[Federal Register Volume 85, Number 138 (Friday, July 17, 2020)]
[Notices]
[Pages 43600-43602]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-15459]


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INTERNATIONAL TRADE COMMISSION

[Investigation No. 337-TA-1153]


Certain Bone Cements, Components Thereof and Products Containing 
the Same; Commission Determination To Review in Part a Final Initial 
Determination Finding a Violation of Section 337; 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 has determined to review in part the final initial 
determination (``final ID'') issued by the presiding administrative law 
judge (``ALJ'') on May 6, 2020, finding no violation of section 337 of 
the Tariff Act of 1930, as amended, in connection with the alleged 
misappropriation of trade secrets. The Commission requests briefing 
from the parties on certain issues under review, as indicated in this 
notice. The Commission also requests briefing from the parties, 
interested government agencies, and interested persons on the issues of 
remedy, the public interest, and bonding.

FOR FURTHER INFORMATION CONTACT: Ron Traud, Office of the General 
Counsel, U.S. International Trade Commission, 500 E Street SW, 
Washington, DC 20436, telephone (202) 205-3427. 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: The Commission instituted this investigation 
on April 10, 2019, based on a complaint filed by Heraeus Medical LLC of 
Yardley, Pennsylvania, and Heraeus Medical GmbH of Wehrheim, Germany 
(collectively, ``Heraeus''). 84 FR 14394-95 (Apr. 10, 2019). The 
complaint alleges a violation of section 337 by reason of 
misappropriation of trade secrets, the threat or effect of which is to 
destroy or substantially injure a domestic industry in the United 
States or to prevent the establishment of such an industry. The 
complaint named the following respondents: Zimmer Biomet Holdings, Inc. 
of Warsaw, Indiana; Biomet, Inc. of Warsaw, Indiana; Zimmer Orthopaedic 
Surgical Products, Inc. of Dover, Ohio; Zimmer Surgical, Inc. of Dover, 
Ohio; Biomet France S.A.R.L. of Valence, France; Biomet Deutschland 
GmbH of Berlin, Germany; Zimmer Biomet Deutschland GmbH of Freiburg im 
Breisgau, Germany; Biomet Europe B.V. of Dordrecht, Netherlands; Biomet 
Global Supply Chain Center B.V. of Dordrecht, Netherlands; Zimmer 
Biomet Nederland B.V. of Dordrecht, Netherlands; Biomet Orthopedics, 
LLC of Warsaw, Indiana; and Biomet Orthopaedics Switzerland GmbH of 
Dietikon, Switzerland. The Commission's Office of Unfair Import 
Investigations (``OUII'') also was named as a party.
    The investigation has terminated as to respondents Zimmer 
Orthopaedic Surgical Products, Inc. and Biomet Europe B.V., Order No. 
10 (May 23, 2019), not reviewed, Notice (June 14, 2019), and as to 
certain accused products, Order No. 30 (Nov. 24, 2019), not reviewed, 
Notice (Dec. 10, 2019). Also, the first amended complaint and notice of 
investigation were amended to add three entities as respondents: Zimmer 
US, Inc.; Zimmer, GmbH; and Biomet Manufacturing, LLC. Order No. 18 
(June 26, 2019), not reviewed, 84 FR

[[Page 43601]]

