Customs Ruling HQ H308232 - Protest No. 170119100004; U.S. International Trade Commission; Limited Exclusion Order; Investigation No. 337-TA-1088, Certain Road Construction Machines and Components Thereof

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HQ H308232
Jan 21, 2020

Type : 19 U.S.C. § 1337; Unfair Competition • HTSUS :

OT:RR:BSTC:IPR H308232 JW/CBC

VIA EMAIL: [email protected]; [email protected]

Mr. Juan J. Porras and Mr. Armando Taboada Directors of Machinery Center of Excellence & Expertise U.S. Customs and Border Protection 109 Shiloh Dr., Ste 300 Laredo, TX 78045

RE: Protest No. 170119100004; U.S. International Trade Commission; Limited Exclusion Order; Investigation No. 337-TA-1088, Certain Road Construction Machines and Components Thereof

Dear Mr. Porras and Mr. Taboada:

This letter is in response to protest number 170119100004 filed by Wirtgen America, Inc. (“Wirtgen” or “Protestant”) on December 24, 2019. Wirtgen is protesting U.S. Customs and Border Protection’s (“CBP”) exclusion of Wirtgen’s series 1810 cold milling machines, models XFi and XTi,1 by reason of the exclusion order issued by the U.S. International Trade Commission (“ITC” or “Commission”) in investigation number 337-TA-1088 under 19 U.S.C. § 1337. Wirtgen Protest at 2; see also, e.g., 1088 LEO (EDIS Doc. No. 679595); 19 U.S.C. § 1337(d).

Wirtgen’s protest specifies that it is “filed in accordance with section 514(a)(4), Tariff Act of 1930, as amended (19 U.S.C. 1514(a)(4)), and 19 C.F.R. § 174.” See Wirtgen Protest at 1. However, the statute is clear on its face that the protest is not proper. See 19 U.S.C. § 1514(a)(4) and 19 C.F.R. § 174.11(b)(4). While “the exclusion of merchandise from entry” is generally addressed under subsection (4) of 19 U.S.C. § 1514(a), Congress excepted—carved out—from protest “a determination appealable under section 1337 of this title [i.e., title 19].” See 19 U.S.C. § 1514(a)(4). Wirtgen’s underlying cause of action in the protest stems from the exclusion order issued by the Commission in investigation no. 337-TA-1088, rather than CBP’s exclusion of merchandise from entry. Thus, in accordance with the language of 19 U.S.C. § 1514(a)(4),

1 Entry no. [[ ]] and entry no. [[ ]]. Wirtgen’s remedy is an appeal as provided by 19 U.S.C. § 1337; not a protest under 19 U.S.C. § 1514(a). See, e.g., 19 U.S.C. §1337(c); 19 U.S.C. §1337(k). The determination that Wirtgen is protesting is not one of the seven categories enumerated in 19 U.S.C. § 1514(a); in fact, it is explicitly carved out. 19 U.S.C. § 1514(a)(4) (“except a determination appealable under section 1337 of this title.”). Accordingly, Wirtgen’s protest is not proper under 19 U.S.C. § 1514(a) and should be DENIED AS NOT PROTESTABLE.

In addition, on January 16, 2020, the Commission “determined to institute a modification proceeding pursuant to Commission authority under 19 U.S.C. § 1337(k) and Commission Rule 210.76, 19 CFR 210.76.” Certain Road Construction Machines and Components Thereof, Investigation No. 337-TA-1088, EDIS Doc. No. 699503, Notice of Commission Determination to Institute a Modification Proceeding; Request for Written Submissions at 2 (January 16, 2020). “The modification proceeding is addressed to whether Wirtgen’s redesigned Models XFi and XTi machines infringe claim 19 of the ’693 patent [i.e., U.S. Patent No. 7,140,693] and therefore fall within the scope of the LEO, or whether the LEO should be modified to include an explicit exemption for Wirtgen’s Model XFi and XTi redesigned machines.” Id. These are the same articles as the articles at issue in Wirtgen’s protest. Accordingly, this modification proceeding at the Commission will have a direct impact on, and dictate with respect to the exclusion order, CBP’s views on the admissibility of the articles at issue in Wirtgen’s protest. The determination of the Commission is binding authority on CBP and, in the case of conflict, will by operation of law modify or revoke any contrary CBP ruling or decision.

Information bracketed in red [[ ]] in this letter will be redacted from the public version. A public version of this letter is also enclosed for your files. Nothing in Wirtgen’s protest, which included Exhibits 1 to 8, was designated as confidential.

If there is additional information not currently bracketed in red [[ ]] that Wirtgen believes should be redacted from the public version, Wirtgen is asked to email the Intellectual Property Rights Branch (“IPR Branch”) of CBP at [email protected] by 5pm ET on January 30, 2020 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/or the Privacy Act of 1974, as amended (5 U.S.C. § 552a).

BACKGROUND Investigation No. 337-TA-1088 The U.S. International Trade Commission instituted investigation no. 337-TA-1088 (“the 1088 investigation”) on November 29, 2017. 82 Fed. Reg. 56625-26 (2017). The complainants were Caterpillar Inc. and Caterpillar Paving Products, Inc. Certain Road Construction Machines and Components Thereof, Investigation No. 337-TA-1088, Final Initial Determination (Feb. 14, 2019) at 2 (“FID”). The respondents were Wirtgen GmbH, Joseph Vogele AG, Wirtgen Group Holding GmbH, and Wirtgen America, Inc. Id. The accused products were Wirtgen’s series 1810 compact milling machines, model numbers W 100 CFi, W 120 CFi, and W 130 CFi. Id. at 3; Certain Road Construction Machines and Components Thereof, Investigation No. 337-TA-1088, Commission Opinion (July 15, 2019) at 9-10 (“Comm’n Op.”).

For the series 1810 machines, Wirtgen noted that it was [[ ]] FID at 24. Wirtgen stated that [[ ]] and [[ ]] Id. The Administrative Law Judge (“ALJ”) found that these alternate swing-leg designs “have not been implemented in any imported articles,” and thus “are not ripe for a determination of infringement or non-infringement in this investigation.” Id. at 24–25. Wirtgen did not petition for review of the FID’s findings on this issue, and the Commission determined not to review this issue. Comm’n Op. at 10 n.22. (The Commission noted that Wirtgen “identified [[ ]] but the FID declined to adjudicate those [[ ]] Wirtgen did not petition for review of the FID’s findings with respect to the [[ ]], and the Commission determined not to review this issue.”).

