Justia U.S. Federal Circuit Court of Appeals Opinion Summaries

In the tenth administrative review of the antidumping order on steel nails from China, the U.S. Department of Commerce found that Pioneer did not cooperate to the best of its ability with Commerce’s request for information, Commerce applied adverse facts available (AFA) and assigned an antidumping margin of 118.04 percent to Pioneer. Following the 2013 third administrative review, Commerce had announced that “all other future respondents for this case report all FOPs [factors of production] data on a CONNUM-specific [control number] basis using all product characteristics in subsequent reviews, as documentation and data collection requirements should now be fully understood by [the particular respondent] and all other respondents.” CONNUM is Commerce jargon for a unique product.The Trade Court and the Federal Circuit affirmed. Commerce’s 2013 pronouncement reflects a statement of policy, not the agency’s explicit invocation of general legislative authority; the CONNUM-specific rule is not subject to notice-and-comment rulemaking under the APA. The use of the CONNUM rule is not inconsistent with 19 U.S.C. 1677b, concerning the calculation of the normal value of merchandise. Commerce determined that CONNUM-specific data is essential for the accurate calculation of costs due to the variations in the physical characteristics of the merchandise. Pioneer did not provide required answers, so the application of AFA was supported by substantial evidence. View "Xi’an Metals & Minerals Import & Export Co. Ltd. v. United States" on Justia Law

Meyer imports cookware. Each cookware item manufactured in Thailand began as a steel disc imported from China. In Thailand, the manufacturer transforms the discs into finished cookware and sells finished cookware to distributors in Macau and Hong Kong. The manufacturers, distributors, and Meyer have a common parent/shareholder.Meyer requested duty-free treatment for the cookware produced in Thailand, based on Thailand’s status as a beneficiary developing country under the Generalized System of Preferences. Meyer also asked Customs to value its cookware based on the first-sale price that its affiliated distributors paid to the manufacturers. Customs denied duty-free treatment and assessed duties based on the second-sale price that Meyer paid to its distributors. The Court of International Trade ruled that raw materials from nonbeneficiary developing countries must undergo a “double substantial transformation” in the beneficiary developing country to count toward duty-free treatment and the manufacturer did not substantially transform the input a second time by converting the shell into a finished pot; Meyer failed to show that an unfinished shell is a “distinct article of commerce.”The Federal Circuit affirmed in part. The Trade Court properly found only one substantial transformation but erred in requiring Meyer to prove that the first sales were at arm’s length and also unaffected by China’s status as a non-market economy. The court remanded for reconsideration of whether Meyer may rely on its first-sale prices. View "Meyer Corp., U.S. v. United States" on Justia Law

Phytelligence, an agricultural biotechnology company that used tissue culture to grow trees, and Washington State University (WSU) contracted for the propagation of WSU's patented “WA 38” apple trees. Section 4 of the agreement was entitled “option to participate as a provider and/or seller in [WSU] licensing programs.” The parties acknowledged that WSU would need to “grant a separate license for the purpose of selling.” Phytelligence expressed concern about the “wispy forward commitment.” WSU responded that “Phytelligence and others would have a shot at securing commercial licenses.”WSU later requested proposals for commercializing WA 38. Phytelligence did not submit a proposal. WSU accepted PVM’s proposal, granting PVM an exclusive license that required PVM to subcontract exclusively with NNII, a fruit tree nursery association, to propagate and sell WA 38 trees. Phytelligence later notified WSU that it wanted to exercise its option. WSU responded that PVM was WSU’s “agent.” Phytelligence rejected PVM’s requirement to become an NNII member and two non-membership proposals for obtaining commercial rights to WA 38. WSU terminated the Propagation Agreement, alleging that Phytelligence breached the Agreement when it sold WA 38 to a third-party without a license and that such actions infringed its plant patent and its COSMIC CRISP trademark.Phytelligence sued, alleging breach of the Agreement. The Federal Circuit affirmed summary judgment in favor of WSU. Section 4 is an unenforceable agreement to agree. WSU did not commit to any definite terms of a future license. View "Phytelligence Inc. v. Washington State University" on Justia Law

