[Federal Register Volume 89, Number 107 (Monday, June 3, 2024)]
[Notices]
[Pages 47605-47607]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-12118]


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INTERNATIONAL TRADE COMMISSION

[Investigation No. 337-TA-1325]


Certain Soft Projectile Launching Devices, Components Thereof, 
Ammunition, and Products Containing Same; Notice of Commission 
Determination To Review in Part a Final Initial Determination of 
Violation of Section 337; Schedule for Filing Written Submissions on 
Remedy, the Public Interest, and Bonding; Extension of the 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 has determined to review in part a final initial 
determination (``Final ID'') issued by the presiding administrative law 
judge (``ALJ'') finding a violation of section 337 of the Tariff Act of 
1930. The Commission requests briefing from the parties on the issues 
under review and from the parties, interested government agencies, and 
interested persons on remedy, the public interest, and bonding based on 
the schedule set forth below. The target date is extended to April 15, 
2024.

FOR FURTHER INFORMATION CONTACT: Robert Needham, Office of the General 
Counsel, U.S. International 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 August 26, 2022, based on a complaint filed by complainants Hasbro, 
Inc. of Pawtucket, Rhode Island (``Hasbro''), and Spin Master, Inc. of 
Los Angeles, California (``Spin Master'') (together, ``Complainants''). 
87 FR 52595-96 (Aug. 26, 2022). The complaint, as supplemented, alleges 
a violation of section 337 of the Tariff Act of 1930, as amended,19 
U.S.C. 1337 (``section 337''), based upon the importation into the 
United States, the sale for importation, and the sale within the United 
States after importation of certain soft projectile launching devices, 
components thereof, ammunition, and products containing same by reason 
of the infringement of one or more of claims 1-15 and 17-21 of U.S. 
Patent No. 8,371,282 (``the '282 patent'') and claims 1-6 and 10-15 of 
U.S. Patent No. 8,640,683 (``the '683 patent''). Id. at 52595. The 
complaint further alleges that an industry in the United States exists 
or is in the process of being established. Id. The notice of 
investigation names as respondents Shenzhen Yi Jin Electronics Science 
of Shenzhen City, China, Guangdong Yu Lee Technology Corp. of Dongguan 
City, China, Yu Lee Company Ltd. of Tsuen Wan, Hong Kong, and Gel 
Blaster Inc. f/k/a Gel Blaster, LLC of Austin, Texas (together, ``the 
Gel Blaster Respondents''); S-Beam Precision Products Ltd. of Zhongshan 
City, China, Splat-R-Ball, LLC of Rogers, Arkansas, and Daisy 
Manufacturing Company of Rogers, Arkansas (together, ``the Splat-R-Ball 
Respondents''); and Prime Time Toys Ltd. of Kwun Tong, Hong Kong, Prime 
Time Toys LLC of Pompton

[[Page 47606]]

