H315840

HQ H315840 February 8, 2021 OT:RR:BSTC:EOE H315840 JW CATEGORY: 19 U.S.C. § 1337; Unfair Competition VIA EMAIL: ASmith@gibsondunn.com Mr. Adam M. Smith Gibson, Dunn & Crutcher LLP 1050 Connecticut Avenue, N.W. Washington, DC 20036-5306 RE: Ruling Request; U.S. International Trade Commission; General Exclusion Order; Investigation No. 337-TA-976; Certain Woven Textile Fabrics and Products Containing Same. Dear Mr. Smith: Pursuant to 19 C.F.R. Part 177, the Exclusion Order Enforcement Branch (“EOE Branch”), Regulations and Rulings, U.S. Customs and Border Protection (“CBP”) issues this ruling letter. This ruling letter is the result of a request for an administrative ruling from CBP, dated December 18, 2020, and submitted on behalf of Niche Sourcing, Inc. (“Niche”). CBP’s position is Niche has not met its burden to show that the “Chief Value Cotton (CVC) bed linens” that it purchases from [[ ]] and seeks to enter for consumption into the United States are not subject to the general exclusion order (“976 GEO”) issued by the U.S. International Trade Commission (“ITC” or “Commission”) in investigation no. 337-TA-976 (the “976 investigation”). We further found no determination by the Commission, as of the date of this ruling letter, either in the 976 investigation, or in any subsequent ancillary proceeding, that “Chief Value Cotton (CVC) bed linens” purchased from [[ ]] do not violate the 976 GEO. Accordingly, there is no present basis for CBP to use its discretion to permit certification by Niche as set forth in the standard certification provision provided in paragraph 3 of the 976 GEO. See e.g., Certain Composite Aerogel Insulation Materials & Methods for Manufacturing the Same, Inv. No. 337-TA-1003, Comm’n Op. at 62, (Feb. 22, 2018) (USITC Pub. 4932, August 2019) (“The standard certification provision does not allow an importer to simply certify that it is not violating the exclusion order. . . . As the Commission has previously stated, [CBP] only accepts a certification that the goods have been previously determined by [CBP] or the Commission not to violate the exclusion order.”). Niche was asked to clearly identify confidential information with [[red brackets]] in their submissions to the CBP. See, e.g., EOE Branch Email to Niche dated January 8, 2021. However, as of the date of this ruling letter, other than a general statement in Niche’s ruling request stating, “EXEMPT FROM DISCLOSURE UNDER 5 U.S.C. § 552(B)(4)”, along with a footnote stating “[t]his correspondence, including any attachments contains trade secrets and/or confidential commercial information exempt from disclosure under 5 U.S.C. § 552(b)(4)”; Niche has neither clearly identified the alleged “trade secrets and/or confidential commercial information,” nor attempted to overcome the presumption of disclosure with a request for confidential treatment that is narrowly tailored and supported by evidence establishing the aspects noted below, and in section III.B. infra. Thus, at present, nothing is bracketed in red [[ ]] in this ruling letter. If there is information in this ruling letter, or Niche’s letter to CBP dated December 18, 2020 requesting an administrative ruling pursuant to 19 C.F.R. Part 177, which included Exhibits 1 to 9, not currently bracketed in red [[ ]] that Niche believes constitutes confidential information, and should be redacted from the published ruling, then Niche is asked to contact CBP within ten (10) working days of the date of this ruling letter clearly identifying such confidential information with [[red brackets]]. See, e.g., 19 C.F.R. § 177.8(a)(3). Please note that disclosure of information related to administrative rulings under 19 C.F.R. Part 177 is governed by, for example, 6 C.F.R. Part 5, 31 C.F.R. Part 1, 19 C.F.R. Part 103, and 19 C.F.R. § 177.8(a)(3). See, e.g., 19 C.F.R. § 177.10(a). In addition, CBP is guided by the laws relating to confidentiality and disclosure, such as the Freedom of Information Act (“FOIA”), as amended (5 U.S.C. § 552), the Trade Secrets Act (“TSA”) (18 U.S.C. § 1905), and the Privacy Act of 1974, as amended (5 U.S.C. § 552a). A request for confidential treatment of information submitted in connection with a ruling requested under 19 C.F.R. Part 177 faces a strong presumption in favor of disclosure. See, e.g., 19 C.F.R. § 177.8(a)(3). The person seeking this treatment must overcome that presumption with a request that is narrowly tailored and supported by evidence establishing at least that: (1) it is information that is customarily kept private or closely; and (2) either (a) the government provided an express or implied assurance of confidentiality when the information was shared with the government; or (b) there were no express or implied indications at the time the information was submitted that the government would publicly disclose the information. See, e.g., OIP Guidance: Step-by-Step Guide for Determining if Commercial or Financial Information Obtained from a Person is Confidential Under Exemption 4 of the FOIA (posted 10/3/2019). BACKGROUND ITC Investigation No. 337-TA-976 Procedural History at the ITC The Commission instituted investigation no. 337-TA-976 (the “underlying investigation” or the “976 investigation”) on December 18, 2015, based on a supplemented and twice amended complaint filed by AAVN, Inc. of Richardson, Texas (“AAVN”). 