The Commission found “a section 337 violation based on the infringement of claim 19 of [U.S. Patent No. 7,140,693 (“the ’693 patent”)] by Wirtgen’s series 1810 milling machines.” Comm’n Op. at 46. 2

Hence, the Commission issued a limited exclusion order in the 1088 investigation (“the 1088 LEO”) on June 27, 2019. See 1088 LEO (EDIS Doc. No. 679595). The 1088 LEO, inter alia, prohibits the unlicensed entry for consumption of road construction machines and components thereof that infringe claim 19 of the ’693 patent that are manufactured abroad by or on behalf of, or are imported by or on behalf of, the respondents Wirtgen GmbH, Wirtgen Group Holding GmbH, and Wirtgen America, Inc.3

2 Wirtgen further identified a prior generation of milling machines, that Complainants did not accuse (the 1310 series, with model numbers W 100 Fi, W 120 Fi, and W 130 Fi), for which Respondents requested that the ALJ adjudicate infringement. FID at 3; Comm’n Op. at 10 footnote Wirtgen’s 1310 series machines were found to not infringe any asserted claims of the ’693 patent. FID at 24. Accordingly, in contrast, “[t]he Commission [determined] that the LEO should include an explicit carve-out for Wirtgen’s series 1310 machines.” Comm’n Op. at 47.

3 It should further be noted that in the 1088 investigation Wirtgen sought to limit the limited exclusion order to accused road milling machines, and asserted that the LEO should not encompass other road construction machines and components. FID at 79. However, the ALJ differentiated this argument citing that “[l]ong-standing Commission precedent supports issuance of broad remedial orders extending to ‘all products covered by the patent claims as to which a violation has been found, rather than limiting its orders to only those specific models selected for the infringement analysis.’” FID at 80 (citation omitted). The ALJ recognized that Wirtgen has presented “no evidence or arguments that would justify setting aside the Commission’s established policy with respect to a LEO.” Id.; see also Comm’n Op. at 50 (“[T]he Commission finds no reason to limit the scope of the remedial orders.”). Wirtgen’s Communications with CBP

On August 13, 2019, and again, on August 15, 2019, the IPR Branch offered Wirtgen an opportunity to submit a request for an administrative ruling under 19 C.F.R. part 177 to obtain guidance as to whether its redesigned series 1810 milling machines fall within the scope of the limited exclusion order issued in the 1088 investigation.4 The IPR Branch further noted that there were also administrative procedures available at the Commission. 5

Wirtgen neither used the procedures available under Commission Rules 210.76 and 210.79 to obtain a determination from the Commission regarding whether its redesign falls within the scope of the limited exclusion order issued in the 1088 investigation.6 Nor did Wirtgen request guidance from CBP under 19 C.F.R. part 177 on that issue.

Instead, Wirtgen opted to submit a memorandum,7 with unilateral attorney argument and devoid of expert analysis, to the IPR Branch on September 5, 2019, stating that they “will be importing a road milling machine that has been modified to be outside the scope of the limited exclusion order . . . issued by the U.S. International Trade Commission . . . in Investigation No. 337-TA-1088.” See Exhibit 6 of Wirtgen Protest at 1. In the email accompanying this memorandum, Wirtgen noted that the “first modified milling machine” was scheduled to arrive on September 9, 2019 (i.e., four days after submission of the memorandum).

4 The IPR Branch offered again in an email dated January 6, 2020 noting that “we remain open to a request for an administrative ruling submitted pursuant to 19 C.F.R. part 177.” 5 We further note that on August 19, 2019 Wirtgen filed a motion to stay the Commission’s remedial orders pending appeal; however this motion was denied by the Commission. In the Commission’s Order issued September 12, 2019, denying Wirtgen’s motion, the Commission also noted the procedures available to Wirtgen at the Commission “through which Wirtgen may obtain a timely ruling regarding whether its redesign falls within the scope of the remedial order.” Commission Order at 6, n.8, Doc. ID 688119 (Sep. 2019) (Public Version) (“Wirtgen states that it ‘is attempting to bring to market a redesign that would not be subject to the Commission’s exclusion order.’ Wirtgen’s Mot. at 19 n.1. The Commission notes that there are procedures available under Commission Rules 210.76 and 210.79 through which Wirtgen may obtain a timely ruling regarding whether its redesign falls within the scope of the remedial order. See 19 C.F.R. §§ 210.76, 210.79.”).

6 However, as noted infra, on January 16, 2020, the Commission “determined to institute a modification proceeding pursuant to Commission authority under 19 U.S.C. § 1337(k) and Commission Rule 210.76, 19 CFR 210.76.” Certain Road Construction Machines and Components Thereof, Investigation No. 337-TA-1088, EDIS Doc. No. 699503, Notice of Commission Determination to Institute a Modification Proceeding; Request for Written Submissions at 2 (January 16, 2020). 7 Nothing in the email or memorandum was designated as confidential. In addition to the memorandum dated September 5, 2019, Wirtgen provided photographs and videos of an XFi8 machine with a particular serial number, and noted that a technician could be arranged to demonstrate the operation of this machine at the port if needed. In a later email that same day, Wirtgen further stated that this memorandum was not a request for an administrative ruling under 19 C.F.R. part 177, but rather only a “courtesy” to let CBP know that an XFi machine “is already on the way.” Wirtgen further noted that “[s]hould Customs determine to exclude that machine [described in the memorandum], Wirtgen intends to file an administrative protest under 19 C.F.R. [part] 174.”

Since the submission of the memorandum to the IPR Branch on September 5, 2019, Wirtgen did not provide any additional information to the IPR Branch regarding its purportedly modified machines until December 2, 2019 following detention of one of its shipments. On December 2, 2019, Wirtgen’s broker submitted what appeared to be a self-certification from Wirtgen signed and dated September 9, 2019. This self-certification, which was not specific to any particular entry number, stated that the articles being imported are not subject to the exclusion order issued in the 1088 investigation.9

In addition, we note that on December 13, 2019, counsel for Wirtgen sent the IPR Branch a copy of a final written decision from the Patent Trial and Appeal Board (“PTAB”) of the U.S. Patent and Trademark Office (“USPTO”) finding certain claims, including claim 19, of the ’693 patent unpatentable. Wirtgen America, Inc. and Joseph Vogele AG v. Caterpillar Paving Products Inc., IPR2018-01201, Final Written Decision (Dec. 13, 2019) at 35.10

8 In the memorandum, Wirtgen noted that “[a]ll future modified machines can be identified by the ‘XFi’, e.g., W 100 XFi, W120 XFi, and W130 XFi.”

9 We note generally that “[c]ertification provisions aid U.S. Customs and Border Protection (“CBP”) in enforcing Commission Orders but ‘do not mandate that CBP accept certification as proof that the articles in question are not covered’ by the limited exclusion order.” Certain Robotic Vacuum Cleaning Devices and Components Thereof Such As Spare Parts, Comm’n Op. at 55 (Feb. 1, 2019) (USITC Pub. 4979 (Sept. 2019)) (quoting Certain Access Control Systems and Components Thereof, Inv. No. 337-TA-1016, Comm’n Op. at 35 (Aug. 21, 2018) (USITC Pub. 4957 (Sept. 2019)); see also Certain Network Devices, Related Software and Components Thereof (I), lnv. No. 337-TA-944, Comm’n Op. at 54 n.19 (June 23, 2016) (USITC Pub. 4909 (June 2019)) (“[t]he standard provision does not allow an importer to simply certify that it is not violating the exclusion order as Arista suggests. CBP only accepts a certification that the goods have been previously determined by CBP or the Commission not to violate the exclusion order.”).

