[Federal Register Volume 85, Number 80 (Friday, April 24, 2020)]
[Notices]
[Pages 23061-23063]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-08689]


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INTERNATIONAL TRADE COMMISSION

[Investigation No. 337-TA-1139]


Certain Electronic Nicotine Delivery Systems and Components 
Thereof; Issuance of Limited Exclusion Order and Cease and Desist 
Orders; Termination of the Investigation

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 issue a limited exclusion order (``LEO'') 
and cease and desist orders (``CDOs'') directed to respondent Eonsmoke, 
LLC (``Eonsmoke'') and defaulted respondent XFire, Inc. (``XFire'') in 
the above-captioned investigation. The investigation is terminated in 
its entirety.

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 documents filed in connection with this investigation may 
be viewed on the Commission's electronic docket (EDIS) at https://edis.usitc.gov. For help accessing EDIS, please email 
[email protected]. General information concerning the Commission may 
also be obtained by accessing its internet server at https://www.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).
    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).
    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 Technology Co., 
Ltd. of Guangdong Province, China; and Myle Vape Inc. of Jamaica, New 
York. See Order No. 13 (Mar. 12, 2019), not rev'd by Comm'n Notice 
(Apr. 5, 2019); Order No. 16 (Mar. 21, 2019), not rev'd by Comm'n 
Notice (Apr. 4, 2019); Order No. 31 (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); Order No. 33 (July 30, 2019), not 
rev'd by Comm'n Notice (Aug. 23, 2019); Order No. 34 (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). At the 
time XFire was found in default, it was accused of infringing claims 1, 
2, 4, 5, 7, 8, 10, 12, 13, 16, 17, 20, and 21 of the '669 patent; 
claims 1, 2, 3, 4, 9, 10, 11, 13, 14, 19, 20, 21, 24, 28, and 29 of the 
'139 patent; and claims 1, 2, 3, 4, 6, 9, 11, 12, 18, 19, 20, 21, 22, 
23, and 27 of the '915 patent (collectively, ``the Asserted XFire 
Claims'').
    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

[[Page 23062]]

'568 patent; claims 1, 2, and 4 of the '130 patent; and claims 1, 6, 
and 21 of the '915 patent (collectively, ``the Asserted Eonsmoke 
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.
    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 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 Eonsmoke's posthearing brief. 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 Eonsmoke Claims; that JLI has satisfied the domestic industry 
requirement with respect to the '669, the '568, the '130, and the '915 
patents; and that the Asserted Eonsmoke 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 an LEO and 
CDOs directed at each of respondent Eonsmoke and defaulted respondent 
XFire, and impose a 100 percent bond during the period of Presidential 
review. No public interest submissions were filed in response to the 
Federal Register notice seeking such submissions, 85 FR 3720 (Jan. 22, 
2020).
    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).
    On February 13, 2020, the Commission determined to sua sponte 
review the final ID in part. 85 FR 9803-06 (Feb. 20, 2020). 
Specifically, the Commission determined to review and, on review, 
declined 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 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 determined not to review the remainder 
of the final ID, including the other portions of the ID's domestic 
industry analysis, which were sufficient to support the final ID's 
finding that JLI has satisfied the domestic industry requirement under 
subparagraphs 337(a)(3)(A) and (B) with respect to the '669, the '568, 
the '130, and the '915 patents. Accordingly, the Commission's 
determination resulted in finding 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 the Asserted Eonsmoke 
Claims. The Commission also determined that JLI is entitled to relief 
against defaulted respondent XFire pursuant to 19 U.S.C. 1337(g)(1). 
The parties were requested to file written submissions on remedy, the 
public interest, and bonding.
    On February 27, 2020 JLI and OUII submitted their briefs on remedy, 
the public interest, and bonding. JLI and OUII further filed response 
briefs on March 5, 2020.
    On review, the Commission has determined to affirm the discussion 
of Warranty and Customer Support and Regulatory Compliance as it 
concerns the economic prong of the domestic industry requirement on 
pages 265-66 of the final ID. The Commission has also determined to 
decline to adopt the discussion of the quantitative significance of 
JLI's contract manufacturers' investments as it concerns the economic 
prong of the domestic industry requirement in the last paragraph on 
page 272 of the final ID.
    The Commission has further determined that the appropriate remedy 
in this investigation is: (1) An LEO directed to a) respondent Eonsmoke 
prohibiting the unlicensed importation of nicotine vaporizer devices 
and the associated pods sold for use with the devices, and components 
thereof that infringe one or more of the Asserted Eonsmoke Claims and 
b) respondent XFire prohibiting the unlicensed importation of nicotine 
vaporizer devices and the associated pods sold for use with the 
devices, and components thereof that infringe one or more of the 
Asserted XFire Claims; and (2) CDOs prohibiting respondents Eonsmoke 
and XFire from further importing, selling, and distributing infringing 
products in the United States. The Commission has also determined that 
the public interest factors enumerated in paragraphs 337(d)(1), (f)(1), 
and (g)(1) (19 U.S.C. 1337(d)(1), (f)(1), and (g)(1)), do not preclude 
issuance of these remedial orders. Finally, the Commission has 
determined that the bond during the period of Presidential review 
pursuant

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to 19 U.S.C. 1337(j) shall be in the amount of 100 percent of the 
entered value of the imported articles. The Commission's order was 
delivered to the President and to the United States Trade 
Representative on the day of its issuance. The investigation is hereby 
terminated.
    While temporary remote operating procedures are in place in 
response to COVID-19, the Office of the Secretary is not able to serve 
parties that have not retained counsel or otherwise provided a point of 
contact for electronic service. Accordingly, pursuant to Commission 
Rules 201.16(a) and 210.7(a)(1) (19 CFR 201.16(a), 210.7(a)(1)), the 
Commission orders that the Complainant complete service for any party 
without a method of electronic service noted on the attached 
Certificate of Service and shall file proof of service on the 
Electronic Document Information System (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: April 20, 2020.
William Bishop,
Supervisory Hearings and Information Officer.
[FR Doc. 2020-08689 Filed 4-23-20; 8:45 am]
 BILLING CODE 7020-02-P