Certain Kinesiotherapy Devices and Components Thereof; Commission Decision To Rescind a General Exclusion Order and Cease and Desist Orders, 44384 [2015-18269]

Agencies

• INTERNATIONAL TRADE COMMISSION

[Federal Register Volume 80, Number 143 (Monday, July 27, 2015)]
[Notices]
[Page 44384]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-18269]



[[Page 44384]]

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INTERNATIONAL TRADE COMMISSION

[Investigation No. 337-TA-823]


Certain Kinesiotherapy Devices and Components Thereof; Commission 
Decision To Rescind a General Exclusion Order and Cease and Desist 
Orders

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Commission has rescinded the general exclusion order and cease and 
desist orders issued at the conclusion of the above-captioned 
investigation. The general exclusion order was directed against 
infringing kinesiotherapy devices and components thereof, and the cease 
and desist orders were directed against certain respondents.

FOR FURTHER INFORMATION CONTACT: Michael K. Haldenstein, Office of the 
General Counsel, U.S. International Trade Commission, 500 E Street SW., 
Washington, DC 20436, telephone (202) 205-3041. Copies of non-
confidential documents filed in connection with this investigation are 
or will be available for inspection during official business hours 
(8:45 a.m. to 5:15 p.m.) in the Office of the Secretary, U.S. 
International Trade Commission, 500 E Street SW., Washington, DC 20436, 
telephone (202) 205-2000. General information concerning the Commission 
may also be obtained by accessing its Internet server (https://www.usitc.gov). The public record for this investigation may be viewed 
on the Commission's electronic docket (EDIS) at https://edis.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 January 10, 2012, based on a complaint filed by Standard Innovation 
Corporation of Ottawa, ON, Canada and Standard Innovation (US) Corp. of 
Wilmington, Delaware (collectively, ``Standard Innovation''). 77 FR 
1504-05 (Jan. 10, 2012). The complaint alleged violations of Section 
337 of the Tariff Act of 1930, as amended, 19 U.S.C. 1337, by reason of 
infringement of certain claims of United States Patent Nos. 7,931,605 
(``the '605 patent'') and D605,779 (``the D'779 patent''). The 
complaint named twenty-one business entities as respondents, several of 
which have since been terminated from the investigation based upon 
consent orders or withdrawal of the complaint. On July 25, 2012, the 
Commission determined not to review an ID (Order No. 25) granting 
Standard Innovation's motion to withdraw the D'779 patent from the 
investigation. An evidentiary hearing was held from August 21, 2012, to 
August 24, 2012.
    On January 8, 2013, the ALJ issued a final ID finding no violation 
of Section 337. The ALJ also issued a recommended determination on 
remedy and bonding on January 22, 2013. Specifically, the ALJ found 
that Standard Innovation had not satisfied the economic prong of the 
domestic industry requirement. The ALJ found, however, that the accused 
products infringe the asserted claims, that the asserted claims were 
not shown to be invalid, and that the technical prong of the domestic 
industry requirement was shown to be satisfied.
    On January 22, 2013, Standard Innovation and the Commission 
investigative attorney filed petitions for review of the final ID, and 
the remaining respondents in the investigation filed a contingent 
petition for review. On January 30, 2013, each party filed a response.
    On March 25, 2013, the Commission determined to review the ID in 
its entirety and posed questions to the parties concerning the 
satisfaction of the economic prong of the domestic industry and remedy, 
the public interest, and bonding. The parties and the IA submitted 
briefs on April 8, 2013, and briefs in reply on April 15, 2013. The 
target date for completion of the investigation was also extended until 
June 17, 2013.
    On June 17, 2013, the Commission issued its final determination 
finding that Standard Innovation had satisfied the economic prong of 
the domestic industry requirement and that Standard Innovation had 
proven a violation of Section 337 by reason of infringement of the '605 
patent. Based on evidence of a pattern of violation and difficulty 
ascertaining the source of the infringing products, the Commission 
issued a general exclusion order against certain kinesiotherapy devices 
that infringe the '605 patent. The Commission also issued cease and 
desist orders against the following respondents: LELO Inc. of San Jose, 
California; PHE, Inc. d/b/a Adam & Eve of Hillsborough, North Carolina; 
Nalpac Enterprises, Ltd. of Ferndale, Michigan; E.T.C. Inc. (d/b/a 
Eldorado Trading Company, Inc.) of Broomfield, Colorado; Williams 
Trading Co., Inc. of Pennsauken, New Jersey; Honey's Place Inc. of San 
Fernando, California; and Lover's Lane & Co. of Plymouth, Michigan. The 
Commission's remedial orders allowed entry under bond during the 
Presidential review period.
    On August 20, 2013, respondents LELO, Inc. and Leloi AB filed a 
notice of appeal with the U.S. Court of Appeals for the Federal Circuit 
seeking review of the Commission's final determination. Standard 
Innovation intervened in the appeal and the parties filed briefs with 
the Court. On May 11, 2015, the Federal Circuit issued its opinion in 
Lelo Inc. v. International Trade Commission, 786 F.3d 879 (Fed. Cir. 
2015). The Court indicated that the Commission had erred in relying 
solely upon qualitative factors to find ``significant investment in 
plant and equipment'' and ``significant employment of labor or 
capital'' under prongs (A) and (B) of the domestic industry 
requirement. Accordingly, the Court reversed the Commission's finding 
of a violation of 19 U.S.C. 1337. The Court issued its mandate on July 
2, 2015.
    As the U.S. Court of Appeals for the Federal Circuit has reversed 
the Commission's finding of violation, the Commission has determined 
that there is no longer a basis for the general exclusion order or the 
cease and desist orders previously issued in this investigation. The 
Commission has therefore rescinded the orders.
    This action is taken under the authority of Section 337 of the 
Tariff Act of 1930, 19 U.S.C. 1337(k) and Commission rule 210.76, 19 
CFR 210.76.

    By order of the Commission.

    Issued: July 21, 2015.
Lisa R. Barton,
Secretary to the Commission.
[FR Doc. 2015-18269 Filed 7-24-15; 8:45 am]
BILLING CODE 7020-02-P