Articles Posted in International Trade

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The 753 trademark, issued to Converse in 2013, describes the trade-dress configuration of three design elements on the midsole of Converse’s All Star shoes. Converse filed a complaint with the International Trade Commission (ITC), alleging violations of 19 U.S.C. 337 by various companies in the importation into the U.S., the sale for importation, and the sale within the U.S. after importation of shoes that infringe its trademark. The ITC found the registered mark invalid and that Converse could not establish the existence of common-law trademark rights, but nonetheless stated that various accused products would have infringed Converse’s mark if valid. The Federal Circuit vacated. The ITC erred in failing to distinguish between alleged infringers who began infringing before Converse obtained its trademark registration and those who began afterward. With respect to the pre-registration period, Converse, as the party asserting trade-dress protection, must establish that its mark had acquired secondary meaning before the first infringing use by each alleged infringer. In addition, the ITC applied the wrong legal standard in its determination of secondary meaning. On remand, the ITC should reassess the accused products to determine whether they are substantially similar to the mark in the infringement analysis. View "Converse, Inc. v. International Trade Commission" on Justia Law

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Sigvaris imports graduated compression hosiery from three product lines. All of the product lines exert 15–20 millimeters of mercury (mmHg) of compression onto the wearer. Graduated compression hosiery “when properly worn, forces pooled blood to circulate out of the leg and throughout the body.” Between September 2008 and November 2010, Sigvaris imported 105 entries. Customs liquidated the entries between August 2009 and September 2011. Customs classified the subject merchandise as “[o]ther graduated compression hosiery: . . . [o]f synthetic fibers” under the Harmonized Tariff Schedule of the United States (HTSUS) subheading 6115.10.40 subject to a duty rate of 14.6%. The Trade Court held and the Federal Circuit affirmed that the merchandise does not qualify as duty-free under the HTSUS subheading 9817.00.96 as articles specially designed for the use or benefit of physically handicapped persons. The plain language of the heading focuses the inquiry on the “persons” for whose use and benefit the articles are “specially designed,” and not on any disorder that may incidentally afflict persons who use the subject merchandise. To be “specially designed,” the subject merchandise must be intended for the use or benefit of a specific class of persons to an extent greater than for the use or benefit of others. View "Sigvaris, Inc. v. United States" on Justia Law

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The patent describes an ATM, capable of performing banking transactions, including “automatically depositing a bundle of cashes and cheques inserted at once” by separating deposited bundles into individual banknotes; verifying the authenticity or abnormality of each note; sorting and processing the notes based on how each was verified; and preparing the notes for storage safes. One component recited in each of the nine claims is a “cheque standby unit.” The specification does not mention a “cheque standby unit,” but references a “cheque temporary standby unit” in three portions of the detailed description. The International Trade Commission found that Diebold violated section 337 of the Tariff Act of 1930 by importing ATM components that infringe the claims, all of which recite the term “cheque standby unit.” The Federal Circuit reversed, finding that the term “cheque standby unit” is a means-plus-function term subject to 35 U.S.C. 112, para. 6, which lacks corresponding structure disclosed in the specification. The claimed function is “holding the at least one authentic cheque to return the at least one authentic cheque to the user responsive to receiving user instructions canceling depositing of the at least one authentic cheque.” A person of ordinary skill in the art would be unable to recognize the structure in the specification and associate it with the corresponding function in the claim. View "Diebold Nixdorf, Inc. v. International Trade Commission" on Justia Law

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Gerson imports finished decorative candle and tea light lamps made of plastic and/or wax, designed to resemble ordinary candles, but using battery-operated LEDs, and serving both decorative and illuminative functions. Customs liquidated the merchandise under HTSUS subheading 9405.40.80, which imposes a duty rate of 3.9%, and reads: Lamps and lighting fittings including searchlights and spotlights and parts thereof, not elsewhere specified or included; illuminated signs, illuminated nameplates and the like, having a permanently fixed light source, and parts thereof not elsewhere specified or included: 40 Other electric lamps and lighting fittings. Gerson argued that it should have been classified under subheading 8543.70.70, which imposes a rate of 2%, and reads: Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof: 70 Other machines and apparatus: 70 Electric luminescent lamps. The Federal Circuit affirmed judgment in favor of the government. Gerson’s reading would impermissibly expand the scope of heading 8543, unduly narrow the scope of heading 9405, and be inconsistent with the World Customs Organization’s Harmonized Commodity Description and Coding System Explanatory Notes, which suggest that chapter 94 is reserved for finished household lamps like Gerson’s candles, while chapter 85 is reserved for unfinished lamps used in conjunction with other electrical devices. View "Gerson Co. v. United States" on Justia Law