10 We further note that the Commission has previously stated “that patent claims are valid until the [USPTO] issues certificates [for] cancelling [ ] those claims, which it cannot do until the exhaustion of any appeals [the patent owner] may take from the PTAB’s final written decisions.” See e.g., Certain Network Devices, Related Software and Components Thereof (II), Inv. No. 337-TA-945, Comm’n Op. at 12 (Aug. 16, 2017) (Public Version) (EDIS Doc. No. 620120) (“. . . the Commission finds that the PTAB final written decisions finding the relevant claims of the ‘577 and ‘668 patents unpatentable do not constitute a changed circumstance warranting temporarily rescinding the remedial orders issued in Inv. No. 337-TA-945, Certain Network Devices (II).”). To date, the

The Excluded Articles On December 17, 2019, pursuant to 19 U.S.C. § 1337(d), CBP denied entry of the following articles by reason of the limited exclusion order issued by the Commission in the 1088 investigation:

From Bill of Lading No. KKLU-HAM505320 (S) (i.e., entry no. [[ ]]): Wirtgen Cold Milling Machine, W 120 XTi, Serial No. 18101088; Wirtgen Cold Milling Machine, W 120 XTi, Serial No. 18101089; and Wirtgen Cold Milling Machine, W 120 XFi, Serial No. 18101092

From Bill of Lading No. WLWH-DE2007062 (S) (i.e., entry no. [[ ]]): Wirtgen Cold Milling Machine, W 120 XFi, Serial No. 18101084; and Wirtgen Cold Milling Machine, W 120 XTi, Serial No. 18101086. See e.g., CBP Letters to Wirtgen dated December 18, 2019 (Exhibits 2 and 3 of Wirtgen Protest).11

D. Protest No. 170119100004 On December 24, 2019, Wirtgen America, Inc. filed a protest challenging CBP’s denial of entry of the five Wirtgen Cold Milling Machines referenced above (collectively, the “articles at issue”). See Wirtgen Protest at 1–2. The statutory and regulatory authority cited by Wirtgen for the filing of this protest is “section 514(a)(4), Tariff Act of 1930, as amended (19 U.S.C. 1514(a)(4)), and 19 C.F.R. [part] 174.” Id. at 1.

Seizure and Forfeiture Order

On January 14, 2020, pursuant to 19 U.S.C. § 1337(i), the Commission issued a seizure and forfeiture order against road construction machines and components thereof that are imported in violation of the limited exclusion order issued in the 1088 investigation if imported by Wirtgen America Inc., or any affiliated companies, parents, subsidiaries, or other related business entities, or any of their successors or assigns. Certain Road Construction Machines and Components Thereof, Investigation No. 337-TA-1088, EDIS Doc. No. 699209, Seizure and Forfeiture Order (January 14, 2020) (the “1088 SFO”).

USPTO has not issued certificates cancelling claim 19 of the ’693 patent and the Commission has not modified or set aside the limited exclusion order issued in the 1088 investigation. Hence, the limited exclusion order issued in the 1088 investigation remains in effect.

11 We note that on December 6, 2019, CBP sent a letter to the Commission requesting clarification as to the 1088 investigation, particularly whether the Commission adjudicated any redesigned versions of Wirtgen’s series 1810 milling machines. See EDIS Doc. No. 699429. On December 12, 2019, the Commission responded to CBP in a letter, confirming that it did not adjudicate Wirtgen’s redesigned series 1810 machines. See EDIS Doc. No. 699436. Notice of Commission Determination to Institute a Modification Proceeding

On January 16, 2020, the Commission “determined to institute a modification proceeding pursuant to Commission authority under 19 U.S.C. § 1337(k) and Commission Rule 210.76, 19 CFR 210.76.” Certain Road Construction Machines and Components Thereof, Investigation No. 337-TA-1088, EDIS Doc. No. 699503, Notice of Commission Determination to Institute a Modification Proceeding; Request for Written Submissions at 2 (January 16, 2020) (“Commission Notice to Institute Modification”). “The modification proceeding is addressed to whether Wirtgen’s redesigned Models XFi and XTi machines infringe claim 19 of the ’693 patent and therefore fall within the scope of the LEO, or whether the LEO should be modified to include an explicit exemption for Wirtgen’s Model XFi and XTi redesigned machines.” Id.

The Commission found that an institution of a modification is warranted in view of the following facts:

Wirtgen’s Renewed Motion for Stay12 requests the Commission to clarify the scope of the Commission’s remedial orders; In the underlying violation investigation, the Commission did not adjudicate whether any redesigned products infringe the asserted patent claims; When CBP offered Wirtgen an opportunity to submit a request for an administrative ruling under 19 C.F.R. part 177 to address whether the redesigned products infringe, “Wirtgen declined to consent to an inter partes proceeding in which Caterpillar would be able to be heard, and thus declined CBP’s invitation for CBP to issue a ruling under 19 CFR part 177.”

Id. at 2–3.

ISSUE Whether an exclusion from entry made by CBP based on an order issued by the U.S. International Trade Commission pursuant to 19 U.S.C. § 1337 is a Customs decision subject to protest enumerated in 19 U.S.C. § 1514(a) and 19 C.F.R. § 174.11.

LEGAL STANDARDS Section 337 Exclusion Orders

Congress charged the Commission with investigating and making a determination whether or not there is a violation of Section 337, and on that basis, absent a finding that the public interest would be negatively affected, issuing an Order to “direct that the articles concerned, imported by any person violating the provision of this section, be excluded from entry into the United States.”

12 Wirtgen’s Renewed Motion for a Stay of the Commission’s Remedial Orders was filed on December 31, 2019 and Wirtgen asked the Commission to “[a]t a minimum, . . . clarify that the exclusion order does not apply to the Redesigned 1810 Series machines. . . .” Wirtgen’s Renewed Motion for Stay (Public Version) at 14 (EDIS Doc. No. 699111). See Section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1337(a)(1) (“the following are unlawful, and when found by the Commission to exist shall be dealt with, in addition to any other provision of law. …”); 19 U.S.C §§ 1337(b), (c) and (d); see also S.Rep. No. 1298, 93d Cong., 2d Sess. 196 (“the relief provided for violations of section 337 is ‘in addition to’ that granted in ‘any other provisions of law’”). “Any person adversely affected by a final determination of the Commission . . . may appeal such determination . . . to the United States Court of Appeals for the Federal Circuit for review. ” 19 U.S.C. § 1337(c).

