[Federal Register Volume 87, Number 17 (Wednesday, January 26, 2022)]
[Notices]
[Pages 4044-4046]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-01457]


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INTERNATIONAL TRADE COMMISSION

[Investigation No. 337-TA-1226]


Certain Artificial Eyelash Extension Systems, Products, 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 Issues Under Review and on Remedy, Public 
Interest, and Bonding; Extension of Target Date

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 a final 
initial determination (``FID'') of the presiding chief administrative 
law judge (``ALJ'') finding no violation of section 337 of the Tariff 
Act of 1930, as amended, in the above-captioned investigation. 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. The Commission has also determined to extend the target date 
in the above-captioned investigation to April 27, 2022.

FOR FURTHER INFORMATION CONTACT: Lynde Herzbach, Office of the General 
Counsel, U.S. International Trade Commission, 500 E Street SW, 
Washington, DC 20436, telephone (202) 205-3228. 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 October 28, 2020, the Commission 
instituted this investigation under section 337 of the Tariff Act of 
1930, as amended, 19 U.S.C. 1337 (``section 337''), based on a 
complaint filed by Lashify, Inc. of Glendale, California (``Lashify''). 
See 85 FR 68366-67. The

[[Page 4045]]

complaint, as supplemented, alleges a violation of section 337 based 
upon the importation into the United States, sale for importation, or 
sale after importation into the United States of certain artificial 
eyelash extension systems, products, and components thereof by reason 
of infringement of certain claims of U.S. Patent Nos. 10,660,388 (``the 
'388 patent'') and 10,721,984 (``the '984 patent''), and the sole claim 
of U.S. Design Patent Nos. D877,416 (``the D'416 patent'') and D867,664 
(``the D'664 patent''), respectively (collectively, the ``Asserted 
Patents''). The complaint also alleges the existence of a domestic 
industry. The notice of investigation (``NOI'') names nine respondents, 
including: KISS Nail Products, Inc. of Port Washington, New York 
(``KISS''); Ulta Beauty, Inc. of Bolingbrook, Illinois (``Ulta''); CVS 
Health Corporation of Woonsocket, Rhode Island (``CVS''); Walmart, Inc. 
of Bentonville, Arkansas (``Walmart''); Qingdao Hollyren Cosmetics Co., 
Ltd. d/b/a Hollyren of Shandong Province, China; Qingdao Xizi 
International Trading Co., Ltd. d/b/a Xizi Lashes of Shandong Province, 
China; Qingdao LashBeauty Cosmetic Co., Ltd. d/b/a Worldbeauty of 
Qingdao, China; Alicia Zeng d/b/a Lilac St. and Artemis Family 
Beginnings, Inc. of San Francisco, California; and Rachael Gleason d/b/
a Avant Garde Beauty Co. of Dallas, Texas. Id. The Office of Unfair 
Import Investigations is also a party to the investigation. Id.
    The Commission later amended the complaint and NOI to substitute 
CVS Pharmacy, Inc. of Woonsocket, Rhode Island in place of named 
respondent CVS Health Corporation and Ulta Salon, Cosmetics & 
Fragrance, Inc. of Bolingbrook, Illinois in place of named respondent 
Ulta Beauty, Inc. See Order No. 10, unreviewed by Comm'n Notice (Feb. 
10, 2021); see also 86 FR 9535 (Feb. 16, 2021).
    The Commission previously terminated the investigation as to claims 
2-4 and 7 of the '388 patent and claims 6-8, 12, 18-19, 25-26, and 29 
of the '984 patent based on Complainant's partial withdrawal of the 
complaint. See Order No. 24 (Apr. 23, 2021), unreviewed by Comm'n 
Notice (May 11, 2021). The Commission also previously terminated claims 
2-5, 10-11, 14, 17, 21-22, and 24 of the '984 patent from the 
investigation. See Order No. 38 (June 22, 2021), unreviewed by Comm'n 
Notice (July 6, 2021).
    The Commission previously terminated Rachael Gleason d/b/a Avant 
Garde Beauty Company from the investigation based on a Consent Order. 
See Order No. 28, unreviewed by Comm'n Notice (May 20, 2021).
    The Commission previously determined that Lashify failed to satisfy 
the technical prong of the domestic industry requirement for the '388 
patent, thus terminating that patent from the investigation. See Order 
No. 35, unreviewed by Comm'n Notice (July 9, 2021).
    On October 28, 2021, the presiding ALJ issued the FID, finding that 
no violation of section 337 has occurred in the importation into the 
United States, the sale for importation, or the sale within the United 
States after importation, of certain artificial eyelash extension 
systems, products, and components thereof. FID at 141-142. The FID 
finds that two accused products infringe the '984 patent, the'984 
patent is not invalid, and Lashify has failed to satisfy the technical 
prong of the domestic industry requirement with respect to the '984 
patent. The FID further finds that the D'416 patent and D'664 patent 
are infringed and not invalid, and Lashify satisfied the technical 
prong with respect to both design patents. The FID further finds that 
Lashify has failed to satisfy the economic prong of the domestic 
industry requirement with respect to all of the Asserted Patents 
remaining in the investigation. The FID also includes the ALJ's 
recommended determination on remedy and bonding should the Commission 
find a violation of section 337. Specifically, the ALJ recommended a 
limited exclusion order directed to certain artificial eyelash 
extension systems, products, and components thereof, and cease and 
desist orders directed to KISS, Ulta, CVS, and Walmart.
    On November 9, 2021, Lashify filed a petition for review of the 
FID's findings of non-infringement, that Lashify has failed to satisfy 
the technical prong of the domestic industry requirement with respect 
to the '984 patent, and that Lashify has not satisfied the economic 
prong of the domestic industry requirement with respect to any of the 
patents-in-suit. That same day, Respondents filed a contingent petition 
seeking review of alleged additional, independent grounds of non-
infringement and invalidity to support the FID's finding of no 
violation.
    On November 17, 2021, Lashify, Respondents, and OUII filed their 
respective responses to the petitions for review.
    On November 29, 2021, respondents KISS, Ulta, Walmart, and CVS 
filed a joint submission on the public interest pursuant to Commission 
Rule 210.50(a)(4) (19 CFR 210.50 (a)(4)). Lashify and OUII did not file 
a statement on the public interest. No submissions were received in 
response to the Commission notice seeking public interest submissions. 
86 FR 62844-45 (Nov. 12, 2021).
    Having examined the record of the investigation, including the FID, 
the petitions for review, and the responses thereto, the Commission has 
determined to review the FID in part. In particular, as to the '984 
patent, the Commission has determined to review: (1) The FID's findings 
regarding the technical prong of the domestic industry requirement; and 
(2) the FID's findings that the asserted claims of the '984 patent are 
not invalid as obvious. The Commission has further determined to review 
the FID's findings regarding the economic prong of the domestic 
industry requirement. The Commission has determined not to review the 
remainder of the FID.
    The Commission has also determined to extend the target date for 
completing this investigation until April 27, 2022.
    In connection with its review, the Commission requests responses to 
the following questions. The parties are requested to brief their 
positions with reference to the applicable law and the existing 
evidentiary record.
    (1) Please discuss whether Complainant should be considered a mere 
importer when its domestic activities and investments are evaluated as 
a whole with respect to the asserted patents, rather than when its 
domestic activities and investments are evaluated in a ``line-by-line'' 
approach, with citation to the record evidence.
    (2) To the extent Complainant is not a mere importer and certain 
domestic activities and investments with respect to the asserted 
patents excluded by the FID (see e.g., certain warehousing/
distribution, quality control, and/or sales and marketing expenditures) 
should be credited as cognizable domestic industry investments, please 
discuss whether Complainant's cognizable domestic industry investments 
are significant or substantial within the meaning of section 
337(a)(3)(A)-(C), with citation to record evidence. Please be sure to 
provide your explanation and data separately for each asserted patent.
    The parties are invited to brief only the discrete issues requested 
above. 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, inter alia, (1) an exclusion order that 
could result in the exclusion of the subject articles

