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Lexmark holds patents on the components of toner cartridges that it manufactures and sells. Lexmark allows consumers to buy a cartridge at full price, with no restrictions, or to buy a cartridge at a discount through Lexmark’s “Return Program,” by signing a contract agreeing to use the cartridge only once and to refrain from transferring the cartridge to anyone but Lexmark. Remanufacturers acquire empty Lexmark cartridges—including Return Program cartridges—from purchasers in the U.S. and overseas, refill them, and resell them in the U.S. Lexmark sued remanufacturers with respect to Return Program cartridges that Lexmark had sold within the U.S. and cartridges that Lexmark had sold abroad and that remanufacturers imported into the country. The Federal Circuit ruled for Lexmark with respect to both. The Supreme Court reversed. Lexmark exhausted its patent rights (35 U.S.C. 271(a)) in all of the cartridges. A patentee’s decision to sell a product exhausts all of its patent rights in that item, regardless of any restrictions the patentee purports to impose. If a patentee negotiates a contract restricting the purchaser’s right to use or resell an item, it may be able to enforce that restriction as a matter of contract law, but may not do so through a patent infringement lawsuit. The exhaustion doctrine is not a presumption about the authority that comes along with a sale; it is a limit on the scope of the patentee’s rights. The Patent Act just ensures that the patentee receives one reward—of whatever it considers satisfactory compensation—for every item that passes outside the scope of its patent monopoly. View "Impression Products, Inc. v. Lexmark International, Inc." on Justia Law

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OFAC is authorized to impose civil penalties against any person who exports goods to a third party who it has reason to know intends to send them to Iran. At issue was whether OFAC must also show that the goods actually ended up in Iran. The DC Circuit held that the government need not make that showing and affirmed the district court on that ground. However, the court held that OFAC did not adequately explain parts of its determination that the exporter in this case had reason to know that its shipments would be sent on to Iran. Therefore, the court affirmed the district court's order granting the government defendants' motion for summary judgment as to OFAC's determination that Epsilon's 34 shipments to Asra International between August 2008 and March 2011 violated section 560.204 of the Iranian Transactions and Sanctions Regulations. The court reversed as to OFAC's determination that Epsilon's five shipments to Asra International in 2012 violated the same regulation. The court remanded with instructions. View "Epsilon Electronics v. US Department of Treasury" on Justia Law

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AHAC, a surety, secured importers’ importation of preserved mushrooms and crawfish tail meat from China by issuing single transaction and continuous entry bonds in 2001 and 2002. The bonds obligated the importers and AHAC to pay, up to the face amounts of the bonds, “any duty, tax or charge and compliance with law or regulations” resulting from covered activities. Customs liquidated entries secured by the bonds and assessed antidumping duties, which the importers failed to pay. Customs started charging statutory post-liquidation interest on the unpaid duties, 19 U.S.C. 1505(d). From 2003-2009, Customs issued multiple demands notifying AHAC of its intent to seek section 1505(d) interest. Customs denied AHAC’s protest. AHAC did not challenge that denial under 28 U.S.C. 1581(a). The government commenced Trade Court suits. The Federal Circuit affirmed the Trade Court’s order that AHAC pay section 1505(d) interest up to the face amounts of the bonds. Section 1505(d) interest involves “charges or exactions of whatever character” under 19 U.S.C. 1514(a)(3); the statute does not exempt charges arising after liquidation. The bonds do not distinguish between pre- and post-liquidation interest. Because AHAC failed to contest its denied protest, AHAC was precluded from asserting defenses regarding its liability under section 1505(d). View "United States v. American Home Assurance Co." on Justia Law

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The 320 patent describes single-brew coffee machines, such as the Keurig® system, and purports to address the incompatibility between pod-based and cartridge-based systems. The invention “more particularly relates to an adaptor assembly configured to effect operative compatibility between a single serve beverage brewer and beverage pods.” None of the claims as issued included any reference to a “pod,” “pod adaptor assembly,” or “brewing chamber for a beverage pod.” Instead, the relevant claims call for “a container . . . adapted to hold brewing material.” In 2014, Rivera filed a complaint with the International Trade Commission, alleging that Solofill was importing beverage capsules that infringed the patent, in violation of 19 U.S.C. 1337. Solofill’s K2 and K3 beverage capsules are made to fit into a Keurig® brewer, and include an integrated mesh filter surrounding a space designed to accept loose coffee grounds. An ALJ found no violation of section 337, The Commission affirmed, finding asserted claims invalid for lack of written description, and others invalid as anticipated. The Federal Circuit affirmed, agreeing that the claims were invalid for lack of written description. View "Rivera v. International Trade Commission" on Justia Law

