H323683

HQ H323683 March 17, 2022 OT:RR:BSTC:EOE H323683 JW CATEGORY: 19 U.S.C. § 1337; Unfair Competition Mr. James Snider Assistant Center Director, Apparel, Footwear & Textiles Center U.S. Customs and Border Protection VIA EMAIL: James.Snider@cbp.dhs.gov RE: Request for Internal Advice on Protest No. 3002-21-103869; U.S. International Trade Commission; General Exclusion Order; Investigation No. 337-TA-567, Certain Foam Footwear Dear Mr. Snider: This letter is in response to your request for internal advice under 19 C.F.R. § 177.11 regarding protest number 3002-21-103869 and referred to the Exclusion Order Enforcement Branch (“EOE Branch”), Regulations and Rulings, on January 31, 2022. Triple T Trading Ltd. (“Triple T”) is the importing party that submitted the administrative challenge under consideration. Specifically, Triple T is challenging U.S. Customs and Border Protection’s (“CBP”) exclusion of certain foam footwear (“the articles at issue”) contained in entry no. [[ ]] by reason of the general exclusion order issued by the U.S. International Trade Commission (“ITC” or “Commission”), pursuant to 19 U.S.C. § 1337, in Investigation Number 337-TA-567. Protest Submission at 3; see also, e.g., Certain Foam Footwear, Investigation No. 337-TA-567, EDIS Doc. No. 454597, Notice of Final Commission Determination of Violation, Issuance of General Exclusion Order and Cease and Desist Orders; and Termination of Investigation at 5-8 (July 15, 2011) (“567 GEO”). As an initial matter, while “the exclusion of merchandise from entry” as a statutory category is generally addressed under subsection (4) of 19 U.S.C. § 1514(a), Congress exempted from this provision “a determination appealable under section 1337 of this title [i.e., Title 19].” See 19 U.S.C. § 1514(a)(4). As shown below, the determination that Triple T is attempting to protest falls under this exemption. Accordingly, this protest submission is not proper under 19 U.S.C. § 1514 and should be DENIED AS NOT PROTESTABLE. However, the EOE Branch has authority under 19 C.F.R. § 177.11 to address the substance of Triple T’s challenge and determine whether the articles at issue are subject to the 567 GEO. This authority is consistent with the broader authority of Regulations and Rulings to address administrative challenges to agency action, even in instances, for example, when an importer does not request further review of a protest but an issue arises for which a field office seeks advice or guidance. See e.g., HQ H087980, dated December 19, 1990; see also HQ H317432, dated April 29, 2021 (“We are providing internal advice with regard to Protest No. 4772-20-100684.”). Accordingly, “[a]dvice or guidance as to the interpretation or proper application of the Customs and related laws with respect to a specific Customs transaction may be requested by Customs Service field offices from the Headquarters Office at any time, whether the transaction is prospective, current, or completed.” 19 C.F.R. § 177.11(a) (emphasis added); see also 19 C.F.R. § 177.1. Therefore, in addition to analyzing why the protest submission in this case is not proper, the EOE Branch will address the admissibility question with respect to the articles at issue pursuant to the authority in 19 C.F.R. § 177.11. On that question, as discussed in greater detail below, and upon reexamination of the imported merchandise, we find that the articles at issue, absent any issues outside 19 U.S.C. § 1337 that bear on admissibility, may be released and entered for consumption into the United States. Information bracketed in red [[ ]] in this letter will be redacted from the public version when published in accordance with 19 U.S.C. § 1625. Nothing in Triple T’s submission, which included Exhibits 1-3, was designated as confidential. However, if there is additional information not currently bracketed in red [[ ]] that Triple T believes should be redacted from the public version, Triple T must contact the EOE Branch at EOEBranch.ITC337.Admin@cbp.dhs.gov within fifteen (15) working days of the date of this letter identifying the additional information that should be redacted from the public version. Please note that CBP is guided in this regard by the laws relating to confidentiality and disclosure to include, for example, 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). BACKGROUND ITC Investigation No. 337-TA-567 The Commission instituted Investigation No. 337-TA-567 on May 11, 2006, based on a complaint, as amended, filed by Crocs, Inc. (“Crocs”). 71 Fed. Reg. 27514-15 (May 11, 2006). The complaint alleged, inter alia, 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, and the sale within the United States after importation of certain foam footwear by reason of infringement of claims 1 and 2 of U.S. Patent No. 6,993,858 (“the ‘858 patent”) and U.S. Patent No. D517,789 (“the ‘789 patent”). On July 25, 2008, the Commission issued its final determination finding no violation of section 337. 