[Federal Register Volume 86, Number 152 (Wednesday, August 11, 2021)]
[Notices]
[Pages 44054-44056]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-17082]


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INTERNATIONAL TRADE COMMISSION

[Investigation No. 337-TA-1166]


Certain Foodservice Equipment and Components Thereof; Commission 
Determination To Review in Part a Final Initial Determination Finding 
No 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 June 4, 2021, finding no violation of section 337 of 
the Tariff Act of 1930, as amended. 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: Ronald A. Traud, Esq., 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 July 3, 2019, based on a complaint filed on behalf of Illinois Tool 
Works, Inc. of Glenview, Illinois; Vesta Global Limited of Hong Kong; 
Vesta (Guangzhou) Catering Equipment Co., Ltd. of China; and Admiral 
Craft Equipment Corp. of Westbury, New York (collectively, 
``Complainants''). 84 FR 31911 (Jul. 3, 2019). The complaint, as 
supplemented, alleged violations of section 337 of the Tariff Act of 
1930, as amended, 19 U.S.C. 1337, based upon the importation of 
articles into the United States, or in the sale of such articles by the 
owner, importer, or consignee of certain foodservice equipment and 
components thereof by reason of misappropriation of trade secrets and 
unfair competition through tortious interference with contractual 
relationships, the threat or effect of which is to destroy or 
substantially injure a domestic industry. Id. at 31911-12. The notice 
of investigation named as respondents Guangzhou Rebenet Catering 
Equipment Manufacturing Co., Ltd.; Zhou Hao; Aceplus International 
Limited (aka Ace Plus International Ltd.); Guangzhou Liangsheng Trading 
Co., Ltd.; and Zeng Zhaoliang, all of China. Id. at 31912. The Office 
of Unfair Import Investigations (``OUII'') was also named as a party in 
this investigation. Id.
    On July 9, 2020, Order No. 52 granted a motion for summary 
determination of no substantial injury to a domestic industry. The 
Commission determined to review Order No. 52, and on December 14, 2020, 
reversed the grant of summary determination.
    On June 4, 2021, the ALJ issued the final ID, which found that 
Respondents did not violate section 337, primarily based on a 
Complainants' failure to establish a domestic industry. The final ID 
found that the Commission has in rem jurisdiction over the accused 
products, subject matter jurisdiction, and personal jurisdiction. ID at 
99. The final ID also found that Respondents imported into the United 
States, sold for importation, or sold within the United States after 
importation the accused products. Id. The final ID further found that 
Respondents have misappropriated certain of Complainants' trade secrets 
in the manufacture of certain accused products, but that Complainants 
have not shown that Respondents tortiously interfered with contractual 
relationships. Id. The final ID additionally found that Complainants 
have not shown that the importation and sale of accused products has 
the threat or effect of destroying or substantially injuring a domestic 
industry.
    The RD issued on June 10, 2021. The RD recommended that, if the 
Commission finds a violation of section 337, the Commission should 
issue limited exclusion orders of various durations for each of the 
various categories of accused products. RD at 10. The durations of the 
recommended exclusion orders are all quite short, ranging from 1-17 
months from issuance. Id. at 10-11. The RD further recommended that a 
cease and desist order would be unnecessary. Id. at 12. The RD 
additionally recommended that a bond of 1% of entered value be imposed 
during the period of Presidential review. The public interest was not 
delegated to the ALJ.
    On June 21, 2021, Complainants and Respondents filed petitions for 
review and OUII filed a contingent petition for review. On June 29, 
2021, the parties filed responses to the petitions.
    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 final ID's findings and conclusions as to the existence of 
a domestic industry and injury to a domestic industry.
    (2) The final ID's findings and conclusions regarding the wrongful 
taking and use of the Bills of Materials

[[Page 44055]]

(``BOM'') Trade Secrets and the Custom Components and Mold Trade 
Secrets.

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) Regarding domestic industry:
    (A) Please explain whether Complainants' asserted expenditures for 
warranty services differ from those 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 warranty servicing 
activities relied upon to show the existence of a domestic industry 
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.
    (B) Are complainants required to allocate payments made to third-
party service providers for warranty services to qualifying activities 
in an investigation under 19 U.S.C. 1337(a)(1)(A)? In answering this 
question, please discuss any relevant legal authority.
    (C) Did Complainants sufficiently allocate their payments to third-
party service providers for warranty services to qualifying activities.
    (D) If the payments to third-party service providers are not 
sufficiently allocated, what qualifying expenditures remain?
    (E) What evidence and argument were timely-presented regarding the 
nature and significance of those remaining qualifying expenditures?
    (F) Assuming there is an industry in the United States within the 
meaning of 19 U.S.C. 1337(a)(1)(A), please discuss the evidence and 
arguments addressing whether the industry is substantially injured or 
threatened with substantial injury.
    (2) Regarding wrongful taking and use of the BOM Trade Secrets:
    (A) To what extent are Vesta's BOM Codes non-public information, 
and to what extent did the final ID make findings on that point 
(particularly unpetitioned findings)?
    (B) Is it contradictory for the final ID to consider the 
similarities in Vesta's BOM Codes and Rebenet's part numbers in its 
wrongful taking and use analysis, where the final ID finds that the BOM 
Codes are not themselves trade secrets? Please discuss any relevant 
legal authority.
    (C) If evidence of the similarities between Vesta's BOM Codes and 
Rebenet's part numbers cannot be considered for determining wrongful 
taking and use of the BOM Trade Secrets, could Complainants still meet 
their burden of proof as to those elements of trade secret 
misappropriation?
    (3) Regarding wrongful taking and use of the Custom Components and 
Mold Trade Secrets:
    (A) Is it contradictory for the final ID to consider the 
similarities in Vesta's BOM Codes and Rebenet's part numbers, and 
Vesta's and Rebenet's drawings, where those codes and drawings were not 
found to be trade secrets? Please discuss any relevant legal authority.
    (B) If evidence of the similarities between Vesta's BOM Codes and 
Rebenet's part numbers, and Vesta's and Rebenet's drawings cannot be 
considered for determining wrongful taking and use of the Custom 
Components and Mold Trade Secrets, could Complainants still meet their 
burden of proof as to those elements of trade secret misappropriation?
    In connection with the final disposition of this investigation, the 
statute authorizes issuance of, inter alia, (1) an exclusion 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 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).
    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 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 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 June 
10, 2021.
    Initial written submissions, limited to 60 pages, must be filed no 
later than the close of business on August 19, 2021. The following 
information is also requested in the initial written submissions and 
will not count against the above-mentioned page limitations. 
Complainants are requested to identify the form of the remedy sought. 
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.
    Reply submissions, limited to 30 pages, must be filed no later than 
the close of business on August 26, 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-1166'') in a prominent place on 
the cover page and/or the first

[[Page 44056]]

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 by marking each document 
with a header indicating that the document contains confidential 
information. This marking will be deemed to satisfy the request 
procedure set forth in Rules 201.6(b) and 210.5(e)(2) (19 CFR 201.6(b) 
& 210.5(e)(2)). 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 on EDIS.
    The Commission vote for this determination took place on August 5, 
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: August 5, 2021.
Lisa Barton,
Secretary to the Commission.

[FR Doc. 2021-17082 Filed 8-10-21; 8:45 am]
BILLING CODE 7020-02-P