[Federal Register Volume 85, Number 179 (Tuesday, September 15, 2020)]
[Notices]
[Pages 57249-57251]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-20279]


-----------------------------------------------------------------------

INTERNATIONAL TRADE COMMISSION

[Investigation No. 337-TA-1118]


Certain Movable Barrier Operator Systems and Components Thereof; 
Notice of a Commission Determination To Review a Remand Initial 
Determination; Request for Written Submissions

AGENCY: U.S. International Trade Commission.

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: Notice is hereby given that the U.S. International Trade 
Commission (the ``Commission'') has determined to: Review a Remand 
Initial Determination (``Remand ID'') finding that the complainant The 
Chamberlain Group, Inc. (``CGI'') has satisfied the economic prong of 
the domestic industry requirement with respect to U.S. Patent No. 
7,755,223 (``the '223 patent''); and request supplemental briefing on 
remedy, the public interest, and bonding for the limited purpose of 
updating submissions submitted in March 2020.

FOR FURTHER INFORMATION CONTACT: Carl P. Bretscher, Office of the 
General Counsel, U.S. International Trade Commission, 500 E Street SW, 
Washington, DC 20436, telephone (202) 205-2382. Copies of non-
confidential documents filed in connection with this investigation may 
be viewed on the Commission's electronic docket system (``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, telephone (202) 205-1810.

SUPPLEMENTARY INFORMATION: The Commission instituted this investigation 
on June 11, 2018, based on a complaint, as supplemented, filed by CGI 
of Oak Brook, Illinois. 83 FR 27020-21 (June 11, 2018). The complaint 
alleges a violation of section 337 of the Tariff Act of 1930, as 
amended, 19 U.S.C. 1337 (``Section 337''), in the importation, sale for 
importation, or sale in the United States after importation of certain 
movable barrier operator (``MBO'') systems that purportedly infringe 
one or more of the asserted claims of the '223 patent and U.S. Patent 
Nos. 8,587,404 (``the '404 patent'') and 6,741,052 (``the '052 
patent''). Id. The Commission's notice of investigation named Nortek 
Security & Control, LLC of Carlsbad, CA; Nortek, Inc. of Providence, 
RI; and GTO Access Systems, LLC of Tallahassee, FL (collectively, 
``Nortek'') as respondents. Id. The Office of Unfair Import 
Investigations was not named as a party to this investigation. See id.
    The Commission subsequently terminated the investigation with 
respect to certain patent claims withdrawn by CGI. See Order No. 16 
(Feb. 5, 2019), unreviewed by Comm'n Notice (March 6, 2019); Order No. 
27 (June 7, 2019), unreviewed by Comm'n Notice (June 27, 2019); Order 
No. 31 (July 30, 2019), unreviewed by Comm'n Notice (Aug. 19, 2019); 
Order No. 32 (Sept. 27, 2019), unreviewed by Comm'n Notice (Oct. 17, 
2019).
    On June 5, 2019, the presiding administrative law judge (``ALJ'') 
issued a Markman order (Order No. 25) construing the claim terms in 
dispute.
    On December 12, 2018, CGI filed a motion for summary determination 
that it satisfied the economic prong of the domestic industry 
requirement. Nortek opposed the motion. On June 6, 2019, the ALJ issued 
a notice advising the parties that the motion would be granted and a 
formal written order would be issued later. Order No. 26 (June 6, 
2019).
    The ALJ held an evidentiary hearing on the issues in dispute on 
June 10-14, 2019.
    On November 25, 2019, ALJ issued Order No. 38, finding no issue of 
material fact that CGI's investments in labor and capital relating to 
its domestic industry products were ``significant''

[[Page 57250]]