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Trade Court abused its discretion in waiving the exhaustion requirement in appeal of antidumping order. The Department Commerce initiated an investigation into whether oil country tubular goods (OCTGs) from Saudi Arabia and other countries were sold for less than fair value in the U.S. Commerce selected Duferco as the mandatory respondent; preliminarily found dumping; determined to treat Duferco and three affiliates as a single entity; and determined that Duferco is affiliated with JESCO, the producer of the OCTGs. Duferco owns 10 percent of JESCO. JESCO participated as a voluntary respondent. Commerce published its final determination, concluding that Saudi OCTGs were being dumped and recalculating the duty margin at 2.69 percent. Following the final determination, JESCO identified an error in Commerce’s calculation of Constructed Value (CV) profit. Correcting this error lowered JESCO’s CV profit, reducing JESCO's dumping margin to 1.37 percent. Commerce issued an amended negative final determination, imposing no duties. U.S. companies appealed, arguing that JESCO’s sales to a Colombian distributor were intra-company transfers within the Duferco entity, not an appropriate basis to construct CV profit--an argument not made during the investigation. The Trade Court affirmed Commerce’s determination, declining to apply the exhaustion requirement because the parties did not know that Commerce was considering using the Colombian sales until the final determination. The Federal Circuit vacated. Commerce need not expressly notify interested parties when it intends to change its methodology between its preliminary and final determinations, given the inclusion of the relevant data in the record and the advancement of arguments related to that data. The parties had an opportunity to raise their single entity objection before Commerce. View "Boomerang Tube LLC v. United States" on Justia Law

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In 2012, Meridian asked the U.S. Department of Commerce to issue a scope ruling that certain aluminum trim kit packages did not fall within the scope of the antidumping and countervailing duty orders (19 U.S.C. 1671(a)(1)) on aluminum extrusions from the People’s Republic of China. Commerce found the trim kits subject to the Orders’ scope. Five opinions and three remands later, the Trade Court sustained Commerce’s third remand determination, under protest, that the trim kits do not fall within the Orders’ scope. The Federal Circuit reversed. Commerce did not err in its interpretation of the finished goods kit exclusion in the initial scope ruling. The exclusion states that, to fall outside the scope of the Orders, a finished goods kit must contain more than only aluminum extrusion parts necessary for final assembly. Substantial evidence supports Commerce’s finding that the trim kits meet the exception to the finished goods kit exclusion. View "Meridian Products, LLC v. United States" on Justia Law

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In 1963, the Republic of Guinea entered into an agreement with Halco establishing the Compagnie des Bauxites de Guinée (CBG) for the purpose of developing Guinea's rich bauxite mines. Nanko filed suit against Alcoa, alleging breach of the CBG Agreement, asserting that it was a third-party beneficiary thereof, and another for racial discrimination in violation of 42 U.S.C.1981. Nanko later added Halco as a defendant and asserted an additional claim against Alcoa for tortious interference with contractual relations. The district court dismissed the case under Rule 12(b)(7) for failure to join Guinea as a required Rule 19 party. The court concluded that the district court's Rule 19 holding failed to fully grapple with Nanko's allegations and that those allegations, accepted as true, state a claim for racial discrimination under section 1981. The court reasoned that, insofar as the existing parties' interests are concerned, evidence of Guinea's actions, views, or prerogatives can be discovered and introduced where relevant to the parties' claims and defenses even if Guinea remained a nonparty. At this stage in the pleadings, the court did not believe that the allegations could be reasonably read to show that Guinea was a necessary party. Accordingly, the court reversed and remanded. View "Nanko Shipping, USA v. Alcoa" on Justia Law

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Promega sublicensed a patent, which claims a toolkit for genetic testing, to Life Technologies for the manufacture and sale of kits for use in licensed law enforcement fields worldwide. One of the kit’s five components, an enzyme, was manufactured by Life Technologies in the U.S. and shipped to the United Kingdom, where the other components were made, for combination there. When Life Technologies began selling kits outside the licensed fields of use, Promega sued, citing section 271(f)(1) of the Patent Act, which prohibits the supply from the U.S. of “all or a substantial portion of the components of a patented invention” for combination abroad. The district court held that the section did not encompass the supply of a single component of a multicomponent invention. The Federal Circuit reversed, reasoning that a single important component could constitute a “substantial portion” of the components of an invention. The Supreme Court reversed. The supply of a single component of a multicomponent invention for manufacture abroad does not give rise to liability under section 271(f)(1), which refers to a quantitative measurement. The Court rejected Promega’s proffered “case-specific approach,” which would require a factfinder to decipher whether the components at issue are a “substantial portion” under either a qualitative or a quantitative test. When a product is made abroad and all components but a single commodity article are supplied from abroad, the activity is outside the statute’s scope. View "Life Technologies Corp. v. Promega Corp." on Justia Law

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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

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In 2010, the Department of Commerce initiated an antidumping-duty investigation of multilayered wood flooring from China (19 U.S.C. 1673a(b)) and sent questionnaires to Chinese exporters and producers, selecting the three largest exporters as mandatory respondents. Commerce deems China to be a nonmarket economy and presumes that each Chinese exporter and producer is state-controlled, and covered by a single China-wide antidumping-duty rate, but a firm may rebut the presumption. Commerce determined that 74 firms established their independence from the Chinese government (not individually investigated, but not covered by the China-wide rate) and calculated a “separate rate.” Commerce did not individually investigate the appellants to determine firm-specific dumping margins. It assigned them a rate that, though not specified numerically, was declared to be more than de minimis, even though it found zero or de minimis dumping margins for all three of the Chinese firms that were individually investigated. The Trade Court affirmed. The Federal Circuit subsequently held that the “separate rate” method used in this case was a departure from the congressionally-approved “expected method” applicable when all of the individually investigated firms have a zero or de minimis rate, and that certain findings are necessary to justify such a departure. Under the “expected method,” appellants would be entitled to a de minimis rate. Because Commerce did not make the necessary findings, the Federal Circuit vacated. View "Changzhou Hawd Flooring Co. v. United States" on Justia Law