[Federal Register Volume 87, Number 17 (Wednesday, January 26, 2022)]
[Notices]
[Pages 4044-4046]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-01457]
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INTERNATIONAL TRADE COMMISSION
[Investigation No. 337-TA-1226]
Certain Artificial Eyelash Extension Systems, Products, and
Components Thereof; Commission Determination To Review in Part a Final
Initial Determination Finding No Violation of Section 337; Schedule for
Filing Written Submissions on Issues Under Review and on Remedy, Public
Interest, and Bonding; Extension of Target Date
AGENCY: U.S. International Trade Commission.
ACTION: Notice.
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SUMMARY: Notice is hereby given that the U.S. International Trade
Commission (``Commission'') has determined to review in part a final
initial determination (``FID'') of the presiding chief administrative
law judge (``ALJ'') finding no violation of section 337 of the Tariff
Act of 1930, as amended, in the above-captioned investigation. The
Commission requests briefing from the parties on certain issues under
review, as indicated in this notice. The Commission also requests
briefing from the parties, interested government agencies, and
interested persons on the issues of remedy, the public interest, and
bonding. The Commission has also determined to extend the target date
in the above-captioned investigation to April 27, 2022.
FOR FURTHER INFORMATION CONTACT: Lynde Herzbach, Office of the General
Counsel, U.S. International Trade Commission, 500 E Street SW,
Washington, DC 20436, telephone (202) 205-3228. Copies of non-
confidential documents filed in connection with this investigation may
be viewed on the Commission's electronic docket (EDIS) at https://edis.usitc.gov. For help accessing EDIS, please email
[email protected]. General information concerning the Commission may
also be obtained by accessing its internet server at https://www.usitc.gov. Hearing-impaired persons are advised that information on
this matter can be obtained by contacting the Commission's TDD terminal
on (202) 205-1810.
SUPPLEMENTARY INFORMATION: On October 28, 2020, the Commission
instituted this investigation under section 337 of the Tariff Act of
1930, as amended, 19 U.S.C. 1337 (``section 337''), based on a
complaint filed by Lashify, Inc. of Glendale, California (``Lashify'').
See 85 FR 68366-67. The
[[Page 4045]]
complaint, as supplemented, alleges a violation of section 337 based
upon the importation into the United States, sale for importation, or
sale after importation into the United States of certain artificial
eyelash extension systems, products, and components thereof by reason
of infringement of certain claims of U.S. Patent Nos. 10,660,388 (``the
'388 patent'') and 10,721,984 (``the '984 patent''), and the sole claim
of U.S. Design Patent Nos. D877,416 (``the D'416 patent'') and D867,664
(``the D'664 patent''), respectively (collectively, the ``Asserted
Patents''). The complaint also alleges the existence of a domestic
industry. The notice of investigation (``NOI'') names nine respondents,
including: KISS Nail Products, Inc. of Port Washington, New York
(``KISS''); Ulta Beauty, Inc. of Bolingbrook, Illinois (``Ulta''); CVS
Health Corporation of Woonsocket, Rhode Island (``CVS''); Walmart, Inc.
of Bentonville, Arkansas (``Walmart''); Qingdao Hollyren Cosmetics Co.,
Ltd. d/b/a Hollyren of Shandong Province, China; Qingdao Xizi
International Trading Co., Ltd. d/b/a Xizi Lashes of Shandong Province,
China; Qingdao LashBeauty Cosmetic Co., Ltd. d/b/a Worldbeauty of
Qingdao, China; Alicia Zeng d/b/a Lilac St. and Artemis Family
Beginnings, Inc. of San Francisco, California; and Rachael Gleason d/b/
a Avant Garde Beauty Co. of Dallas, Texas. Id. The Office of Unfair
Import Investigations is also a party to the investigation. Id.
The Commission later amended the complaint and NOI to substitute
CVS Pharmacy, Inc. of Woonsocket, Rhode Island in place of named
respondent CVS Health Corporation and Ulta Salon, Cosmetics &
Fragrance, Inc. of Bolingbrook, Illinois in place of named respondent
Ulta Beauty, Inc. See Order No. 10, unreviewed by Comm'n Notice (Feb.
10, 2021); see also 86 FR 9535 (Feb. 16, 2021).
The Commission previously terminated the investigation as to claims
2-4 and 7 of the '388 patent and claims 6-8, 12, 18-19, 25-26, and 29
of the '984 patent based on Complainant's partial withdrawal of the
complaint. See Order No. 24 (Apr. 23, 2021), unreviewed by Comm'n
Notice (May 11, 2021). The Commission also previously terminated claims
2-5, 10-11, 14, 17, 21-22, and 24 of the '984 patent from the
investigation. See Order No. 38 (June 22, 2021), unreviewed by Comm'n
Notice (July 6, 2021).
The Commission previously terminated Rachael Gleason d/b/a Avant
Garde Beauty Company from the investigation based on a Consent Order.
