[Federal Register Volume 82, Number 17 (Friday, January 27, 2017)]
[Notices]
[Pages 8623-8625]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-01838]


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INTERNATIONAL TRADE COMMISSION

[Investigation No. 337-TA-971]


Certain Air Mattress Systems, Components Thereof, and Methods of 
Using the Same Commission Determination To Review in Part a Final 
Initial Determination; Schedule for Filing Written Submissions on the 
Issues Under Review and 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 (``the Commission'') has determined to review in part the 
final initial determination (``ID'') issued by the presiding 
administrative law judge (``ALJ'') finding no violation of section 337 
of the Tariff Act of 1930, as amended (``section 337''), in the above-
referenced investigation on November 18, 2016.

FOR FURTHER INFORMATION CONTACT: Michael Liberman, Esq., Office of the 
General Counsel, U.S. International Trade Commission, 500 E Street SW., 
Washington, DC 20436, telephone (202) 205-3115. 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 https://www.usitc.gov. The public record for this investigation may be viewed 
on the Commission's electronic docket (EDIS) at https://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 November 20, 2015, based on a complaint filed by Select Comfort 
Corporation of Minneapolis, Minnesota and Select Comfort SC Corporation 
of Greenville, South Carolina (collectively, ``Select Comfort,'' or 
``Complainants''). 80 FR 72738 (Nov. 20, 2015). The complaint alleges 
violations of section 337 of the Tariff Act of 1930, as amended, 19 
U.S.C. 1337, in the importation into the United States, the sale for 
importation, and the sale within the United States after importation of 
certain air mattress systems, components thereof, and methods of using 
the same by reason of infringement of certain claims of U.S. Patent 
Nos. 5,904,172 (``the `172 patent'') and 7,389,554 (``the `554 
patent''). Id. The notice of investigation names as respondents 
Sizewise Rentals LLC of Kansas City, Missouri; American National 
Manufacturing Inc. of Corona, California; and Dires LLC and Dires LLC 
d/b/a Personal Comfort Beds of Orlando, Florida (collectively, 
``Respondents''). Id. The Office of Unfair Import Investigations 
(``OUII'') was also named as a party to the investigation. Id.
    Pursuant to Commission Rule 210.50(b)(1), 19 CFR 210.50(b)(1), the 
Commission ordered that the presiding ALJ:

[S]hall take evidence or other information and hear arguments from 
the parties and other interested persons with respect to the public 
interest in this investigation, as appropriate, and provide the 
Commission with findings of fact and a recommended determination on 
this issue, which shall be limited to the statutory public interest 
factors set forth in 19 U.S.C. 1337(d)(1), (f)(1), (g)(1).

80 FR 72738 (Nov. 20, 2015).

    The evidentiary hearing on the question of violation of section 337 
was

[[Page 8624]]

held August 8-12, 2016. The final ID on violation was issued on 
November 18, 2016. The ALJ issued his recommended determination on 
remedy, the public interest and bonding on the same day. The ALJ found 
no violation of section 337 in this investigation. The ALJ recommended 
that if the Commission finds a violation of section 337 in the present 
investigation, the Commission issue a limited exclusion order (``LEO'') 
prohibiting the importation of Respondents' air controllers and air 
mattress systems found to infringe the asserted patents. The ALJ also 
recommended the inclusion of a provision for the `554 patent, whereby 
Respondents certify that certain imports are not covered by the LEO 
because they contain components for use in non-infringing products.
    The ALJ did not recommend that the Commission issue a cease and 
desist order in this investigation. The ALJ further recommended a zero 
bond during the period of Presidential review.
    All parties to this investigation filed timely petitions for review 
of various portions of the final ID, as well as timely responses to the 
petitions.
    On December 19, 2016, both Complainants and Respondents filed their 
respective Public Interest Statement pursuant to 19 CFR 210.50(a)(4). 
Responses from public were likewise received by the Commission pursuant 
to notice. See Notice of Request for Statements on the Public Interest 
(Nov. 29, 2016).
    Having examined the record in this investigation, including the 
final ID, the petitions for review, and the responses thereto, the 
Commission has determined to review the final ID in part. In 
particular, the Commission has determined as follows:

    (1) To review the ID's findings that the P5000, P6000, and Arco 
products do not meet ``guides and stops'' limitation in claim 2 of 
the `172 patent, and that these products do not meet the same claim 
limitation in claim 12 of the `172 patent and for that reason do not 
infringe that claim;
    (2) to review the ID's finding that the `172 Accused Products do 
not meet claim limitation ``pressure monitor means being operably 
coupled to the processor and being in fluid communications with the 
at least one bladder for continuously monitoring the pressure in the 
at least one bladder'' in claims 2, 6, 20, 22, and 24 of the `172 
patent;
    (3) to review the ID's finding that the `172 Accused Products do 
not infringe claim 9 of the `172 patent;
    (4) to review, in part, the ID's analysis regarding whether the 
`172 Accused Products infringe claim 2 of the `172 patent for the 
limited purpose of taking no position on the ALJ's discussion in the 
last paragraph of page 20 and in the first paragraph of page 21 of 
the ID;
    (5) to review the ID's finding that claim 16 of the `554 patent 
is not infringed because Complainants did not establish that the 
accused products practice the ``air posturizing sleep surface'' 
limitation;
    (6) to review the ID's finding that the `554 Domestic Industry 
Products do not practice the `554 patent;
    (7) to review the ID's finding that Complainants did not satisfy 
the economic prong of the domestic industry requirement with respect 
to both the `172 and `554 patents.
    The Commission has determined not to review the remainder of the 
ID.

    The parties are requested to brief their positions on only the 
following issues, with reference to the applicable law and the 
evidentiary record:
    1. The ID finds that: ``Because Select Comfort asserts that guides 
and stops of the P5000, P6000, and Arco products are screws and screw 
bores, the undersigned finds that Select Comfort has failed to 
establish that these products meet this limitation.'' ID at 27.
    a. Does the record support a finding that ``Select Comfort asserts 
that guides and stops of the P5000, P6000, and Arco products are screws 
and screw bores?''
    b. Does the record show that P5000, P6000, and Arco products meet 
the guides and stops limitation in claims 2 and 12 of the `172 patent?
    2. The ID finds that because Complainants did not establish that 
the `172 Accused Products continuously monitor pressure using a 
processor in conjunction with the transducer, the `172 Accused Products 
do not meet claim limitation ``and pressure monitor means being 
operably coupled to the processor and being in fluid communications 
with the at least one bladder for continuously monitoring the pressure 
in the at least one bladder.'' ID at 32; see id. at 29-32.
    a. To the extent not already briefed to the Commission, please 
discuss whether the record supports the ID's finding (with supporting 
citations to the record evidence).
    3. The ID finds that: ``Claim 9, like claim 2, includes the term 
`continuously monitoring.' For the reasons stated above in the 
discussion of claim 2, claim 9 is not infringed because Select Comfort 
did not establish that the `172 Accused Products `continuously monitor' 
pressure.'' ID at 32.
    a. Does the record show that claim 9 of the `172 patent is not 
infringed because Select Comfort did not establish that the `172 
Accused Products ``continuously monitor'' pressure?
    4. The ID finds that: ``Claim 16, like claim 1, includes the term 
`air posturizing sleep surface.' For the reasons stated above in the 
discussion of claim 1, claim 16 is not infringed because Select Comfort 
did not establish that the accused products practice the `air 
posturizing sleep surface' limitation.'' ID at 70.
    a. Does the record show that the accused products infringe the 
``air posturizing sleep surface'' limitation of claim 16 of the `554 
patent?
    5. Does the record show that the `554 Domestic Industry Products 
practice the `554 patent?
    6. The ID finds that: ``Claim 16, like claim 1, includes the term 
`air posturizing sleep surface.' For the reasons stated above in the 
discussion of claim 1, the `554 DI products do not practice claim 16 
because they do not meet the `air posturizing sleep surface' 
limitation.'' ID at 75.
    a. Does the record show that the `554 DI products practice the 
``air posturizing sleep surface'' limitation of claim 16 of the `554 
patent?
    7. With respect to Complainants' investment in plant and equipment 
alleged under 19 U.S.C. 1337(a)(3)(A) the ID finds that:

While the Commission has stated that a precise allocation of 
expenses among various DI products is not necessary, that precedent 
cannot mean that Select Comfort's proposed allocation is acceptable; 
i.e., allocating 100% of the rental expenses to the `172 patent, and 
then a portion of those same expenses to the `554 patent DI 
products. Accordingly, Select Comfort has not shown a domestic 
industry for either the `172 patent or the `554 patent based upon 19 
U.S.C. 1337(a)(3)(A).

ID at 89-90.

    a. Do Commission and judicial precedents and the record in the 
present investigation support the ID's finding?
    b. Please explain with citation to the record what portion of the 
asserted domestic investment in plant and equipment, in terms of the 
dollar amount and percentage, can be allocated to the articles that 
practice the `172 patent.
    c. Does the record show that Complainants' investment in plant and 
equipment under 19 U.S.C. 1337(a)(3)(A) is significant with respect to 
the articles that practice the `172 patent?
    d. Please explain with citation to the record what portion of the 
asserted domestic investment in plant and equipment, in terms of the 
dollar amount and percentage, can be allocated to the articles that 
practice the `554 patent.
    e. Does the record show that Complainants' investment in plant and 
equipment under 19 U.S.C. 1337(a)(3)(A) is significant with respect to 
the articles that practice the `554 patent?

