[Federal Register Volume 85, Number 34 (Thursday, February 20, 2020)]
[Notices]
[Pages 9803-9806]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-03346]
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INTERNATIONAL TRADE COMMISSION
[Investigation No. 337-TA-1139]
Certain Electronic Nicotine Delivery Systems and Components
Thereof; Commission Determination to Review the Final Initial
Determination in Part and To Affirm the Finding of a Violation of
Section 337; Schedule for Filing Written Submissions on Remedy, the
Public Interest and Bonding; Extension of the Target Date
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 to review the presiding administrative law
judge's (``ALJ'') final initial determination (``ID'') in part. On
review, the Commission affirms the ID's finding of a violation of
section 337 in the above-captioned investigation. The Commission
requests written submissions from the parties, interested government
agencies, and interested persons on the issues of remedy, the public
interest, and bonding concerning respondent Eonsmoke, LLC
(``Eonsmoke'') and defaulting respondent XFire, Inc. (``XFire''). The
Commission has also determined to extend the target date for completion
of the above-captioned investigation to Monday, April 20, 2020.
FOR FURTHER INFORMATION CONTACT: Cathy Chen, Office of the General
Counsel, U.S. International Trade Commission, 500 E Street SW,
Washington, DC 20436, telephone 202-205-2392. Copies of non-
confidential
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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: On December 13, 2018, the Commission
instituted this investigation under section 337 of the Tariff Act of
1930, as amended, 19 U.S.C. 1337, based on a complaint filed on behalf
of Juul Labs, Inc. (``JLI'') of San Francisco, California. 83 FR 64156
(Dec. 13, 2018). The complaint, as amended and supplemented, alleges
violations of section 337 based upon the importation into the United
States, the sale for importation, and the sale within the United States
after importation of certain electronic nicotine delivery systems and
components thereof by reason of infringement of certain claims of U.S.
Patent Nos.: 10,070,669 (``the '669 patent''); 10,076,139 (``the '139
patent''); 10,045,568 (``the '568 patent''); 10,058,130 (``the '130
patent''); and 10,104,915 (``the '915 patent'') (collectively, ``the
Asserted Patents''). Id. The Commission's notice of investigation named
twenty-one respondents, including Eonsmoke of Clifton, New Jersey and
XFire of Stafford, Texas. Id. at 64157. The Office of Unfair Import
Investigations (``OUII'') is also a party to the investigation.
On February 25, 2019, the ALJ granted JLI's motion to amend the
complaint and notice of investigation to change the name of respondent
Bo Vaping of Garden City, New York to ECVD/MMS Wholesale LLC of Garden
City, New York and the name of respondent MMS Distribution LLC of Rock
Hill, New York to MMS/ECVD LLC of Garden City, New York. See Order No.
8 (Feb. 25, 2019), not rev'd by Comm'n Notice (Mar. 25, 2019).
On February 28, 2019, the ALJ granted a motion to amend the
complaint and notice of investigation to change the name of respondent
Limitless Mod Co. of Simi Valley, California to Limitless MOD, LLC of
Simi Valley, California. See Order No. 10 (Feb. 28, 2019), not rev'd by
Comm'n Notice (Mar. 27, 2019).
Before the evidentiary hearing, JLI settled with the following
eight respondents: J Well France S.A.S. of Paris, France; ECVD/MMS
Wholesale LLC; MMS/ECVD LLC; The Electric Tobacconist, LLC of Boulder,
Colorado; ALD Group Limited of Guangdong Province, China; Flair Vapor
LLC of South Plainfield, New Jersey; Shenzhen Joecig Techonology Co.,
Ltd. of Guangdong Province, China; and Myle Vape Inc. of Jamaica, New
York. See Order No. 31 (July 30, 2019), not rev'd by Comm'n Notice
(Aug. 23, 2019); Order No. 16 (Mar. 21, 2019), not rev'd by Comm'n
Notice (Apr. 4, 2019); Order No. 33 (July 30, 2019), not rev'd by
Comm'n Notice (Aug. 23, 2019); Order No. 13 (Mar. 12, 2019), not rev'd
by Comm'n Notice (Apr. 5, 2019); Order No. 34 (July 30, 2019), not
rev'd by Comm'n Notice (Aug. 23, 2019); Order No. 32 (July 30, 2019),
not rev'd by Comm'n Notice (Aug. 23, 2019).
In addition, the investigation terminated as to the following six
respondents based on a consent order stipulation and the issuance of a
consent order: Vapor Hub International, Inc. of Simi Valley,
California; Limitless MOD, LLC; Asher Dynamics, Inc. of Chino,
California; Ply Rock of Chino, California; Infinite-N Technology
Limited of Guangdong Province, China; and King Distribution LLC of
Elmwood Park, New Jersey. See Order No. 9 (Feb. 27, 2019), not rev'd by
Comm'n Notice (Mar. 27, 2019); Order No. 11 (Feb. 28, 2019), not rev'd
by Comm'n Notice (Mar. 26, 2019); Order No. 18 (Mar. 28, 2019), not
rev'd by Comm'n Notice (Apr. 11, 2019); Order No. 20 (Apr. 2, 2019),
not rev'd by Comm'n Notice (Apr. 15, 2019).