When the Commission determines there is a violation of section 337, it generally issues one of two types of exclusion orders: (1) a limited exclusion order or (2) a general exclusion order. See Fuji Photo Film Co., Ltd. v. U.S. Int’l Trade Comm’n, 474 F.3d 1281, 1286 (Fed. Cir. 2007). Both types of orders direct CBP to bar infringing products from entering the country. See Yingbin- Nature (Guangdong) Wood Indus. Co. v. U.S. Int’l Trade Comm’n, 535 F.3d 1322, 1330 (Fed Cir. 2008). “A limited exclusion order is ‘limited’ in that it only applies to the specific parties before the Commission in the investigation. In contrast, a general exclusion order bars the importation of infringing products by everyone, regardless of whether they were respondents in the Commission's investigation.” Id.

The “Commission has broad discretion in selecting the form, scope and extent of the remedy. Viscofan, S.A. v. United States ITC, 787 F.2d 544, 548 (Fed. Cir. 1986). The Commission has consistently issued exclusion orders coextensive with the violation of section 337 found to exist.” See Certain Erasable Programmable Read Only Memories, Inv. No. 337-TA-276, Enforcement Proceeding, Comm’n Op. at 11, Doc ID 43536 (Aug. 1991) (emphasis added).

While individual models may be evaluated to determine importation and [violation], the Commission's jurisdiction extends to all models of [violative] products that are imported at the time of the Commission’s determination and to all such products that will be imported during the life of the remedial orders . . . Moreover, the Commission’s long-standing practice has been to avoid using model numbers in its exclusion orders because such model numbers can be changed, and the exclusion order circumvented.

Certain Optical Disk Controller Chips and Chipsets, Inv. No. 337-TA-506, Comm’n Op. at 56– 57, USITC Pub. 3935, Doc ID 287263 (July 2007); cf. NLRB v. Bell Aerospace Co., 416 U.S. 267, 294 (1974) (An agency “is not precluded from announcing new principles in an adjudicative proceeding and that the choice between rulemaking and adjudication lies in the first instance within the [agency’s] discretion.”) (citing SEC v. Chenery Corp., 332 U.S. 194, 203 (1947)).

After the Commission finds a violation of section 337 and remedial orders issue, the burden shifts to the adjudged infringer (i.e., the respondent) to demonstrate that similar articles, such as redesigned articles, do not infringe. See, e.g., Hyundai Elecs. Indus. Co. v. USITC, 899 F.2d 1204, 1210 (Fed. Cir. 1990) (stating that the issuance of an exclusion order “effectively shifts to would- be importers of potentially infringing articles, as a condition of entry, the burden of establishing noninfringement.”); see also Sealed Air Corp. v. ITC, 645 F.2d 976, 985–89 (C.C.P.A. 1981). In doing so, the Commission is permitted to place the risk of unfairness on importers, rather than domestic industries. Id. Pursuant to title 19 U.S.C. § 1337(d), and the delegated authority from the Secretary of the Treasury, the Commission directs CBP to exclude from entry into the United States, merchandise that is subject to a section 337 exclusion order.13 See 19 U.S.C. § 1337(d) (“The Commission shall notify the Secretary of the Treasury of its action under this subsection directing such exclusion from entry, and upon receipt of such notice, the Secretary shall, through the proper officers, refuse such entry.”); 19 U.S.C § 1401(i); 6 U.S.C §§ 212 & 215; see 6 U.S.C. § 212; 19 C.F.R. pt. 0; Customs Directive No. 2310-006A (Dec. 16, 1999). Further, except as provided in 337(f) and (j), “any exclusion from entry or order under [Section 337] shall continue in effect until the Commission finds, and in the case of exclusion from entry notifies the Secretary of the Treasury, that the conditions which led to such exclusion from entry no longer exist.” 19 U.S.C § 1337(k). Accordingly, action by CBP with respect to exclusion under Section 337 is dependent on an Order from another agency.14

In addition, the Commission may issue an order under 19 U.S.C. § 1337(i) directing CBP to seize and forfeit articles attempting entry in violation of an exclusion order if their owner, importer, or consignee previously had articles denied entry on the basis of that exclusion order and received notice that seizure and forfeiture would result from any future attempt to enter articles subject to the same.

Section 337 of the Tariff Act of 1930, as amended, 19 U.S.C § 1337, is a trade statute. See e.g., Ninestar v. International Trade Commission, 667 F.3d 1373, 1384 (Fed. Cir. 2012) (quoting Akzo N.V. v. U.S. Int’l Trade Comm’n, 808 F.2d 1471, 1488 (Fed. Cir. 1986) (“[a]lthough it is true that private rights may be affected by section 337 determinations, the thrust of the statute is directed toward the protection of the public interest from unfair trade practices in international commerce.”); see also, Suprema, Inc. v. Int’l Trade Comm’n, 796 F.3d 1338, 1350 (Fed. Cir. 2015) (en banc) (“[t]he legislative history consistently evidences Congressional intent to vest the Commission with broad enforcement authority to remedy unfair trade acts.”).

The source of Section 337’s authority is different from that underlying patent law. Section 337 and its predecessor provisions are a delegation of Congress’s “plenary constitutional power to regulate foreign commerce” under Article I, Sealed Air Corp. v. ITC, 645 F.2d 976, 985–87 (C.C.P.A. 1981)), for the purpose of providing an adequate remedy for domestic industries against unfair practices undertaken abroad. Id. at 985; In re Orion Co., 71 F.2d at 467 (C.C.P.A. 1934). The Commission considers, among other bases, allegations of patent infringement in order to determine whether there has been a violation of Section 337. See S.Rep. No. 1298, 93d Cong., 2d Sess. 196 (“[I]n patent-based cases, the Commission considers, for its own purposes under section

13 If the Commission orders temporary relief during the pendency of proceedings before the Commission to determine whether there has been a violation of Section 337, the Secretary is directed to exclude merchandise pursuant to 19 U.S.C § 1337(e).

14 In comparison, CBP has independent authority to take action against imported articles that infringe a registered and recorded U.S. trademark, see 15 U.S.C. § 1124; 19 U.S.C. § 1526, or a copyright, see 17 U.S.C. § 602. 337, the status of imports with respect to the claims of U.S. patents.”); Corning Glass Works v. ITC, 799 F.2d 1559, 1565 & n.5 (Fed. Cir. 1986).