[[Page 8625]]

    8. With respect to Complainants' employment of labor or capital 
alleged under 19 U.S.C. 1337(a)(3)(B) the ID finds that:

As with the plant and equipment issue in the previous section, 
Select Comfort has again allocated 100% of the relevant expense (in 
this section, employee compensation) to the `172 patent DI products 
and then allocated a portion of those same expenses to the `554 DI 
products. (CX-0445 at Q/A 59, 62; CX-0449C at Q/A 52; CIB at 92-93.) 
For the reasons set forth in the previous section, this argument is 
not persuasive. Accordingly, Select Comfort has not shown a domestic 
industry for either the `172 patent or the `554 patent based upon 19 
U.S.C. 1337(a)(3)(B).

ID at 91.
    a. Do Commission and judicial precedents and the record in the 
present investigation support the ID's finding?
    b. Please explain with citation to the record what portion of the 
asserted domestic employment of labor or capital, in terms of the 
dollar amount and percentage, can be allocated to the articles that 
practice the `172 patent.
    c. Does the record show that Complainants' employment of labor or 
capital under 19 U.S.C. 1337(a)(3)(B) is significant with respect to 
the articles that practice the `172 patent?
    d. Please explain with citation to the record what portion of the 
asserted domestic employment of labor or capital, in terms of the 
dollar amount and percentage, can be allocated to the articles that 
practice the `554 patent.
    e. Does the record show that Complainants' employment of labor or 
capital under 19 U.S.C. 1337(a)(3)(B) is significant with respect to 
the articles that practice the `554 patent?
    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 the 
respondent 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 Certain Devices for Connecting Computers via Telephone 
Lines, Inv. No. 337-TA-360, USITC Pub. No. 2843, Comm'n Op. at 7-10 
(Dec. 1994).
    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 U.S. Trade 
Representative, as delegated by the President, has 60 days to approve 
or disapprove the Commission's action. See 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 and prescribed by the 
Secretary of the Treasury.
    Written Submissions: The parties to the investigation are requested 
to file written submissions on the issues under review. The submissions 
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 recommended determination 
on remedy, the public interest and bonding issued on December 1, 2016, 
by the ALJ. Complainants and the Commission investigative attorney 
(``IA'') are also requested to submit proposed remedial orders for the 
Commission's consideration.
    Complainants are further requested to provide the expiration date 
of the `172 and `554 patents, the HTSUS numbers under which the accused 
articles are imported, and any known importers of the accused products. 
The written submissions and proposed remedial orders must be filed no 
later than the close of business on February 6, 2017. Reply submissions 
must be filed no later than the close of business on February 13, 2017. 
No further submissions on these issues will be permitted unless 
otherwise ordered by the Commission.
    Persons filing written submissions must file the original document 
electronically on or before the deadlines stated above and submit 8 
true paper copies to the Office of the Secretary by noon the next day 
pursuant to section 210.4(f) of the Commission's Rules of Practice and 
Procedure (19 CFR 210.4(f)). Submissions should refer to the 
investigation number (``Inv. No. 337-TA-971'') in a prominent place on 
the cover page and/or the first page. (See Handbook for Electronic 
Filing Procedures, http://www.usitc.gov/secretary/fed_reg_notices/rules/handbook_on_electronicfiling.pdf) . Persons with questions 
regarding filing should contact the Secretary (202-205-2000).
    Any person desiring to submit a document to the Commission in 
confidence must request confidential treatment. All such requests 
should be directed to the Secretary to 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 
by the Commission is properly sought will be treated accordingly. All 
information, including confidential business information and documents 
for which confidential treatment is properly sought, submitted to the 
Commission for purposes of this Investigation may be disclosed to and 
used: (i) By the Commission, its employees and Offices, and contract 
personnel (a) for developing or maintaining the records of this or a 
related proceeding, or (b) in internal investigations, audits, reviews, 
and evaluations relating to the programs, personnel, and operations of 
the Commission including under 5 U.S.C. Appendix 3; or (ii) by U.S. 
government employees and contract personnel, solely for cybersecurity 
purposes. All contract personnel will sign appropriate nondisclosure 
agreements. All non-confidential written submissions will be available 
for public inspection at the Office of the Secretary and on EDIS.
    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 Part 210 of the Commission's Rules of Practice and Procedure, 19 CFR 
part 210.

    By Order of the Commission.

    Issued: January 23, 2017.
Lisa R. Barton,
Secretary to the Commission.
[FR Doc. 2017-01838 Filed 1-26-17; 8:45 am]
 BILLING CODE 7020-02-P