On April 23, 2019, the ALJ found respondent XFire in default
pursuant to Commission Rule 210.16(b), 19 CFR 210.16(b). See Order No.
22 (Apr. 23, 2019), not rev'd by Comm'n Notice (May 16, 2019).
Also, prior to the evidentiary hearing, the ALJ granted JLI's
motion for partial termination of the investigation with respect to
allegations of infringement as to all asserted claims of the '139
patent and certain asserted claims of the other asserted patents. See
Order No. 36 (Aug. 8, 2019), not rev'd by Comm'n Notice (Sep. 5, 2019).
As a result, the following claims remain at issue in the investigation:
Claims 1, 2, and 13 of the '669 patent; claims 12, 17, and 20 of the
'568 patent; claims 1, 2, and 4 of the '130 patent; and claims 1, 6,
and 21 of the '915 patent (collectively, ``the Asserted Claims'').
JLI and the Commission were unable to serve respondent Keep Vapor
Electronic Tech. Co., Ltd. of Shenzhen, China despite multiple attempts
at service. The final ID states that JLI does not request any relief
against this respondent. See ID at 2 n.1.
On May 21, 2019, the ALJ granted a motion to amend the complaint
and notice of investigation to change the name of respondent Ziip Lab
Co., Ltd. of Guangdong Province, China to SS Group Holdings of
Guangdong Province, China. See Order No. 26 (May 21, 2019), not rev'd
by Comm'n Notice (June 14, 2019).
Only five respondents participated in the evidentiary hearing: SS
Group Holdings; ZLab S.A. of Punta del Este--Maldonado, Uruguay;
Shenzhen Yibo Technology Co. Ltd. of Guangdong Province, China
(collectively, ``the Ziip Respondents''); Vapor 4 Life Holdings, Inc.
of Northbrook, Illinois (``V4L''); and Eonsmoke.
On August 5, 2019, one day before the prehearing conference, the
ALJ issued an ID (Order No. 35), granting JLI's motion for summary
determination of importation, infringement, and domestic industry. The
ALJ found that JLI was entitled to summary determination of importation
with respect to the Ziip Respondents and their accused products;
Eonsmoke and its accused products; and V4L and certain V4L accused
products. See Order No. 35 at 4-11 (Aug. 5, 2019). Citing to a
stipulation between JLI and the Ziip Respondents, the ALJ stated in his
infringement analysis with respect to the Ziip Respondents' accused
products that ``the question of whether Ziip accused products contain
or perform each limitation of asserted claims is moot.'' Id. at 11. The
ALJ did not specifically state whether summary determination of
infringement as to the Ziip Respondents was denied or granted nor the
reasoning supporting grant or denial of the motion as to this issue.
Id.
An evidentiary hearing was held from August 6-7, 2019.
On September 4, 2019 the Commission reviewed Order No. 35 in part.
Specifically, the Commission reviewed the ALJ's analysis as to
infringement and a statement regarding mootness on page 11 of the ID.
The Commission remanded to the ALJ for clarification on this issue and
as to whether the ID grants or denies summary determination that the
Ziip Respondents infringe the Asserted Patents. See Comm'n Notice (Sep.
4, 2019).
In response to the Commission's September 4, 2019 Notice, the ALJ
clarified that Order No. 35 denied
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summary determination of infringement as to the Ziip Respondents
because that issue was moot in light of the stipulation between JLI and
the Ziip Respondents. See Remand of Order No. 35 (Oct. 10, 2019).
On November 19, 2019, the ALJ granted motions to terminate the
investigation as to the Ziip Respondents and V4L based on settlement
agreements. See Order Nos. 38 and 39 (Nov. 19, 2019), not rev'd by
Comm'n Notice (Dec. 16, 2019). Accordingly, only respondent Eonsmoke
remains active in this investigation.
On December 12, 2019, the ALJ granted JLI's motion to strike
portions of the Ziip Respondents' and Eonsmoke's posthearing briefs.
See Order No. 40 (Dec. 12, 2019). Specifically, these portions relate
to the issue of invalidity of asserted claim 4 of the '915 patent,
which was not addressed by Respondents' expert or in their prehearing
briefings. Id. at 3-5.