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If the International Trade Commission (ITC) determines that an article is being imported into the U.S. in such increased quantities as to be a substantial cause of serious injury or the threat thereof, to the competitive domestic industry, the President “shall take all appropriate and feasible action ... which the President determines will facilitate efforts by the domestic industry to make a positive adjustment to import competition and provide greater economic and social benefits than costs, 19 U.S.C. 2251(a). A U.S. manufacturer requested that the President protect U.S. solar manufacturers against foreign imports of crystalline silicon photovoltaic cells. The ITC made an affirmative serious injury determination; the Commissioners were divided with respect to relief. The ITC reported on imports from Canada under the NAFTA Implementation Act, finding that Canada contributed roughly 2% of the relevant imports during the applicable period. Imports from Canada declined in 2015-2016. ITC found that Canadian imports did not “contribute importantly” to the serious injury. In 2018, the President announced a four-year safeguard, including a 30- percent tariff on solar products, whether assembled as cells or modules; finding that imports from Canada accounted for a substantial share and contributed importantly to the serious injury or threat, he did not exempt Canadian imports. Canadian manufacturers and a U.S. importer filed suit. The Federal Circuit affirmed the denial of a preliminary injunction, holding that the President’s actions here were lawful, so there was no probability of success on the merits as required for a preliminary injunction. View "Silfab Solar, Inc. v. United States" on Justia Law

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The Department of Commerce published antidumping and countervailing duty orders on certain crystalline silicon photovoltaic cells imported from China (CSPV Orders). Sunpreme, a U.S. company, imports solar modules produced in China that are composed, in part, of solar cells designed, developed, and tested at Sunpreme’s California facility. Sunpreme’s solar modules had been imported as entry type “01,” ordinary consumption entries not subject to any antidumping or countervailing duties. In April 2015, Customs requested that Sunpreme file its entries under type “03,” entries subject to duties. Sunpreme provided Customs with lab results from an independent third party and invited Customs to its California facility to observe its production process, arguing that its products were not within the scope of the CSPV orders. Customs performed its own laboratory testing. Sunpreme sought relief in the Trade Court. Commerce initiated a formal scope inquiry. The Trade Court issued a preliminary injunction, holding that Customs acted outside its authority in its unilateral interpretation of the scope language of the CSPV Orders to include Sunpreme’s solar modules. Commerce issued its final scope determination concluding that Sunpreme’s products fall within the scope of those Orders. The Federal Circuit reversed, holding that the Trade Court lacked jurisdiction under 28 U.S.C. 1581. Sunpreme was required to exhaust administrative remedies by a scope ruling inquiry and scope ruling determination. View "Sunpreme Inc. v. United States" on Justia Law

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The Commerce Department's duty orders concerning aluminum extrusions from China cover “aluminum extrusions” described as "parts for final finished products that are assembled after importation.” The scope “includes the aluminum extrusion components that are attached (e.g., by welding or fasteners) to form subassemblies, i.e., partially assembled merchandise” but “excludes finished merchandise containing aluminum extrusions as parts that are fully and permanently assembled and completed at the time of entry.” The orders also exclude goods containing aluminum extrusions that are entered unassembled in a “finished goods kit, a packaged combination of parts that contains all of the necessary parts to fully assemble a final finished good without further finishing, such as cutting or punching, for assembly “as is” into a finished product, except that “[a]nimported product will not be considered a finished goods kit "merely by including fasteners such as screws, bolts.” Whirlpool requested a scope ruling concerning its kitchen appliance door handles with end caps. Commerce found that the handles were within the Orders’ scope. The Federal Circuit held that substantial evidence supports Commerce’s Scope Ruling. The exception for fasteners unambiguously applies only to the finished goods kit exclusion and not to the finished merchandise exclusion; because the finished goods kit exclusion is inapplicable to Whirlpool’s assembled handles, so is the fasteners exception to the finished goods kit exclusion. The court remanded for a determination of whether Whirlpool’s assembled handles meet the requirements for the finished merchandise exclusion. View "Whirlpool Corp. v. United States" on Justia Law