Unlike in district court, the Commission’s primary remedy is an exclusion order (and, as appropriate, a cease and desist order): “[t]he legislative history…indicates that Congress intended injunctive relief to be the normal remedy for a Section 337 violation and that a showing of irreparable harm is not required to receive such injunctive relief.” Spansion, Inc. v. U.S. Int’l Trade Comm’n, 629 F.3d 1331, 1359 (Fed. Cir. 2010). This difference between exclusion orders under Section 337 and injunctions under the Patent Act “follows ‘the long-standing principle that importation is treated differently than domestic activity.’” Id. at 1360 (quoting In the Matter of Certain Baseband Processor Chips and Chipsets, Transmitter and Receiver (Radio) Chips, Power Control Chips, and Products Containing Same, Including Cellular Telephone Handsets, Inv. No. 337-TA-543, 2007 ITC LEXIS 621 *102 n.230 (U.S.I.T.C. June 19, 2007)(citing United States v. 12-200-ft. Reels of Film, 413 U.S. 123,125 (1973))).

Decisions of Customs subject to Protests

19 U.S.C. § 1514(a) identifies the decisions that are subject to protest:

ecisions of the Customs Service, including the legality of all orders and findings entering into the same, as to—

the appraised value of merchandise; the classification and rate and amount of duties chargeable; all charges or exactions of whatever character within the jurisdiction of the Secretary of the Treasury; the exclusion of merchandise from entry or delivery or a demand for redelivery to customs custody under any provision of the customs laws, except a determination appealable under section 1337 of this title; the liquidation or reliquidation of an entry, or reconciliation as to the issues contained therein, or any modification thereof, including the liquidation of an entry, pursuant to either section 1500 of this title or section 1504 of this title; the refusal to pay a claim for drawback; or the refusal to reliquidate an entry under subsection (d) of section 1520 of this title;

shall be final and conclusive upon all persons (including the United States and any officer thereof) unless a protest is filed in accordance with this section, or unless a civil action contesting the denial of a protest, in whole or in part, is commenced in the United States Court of International Trade . . . .

19 U.S.C. § 1514(a). This is echoed in CBP’s protest regulations at 19 C.F.R. part 174, which enumerate the CBP administrative decisions that may be protested under 19 U.S.C. § 1514. See 19 C.F.R. part 174. Specifically 19 C.F.R. § 174.11(b) states:

CBP administrative decisions involving the following subject matters are subject to protest:

The appraised value of merchandise; The classification and rate and amount of duties chargeable; All charges or exactions of whatever character, including the accrual of interest, within the jurisdiction of the Secretary of Homeland Security or the Secretary of the Treasury; The exclusion of merchandise from entry, delivery, or a demand for redelivery to CBP custody under any provision of the customs laws except a determination that may be appealed under 19 U.S.C. 1337; The liquidation or reliquidation of an entry, or any modification of an entry; The refusal to pay a claim for drawback; The refusal to reliquidate an entry made before December 18, 2004, under section 520(c), Tariff Act of 1930, as amended (19 U.S.C. 1520(c)); or The refusal to reliquidate an entry under section 520(d), Tariff Act of 1930, as amended (19 U.S.C. 1520(d)).

19 C.F.R. § 174.11(b).

28 U.S.C. § 1581(a) provides no jurisdiction for the Court of International Trade (“CIT”) outside of the categories enumerated in 19 U.S.C. § 1514(a). See Mitsubishi Electronics America, Inc. v. United States, 44 F.3d 973, 976 (Fed. Cir. 1994) citing Playhouse Import & Export, Inc. v. United States, 843 F. Supp. 716, 719 (Ct. Int’l Trade 1994); see also Acciaierie Valbruna S.p.A v. United States, 33 C.I.T. 1012, 1019, 2009 Ct. Intl. Trade LEXIS 84, *16-17, 31 Int'l Trade Rep. (BNA) 1789, SLIP OP. 2009-77 (“[T]hese categories are exclusive, and if Customs’ underlying decision does not relate to any of these seven categories, [then] the court may not exercise § 1581(a) jurisdiction over an action contesting Customs’ denial of a protest filed against that decision.”) (citations omitted) (internal quotations omitted).

Commission Modification of its Own Order

The statutory authority for modification proceedings at the Commission is 19 U.S.C. § 1337(k). 19 U.S.C. § 1337(k)(1) states: Except as provided in subsections (f) and (j), any exclusion from entry or order under this section shall continue in effect until the Commission finds, and in the case of exclusion from entry notifies the Secretary of the Treasury, that the conditions which led to such exclusion from entry or order no longer exist.15

In accordance with that statutory provision, the Commission has promulgated rules governing modification proceedings. See 19 C.F.R. § 210.76. In addition, on February 23, 2015, the Commission announced a Pilot Program to test an expedited administrative process in these proceedings. See https://www.usitc.gov/press_room/featured_news/pilot_program_will_test_exp edited_procedures_usitc.htm (last visited Nov. 27, 2019) (“Modification proceedings are instituted to determine whether [sic] the scope of an existing remedial order should be modified based on changed circumstances of fact or law. The Commission can determine whether a redesigned or new product is covered by an existing exclusion, consent, or cease and desist order. . . .”). Commission modification decisions are final determinations appealable to the U.S. Court of Appeals for the Federal Circuit (“CAFC” or “Federal Circuit”). See, e.g., Allied Corp. v. U.S. Int’l Trade Comm’n, 850 F.2d 1573 (Fed. Cir. 1988).

ANALYSIS

Whether an exclusion from entry made by CBP pursuant to an exclusion order issued under 19 U.S.C. § 1337 is a Customs decision subject to protest enumerated in 19 U.S.C. § 1514(a) and 19 C.F.R. § 174.11 is not an issue that CBP, or any court, has a taken a considered analysis of in the past. Rather, this issue has largely gone undisputed and unaddressed. See, e.g., Corning Gilbert, Inc. v. United States, 896 F. Supp. 2d 1281, 1283 (Court noted that plaintiff “timely protested the exclusion [made by CBP based on a general exclusion order issued by the U.S. International Trade Commission] and, pursuant to 19 U.S.C. § 1515(a) and 19 C.F.R. §§ 174.24 and 177.2, applied for further review, and requested an administrative ruling from Customs Headquarters” but did not discuss whether the exclusion was a decision subject to protest under 19 U.S.C. § 1514(a) and 19 C.F.R. § 174.11 in the first instance); Otter Prods., LLC v. United States, 37 F. Supp. 3d 1306, 1313 (Court said that it was without dispute that the court has subject matter jurisdiction in this case pursuant to 28 U.S.C. § 1581(a) without further discussion on whether the exclusion of merchandise by CBP pursuant to an exclusion order issued by the Commission under 19 U.S.C. § 1337 was, in the first instance, a decision subject to protest under 19 U.S.C. § 1514(a) and 19 C.F.R. § 174.11).

