[Federal Register Volume 86, Number 99 (Tuesday, May 25, 2021)]
[Notices]
[Pages 28143-28146]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-10944]


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INTERNATIONAL TRADE COMMISSION

[Investigation No. 337-TA-1195]


Certain Electronic Candle Products and Components Thereof 
Commission Determination To Review in Part an 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 (``Commission'') has determined to review in part an initial 
determination (``ID'') (Order No. 41) of the presiding administrative 
law judge (``ALJ''). 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 other interested persons on the issues of 
remedy, the public interest, and bonding.

FOR FURTHER INFORMATION CONTACT: Robert Needham, Esq., Office of the 
General Counsel, U.S. International

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Trade Commission, 500 E Street SW, Washington, DC 20436, telephone 
(202) 708-5468. 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 6, 2020, based on a complaint filed by L&L Candle Company LLC 
of Brea, California and Sotera Tschetter, Inc. of St. Paul, Minnesota 
(together, ``Complainants''). 85 FR 19158-59. The complaint alleged 
violations of section 337 in the importation into the United States, 
the sale for importation, and the sale after importation within the 
United States after importation of certain electronic candle products 
and components thereof by reason of infringement of one or more of 
claims 1-6, 10, 12-15, 17-19, and 28 of U.S. Patent No. 8,550,660; 
claims 1-15 of the U.S. Patent No. 9,366,402; claims 1-4, 6-12, 14-18, 
20-25, 27, and 28 of the U.S. Patent No. 9,512,971; claims 1-7, 10-14, 
17, 18, 22, 24, 25, 27, and 29 of U.S. Patent No. 9,523,471; and claims 
1-5, 7, 8, 10-12, 15, 17, 21 and 22 of U.S. Patent No. 10,533,718. Id. 
The notice of investigation named as respondents The Gerson Company of 
Olathe, Kansas; Gerson International (H.K.) Ltd. of Hong Kong; Sterno 
Home Inc. of Coquitlam, Canada; Ningbo Huamao International Trading 
Co., Ltd. of Ningbo City, China; Ningbo Yinzhou Langsheng Artware Co., 
Ltd of Ningbo City, China; Lifetime Brands, Inc. of Garden City, New 
York; Scott Brothers Entertainment, Inc. of Las Vegas, Nevada; Nantong 
Ya Tai Candle Arts & Crafts Co., Ltd. of San Gabriel, California; 
NapaStyle, Inc. of Napa, California; Veraflame International, Inc. of 
Vancouver, Canada (``Veraflame''); MerchSource, LLC of Irvine, 
California; Ningbo Mascube Import Export Company of Ningbo City, China 
(``Ningbo Mascube''); Decorware International Inc. dba Decorware Inc. 
of Rancho Cucamonga, California; Shenzhen Goldenwell Smart Technology 
Co., Ltd. of Shenzhen City, China; Shenzhen Ksperway Technology Co., 
Ltd. of Shenzhen City, China; Ningbo Shanhuang Electric Appliance Co. 
of Ningbo City, China (``Ningbo Shanhuang''); Yiwu Shengda Art Co., 
Ltd. of Yiwu City, China (``Yiwu Shengda''); Shenzhen Tongfang 
Optoelectronic Technology Co., Ltd. of Shenzhen City, China; TFL 
Candles of Shenzhen City, China; Guangdong Tongfang Lighting Co., Ltd. 
of Hong Kong; Tongfang Optoelectronic Company of Hong Kong; and Virtual 
Candles Limited of Kent, United Kingdom (``Virtual Candles''). Id. at 
19159. The Office of Unfair Import Investigations (``OUII'') is a party 
to the investigation. Id.
    The Commission terminated five respondents from the investigation 
based on consent orders. See Order No. 7 (May 4, 2020), unreviewed by 
Notice (Jun. 3, 2020) (terminating the investigation with respect to 
Shenzhen Tongfang Optoelectronic Technology Co., Ltd.; TFL Candles; 
Guandong Tongfang Lighting Co., Ltd.; and Tongfang Optoelectronic 
Company); Order No. 37 (Dec. 17, 2020), unreviewed by Notice (Jan. 5, 
2021) (terminating the investigation with respect to Nantong Ya Tai 
Candle Arts & Crafts Co., Ltd. based on a consent order and a 
settlement agreement). The Commission also terminated eight respondents 
from the investigation based on settlement. Order No. 12 (Jun. 15, 
2020), unreviewed by Notice (Jun. 20, 2020) (terminating The Gerson 
Company and Gerson International (H.K.) Ltd. based on settlement); 
Order No. 15 (Jul. 15, 2020), unreviewed by Notice (Aug. 5, 2020) 
(terminating Merchsource, LLC based on settlement); Order No. 29 (Oct. 
19, 2020), unreviewed by Notice (Nov. 2, 2020) (terminating Decorware 
International Inc. based on settlement); Order No. 38 (Dec. 18, 2020), 
unreviewed by Notice (Jan. 5, 2021) (Sterno Home Inc., Ningbo Huamao 
International Trading Co., Ltd., and Ningbo Yinzhou Langsheng Artware 
Co., Ltd. based on settlement); Order No. 39 (Dec. 18, 2020), 
unreviewed by Notice (Jan. 5, 2021) (terminating Lifetime Brands, Inc. 
based on settlement). The Commission further terminated three 
respondents from the investigation based on Complainants' partial 
withdrawal of the complaint due to the failure to serve those entities 
with the complaint and notice of investigation. Order No. 35 (Nov. 13, 
2020), unreviewed by Notice (Nov. 30, 2020) (terminating NapaStyle, 
Inc., Shenzhen Goldenwell Smart Technology Co., Ltd., and Shenzhen 
Ksperway Technology Co., Ltd. based on a partial withdrawal of the 
complaint). Finally, the Commission terminated Scott Brothers 
Entertainment Inc. from the investigation based on a summary 
determination that Complainants failed to establish the importation 
requirement with respect to that respondent. Order No. 17 (Jul. 28, 
2020), unreviewed by Notice (Aug. 28, 2020).
    With respect to the five remaining respondents, the Commission 
found Veraflame, Ningbo Mascube, Virtual Candles, Yiwu Shengda, and 
Ningbo Shanhuang (together, ``the Defaulting Respondents'') in default 
for failing to respond to the complaint and notice of investigation and 
for failing to show cause why they had not done so, or for failing to 
participate in discovery. Order No. 14 (Jul. 8, 2020), unreviewed by 
Notice (Aug. 3, 2020) (finding Veraflame, Mascube, and Virtual Candles 
in default); Order No. 33 (Nov. 12, 2020), unreviewed by Notice (Nov. 
30, 2020) (finding Yiwu Shengda and Ningbo Shanhuang in default).
    On November 13, 2020, Complainants moved for a summary 
determination of violation and for a recommendation for the issuance of 
a GEO. On December 4, 2020, OUII filed a response that questioned 
whether Complainants had satisfied the economic prong of the domestic 
industry requirement, but otherwise supported a finding of violation 
and the issuance of a GEO. On December 9, 2020, Complainants filed a 
reply in support of their motion.
    On April 2, 2021, the ALJ issued the subject ID and granted 
Complainants' motion for a summary determination of violation by each 
of the five Defaulting Respondents. Order No. 41 (Apr. 2, 2021). No 
party petitioned for review of the subject ID.
    The Commission has determined to review the subject ID in part. 
Specifically, the Commission has determined to review the ID's finding 
that Complainants satisfied the economic prong of the domestic industry 
requirement. The Commission has not determined to review any other 
findings in the ID.
    In connection with its review, the Commission is interested in 
briefing on the following issues:
    1. Attached to Complainants' motion for summary determination, 
Complainants submitted the declaration of Dr. Seth Kaplan. That 
declaration repeatedly refers to exhibits ``attached hereto,'' but the 
declaration contains no attachments. Do the documents referred to in 
Dr. Kaplan's declaration appear elsewhere in the record? If so, please 
identify the location. If not, please address the admissibility of Dr. 
Kaplan's declaration and whether the Commission should entertain a 
motion under Rule 210.15 (19 CFR 210.15) by Complainants, accompanied 
by the