35884-85 (July 25, 2019). The remaining respondents are referred to 
collectively herein as ``Zimmer Biomet.''
    On May 6, 2020, the ALJ issued the final ID, which finds that 
Zimmer Biomet did not violate section 337. More particularly, the final 
ID finds, inter alia, that: (1) The Commission has subject matter and 
personal jurisdiction; (2) Zimmer Biomet sold for importation into the 
United States, imported, or sold after importation the Accused 
Products; (3) a domestic industry exists with respect to Heraeus's 
education, training, and research and development and Heraeus owns the 
asserted trade secrets; (4) trade secrets (``TS'') 1-35 are protectable 
trade secrets, but TS 121-23, 130-34, and 145 are not protectable trade 
secrets; (5) Zimmer Biomet misappropriated TS 1-35; and (6) Heraeus did 
not show a substantial injury or threat of injury to its domestic 
industry by Zimmer Biomet's misappropriation.
    The final ID includes the ALJ's Recommended Determination on Remedy 
and Bond (the ``RD''). The RD recommends that, if the Commission finds 
a violation of section 337, the Commission should issue a limited 
exclusion order directed to copolymer trade secrets TS 1-35 for five 
years; a limited exclusion order directed to the other categories of 
asserted trade secrets for two years or less; and cease and desist 
orders directed to Zimmer Biomet. The RD further recommends imposing a 
bond of five percent during the period of Presidential review.
    On May 18, 2020, the parties filed petitions for review of the 
final ID, and on May 26, 2020, the parties filed responses. Issues not 
raised in the petitions for review are deemed to have been abandoned. 
19 CFR 210.43.
    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 to review the following:
    (1) The ALJ's findings and conclusions as to TS 1-35 and 121-23; 
and
    (2) The ALJ's domestic industry findings, including whether there 
has been a substantial injury to the alleged domestic industry.
    The Commission has determined to not review the remainder of the 
final ID.
    The parties are requested to brief their positions with reference 
to the applicable law and the evidentiary record regarding the 
questions provided below:
    (1) For purposes of determining whether Heraeus has established the 
existence of a domestic industry, if the final ID's findings are 
modified to exclude expenditures for the Reduce Revisions initiative 
and contracting costs for medical professionals, but to include the 
contracting costs for FDA Group: (A) What would be the dollar amount of 
total qualifying investments, and (B) what evidence and argument was 
presented to the administrative law judge regarding the nature and 
significance of those investments?
    (2) For purposes of determining whether Heraeus has established the 
existence of a domestic industry, if the final ID's findings are 
modified to exclude expenditures for the Reduce Revisions initiative 
and contracting costs for medical professionals, and the contracting 
costs for FDA Group were excluded (as the ID did): (A) What would be 
the dollar amount of total qualifying investments, and (B) what 
evidence and argument was presented to the administrative law judge 
regarding the nature and significance of those investments?
    (3) For the costs related to education-and-training-related 
investments (e.g., the Reduce Revisions initiative), discuss: (A) How 
the Commission and the Federal Circuit have considered education-and-
training-related investments in prior investigations, e.g., Certain 
Sleep-Disordered Breathing Treatment Systems and Components Thereof, 
Inv. No. 337-TA-890, Init. Det. at 168-70 (Aug. 21, 2014), not reviewed 
in relevant part, Notice (Oct. 16, 2014), and (B) how the facts of this 
investigation should be assessed in light of applicable precedent.
    (4) For the Reduce Revisions initiative costs: (A) Are these costs 
incorporated into Heraeus's general marketing expenses? See Certain Gas 
Spring Nailer Products and Components Thereof, Inv. No. 337-TA-1082, 
Comm'n Op. at 83 n.20 (Apr. 28, 2020); (B) if the costs are viewed as 
marketing expenses, is there a basis for concluding the costs are 
technical marketing costs; and (C) how should technical marketing costs 
be treated?
    (5) For the alleged costs related to FDA and other regulatory 
approvals and compliance: (A) Which of those regulatory efforts had to 
take place in the United States (for either legal or practical 
reasons), and which could have been carried out in another country; and 
(B) does the record permit allocation of costs between those two 
categories?
    (6) Please analyze whether a complainant bringing a claim under 
section 337(a)(1)(A)(i) must demonstrate that its industry in the 
United States is ``significant'' or ``substantial.'' Please include a 
discussion of the relevant statutory language, any relevant legislative 
history, any relevant Federal Circuit decisions and any relevant prior 
Commission determinations.
    In connection with the final disposition of this investigation, the 
statute authorizes issuance of: (1) An exclusion order that could 
result in the exclusion of the subject articles from entry into the 
United States, and/or (2) one or more cease and desist orders that 
could result in the respondents 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). 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, Inv. 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, Inv. No. 337-TA-959, 
Comm'n Op. (Feb. 13, 2017).
    The statute requires the Commission to consider the effects of that 
remedy upon the public interest. The public interest 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, 
disapprove, or take no action on the Commission's action. See 
Presidential Memorandum of July 21, 2005, 70 FR

[[Page 43602]]

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: The parties to the investigation are requested 
to file written submissions on the questions identified in this notice. 
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 initial 
written submissions should include views on the RD that issued on May 
6, 2020.
    In their initial written submission, Complainants are also 
requested to identify the form of the remedy sought, and Complainants 
and OUII are requested to submit proposed remedial orders for the 
Commission's consideration. Complainants are also requested to state 
the HTSUS subheadings under which the accused articles are imported, 
and to supply identification information for all known importers of the 
accused products. Initial written submissions, including proposed 
remedial orders must be filed no later than the close of business on 
July 27, 2020. Reply submissions must be filed no later than the close 
of business on August 3, 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. The 
Commission's paper filing requirements in 19 CFR 210.4(f) are currently 
waived. 85 FR 15798 (March 19, 2020). Submissions should refer to the 
investigation number (``Inv. No. 337-TA-1153'') 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 at (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 Commission vote for this determination took place on July 13, 
2020.
    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: July 13, 2020.
Lisa Barton,
Secretary to the Commission.
[FR Doc. 2020-15459 Filed 7-16-20; 8:45 am]
BILLING CODE 7020-02-P