23
Jun
By Eric Schweibenz and Sasha Rao
On June 14, 2017, the International Trade Commission (“the Commission”) issued the public version of its opinion in Certain Carbon Spine Board, Cervical Collar and Various Medical Training Manikin Devices, and Trademarks, Copyrights of Product Catalogues, Product Inserts and Components Thereof (Inv. No. 337-TA-1008).

By way of background, this investigation is based on a March 21, 2016 complaint filed by Laerdal Medical Corp. and Laerdal Medical AS (collectively, “Complainants”) alleging violation of Section 337 by way of unlawful importation into the U.S., selling for importation, and/or selling within the U.S. after importation of certain carbon spine board, cervical collar, and various medical training manikin devices, and accompanying product catalogs, product inserts, literature, and components thereof that infringe one or more claims of U.S. Patent Nos. 6,090,058 (“the ’058 patent”) and 6,170,486 (“the ’486 patent”) and/or certain copyrights, trade dress rights, and trademarks. However, the investigation was instituted with respect to only claim 1 of the ’058 patent and certain copyrights, mark, and trade dresses. See our March 21, 2016 and June 29, 2016 posts for more details on the complaint and Notice of Investigation, respectively. On November 21, 2016, the ALJ issued an initial determination (“ID”) finding all respondents in default for failing to respond to the complaint and Notice of Investigation. The Commission declined to review the default ID and, assuming all factual allegations against the defaulted respondents as true, considered whether there was a Section 337 violation and the appropriate remedy. Complainants sought (and the Office of Unfair Import Investigations supported) a limited exclusion order against all respondents and a cease and desist order against one domestic defaulting respondent.

The Asserted ’058 Patent

The Commission found that a Section 337 violation was sufficiently pled for the ’058 patent. Specifically, several Respondents induced infringement by selling the accused product with instructions on how to use the product in an infringing manner. The Complainants also showed domestic industry through their investments in labor, capital, plant, and equipment for one accused product that practiced claim 1 of the ’058 patent.

The Asserted Trademark

The Commission also found a Section 337 violation adequately pled with respect to the registered trademark. In addition to alleging that the Respondents imported and sold the accused products, the Complainants further provided screenshots of the Respondents’ websites demonstrating offers for sale of the accused products and a quote sheet providing pricing for shipping the accused products to the United States. Again, the Complainants alleged that their investments in labor, capital, plant, and equipment for their product that bore the trademark established domestic industry.

The Asserted Copyrights

However, the Commission found that the Complainants failed to sufficiently plead facts showing a violation of Section 337 with respect to their copyrights. With respect to copyrights covering two of their product catalogues, Complainants had alleged that the Respondents infringed their copyrights by selling certain accused products found in those catalogues. However, the Commission held that their “copyrights in [their] catalogs do not give [Complainants] the right to exclude others from making the useful articles depicted in those catalogues.”

Next, Complainants alleged that Respondents made and sold unauthorized copies of “various literature that is used to describe one or more products made by [Complainants], which includes images, description and photographs of [Complainants’] product catalogues, product manuals and on [Complainants’] website.” In this allegation, the Commission found that these allegations covered material beyond the infringement of Complainants’ registered copyrights and thus were outside the scope of the investigation.

Finally, the Commission found that Complainants had “failed to allege that it had a domestic industry in the catalogues protected by the copyrights.” Specifically, the Complainants had improperly relied on the domestic industry of products not protected by the copyrights at issue.

Trade Dress Misappropriation

The Commission further found that Complainants had failed to plead sufficient facts to show a Section 337 violation as to their alleged trade dress rights. According to the Commission, the Complainants did not allege that the infringement had the effect or threat of substantially injuring or preventing the establishment of a domestic industry. Additionally, Complainants had not articulated the design elements that compose their trade dress, describing their trade dresses vaguely and without limitation. As such, Complainants had failed to allege a protectable trade dress. Furthermore, Complainants had not carried their burden of proving that their asserted trade dresses were not functional. The Commission found that “many of the alleged trade dress elements of the spine boards, cervical collars, and training manikins are functional.”

Remedy, Public Interest and Bonding

Since the Commission concluded that Complainants had adequately pled Section 337 violations with respect to their patent and trademark claims but not copyright or trade dress claims, the scope of the remedy sought was accordingly limited. The Commission issued a limited exclusion order against the products of only those Respondents alleged to have infringed the asserted patent and trademark: Medsource International, Medsource Factor, and Basic Medical. The Commission also issued a cease and desist order against domestic respondent Basic Medical.

The Commission found that public interest factors do not preclude issuance of the foregoing remedy. There was no evidence of an impact on public health and welfare, competitive conditions in the U.S. economy, the production of like or directly competitive articles in the U.S., or U.S. consumers. Additionally, these orders were directed to only three related respondents, and the evidence did not establish that Complainants would be unable to meet any demand generated by these orders. Observing that bond is generally set at 100 percent of entered value when a party defaults, as was the case here, the Commission determined that a 100 percent bond during the Presidential review period would be appropriate.