Organik and Dow both manufacture opaque polymers, hollow spheres used as additives to increase paint’s opacity. Dow has maintained its worldwide market-leader position through a combination of patent and trade-secret protections. Dow filed a complaint with the International Trade Commission requesting an investigation into whether Organik’s opaque polymer products infringed four Dow patents. The Commission granted Dow’s request, and the parties began discovery. During the proceedings, Dow amended its complaint to add allegations of trade secret misappropriation when it discovered that Organik may have coordinated the production of its opaque polymers with the assistance of former Dow employees. As Dow attempted to obtain discovery relating to the activities of those employees, Dow discovered spoliation of evidence “on a staggering scale.” The Federal Circuit affirmed the Commission’s imposition of default judgment and entry of a limited exclusion order against Organik as sanctions for the spoliation of evidence. Organik’s “willful, bad faith misconduct” deprived Dow of its ability to pursue its trade secret misappropriation claim effectively. The record supports the limited exclusion order of 25 years with the opportunity for Organik to bypass that order at any time if it can show that it has developed its opaque polymers without using Dow’s misappropriated trade secrets. View "Organik Kimya v. International Trade Commission" on Justia Law

Polar, a Finnish company based in Finland, owns U.S. patents directed to a method and apparatus for measuring heart rates during physical exercise. Polar sued, alleging infringement directly and indirectly, through the manufacture, use, sale, and importation of Suunto products. Suunto is a Finnish company with a principal place of business and manufacturing facilities in Finland. Suunto and ASWO (a Delaware corporation with a principal place of business in Utah) are owned by the same parent company. ASWO distributes Suunto’s products in the U.S. Suunto ships the accused products to addresses specified by ASWO. ASWO pays for shipping; title passes to ASWO at Suunto’s shipping dock in Finland. At least 94 accused products have been shipped from Finland to Delaware retailers using that standard ordering process. At least three Delaware retail stores sell the products. Suunto also owns, but ASWO maintains, a website, where customers can locate Delaware Suunto retailers or order Suunto products. At least eight online sales have been made in Delaware. The Federal Circuit vacated dismissal of Suunto for lack of personal jurisdiction. Suunto’s activities demonstrated its intent to serve the Delaware market specifically; the accused products have been sold in Delaware. Suunto had purposeful minimum contacts, so that Delaware’s “assertion of personal jurisdiction is reasonable and fair” and proper under the Delaware long-arm​ statute. View "Polar Electro Oy v. Suunto Oy" on Justia Law

Between 2001 and 2004, Nitek Electronics, Inc. entered thirty-six shipments of pipe fitting components used for gas meters into the United States from China. U.S. Customs and Border Protection (“Customs”) claimed that the merchandise was misclassified and issued Nitek a final penalty claim stating that the tentative culpability was gross negligence. Customs then referred the matter to the United States Department of Justice (“Government”) to bring a claim against Nitek in the Court of International Trade to enforce the penalty. The Government brought suit against Nitek to recover lost duties, antidumping duties, and a penalty based on negligence under 19 U.S.C. 1592. Nitek moved to dismiss the case for failure to state a claim. The court denied dismissal of the claims to recover lost duties and antidumping duties but did dismiss the Government’s claim for a penalty based on negligence, concluding that the Government had failed to exhaust all administrative remedies under 19 U.S.C. 1592 by not having Customs demand a penalty based on negligence, instead of gross negligence. The Federal Circuit affirmed, holding that the statutory framework of section 1592 does not allow the Government to bring a penalty claim based on negligence in court because such a claim did not exist at the administrative level. View "United States v. Nitek Elecs., Inc." on Justia Law