80 Fed. Reg. 79094 (Dec. 18, 2015); See Certain Woven Textile Fabrics and Products Containing Same, Investigation No. 337-TA-976, EDIS Doc. No. 605892, Commission Opinion (March 20, 2017) (“Comm’n Op.”) at 1. The complaint alleged violations of section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1337, in the importation into the United States, the sale for importation, or the sale within the United States after importation of certain woven textile fabrics and products containing the same, by reason of infringement of claims 1–7 of U.S. Patent No. 9,131,790 (“the ’790 patent”) and/or by reason of false advertising. Id. The notice of investigation named fifteen respondents including [[ ]] 80 Fed. Reg. 79094 (Dec. 18, 2015); Comm’n Op. at 1. Fourteen of those respondents entered into a settlement agreement or consent order. Id. The last remaining respondent was Pradip Overseas Ltd. of Ahmedabad, India (“Pradip”). Id. AAVN accused Pradip of false advertising, specifically alleging that Pradip misrepresented the thread count of sheets manufactured in India, imported into the United States, and sold in United States department stores. Id. Pradip was not accused of infringing the ’790 patent. Id. On September 2, 2016, AAVN moved for leave to file a motion for summary determination of violation out of time. Comm’n Op. at 2. In the motion, AAVN noted that as a result of the settlements and consent orders, Pradip was the last remaining respondent. Id. The summary determination motion that was appended argued, inter alia, that Pradip had violated section 337 by falsely advertising the thread count of its imported sheets, and that the false advertising was deceptive, material, and injurious to AAVN. Id. AAVN requested that the administrative law judge (“ALJ”) recommend the issuance of a general exclusion order and also sought a 100 percent bond during the Presidential review period. Id. On September 15, 2016, the Commission investigative attorney (“IA”) responded in support of the motion for leave and the accompanying summary determination motion. Id. Pradip did not respond. Id. On November 10, 2016, the ALJ granted the motion for summary determination and issued the initial determination and recommended determination on remedy (“ID/RD”) (Order No. 21). Id. The ALJ found that AAVN had shown a violation of section 337 by reason of false advertising under section 43 of the Lanham Act, 15 U.S.C. § 1125(a)(1)(B). Id. (citing Order No. 21 at 7-9, 13-15). The ALJ found that Pradip’s packaging of its sheets with a falsely stated thread count was a false and misleading description of the sheet

(i.e., injury under the Lanham Act), is misplaced. Determinations of the Commission, including any conclusion of law or finding of fact, that arise from an investigation, or related proceeding, are binding authority on CBP, and applied by CBP with preclusive effect in the administration of exclusion orders issued under 19 U.S.C. § 1337. See, e.g., Eaton Corp. v. United States, 29 C.I.T. 1149, 1164–65 (Ct. of Int’l Trade 2005) (“[T]he Commission has paramount authority and responsibility under section 337 of the Tariff Act. Its opinion and resultant orders have set the substantive law of this case. . . .”). The Commission’s finding in the 976 investigation that injury under the Lanham Act was met was based on misrepresentation of thread count. See, e.g., ALJ ID (Order No. 21) at 14 (“The evidence shows that AAVN has been injured as a result of Pradip’s misrepresentation of thread counts.”). The Commission did not base, in any way, their finding that this injury element was met on alleged infringement of AAVN’s intellectual property rights. Id. Indeed, in the 976 investigation, the last remaining respondent, Pradip, was not accused of infringing the ’790 patent (or any of AAVN’s intellectual property rights). Comm’n Op. at 1. In addition, we also note the Commission’s finding that AAVN demonstrated injury or the threat of substantial injury to “an industry in the United States”, as required by 19 U.S.C. § 1337(a)(l)(A)(i), was similarly based on the false claims of Pradip and its competitors regarding the actual thread count of its products, and not based on allegations of patent infringement. See e.g., Comm’n’ Op. at 3. Indeed, if the alleged 337 violation was infringement of a “valid and enforceable United States patent” the statutory provision at issue would be 19 U.S.C. § 1337(a)(l)(B). Thus, as CBP is bound by the findings of the Commission, if the articles at issue misrepresent the thread count, then it follows that injury under the Lanham Act, and injury as re