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exhibits, to reopen the record to admit the exhibits into the 
administrative record.
    2. Please discuss Complainants' domestic industry investments under 
Section 337(a)(3)(A), (B), or (C) that are related to products that 
practice each patent and explain whether such investments are 
significant or substantial under each subsection in light of Commission 
and Federal Circuit precedents. Please include in your response, a 
contextual discussion of the relevant marketplace, for example, without 
being exhaustive, a discussion of Complainants' foreign investments 
relative to its domestic industry expenditures in these statutory 
categories, a discussion of the value added to the product from 
Complainant's activities in the United States, and/or a discussion of 
the domestic industry investments in the statutory categories relative 
to Complainants' total domestic operations. See, e.g., Certain 
Carburetors & Prods. Containing Such Carburetors, Inv. No. 337-TA-1123, 
Comm'n Op., 2019 WL 5622443, *12 (Oct. 28, 2019); Certain Solid State 
Storage Drives, Stacked Electronics Components, and Products Containing 
the Same, Inv. No. 337-TA-1097, Commission Op. at 29-30 (June 29, 
2018).
    3. Please address whether the domestic industry investments 
constitute investments in the ``exploitation'' of the asserted patents 
under Section 337(a)(3)(C). See Certain Integrated Circuit Chips and 
Products Containing the Same, Inv. No. 337-TA-859, Comm'n Op., 2014 WL 
12796437 (Aug. 22, 2014).
    4. Please explain whether Complainants' asserted domestic industry 
differs from that of a mere importer, including by discussing: (A) How 
the Commission and the Federal Circuit have considered such investments 
in prior investigations, and (B) how the facts of this investigation 
should be assessed in light of applicable precedent. Also address the 
extent to which the activities relied upon to show satisfaction of the 
economic prong need to take place in the United States either as a 
legal or a practical matter, such that those activities would not 
distinguish a domestic industry from a mere importer.
    The parties are invited to brief only the discrete issues described 
above, with reference to the applicable law and evidentiary record. The 
parties are not to brief other issues on review, which are adequately 
presented in the parties' existing filings.
    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 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 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 (December 
1994).
    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 a cease and desist 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: The Commission requests that the parties to 
the investigation file written submissions on the issues 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 submissions should include views on the 
recommended determination by the ALJ on remedy and bonding.
    In their initial submissions, Complainants and OUII are also 
requested to identify the remedy sought and to submit proposed remedial 
orders for the Commission's consideration. Complainants are also 
requested to state the HTSUS subheadings 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 
initial written submissions and proposed remedial orders must be filed 
no later than close of business on June 1, 2021. Reply submissions must 
be filed no later than the close of business on June 8, 2021. 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-1195) 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

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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 on EDIS.
    The Commission vote for this determination took place on May 19, 
2021.
    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: May 19, 2021.
Lisa Barton,
Secretary to the Commission.
[FR Doc. 2021-10944 Filed 5-24-21; 8:45 am]
BILLING CODE 7020-02-P