However, “[i]f that statute is clear on its face, the court must follow Congressional intent, regardless of the existence of an interpretation by Customs to the contrary.” Precision Specialty Metals v. United States, 24 C.I.T. 1016, 1025 (2000) citing Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842–43 (1984)). 19 U.S.C. § 1514(a), addressing the finality of Custom’s decisions for purposes of administrative protests contains an express exception under 19 U.S.C. § 1514(a)(4) for “a determination appealable under [19 U.S.C. § 1337.]” See, also, 19 C.F.R. § 174.11. 19 U.S.C. § 1337(k) provides for a remedy with respect to the underlying order implementing the Commission’s determination on violation wherein any person previously found in violation of Section 337 may seek “modification or rescission” of the order on

15 For purposes of 19 U.S.C. § 1337(k), “a showing that [an article] is not now so covered would reflect a change from that presumed [infringement], even though, . . . it did not actually change.” Sealed Air Corp. v. United States ITC Polybubble, 645 F.2d 976, 989 n.20 (C.C.P.A. 1981). the ground that it “is no longer” violating the statute. See also, 19 C.F.R. § 210.76. A decision on modification or rescission, like violation, is subject to direct review by the Federal Circuit. See, e.g., Allied Corp. v. U.S. Int’l Trade Comm’n, 850 F.2d 1573 (Fed. Cir. 1988).

Moreover, “the existence of unaddressed jurisdictional defects has no precedential effect.” Lewis v. Casey, 518 U.S. 343, 353 n.2 (1996) accord Automated Merchandising Sys v. Lee, 782 F.3d 1376, 1381 (Fed. Cir. 2015). “When a potential jurisdictional defect is neither noted nor discussed in a federal decision, the decision does not stand for the proposition that no defect existed.” Arizona Christian Sch. Tuition Org. v. Winn, 563 U.S. 125, 144 (2011); see Will v. Mich. Dep’t of State Police, 491 U.S. 58, 63 n. 4 (1989) (“[T]his Court has never considered itself bound by prior sub silentio holdings when a subsequent case finally brings the jurisdictional issue before us.”) (citation and internal quotation marks omitted); United States v. L.A. Tucker Truck Lines, Inc., 344 U.S. 33, 38 (1952) (same); see also Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 91 (1998) (cases of “drive-by jurisdictio[n]” “have no precedential effect”).16

For the following reasons and as discussed infra, we find that the exclusion of the articles at issue made by CBP pursuant to the 1088 LEO issued by the Commission under 19 U.S.C. § 1337 is not a matter subject to protest. See e.g., 19 U.S.C. § 1514(a)(4).17 First, this is consistent with the plain text of 19 U.S.C. § 1514(a) and 19 C.F.R. § 174.11. Second, this is supported by the legislative history. Third, this best serves the fundamental statutory objectives of 19 U.S.C. § 1337 to protect industries in the United States from unfair methods of competition and unfair acts in the importation of articles into the United States. See, e.g., 19 U.S.C. § 1337(a). Fourth, this prevents the administrative and judicial difficulties created by potentially permitting review of “a determination appealable under section 1337 of this title [i.e., title 19]” in two forums. Accordingly, the instant protest should be denied as not protestable.

19 U.S.C. § 1514 is clear on its face: “a determination appealable under section 1337 of this title [i.e., title 19]” is not one of the categories enumerated in 19 U.S.C. § 1514(a)

The statute is clear on its face: Wirtgen’s protest challenging CBP’s exclusion of merchandise (i.e., the articles at issue) from entry by reason of the 1088 LEO is not a proper protest under 19 U.S.C. § 1514(a). Instead, Wirtgen’s remedy in this instance is an appeal as provided by 19 U.S.C. § 1337.

CBP’s exclusion of the articles at issue is pursuant to the exclusion order issued by the Commission in the 1088 investigation under 19 U.S.C. § 1337. See, e.g., 1088 LEO; 19 U.S.C. § 1337(d). Wirtgen’s protest specifies that it is “filed in accordance with section 514(a)(4), Tariff

16 See also, Funai Electric Co., Ltd. v. United States, 33 C.I.T. 1496, 1503–04 (2009) (the court acknowledged that it granted an injunction in Eaton Corp. v. United States, 29 C.I.T. 1149 (2005), but it explained that a “subsequent reading” of relevant precedent” does not lead this court to conclude that the current state of the law supports” a finding of jurisdiction). 17 This does not modify or revoke any prior interpretive rulings or decisions. Nor does this have the effect of modifying the treatment previously accorded by CBP to substantially identical transactions. Act of 1930, as amended (19 U.S.C. 1514(a)(4)), and 19 C.F.R. § 174.” See Wirtgen Protest at 1. While “the exclusion of merchandise from entry” is generally addressed under subsection (4) of 19 U.S.C. § 1514(a), Congress excepted—carved out—from protest “a determination appealable under section 1337 of this title [i.e., title 19].” See 19 U.S.C. § 1514(a)(4). Wirtgen’s underlying cause of action in the protest stems from the exclusion order issued by the Commission in the 1088 investigation, rather than CBP’s exclusion of merchandise from entry.18 Thus, in accordance with the language of 19 U.S.C. § 1514(a)(4), Wirtgen’s remedy is an appeal as provided by 19 U.S.C. § 1337, not a protest under 19 U.S.C. § 1514(a). 19

As set forth in 19 U.S.C. §1337(c), “[a]ny person adversely affected by a final determination of the Commission . . . may appeal such determination . . . to the United States Court of Appeals for the Federal Circuit for review. . . .”20 Further, to the extent Wirtgen’s “alternate swing-leg designs” were not ripe for adjudication before the Commission on violation because the designs had not yet been implemented in any imported articles, see, e.g., FID at 25, the Commission has authority to modify or rescind its Order by instituting a modification proceeding under 19 U.S.C. § 1337(k). Commission modification decisions are final determinations

18 The matter is not one of a “[c]lerical error[], mistake[] of fact, [or] other inadvertence[].” 19 U.S.C. § 1514(a). In the 1088 investigation, the Commission found “a section 337 violation based on the infringement of claim 19 of the ‘693 patent by Wirtgen’s series 1810 milling machines.” Comm’n Op. at 46. Further, in the 1088 investigation, while Wirtgen presented “alternate swing- leg designs,” the ALJ found “‘[t]hese alternate swing-leg designs’ are not ripe for a determination of infringement or non-infringement in this investigation.” FID at 24-25. Wirtgen did not petition for review of the FID’s findings on this issue, and the Commission determined not to review this issue. Comm’n Op. at 10 n.22. The Commission did not adjudicate whether any redesigned products infringe the asserted patent claims in the underlying violation investigation. Commission Notice to Institute Modification at 2–3. The articles at issue are Wirtgen’s series 1810 milling machines, albeit purported redesigns, models XFi and XTi. Wirtgen Protest at 2. The Commission has determined to institute a modification proceeding to address “whether Wirtgen’s redesigned Models XFi and XTi machines [i.e., the same as the articles at issue] infringe claim 19 of the ’693 patent and therefore fall within the scope of the LEO, or whether the LEO should be modified to include an explicit exemption for Wirtgen’s Model XFi and XTi redesigned machines.” Commission Notice to Institute Modification at 2. Cf. Jazz Photo Corp. v. United States, 28 C.I.T. 1954, 1956 (2004) (court reviewed sufficiency of documentation presented to CBP for establishing a first-sale and permissible repair defense).

