By Eric Schweibenz and Lisa Mandrusiak
On March 20, 2017, the International Trade Commission (the “Commission”) issued a notice, opinion, and general exclusion order (“GEO”) in Certain Woven Textile Fabrics and Products Containing Same (Inv. No. 337-TA-976).

By way of background, this investigation is based on a complaint filed by AAVN alleging violation of Section 337 in the importation into the U.S. and sale of certain woven textile fabrics and products containing the same that infringe one or more claims of U.S. Patent No. 9,131,790. AAVN also alleged in a second amended complaint violations of Section 337 based upon false advertising claims. See our October 5, 2015 and December 17, 2015 posts for more details on the complaint and Notice of Investigation, respectively.

According to the notice, fourteen of the fifteen respondents were terminated from the investigation based upon settlement agreement or consent order. AAVN filed a motion for summary determination of violation against the last remaining respondent, Pradip Overseas Ltd. (“Pradip”), which was granted on November 21, 2016. In the Initial Determination (“ID”), ALJ Essex found that the evidence shows a widespread pattern of violation, and recommended issuing a GEO. See our December 2, 2016 post for more details.

The Commission determined not to review the ID, resulting in finding a violation of Section 337. Only AAVN and the Commission Investigative Staff (“OUII”) filed submissions in response to the Commission’s request for written submissions on remedy, the public interest, and bonding.

In the opinion, the Commission began by noting that AAVN, the IA, and the ALJ all agree that a GEO is appropriate, that the public interest does not counsel otherwise, and that bond should be set at 100 percent of the entered value of the falsely advertised products.

The Commission agreed that a GEO is appropriate because of the pattern of violation and the difficulty in identifying the source of infringing products. In particular, the Commission quoted submissions noting the ease of establishing new companies in countries such as India, Pakistan, and China, and the fact that import records do not reveal the names of the original manufacturers. The Commission concluded that the OUII’s proposed order is proper in form, AAVN did not object to it, and thus the Commission determined to issue a GEO consistent with that proposed by the OUII.

The Commission reiterated that the investigation does not implicate the Commission’s public interest considerations, and thus the public interest does not preclude issuing a GEO.

Finally, the Commission agreed with the 100 percent bond sought by AAVN and recommended by the ALJ. Here, pricing information was inadequate or unavailable because of Pradip’s failure to provide discovery. The Commission therefore determined to set the bond at 100 percent, noting this approach follows Commission practice in such instances.