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The U.S. Department of Commerce determined that certain extruded aluminum door handles for kitchen appliances that are packaged with two plastic end caps and two screws were within the scope of antidumping and countervailing duty orders applicable to aluminum extrusions from China. The duty order describes imports from China of aluminum extrusions that are shapes and forms, produced by an extrusion process, made from specified aluminum alloys, and possessing “a wide variety of shapes and forms” in “a variety of finishes.” Subject aluminum extrusions may be described at the time of importation as parts for final finished products that are assembled after importation, including, but not limited to, window frames, door frames, solar panels, curtain walls, or furniture. The scope includes the aluminum extrusion components that are attached (e.g., by welding or fasteners) to form subassemblies. On remand, Commerce determined, under protest, that the subject products are not included in the scope of the orders. The Federal Circuit reversed. The Trade Court impermissibly substituted its judgment for that of Commerce to conclude that the plastic end caps rendered the handles “assemblies” excluded from the general scope language. The order's scope as a whole supports Commerce’s treatment of the end caps as fasteners. The scope language does not limit fasteners to non-plastic components, but rather provides examples of common fasteners. View "Meridian Products, LLC v. United States" on Justia Law

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Income earned by Americans typically is taxed in the U.S., regardless of where it is earned. European countries only tax income earned within their borders. To address possible “double taxation” the U.S. generally provides credits for taxes paid to foreign governments; European systems typically exempt from taxation income earned abroad. Congress, believing that the exemption method puts American companies at a trade disadvantage, has enacted various tax regimes, then received push-back from its European trading partners, who claimed each was an effective export subsidy. The 2000 ETI Act, intended to ease the burden of the tax revisions on domestic producers, was rejected in the World Trade Organization (WTO). Congress responded with the 2004 American Jobs Creation Act (AJCA), 118 Stat. 1418. Section 101 repeals the ETI provision that excluded extraterritorial income from taxation, effective for “transactions after December 31, 2004.” Section 101(d), provides: In the case of transactions during 2005 or 2006, the amount includible in gross income by reason of the amendments made by this section shall not exceed the applicable percentage of the amount which would have been so included but for this subsection. In 2005, WTO found that the ACJA improperly maintained prohibited ETI subsidies through transitional and grandfathering measures. Congress repealed section 101(f), effective for “taxable years beginning after” May 17, 2006. It did not repeal or revise section 101(d). Pursuant to a 2006 Agreement, DWA recognized qualifying extraterritorial income for 2006, invoked section 101(d), and excluded 60% from gross income. The IRS allowed the exclusion. DWA subsequently sought refunds for 2007-2009, claiming the section 101(d) exclusion. The Federal Circuit, disagreeing with the IRS and the Claims Court, held that section 101(d) unambiguously provides transitional relief for all extraterritorial income received from transactions entered into in 2005 and 2006, even income received in later years. View "DWA Holdings LLC v. United States" on Justia Law

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The Department of Commerce investigated imports of oil country tubular goods (OCTG). To make OCTG, steel is made into “green tube,” which must be finished to meet specifications for oil and gas well applications. The finishing process includes heat treatment, threading, coating, and other processes. Commerce issued duty orders on OCTG from China, covering "OCTG . . . whether finished (including limited service OCTG products) or unfinished (including green tubes and limited service OCTG products), whether or not thread protectors are attached .... also ... OCTG coupling stock. Excluded from the scope of the order are casing or tubing containing 10.5 percent or more by weight of chromium; drill pipe; unattached couplings; and unattached thread protectors. Customs later determined that OCTG made with unfinished OCTG from China, but finished in Korea or Japan, had a country of origin of Korea or Japan because “heat treating has been held to substantially transform green tubes into oil well tubing.” Commerce addressed the issue in a 2014 Scope Ruling. After remands, the Trade Court concluded that the Orders do not include OCTG finished in third countries and that OCTG finished in third countries does not meet the requirements for circumvention (19 U.S.C. 1677j). The Federal Circuit vacated. The Trade Court improperly proscribed Commerce from using the substantial transformation analysis to determine the country of origin for imported OCTG. View "Bell Supply Co, LLC v. United States" on Justia Law