Cross Match claimed that defendants violated 19 U.S.C. 1337(a)(1)(B)(i) by importing articles that infringe or are used to infringe its patents. The International Trade Commission entered a limited exclusion order barring importation of certain optical scanning devices. In 2013, the Federal Circuit first vacated and remanded for revision of the order to bar only a subset of the scanners, reasoning that an exclusion order may not be predicated on a theory of induced infringement under 35 U.S.C. 271(b) where direct infringement does not occur until after importation of the articles the exclusion order would bar. In doing so, the panel effectively eliminated trade relief under Section 337 for induced infringement and potentially for all types of infringement of method claims. The Federal Circuit later granted en banc rehearing and upheld the Commission’s position. Because Section 337 does not answer the question, the Commission’s interpretation of Section 337 is entitled to Chevron deference. The Commission’s interpretation is reasonable because it is consistent with Section 337 and Congress’ mandate to the Commission to safeguard United States commercial interests at the border. View "Suprema, Inc. v. Int'l Trade Comm'n" on Justia Law

Between July 30, 2003, and August 31, 2003, Sunline imported eight entries of freshwater crawfish tailmeat from Chinese producer Hubei, which were subject to a U.S. Department of Commerce antidumping duty order covering freshwater crawfish tailmeat from China. The Hubei Entries were entered following approval by Customs of eight single-entry bonds that covered the estimated antidumping duties and designated Hartford as surety. The Hubei Entries were made during the pendency of Hubei’s “new shipper review.” After Hubei’s new shipper review was rescinded, meaning Hubei did not qualify for an individual antidumping duty rate, Customs liquidated the Entries at the 223.01% country-wide rate. After Sunline failed to pay, Customs demanded payment from Hartford, which filed a complaint at the Court of International Trade, seeking to void its obligations under the bonds because Customs had been investigating Sunline for possible import law violations during the period in which the bonds were secured and did not inform Hartford of the investigation. The Trade Court dismissed. The Federal Circuit affirmed. Hartford did not allege any facts that establish a connection between the investigation and Sunline’s failure to pay its antidumping duties after liquidation. View "Hartford Fire Ins. Co. v. United States" on Justia Law

The U.S. Department of Commerce published an antidumping duty order on wooden bedroom furniture from China. AFMC requested an administrative review of certain companies exporting such furniture to the U.S. in 2009. After Commerce selected it as the mandatory respondent, Huafeng provided Commerce with data related to its 2008 purchases of wood inputs from market economy suppliers relevant to the subject merchandise. Commerce assigned Huafeng a dumping margin of 41.75% using 2009 import data from the Philippines (surrogate values), a market economy, to value the wood inputs as the “best available information” under 19 U.S.C. 1677b(c)(1) because they were contemporaneous with the Period of Review, and the purchases identified by Huafeng were not. After remand Commerce again relied on the surrogate values. On second remand, Commerce determined that it did not need to reopen the record because the “best available information” analysis focuses on the purchase of inputs, not consumption, verified that the market economy purchases were actually from market economy suppliers, and assigned a new dumping margin of 11.79%. The Court of International Trade judgment sustained that valuation. The Federal Circuit reversed, directing direct the Trade Court to reinstate the valuation in the First Redetermination. View "Home Meridian Int'l, Inc. v. United States" on Justia Law

Roche imported BetaTab, a mixture containing beta-carotene, antioxidants, gelatin, sucrose, and corn starch that can be used as a source of Vitamin A in foods, beverages, and vitamin products. Beta-carotene crystalline makes up 20 percent of the mixture and is an organic colorant with provitamin A activity. Whether used as a colorant or provitamin A, beta-carotene must first be combined with other ingredients. Customs classified BetaTab under the Harmonized Tariff Schedule of the United States (HTSUS) subheading 2106.90.97 as “[f]ood preparations not elsewhere specified or included” and denied a protest. In the Court of International Trade,Roche argued that BetaTab was classifiable either as a “coloring matter” under HTSUS subheading 3204.19.35, and eligible for duty-free entry pursuant to the Pharmaceutical Appendix, or, alternatively, as a provitamin under HTSUS heading 2936. The Court ruled in favor of the company, reclassifying the product under HTSUS 2936. The Federal Circuit affirmed. Roche’s manufacturing process did not change BetaTab’s functionality as a provitamin or change the character of beta-carotene as a source of provitamin A. Addition of the stabilizing ingredients did not exclude the merchandise from classification under heading 2936. View "Roche Vitamins, Inc. v. United States" on Justia Law