See Order No. 28, unreviewed by Comm'n Notice (May 20, 2021).
The Commission previously determined that Lashify failed to satisfy
the technical prong of the domestic industry requirement for the '388
patent, thus terminating that patent from the investigation. See Order
No. 35, unreviewed by Comm'n Notice (July 9, 2021).
On October 28, 2021, the presiding ALJ issued the FID, finding that
no violation of section 337 has occurred in the importation into the
United States, the sale for importation, or the sale within the United
States after importation, of certain artificial eyelash extension
systems, products, and components thereof. FID at 141-142. The FID
finds that two accused products infringe the '984 patent, the'984
patent is not invalid, and Lashify has failed to satisfy the technical
prong of the domestic industry requirement with respect to the '984
patent. The FID further finds that the D'416 patent and D'664 patent
are infringed and not invalid, and Lashify satisfied the technical
prong with respect to both design patents. The FID further finds that
Lashify has failed to satisfy the economic prong of the domestic
industry requirement with respect to all of the Asserted Patents
remaining in the investigation. The FID also includes the ALJ's
recommended determination on remedy and bonding should the Commission
find a violation of section 337. Specifically, the ALJ recommended a
limited exclusion order directed to certain artificial eyelash
extension systems, products, and components thereof, and cease and
desist orders directed to KISS, Ulta, CVS, and Walmart.
On November 9, 2021, Lashify filed a petition for review of the
FID's findings of non-infringement, that Lashify has failed to satisfy
the technical prong of the domestic industry requirement with respect
to the '984 patent, and that Lashify has not satisfied the economic
prong of the domestic industry requirement with respect to any of the
patents-in-suit. That same day, Respondents filed a contingent petition
seeking review of alleged additional, independent grounds of non-
infringement and invalidity to support the FID's finding of no
violation.
On November 17, 2021, Lashify, Respondents, and OUII filed their
respective responses to the petitions for review.
On November 29, 2021, respondents KISS, Ulta, Walmart, and CVS
filed a joint submission on the public interest pursuant to Commission
Rule 210.50(a)(4) (19 CFR 210.50 (a)(4)). Lashify and OUII did not file
a statement on the public interest. No submissions were received in
response to the Commission notice seeking public interest submissions.
86 FR 62844-45 (Nov. 12, 2021).
Having examined the record of the investigation, including the FID,
the petitions for review, and the responses thereto, the Commission has
determined to review the FID in part. In particular, as to the '984
patent, the Commission has determined to review: (1) The FID's findings
regarding the technical prong of the domestic industry requirement; and
(2) the FID's findings that the asserted claims of the '984 patent are
not invalid as obvious. The Commission has further determined to review
the FID's findings regarding the economic prong of the domestic
industry requirement. The Commission has determined not to review the
remainder of the FID.
The Commission has also determined to extend the target date for
completing this investigation until April 27, 2022.
In connection with its review, the Commission requests responses to
the following questions. The parties are requested to brief their
positions with reference to the applicable law and the existing
evidentiary record.
(1) Please discuss whether Complainant should be considered a mere
importer when its domestic activities and investments are evaluated as
a whole with respect to the asserted patents, rather than when its
domestic activities and investments are evaluated in a ``line-by-line''
approach, with citation to the record evidence.
(2) To the extent Complainant is not a mere importer and certain
domestic activities and investments with respect to the asserted
patents excluded by the FID (see e.g., certain warehousing/
distribution, quality control, and/or sales and marketing expenditures)
should be credited as cognizable domestic industry investments, please
discuss whether Complainant's cognizable domestic industry investments
are significant or substantial within the meaning of section
337(a)(3)(A)-(C), with citation to record evidence. Please be sure to
provide your explanation and data separately for each asserted patent.
The parties are invited to brief only the discrete issues requested
above. The parties are not to brief other issues on review, which are
adequately presented in the parties' existing filings.
In connection with the final disposition of this investigation, the
statute authorizes issuance of, inter alia, (1) an exclusion order that
could result in the exclusion of the subject articles
[[Page 4046]]
from entry into the United States; and/or (2) cease and desist orders
that could result in the respondents being required to cease and desist
from engaging in unfair acts in the importation and sale of such
articles. Accordingly, the Commission is interested in receiving
written submissions that address the form of remedy, if any, that
should be ordered. If a party seeks exclusion of an article from entry
into the United States for purposes other than entry for consumption,
the party should so indicate and provide information establishing that
activities involving other types of entry either are adversely
affecting it or likely to do so. For background, see Certain Devices
for Connecting Computers via Telephone Lines, Inv. No. 337-TA-360,
USITC Pub. No. 2843, Comm'n Op. at 7-10 (Dec. 1994). In particular, the
written submissions should address any request for a cease and desist
order in the context of recent Commission opinions, including those in
Certain Arrowheads with Deploying Blades and Components Thereof and
Packaging Therefor, Inv. No. 337-TA-977, Comm'n Op. (Apr. 28, 2017) and
Certain Electric Skin Care Devices, Brushes and Chargers Therefor, and
Kits Containing the Same, Inv. No. 337-TA-959, Comm'n Op. (Feb. 13,
2017). Specifically, if Complainant seeks a cease and desist order, the
written submissions should respond to the following requests:
(1) Please identify with citations to the record any information
regarding commercially significant inventory in the United States as to
each respondent against whom a cease and desist order is sought. If
Complainant also relies on other significant domestic operations that
could undercut the remedy provided by an exclusion order, please
identify with citations to the record such information as to each
respondent against whom a cease and desist order is sought.
