By Eric Schweibenz
On September 11, 2017, the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”) issued a judgment without opinion affirming the decision of the International Trade Commission (“the Commission”) in Viraj Profiles Limited v. ITC (2016-2482). This was an appeal from the Commission’s issuance of an exclusion order against Respondent Viraj Profiles Ltd. (“Viraj”). The underlying investigation is Certain Stainless Steel Products, Certain Processes for Manufacturing or Relating to Same, and Certain Products Containing Same (Inv. No. 337-TA-933).

By way of background, this investigation was based on a complaint filed by Valbruna Slater Stainless, Inc., Valbruna Stainless Inc., and Acciaierie Valbruna S.p.A. (collectively, “Valbruna”) alleging violation of Section 337 in the importation into the U.S. and sale of certain stainless steel products manufactured using Valbruna’s allegedly stolen trade secrets. See our September 8, 2014 and October 9, 2014 posts for more details on the complaint and Notice of Investigation, respectively.

On December 8, 2015, ALJ Theodore R. Essex issued an initial determination (“ID”) (Order No. 17) finding Viraj in default for spoliation of evidence and ordering the disgorgement of Valbruna’s operating practices in Viraj’s possession. On February 8, 2016, the Commission determined to review Order No. 17 and affirmed the default finding against Viraj. On May 25, 2016, the Commission modified the reasoning underlying the default finding in Order No. 17, vacated the ID’s order of disgorgement, and terminated the investigation with a finding of violation of Section 337 as to Viraj. Having found that “[t]he evidence as a whole supports only one reasonable inference: that Viraj ... destroyed evidence during the investigation with the intent to impair the ability of Valbruna to prove its claim,” and that Viraj’s conduct and numerous false representations were “so egregious” and in such “bad faith” as to warrant default as a sanction, the Commission issued a limited exclusion order (“LEO”) prohibiting the unlicensed entry of certain stainless steel products, certain processes for manufacturing or relating to same, and certain products containing same manufactured or sold by Viraj using any of the misappropriated trade secrets identified in the complaint (“the Valbruna Trade Secrets”). The LEO is in effect for 16.7 years and includes a provision requiring that “[p]rior to the importation of stainless steel product that may be subject to this Order, the importer or Respondent must seek a ruling from the Commission to determine whether the stainless steel product sought to be imported is covered by this Order.” The Commission also issued a cease-and-desist order against Viraj. See our June 9, 2016 post for more details regarding the Commission’s opinion.

On June 22, 2016, Viraj filed a request for an advisory opinion from the Commission declaring that stainless steel billets and ingots which have been melted, refined, and cast by an unrelated third-party are not covered by the Commission’s orders because the Valbruna Trade Secrets associated with the LEO relate only to the “melting” stage of the stainless steel manufacturing process. The Commission found that Viraj did not provide sufficient information for the Commission to determine whether any specific stainless steel products sought to be imported by Viraj would be covered by the LEO. See our October 18, 2016 post for more details regarding the Commission’s advisory opinion.

The Federal Circuit’s one-line decision affirmed the Commission’s 16.7-year LEO against Viraj.