[[Page 4046]]

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 (Dec. 1994). In particular, the 
written submissions should address any request for a cease and desist 
order 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). Specifically, if Complainant seeks a cease and desist order, the 
written submissions should respond to the following requests:
    (1) Please identify with citations to the record any information 
regarding commercially significant inventory in the United States as to 
each respondent against whom a cease and desist order is sought. If 
Complainant also relies on other significant domestic operations that 
could undercut the remedy provided by an exclusion order, please 
identify with citations to the record such information as to each 
respondent against whom a cease and desist order is sought.
    (2) In relation to the infringing products, please identify any 
information in the record, including allegations in the pleadings, that 
addresses the existence of any domestic inventory, any domestic 
operations, or any sales-related activity directed at the United States 
for each respondent against whom a cease and desist order is sought.
    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 issues identified in this notice. In 
addition, the 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 submissions should address the recommended determination 
by the ALJ on remedy and bonding.
    In their initial submissions, Complainant is also requested to 
identify the remedy sought and Complainant and OUII are requested to 
submit proposed remedial orders for the Commission's consideration. 
Complainant is further requested to state the dates that the Asserted 
Patents remaining in the investigation expire, to provide 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 February 3, 2022. Reply submissions must be filed 
no later than the close of business on February 10, 2022. 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-1226) 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 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 January 
20, 2022.
    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: January 20, 2022.
Lisa Barton,
Secretary to the Commission.
[FR Doc. 2022-01457 Filed 1-25-22; 8:45 am]
BILLING CODE 7020-02-P