(2) In relation to the infringing products, please identify any
information in the record, including allegations in the pleadings, that
addresses the existence of any domestic inventory, any domestic
operations, or any sales-related activity directed at the United States
for each respondent against whom a cease and desist order is sought.
The statute requires the Commission to consider the effects of that
remedy upon the public interest. The public interest factors the
Commission will consider include the effect that an exclusion order
and/or cease and desist orders would have on: (1) The public health and
welfare, (2) competitive conditions in the U.S. economy, (3) U.S.
production of articles that are like or directly competitive with those
that are subject to investigation, and (4) U.S. consumers. The
Commission is therefore interested in receiving written submissions
that address the aforementioned public interest factors in the context
of this investigation.
If the Commission orders some form of remedy, the U.S. Trade
Representative, as delegated by the President, has 60 days to approve,
disapprove, or take no action on the Commission's determination. See
Presidential Memorandum of July 21, 2005, 70 FR 43251 (July 26, 2005).
During this period, the subject articles would be entitled to enter the
United States under bond, in an amount determined by the Commission and
prescribed by the Secretary of the Treasury. The Commission is
therefore interested in receiving submissions concerning the amount of
the bond that should be imposed if a remedy is ordered.
Written Submissions: The parties to the investigation are requested
to file written submissions on the issues identified in this notice. In
addition, the parties to the investigation, interested government
agencies, and any other interested parties are encouraged to file
written submissions on the issues of remedy, the public interest, and
bonding. Such submissions should address the recommended determination
by the ALJ on remedy and bonding.
In their initial submissions, Complainant is also requested to
identify the remedy sought and Complainant and OUII are requested to
submit proposed remedial orders for the Commission's consideration.
Complainant is further requested to state the dates that the Asserted
Patents remaining in the investigation expire, to provide the HTSUS
subheadings under which the accused products are imported, and to
supply the identification information for all known importers of the
products at issue in this investigation. The initial written
submissions and proposed remedial orders must be filed no later than
close of business on February 3, 2022. Reply submissions must be filed
no later than the close of business on February 10, 2022. No further
submissions on these issues will be permitted unless otherwise ordered
by the Commission.
Persons filing written submissions must file the original document
electronically on or before the deadlines stated above. The
Commission's paper filing requirements in 19 CFR 210.4(f) are currently
waived. 85 FR 15798 (March 19, 2020). Submissions should refer to the
investigation number (Inv. No. 337-TA-1226) in a prominent place on the
cover page and/or the first page. (See Handbook for Electronic Filing
Procedures, https://www.usitc.gov/documents/handbook_on_filing_procedures.pdf). Persons with questions regarding
filing should contact the Secretary, (202) 205-2000.
Any person desiring to submit a document to the Commission in
confidence must request confidential treatment by marking each document
with a header indicating that the document contains confidential
information. This marking will be deemed to satisfy the request
procedure set forth in Rules 201.6(b) and 210.5(e)(2) (19 CFR 201.6(b)
& 210.5(e)(2)). Documents for which confidential treatment by the
Commission is properly sought will be treated accordingly. A redacted
non-confidential version of the document must also be filed
simultaneously with any confidential filing. All information, including
confidential business information and documents for which confidential
treatment is properly sought, submitted to the Commission for purposes
of this investigation may be disclosed to and used: (i) By the
Commission, its employees and Offices, and contract personnel (a) for
developing or maintaining the records of this or a related proceeding,
or (b) in internal investigations, audits, reviews, and evaluations
relating to the programs, personnel, and operations of the Commission
including under 5 U.S.C. Appendix 3; or (ii) by U.S. government
employees and contract personnel, solely for cybersecurity purposes.
All contract personnel will sign appropriate nondisclosure agreements.
All nonconfidential written submissions will be available for public
inspection on EDIS.
The Commission vote for this determination took place on January
20, 2022.
The authority for the Commission's determination is contained in
section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and
in part 210 of the Commission's Rules of Practice and Procedure (19 CFR
part 210).
By order of the Commission.
Issued: January 20, 2022.
Lisa Barton,
Secretary to the Commission.
[FR Doc. 2022-01457 Filed 1-25-22; 8:45 am]
BILLING CODE 7020-02-P