19 Further, in conjunction, 28 U.S.C. § 1581(a) provides no jurisdiction for the CIT outside of the categories enumerated in 19 U.S.C. § 1514(a). See Mitsubishi Electronics America, Inc. v. United States, 44 F.3d 973, 976 (Fed. Cir. 1994) citing Playhouse Import & Export, Inc. v. United States, 843 F. Supp. 716, 719 (Ct. Int’l Trade 1994). In addition, a matter outside the scope of 28 U.S.C. § 1581(a) will also be outside the scope of the jurisdictional provision of 28 U.S.C. § 1581(i) for the review of “administration and enforcement with respect to the matters referred to in . . . subsection[] (a).” K Mart Corp. v. Cartier, 485 U.S. 176, 190 (1988).

20 The Court of Appeals for the Federal Circuit has exclusive jurisdiction to review the Commission’s final determinations under Section 337. 28 USC § 1295(a)(7). appealable to the U.S. Court of Appeals for the Federal Circuit. See, e.g., Allied Corp. v. U.S. Int’l Trade Comm’n, 850 F.2d 1573 (Fed. Cir. 1988).

The Customs Courts Act of 1980

In 1980, Congress enacted the Customs Courts Act of 1980, Pub. L. No. 96-417, 94 Stat. 1727 (1980) “to improve the Federal judiciary machinery by clarifying and revising certain provisions of title 28, United States Code, relating to the judiciary and judicial review of international trade matters . . . .” H.R. Rep. No. 96-1235, at 1 (1980).21 While the revisions enacted enlarged the jurisdiction of the United States Customs Court, which was renamed the United States Court of International Trade, the legislative history of the Customs Courts Act of 1980 indicate a clear intention that the jurisdiction of the United States Court of International Trade was not to encompass the review of the exclusion of merchandise pursuant to section 337 of the Tariff Act of 1930. The plain text of 28 U.S.C. § 1581 and 19 U.S.C. § 1514 confirms this.

Congress Narrowed the Scope of Actions Protestable Under 1514(a)(4) to Except “Determination[s] Appealable Under Section 1337 of This Title” Therefrom

The language “except a determination appealable under section 1337 of this title” was incorporated into §1514 as part of the Customs Courts Act of 1980, thereby narrowing its application. In technical comments incorporated into the Commission’s statement before Congress on the proposed legislation, the Commission proposed adding “except actions otherwise appealable under section 337 of Tariff Act of 1930” after the phrase “any provisions of the custom laws.” Customs Courts Act of 1979: Hearing on S. 1654 Before the Subcomm. on Improvements in Judicial Machinery of the S. Comm. on the Judiciary, 96th Cong. 25 (1979). The Commission specified the reason for this proposed change was that “[e]xclusion of merchandise from entry is a remedy under section 337. Section 337 determinations are reviewable exclusively by the U.S. Court of Customs and Patent Appeals [i.e., currently the U.S. Court of Appeals for the Federal Circuit].” Id.; see Section 337 of the Tariff Act of 1930, as amended by the Trade Act of 1974, 19 U.S.C. §1337(c). Congress later adopted the Commission’s technical amendments. See S. Rep. No. 96-466, at 07 (1979).

Review of Commission Determinations Reserved to the Federal Circuit

In addition, the Commission’s hearing statement supported the bill’s section that would “clarify standards of review in actions to review Section 337 determinations in the U.S. Court of Customs and Patent Appeals,” (before it became the U.S. Court of Appeals for the Federal Circuit in 1982). Id.

21 The Customs Courts Act of 1980 is codified in various sections of Title 19 and Title 28 of the United States Code. See Sec. 201, 94 Stat. at 1728. With the prior enactment of the Trade Act of 1974, Section 337 had recently been overhauled to put it substantially in its current modern form. Trade Act of 1974, Pub. L. No. 93- 618, §§ 171–175, 88 Stat. 2009–2011 (January 3, 1975). Section 337(c), as amended by the Trade Act of 1974, 19 U.S.C § 1337, provided:

(c) The Commission shall determine, with respect to each investigation conducted by it under this section whether or not there is a violation of this section. Each determination under subsection (d) or (e) shall be made on the record after notice and opportunity for a hearing in conformity with the provisions of subchapter II of chapter 5 of title 5, United States Code. All legal and equitable defenses may be presented in all cases. Any person adversely affected by a final determination of the Commission under subsection (d) or (e) may appeal such determination to the United States Court of Customs and Patent Appeals. Such court shall have jurisdiction to review such determination in the same manner and subject to the same limitations and conditions as in the case of appeals from decisions of the United States Customs Court.

Pub. L. No. 93-618 § 337(c); see also Hearing on S. 1654 at 46, 52.

The Commission’s hearing statement elaborated:

Section 337 authorizes the Commission to investigate and order to cease certain unfair trade practices in the import trade of the United States. Under the new law, the standards applicable under the Administrative Procedure Act to adjudicative actions of agencies will apply to all Commission determinations under section 337, except determinations of general public interest factors enumerated in the section, which may not be overturned except for abuse of discretion. No de novo court trial or court determination of the weight of the evidence would be authorized. A corresponding change in the Judicial Code is necessary which we have proposed in our attached technical comments.

Hearing on S. 1654 at 25. . See S. Rep. No. 96-466, at 07 (1979).

Congress amended Section 337(c) providing that CCPA appeals of a Commission determination on violation would be “review[ed] in accordance with chapter 7 of title 5, United States Code” and, “[n]othwithstanding the foregoing…findings on [the public interest], the amount and nature of the bond, appropriate remedy shall be reviewable in accordance with section 706 of title 5, United States Code. Pub. L. No. 96-417, Sec. 604. As part of the discussion of technical and conforming amendments to other Acts, Congress noted that with respect to section 514(a) of the Tariff Act of 1930 (i.e., 19 U.S.C. 1514(a)), “[t]he proviso regarding the exclusion of merchandise pursuant to section 337 of the Tariff Act of 1930 (19 U.S.C. § 1337) is a clarification of the court’s jurisdiction in that 28 U.S.C. § 154322 provides that such determinations are directly reviewable by the [Court of Appeals for the Federal Circuit].” H.R. Rep. No. 96-1235, at 68 (1980).