Lakes, New Jersey, and Easebon Services Ltd. of Kwun Tong, Hong Kong 
(together, ``PTT'') (collectively, ``Respondents''). Id. The Office of 
Unfair Import Investigations (``OUII'') is a party to the 
investigation. Id. at 52595-96.
    Complainants originally asserted that Respondents violated section 
337 based on infringement of claims 1-15 and 17-21 of the '282 patent 
and claims 1-6 and 10-15 of the '683 patent. Id. at 52595. The 
Commission previously terminated the investigation with respect to 
claims 1-7, 9-15, 17, 18, and 21 of the '282 patent and claims 1-4, 6, 
10-12, 13 and 15 of the '683 patent based on Complainants' partial 
withdrawal of the complaint. Order No. 10 (Oct. 25, 2022), unreviewed 
by Comm'n Notice (Nov. 16, 2022); Order No. 21 (Jan. 18, 2023), 
unreviewed by Comm'n Notice (Feb. 14, 2023); Order No. 44 (May 17, 
2023), unreviewed by Comm'n Notice (May 30, 2023). Accordingly, at the 
time of the evidentiary hearing, claims 8, 19, and 20 of the '282 
patent and claims 5 and 14 of the '683 patent remained at issue.
    On November 10, 2022, Complainants and Respondents stipulated that 
the '282 and '683 patents share a common specification and describe 
projectile launchers, soft projectiles made with ``super absorbent 
polymers,'' and systems comprised of projectile launchers and soft 
projectiles. Technology Stipulation (Nov. 10, 2022).
    On November 21, 2022, Respondents stipulated that the importation 
requirement is satisfied. On May 16, 2023, Complainants and Respondents 
stipulated that the technical prong of the domestic industry 
requirement is satisfied under the ALJ's construction of ``super 
absorbent polymer.'' On May 18, 2023, the parties stipulated regarding 
the disclosure of prior art.
    On March 27, 2023, the ALJ issued a claim construction order. Order 
No. 28 (Mar. 27, 2023). The ALJ held an evidentiary hearing on May 19, 
and 22-23, 2023.
    On April 27, 2023, the ALJ granted a motion for a summary 
determination that Respondents infringed claims 6, 8, 19, and 20 of the 
'282 patent and claims 1, 5, and 11 of the '683 patent. Order No. 37 
(Apr. 27, 2023). Shortly thereafter, the Commission terminated the Gel 
Blaster Respondents and Splat-R-Ball Respondents based on settlement. 
Order No. 42 (May 17, 2023), unreviewed by Comm'n Notice (May 30, 
2023); Order No. 45 (May 19, 2023), unreviewed by Comm'n Notice (May 
30, 2023). Also, as noted above, the Commission subsequently terminated 
the investigation with respect to claim 6 of the '282 patent and claims 
1, and 11 of the '683 patent. The Commission affirmed the finding of 
infringement against PTT regarding claims 8, 19, and 20 of the '282 
patent and claims 5 of the '683 patent but determined to review and 
vacate as moot the findings with respect to the Gel Blaster 
Respondents, Splat-R-Ball Respondents, and the withdrawn claims. Comm'n 
Notice (May 30, 2023).
    On October 25, 2023, the ALJ issued the Final ID finding a 
violation of section 337 with respect to claims 8, 19, and 20 of the 
'282 patent and claims 5 and 14 of the '683 patent. Final ID at ii-iii. 
Specifically, the Final ID notes that the Commission already found that 
``the Accused Blasters (i.e., blaster kits with blasters and 
ammunition)'' directly infringe claims 8, 19, and 20 of the '282 patent 
and claim 5 of the '683 patent, and that PTT stipulated that the 
accused products directly infringe claim 14. Id. at 21-22, 38-39. The 
Final ID finds that PTT also induces and contributes to infringement 
with respect to those claims. Id. at 25-30, 39-41. The Final ID further 
finds that Complainants have satisfied the technical prong of the 
domestic industry requirement with respect to claims 8, 19, and 20 of 
the '282 patent and claims 5 and 14 of the '683 patent. Id. at 31-36, 
41-44. Additionally, the Final ID finds that the asserted claims are 
not invalid as obvious under 35 U.S.C. 103 due to PTT's failure to 
provide a motivation to combine the references at issue and 
Complainants' showing on secondary considerations. Id. at 44-91. 
Finally, the Final ID finds that Complainants failed to show that a 
domestic industry exists, but that Complainants did show that a 
domestic industry is in the process of being established. Id. at 91-
117.
    On October 26, 2023, the Commission requested comments from the 
public and interested government agencies regarding any public interest 
issues raised by the ALJ's RD. See 88 FR 74510-11 (Oct. 31, 2023). The 
Commission received no comments from the public or government agencies 
and received no comments from the parties on the public interest 
pursuant to Commission Rule 210.50(a)(4). 19 CFR 210.50(a)(4).
    On November 6, 2023, PTT filed a petition for review challenging 
the Final ID's findings that: (1) PTT failed to provide motivations to 
combine prior art to support a finding of obviousness; (2) secondary 
considerations support a finding of nonobviousness; and (3) 
Complainants showed an industry in the process of being established. 
Also on November 6, 2023, Complainants filed a contingent petition for 
review of the Final ID's finding that Complainants failed to show that 
a domestic industry exists. On November 14. 2023, the Complainants and 
PTT filed responses opposing each other's petitions, and OUII filed a 
response opposing both petitions.
    Having examined the record of 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. Specifically, 
the Commission has determined to review the Final ID's findings on 
obviousness and the economic prong of the domestic industry 
requirement. The Commission has determined not to review the remainder 
of the Final ID. The Commission has also determined to extend the 
target date to April 15, 2024.
    In connection with its review, the Commission requests briefing on 
the following issue. The parties are requested to brief their positions 
with reference to the applicable law, the existing evidentiary record, 
and the parties' submissions during the investigation.

    Please identify and discuss with citations to the record whether 
any argument or evidence was presented to the ALJ that a significant 
and unusual development(s) existed after the complaint was filed in 
this matter that may justify consideration of post-complaint 
evidence to support Complainants' domestic industry claim. See, 
e.g., Certain Televisions, Remote Controls, and Components Thereof, 
Inv. No. 337-TA-1263, Comm'n Op. at 20-21 (Nov. 30, 2022) (Public 
Vers.).

    In connection with the final disposition of this investigation, the 
Commission may (1) issue an order that could result in the exclusion of 
the subject articles from entry into the United States, and/or (2) 
issue cease and desist order(s) 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).
    If the Commission contemplates some form of remedy, it must 
consider the effects of that remedy upon the public

[[Page 47607]]

interest. The 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 position on the Commission's action. 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. The Commission encourages parties to the investigation, 
interested government agencies, and any other interested parties 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, which issued on October 
25, 2023. The Commission further requests that Complainants and OUII 
submit proposed remedial orders, state the date when the asserted 
patents expire, provide the HTSUS subheadings under which the subject 
articles are imported, and supply a list of known importers of the 
subject article. The written submissions, exclusive of any exhibits, 
must not exceed 20 pages, and must be filed no later than close of 
business on February 13, 2024. Reply submissions must not exceed 10 
pages and must be filed no later than the close of business on February 
20, 2024. 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-1325) 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 
30, 2024.
    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.

    Original Issued Date: January 30, 2024.
    Issued: May 29, 2024.
Lisa Barton,
Secretary to the Commission.
[FR Doc. 2024-12118 Filed 5-31-24; 8:45 am]
BILLING CODE 7020-02-P