On December 13, 2019, the ALJ issued a combined final ID and
recommended determination (``RD''), finding a violation of section 337
by respondent Eonsmoke. Specifically, the final ID finds, inter alia,
that JLI satisfied the importation requirement as to Eonsmoke's accused
products; that JLI has shown Eonsmoke's accused products infringe the
Asserted Claims; that JLI has satisfied the domestic industry
requirement with respect to the Asserted Patents; and that the Asserted
Claims have not been shown to be invalid. In addition, in the event the
Commission finds a violation of section 337, the RD recommends that the
Commission issue a limited exclusion order (``LEO'') and cease and
desist orders (``CDO'') directed at Eonsmoke and defaulting respondent
XFire, and impose a 100 percent bond during the period of Presidential
review.
No petitions for review were filed, which means each party has
abandoned all issues decided adversely to that party. See 19 CFR
210.43(b)(4).
Having reviewed the record of this investigation, including the
final ID, the Commission has determined to sua sponte review the final
ID in part. 19 CFR 210.44. Specifically, the Commission has determined
to review and, on review, decline to adopt the discussion of the
validity of element [c] of claim 12 of the '669 patent on pages 50 and
55 of the final ID. The Commission has also determined to review the
discussion of Warranty and Customer Support and Regulatory Compliance
on pages 265-266 of the final ID and the discussion of the quantitative
significance of JLI's contract manufacturers' investments in the last
paragraph on page 272 of the final ID. The Commission has determined
not to review the remainder of the final ID, including the other
portions of the ID's domestic industry analysis, which are sufficient
to support the ID's finding that JLI has satisfied the domestic
industry requirement under subparagraphs 337(a)(3)(A) and (B) with
respect to the Asserted Patents. Accordingly, the Commission finds a
violation of section 337 by reason of Eonsmoke's importation of
electronic nicotine delivery systems and components thereof that
infringe one or more of claims 1, 2, and 13 of the '669 patent; claims
12, 17, and 20 of the '568 patent; claims 1, 2, and 4 of the '130
patent; and claims 1, 6, and 21 of the '915 patent. The Commission also
finds that JLI is entitled to relief against defaulting respondent
XFire pursuant to 19 U.S.C. 1337(g)(1).
The Commission has determined to extend the target date for
completion of the investigation to Monday, April 20, 2020.
In connection with the final disposition of this investigation, the
statute authorizes issuance of (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 order(s) that could result in the
respondent(s) 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 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). In addition, if a party seeks issuance of any
cease and desist orders, the written submissions should address that
request in the context of recent Commission opinions, including those
in Certain Arrowheads with Deploying Blades and Components Thereof and
Packaging Therefor, lnv. No. 337-TA-977, Comm'n Op. (Apr. 28, 2017) and
Certain Electric Skin Care Devices, Brushes and Chargers Therefor, and
Kits Containing the Same, lnv. No. 337-TA-959, Comm'n Op. (Feb. 13,
2017). Specifically, if Complainant seeks a cease and desist order
against a respondent, the written submissions should respond to the
following requests:
1. Please identify with citations to the record any information
regarding commercially significant inventory in the United States as to
each respondent against whom a cease and desist order is sought. If
Complainant also relies on other significant domestic operations that
could undercut the remedy provided by an exclusion order, please
identify with citations to the record such information as to each
respondent against whom a cease and desist order is sought.
2. ln relation to the infringing products, please identify any
information in the record, including allegations in the pleadings, that
addresses the existence of any domestic inventory, any domestic
operations, or any sales-related activity directed at the United States
for each respondent against whom a cease and desist order is sought.
3. Please discuss any other basis upon which the Commission could
enter a cease and desist order.
The statute requires the Commission to consider the effects of any
remedy upon the public interest. The public interest factors the
Commission will consider include the effect that an exclusion order
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,
disapprove, or take no action on the Commission's determination. 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. 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. Such
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initial submissions should include views on the recommended
determination by the ALJ on remedy and bonding.
Complainant and the Commission Investigative Attorney are also
requested to identify the form of remedy sought and to submit proposed
remedial orders for the Commission's consideration in their initial
written submissions. Complainant is further requested to state the
dates that the Asserted Patents expire, the HTSUS numbers under which
the accused products are imported, and to supply the identification
information for all known importers of the products at issue in this
investigation. The written submissions and proposed remedial orders
must be filed no later than close of business on February 27, 2020.
Reply submissions must be filed no later than the close of business on
March 5, 2020. 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 Commission Rule 210.4(f), 19 CFR 210.4(f). Submissions
should refer to the investigation number (Inv. No. 337-TA-1139) in a
prominent place on the cover page and/or the first page. (See Handbook
for Electronic Filing Procedures, https://www.usitc.gov/documents/handbook_on_filing_procedures.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. A
redacted non-confidential version of the document must also be filed
simultaneously with any confidential filing. 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 nonconfidential 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: February 13, 2020.
Lisa Barton,
Secretary to the Commission.
[FR Doc. 2020-03346 Filed 2-19-20; 8:45 am]
BILLING CODE 7020-02-P