and that CGI has satisfied the economic prong of the domestic industry 
requirement pursuant to Section 337(a)(3)(B) (19 U.S.C. 1337(a)(3)(B)). 
Order No. 38 (Nov. 25, 2019). Order No. 38 also finds that genuine 
issues of material fact precluded entry of summary determination with 
respect to CGI's investments in plant and equipment, under Section 
337(a)(3)(A) (19 U.S.C. 1337(a)(3)(A)). Id.
    On the same date, the ALJ issued a final initial determination 
(``Final ID''), finding no violation of Section 337 because the 
asserted claims of the '223 and '404 patents, if valid, are not 
infringed and the asserted claim of the '052 patent is invalid, even if 
infringed. Initial Determination on Violation of Section 337 and 
Recommended Determination on Remedy and Bond (Nov. 25, 2019).
    On February 19, 2020, the Commission issued a notice of its 
determination to review Order No. 38 and to partially review the Final 
ID with respect to certain issues relating to each of the three 
asserted patents. 85 FR 10723-26 (Feb. 25, 2020). The Commission also 
directed the parties to brief its questions on violation and requested 
briefing from the parties, the public, and any interested government 
entities concerning remedy, the public interest, and bonding. Id.
    On April 22, 2020, the Commission issued a determination finding no 
violation with respect to the '404 or '052 patents. Comm'n Notice at 3 
(April 22, 2020). The Commission also vacated Order No. 38 and remanded 
the economic prong issue with respect to the '223 patent. Id.; Order 
Vacating and Remanding Order No. 38 (April 22, 2020) (``Remand 
Order'').
    On May 15, 2020, the ALJ issued Order No. 39, seeking additional 
information from the parties in light of the Commission's Remand Order. 
Order No. 39 (May 15, 2020). On July 10, 2020, the ALJ issued the 
subject Remand ID, finding that CGI has made significant investments, 
both quantitatively and qualitatively, in plant and equipment and labor 
and capital, pursuant to Section 337(a)(3)(A) and (B) (19 U.S.C. 
1337(a)(3)(A)-(B)), respectively. Remand Initial Determination (July 
10, 2020). The Remand ID concludes that CGI has satisfied the economic 
prong of the domestic industry requirement in relation to the '223 
patent. Id.
    On July 20, 2020, Nortek filed a petition for review of the RID. 
CGI filed its opposition to Nortek's petition for review on July 27, 
2020.
    Having reviewed the Remand ID, the parties' submissions, and the 
record in this investigation, the Commission has determined to review 
the Remand ID and requests the parties to brief the following 
questions:
    (1) With respect to CGI's garage door opener (``GDO'') products 
that purportedly practice the '223 patent (`` '223 DI products''), 
provide the percentage of CGI's sales of its '223 DI products in the 
United States compared to its total, worldwide sales of such products. 
Explain whether this percentage substantially differs from the 
percentage of CGI's sales of all GDO products in the United States 
compared to its worldwide sales of all GDO products or the percentage 
of CGI's sales of all products in the United States compared to its 
worldwide sales of all products, as provided by CGI. If so, explain 
whether using the percentage of CGI's sales of '223 DI products in the 
United States, compared to its total worldwide sales of such products, 
would materially affect calculation of its relevant domestic industry 
investments or foreign investments in plant and equipment or labor and 
capital, and how this may affect the economic prong analysis.
    (2) Explain whether CGI's calculations of its foreign expenditures 
for plant and equipment or labor and capital relating to its '223 DI 
products include its foreign manufacturing expenditures. If not, please 
indicate what information is in the record regarding its foreign 
manufacturing expenses, and provide, if possible, calculations 
comparing domestic expenditures to total expenditures (that include the 
foreign manufacturing expenses). Based on these calculations, discuss 
how including CGI's foreign manufacturing expenditures affects 
assessment of the significance of its relevant domestic industry 
investments in either plant and equipment or labor and capital.
    (3) When were the calculations and analyses that the Commission has 
requested in questions (1) and (2) performed? Who performed them?
    (4) Did Nortek previously present any calculations or analyses 
using CGI's worldwide sales?
    (5) Please provide further detail (as available in the record) 
regarding the activities performed at CGI's Technical Support Center in 
Tucson. Explain, with reference to relevant Commission precedent, the 
extent to which the Commission should consider such expenses in its 
assessment of the economic prong. Also explain whether these activities 
are the sort that a mere importer would need to carry out in the United 
States (as opposed to in another country).
    (6) Please discuss the similarities and differences between the 
allocation methodologies Chamberlain used in this investigation and 
allocation methodology used in the 1016 investigation, Certain Access 
Control Systems and Components Thereof, Inv. No. 337-TA-1016.
    (7) In the 1016 investigation, did the presiding ALJ or the 
Commission require Chamberlain to evaluate its worldwide sales or 
foreign manufacturing when it was concluded that Chamberlain satisfied 
the economic prong? See generally 1016 Initial Determination at 222-293 
(Oct. 23, 2017); Comm'n Notice (Dec. 22, 2017). Apart from the 1057 and 
1097 investigations that the parties have already addressed, please 
briefly identify any Commission precedent requiring a complainant to 
present its manufacturing investment data.
    (8) Please discuss whether, in an investigation in which the DI 
products are manufactured outside the United States, it is consistent 
with the statute, legislative history, and court and Commission 
precedent not to consider foreign manufacturing expenses in determining 
the significance of domestic industry investments and expenditures.
    (9) Chamberlain has argued that the '223 DI products overlap with 
the products analyzed in the 1016 investigation. See Chamberlain 
Submission on Remand at 25 (June 1, 2020). Please discuss the extent of 
the overlap in the DI products in the 1016 investigation and the 
present investigation.
    (10) Given that the parties responded to the Commission's request 
for briefing on remedy, the public interest, and bonding five months 
ago, the parties should revise their submissions on these subjects for 
the limited purpose of updating them in light of the last five months. 
The parties should include a discussion as to whether limiting the 
scope of the violation (if any) and covered products to the '233 patent 
and excluding the '404 and '052 patents would impact the determination 
of remedy (e.g., by affecting the scope of Nortek's domestic 
inventory), the public interest, bonding, or any other issues on 
review. The parties, in preparing their supplemental submissions, 
should follow the instructions provided by the Commission in its 
earlier notice of partial review of the Final ID. See 85 FR at 10724-26 
(Feb. 19, 2020).
    The parties are requested to brief only the discrete issues 
identified above, with reference to the applicable law and evidentiary 
record. The parties are not to brief any other issues on review, which 
have already been adequately presented in the parties' previous

[[Page 57251]]

filings. In addition, 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 submissions should include views on the 
recommended determination by the ALJ on the issues of remedy and 
bonding.
    The parties' written submissions and proposed remedial orders must 
be filed no later than the close of business on September 23, 2020. 
Reply submissions must be filed no later than the close of business on 
September 30, 2020. Opening submissions are limited to 30 pages. Reply 
submissions are limited to 25 pages. Third-party submissions should be 
filed no later than the close of business on September 30, 2020, and 
may not include 10 pages, not including any attachments. No further 
submissions on any of 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 (Mar. 19, 2020). Submissions should refer to the 
investigation number (``Inv. No. 337-TA-1118'') in a prominent place on 
the cover page and/or 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. 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).
    The Commission voted to approve these determinations on September 
9, 2020.

    By order of the Commission.

    Issued: September 9, 2020.
Lisa Barton,
Secretary to the Commission.
[FR Doc. 2020-20279 Filed 9-14-20; 8:45 am]
BILLING CODE 7020-02-P