73 Fed. Reg. 45073-74 (Aug. 1, 2008). On July 15, 2011, following an appeal to the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”) and subsequent remand vacating the Commission’s prior finding of no violation, the Commission found a violation of section 337 based on infringement of the asserted claims of the patent and issued, inter alia, a general exclusion order. 76 Fed. Reg. 43723-24 (July 21, 2011). The general exclusion order, inter alia, prohibits the unlicensed entry for consumption of foam footwear covered by one or more of claims 1 and 2 of the ’858 patent or by the ‘789 patent. See 567 GEO at ¶ 1. The ‘789 patent expired in March 2020, and thus, only claims 1 and 2 of the ‘858 patent remain. Additionally, on December 8, 2020, Double Diamond Distribution, Ltd. (“Double Diamond”), a respondent from the underlying investigation, filed a request for an expedited advisory opinion proceeding to determine whether its new products fell within the scope of the Commission’s remedial orders. See Certain Foam Footwear, Investigation No. 337-TA-567 (Advisory Opinion Proceeding 2), EDIS Doc. No. 739678, Commission Opinion at 1 (April 13, 2021) (“Comm’n Op. (Advisory Opinion Proceeding 2)”). On December 18, 2020, Crocs filed a response in opposition to Double Diamond’s request. Id. at 3. On January 13, 2021, the Commission instituted an advisory proceeding where Crocs and Double Diamond were named as parties to the proceeding. Id. Ultimately, the Commission determined that Double Diamond’s new products included permanently affixed plastic washers that prevented any direct contact between the strap and the base of the shoe, and thus did not fall within the scope of the GEO. Id. at 1. During that advisory opinion proceeding, Crocs argued that “[t]o the extent the washers in the footwear models that Double Diamond now intends to import are temporary in nature and intended to be removed upon importation or purchase, such footwear would still fall within the scope of the Remedial Orders.” Id. at 13. However, the Commission found that the record supported “Double Diamond’s contention that the plastic washers on its new Original Beach DAWGS™ shoes are ‘permanently affixed, in that they cannot—and are not intended to be [sic]—be removed by a user without extraordinary effort.’” Id. The Import Transaction at Issue The import transaction at issue is entry no. [[ ]]. Specifically, this entry that Triple T filed generally contained “slippers” of varying styles, as described on the relevant entry documents, such as the commercial invoice. The entry was detained on October 19, 2021. Upon review of the articles at issue, CBP found, inter alia, that: none of the parties to the import transaction have met their burden to establish noninfringement as a c

in a prior decision.”) (quoting Deckers Corp. v. United States, 752 F.3d 949, 956 (Fed. Cir. 2014)) (emphasis added).Therefore, notwithstanding that exclusions from entry are generally identified in 19 U.S.C. § 1514(a), an exclusion from entry pursuant to 19 U.S.C. § 1337, i.e., the determination Triple T has challenged, is exempted from this provision such that it is not subject to challenge by protest but, as a non-final decision, may be reviewed pursuant to a request for internal advice under 19 C.F.R. § 177.11, as noted above. In this context, review of an exclusion based on Section 337 is available through a request for internal advice only in those cases “when[,] although there is evidence to support [the exclusion], [CBP] on the entire evidence is left with a definite and firm conviction that a mistake has been committed.” Anderson v. Bessemer City, 470 U.S. 564, 573 (1985) (emphasis added). In any other cases, an importer whose merchandise has been excluded from entry, based on Section 337, or another interested party will need to submit a ruling request for an inter partes proceeding under the general provisions of 19 C.F.R. Part 177 to address the admissibility question or, in appropriate circumstances, pursue an ancillary proceeding at the Commission under 19 C.F.R. Part 210. The Articles at Issue Do Not Meet the “Direct Contact” Limitation in Claims 1 and 2 of the ‘858 PatentTurning to the infringement question, it appears indisputable that if the fleece within the articles at issue (1) is not removable; and (2) blocks direct contact between the moldable foam material of the strap section and the moldable material of the base section, then the articles at issue do not meet the “direct contact” limitation and thus would not infringe claims 1 and 2 of the ‘858 patent or be subject to the 567 GEO. See e.g., Comm’n Op. (Advisory Opinion Proceeding 2) at 11 (“The fundamental question on which infringement of the relevant claims of the ‘858 patent hinges is u