 
after importation of certain foam footwear, by reason of infringement 
of claims 1-2 of U.S. Patent No. 6,993,858; U.S. Patent No. D517,789; 
and the Crocs trade dress (the image and overall appearance of Crocs-
brand footwear). The complaint further alleged that an industry in the 
United States exists as required by subsection (a)(2) of section 337, 
and requested that the Commission issue a permanent general exclusion 
order and permanent cease and desist orders. The complaint named eleven 
(11) respondents that included: (1) Collective Licensing International, 
LLC of Englewood, Colorado; (2) Double Diamond Distribution Ltd. 
(``Double Diamond'') of Canada; (3) Effervescent Inc. 
(``Effervescent'') of Fitchburg, Massachusetts; (4) Gen-X Sports, Inc. 
of Toronto, Ontario; (5) Holey Shoes Holding Ltd. of Canada; (6) 
Australia Unlimited, Inc. of Seattle, Washington; (7) Cheng's 
Enterprises Inc. of Carlstadt, New Jersey; (8) D. Myers & Sons, Inc. of 
Baltimore, Maryland; (9) Inter-Pacific Trading Corp. of Los Angeles, 
California; (10) Pali Hawaii of Honolulu, Hawaii; and (11) Shaka Shoes 
of Kaliua-Kona, Hawaii. The Commission terminated the investigation as 
to the trade dress allegation on September 11, 2006. A twelfth 
respondent, Old Dominion Footwear, Inc. of Madison Heights, Virginia, 
was added to the investigation on October 10, 2006. All but two 
respondents have been terminated from the investigation on the basis of 
a consent order, settlement agreement, or undisputed Commission 
determination of non-infringement. The two remaining respondents are 
Double Diamond and Effervescent.
    On April 11, 2008, the ALJ issued his final ID finding no violation 
of section 337. The ALJ's final ID made no finding on whether either 
asserted patent was unenforceable due to inequitable conduct. The ALJ's 
final ID also included his recommendation on remedy and bonding should 
the Commission find that there was a violation. On July 25, 2008, after 
review, the Commission affirmed the ALJ's final

[[Page 24053]]

ID with certain modifications and clarifications, and terminated the 
investigation with a finding of no violation of section 337. The 
Commission took no position regarding the issue of enforceability of 
the '858 and '789 patents. On February 24, 2010, the U.S. Court of 
Appeals for the Federal Circuit (``Federal Circuit'') issued its 
judgment overturning the Commission's findings regarding invalidity of 
the '858 patent, and non-infringement/lack of domestic industry 
concerning the '789 patent. The Federal Circuit also specifically 
``remand[ed] the investigation for a determination of infringement of 
the '858 patent and any appropriate remedies.'' See Crocs, Inc. v. 
United States Int'l Trade Comm'n, 598 F.3d 1294, 1311 (Fed. Cir. 2010). 
On July 6, 2010, the Commission remanded the investigation to the ALJ 
to decide the remaining issue of enforceability of the patents.
    On February 9, 2011, the ALJ issued his remand ID finding that the 
patents were not unenforceable. On February 25, 2011, respondents filed 
both a joint petition for review of the remand ID and a motion for 
leave to file the petition two (2) days late. On March 4, 2011, the 
Commission issued an order declining to grant respondents' motion 
without prejudice to respondents refiling their motion stating good 
cause for the enlargement of time. On March 16, 2011, respondents filed 
a joint motion for an enlargement of the time for filing petitions for 
review of the remand ID. On March 18, 2011, the Commission issued an 
order granting respondents' motion for an enlargement of time and 
making responses due on March 28, 2011. On March 28, 2011, Crocs and 
the Commission investigative attorney each filed a brief in response to 
respondents' petition for review.
    The Commission has determined not to review the subject remand ID. 
Also, the Commission has determined to reaffirm the ALJ's previous 
ruling that claims 1 and 2 of the '858 patent are infringed by 
Effervescent's accused products, and that claim 2 of the '858 patent is 
infringed by Double Diamond's accused products. See 73 FR 35710-11 
(June 24, 2008); Remand ID at 2 (February 9, 2011) (citing Final ID at 
121 (April 11, 2008)); Comm'n Op. at 3-4, n. 1 (July 25, 2008). These 
actions, along with the Federal Circuit's decision, result in a finding 
of a violation of section 337 by Double Diamond and Effervescent.
    In connection with the final disposition of this investigation, the 
Commission may issue an order that results in the exclusion of the 
subject articles from entry into the United States. 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 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).
    When 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.
    When the Commission orders some form of remedy, the U.S. Trade 
Representative, as delegated by the President, has 60 days to approve 
or disapprove the Commission's action. See section 337(j), 19 U.S.C. 
1337(j) and the Presidential Memorandum of July 21, 2005, 70 FR 43251 
(July 26, 2005). During this period, the subject articles would be 
entitled to enter the United States under bond, in an amount determined 
by the Commission. The Commission is therefore interested in receiving 
submissions concerning the amount of the bond that should be imposed if 
a remedy is ordered.
    Written Submissions: 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, and such submissions should address the recommended 
determination by the ALJ on remedy and bonding issued on April 23, 2008 
(public version). The complainant and the IA are also requested to 
submit proposed remedial orders for the Commission's consideration. 
Complainant is also requested to state the dates that the patents at 
issue expire and the HTSUS numbers under which the accused articles are 
imported. The written submissions and proposed remedial orders must be 
filed no later than close of business on May 6, 2011. Reply submissions 
must be filed no later than the close of business on May 13, 2011. 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 12 true copies thereof on or before the deadlines stated above with 
the Office of the Secretary. Any person desiring to submit a document 
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 210.6. 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 sections 210.42-46 of the Commission's Rules of Practice and 
Procedure, 19 CFR 210.42-46.

     Issued: April 25, 2011.

    By order of the Commission.
William R. Bishop,
Acting Secretary to the Commission.
[FR Doc. 2011-10363 Filed 4-28-11; 8:45 am]
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