The CIT May Not Assume Jurisdiction Reserved to the Federal Circuit

The statutes are clear on their face. Congress never intended for the U.S. Court of International Trade to have jurisdiction to review the exclusion of merchandise pursuant to an exclusion order issued under section 337 of the Tariff Act of 1930 as that was within the purview of the Commission and appealable to the CCPA (now the CAFC). See e.g., 19 U.S.C. § 1514(a); 28 U.S.C. § 1581(a); 19 U.S.C. § 1337(c); 19 U.S.C. § 1337(k); 28 U.S.C. § 1295. Moreover, as noted above, the legislative history demonstrates that Congress rejected unfettered de novo review by the Federal Circuit in granting to it exclusive jurisdiction to review the Commission’s Section 337 determinations. In review by the Federal Circuit of Commission determinations under Section 337, the Commission’s legal determinations are reviewed de novo and factual findings are reviewed for substantial evidence. Cisco Systems, Inc. v Int’l Trade Comm’n, 873 F.3d 1354, 1361 (Fed. Cir. 2017) (noting “a finding of infringement is a factual determination reviewed for substantial evidence.”) Decisions on remedy, are subject to an arbitrary and capricious/abuse of discretion standard of review. Hyundai v. Int’l Trade Comm’n, 899 F.3d. 1204 (Fed. Cir. 1990); see also, Viscofan, S.A. v. United States Int'l Trade Comm’n, 787 F.2d 544, 548 (Fed. Cir. 1986) (“the Commission has broad discretion in selecting the form, scope, and extent of the remedy, and judicial review of its choice of remedy necessarily is limited.”).

Protecting Industries in the United States

The administrative protest procedure that Wirtgen is attempting to utilize does not serve the objectives of 19 U.S.C. § 1337. As noted supra, in line with the statutory text, Wirtgen’s protest is not proper: it does not contain a matter subject to protest. 19 U.S.C. § 1514(a)(4). Rather, Wirtgen’s remedy in this instance is an appeal as provided by 19 U.S.C. § 1337. See e.g., 19 U.S.C. § 1514(a)(4); 19 U.S.C. § 1337(c); 19 U.S.C. § 1337(k).

A fundamental objective of 19 U.S.C. § 1337 is to protect industries in the United States from unfair methods of competition and unfair acts in the importation of articles into the United States. See e.g., 19 U.S.C. § 1337(a); see also Sealed Air Corp. v. United States ITC Polybubble, 68 C.C.P.A. 93, 104 (1981) (“The Tariff Act of 1930 . . . and its predecessor, the Tariff Act of 1922, were intended to provide an adequate remedy for domestic industries against unfair methods of competition and unfair acts instigated by foreign concerns. ”).

22 The Federal Circuit’s “jurisdictional statute gives [it] exclusive jurisdiction to ‘review the final determinations of the United States International Trade Commission relating to unfair practices in import trade, made under section 337 of the Tariff Act of 1930 (19 U.S.C § 1337).’ § 1295(a)(6). ‘Final determinations appealable under 28 U.S.C. § 1295(a)(6) are specified in § 1337(c)….’” Amarin v. U.S. Int’l Trade Comm’n, 923 F.3d 959, 962 (quoting Crucible Materials Corp. v. ITC, 127 F.3d 1057, 1060 (Fed. Cir. 1997) In line with these objectives, “the purpose of the Commission is to adjudicate trade disputes between U.S. industries and those who seek to import goods from abroad. The retention of the requirement that the statute be utilized on behalf of an industry in the United States retains that essential nexus.” H.R. REP. NO. 100-40, at 156-57. The domestic industry requirement acts as a “gatekeeper,” preventing the “[transformation] of the ITC into an intellectual property court.” 132 Cong. Rec. 30,816 & n.5 (1986) (statement of Rep. Kastenmeier); see also S. Rep. No. 100- 71, at 129 (1987).23 For example, in the 1088 investigation, the Commission found that the complainants, which included Caterpillar Paving Products, Inc., the owner of the ’693 patent, satisfied the domestic industry requirement.

Further, “[t]he central purpose of remedial orders is to ensure complete relief to the domestic industry,” and an “exclusion order covering only specific models of an accused device could easily be circumvented, thereby denying complete relief to the domestic industry.” Certain Hardware Logic Emulation Sys. & Components Thereof, Inv. No. 337-TA-383, Comm’n Op., 1998 ITC LEXIS 138, *32 (Mar. 1, 1998); see also Certain Road Milling Machines and Components Thereof, Investigation No. 337-TA-1067, Wirtgen America, Inc.’s Statement on Remedy, the Public Interest, and Bonding (Public Version) at 4 (May 8, 2019) (citing the quoted language with approval).

However, the administrative protest procedures that Wirtgen is attempting to use bars participation from the industries in the United States that 19 U.S.C. § 1337 was meant to protect. See 19 U.S.C. § 1514; see 19 C.F.R. part 174. As a result, CBP has not been able to disclose information to Caterpillar (and accordingly, receive their input) related to the articles at issue even though, in the 1088 investigation, the Commission in finding infringement of the patent claim at issue relied on expert testimony provided by Caterpillar. See e.g., FID at 22 and 24. Further, “[i]n section 1581(a) actions challenging a denied protest, Congress limited the number of interested parties to two: the importer (or someone standing in the shoes of the importer under 19 U.S.C. § 1514) and the Government. The statute forecloses intervention by any other interested party. 28 U.S.C. § 2631(j)(1)(A) (2006) (‘[N]o person may intervene in a civil action under [19 U.S.C. § 1515 or 1516].’).” Corning Gilbert, Inc. v. United States, 837 F. Supp. 2d 1303, 1305 (2012).

In contrast, appeals and investigations under 19 U.S.C. § 1337 contemplate participation from all interested parties. For example, in appeals under 19 U.S.C. § 1337(c), the Commission is the named appellant and represented by its own general counsel, as authorized by the Trade Act of 1974, to defend the Commission’s determination. Pub. L. No. 93-618, § 174 (“The Commission shall be represented in all judicial proceedings by the attorneys who are employees of the

23 Moreover, a valid complaint before the Commission must describe the complainant’s domestic industry, the complainant’s business and interests in the relevant domestic industry, and ownership of the intellectual property rights at issue. See e.g., 19 C.F.R. § 210.12. For example, in Caterpillar’s complaint for the 1088 investigation, Caterpillar noted, inter alia, that Caterpillar Paving Products, Inc. and Caterpillar Inc. have approximately 70 facilities in the United States, a workforce of 48,500 people, a network of independent dealers in all 50 states, and a supplier base of more than 15,000 companies. Certain Road Construction Machines and Components Thereof, Investigation No. 337-TA-1088, Caterpillar’s Complaint at ¶ 10 (Oct. 26, 2017). commission, or, at the request of the commission, by the Attorney General of the United States;”); 19 U.S.C § 1337(c). Moreover, intervention in this appeal by the party that prevailed in the underlying Commission proceedings is routinely granted. For example, in Wirtgen GmBH, Jospeh Vogele AG, Wirtgen Group Holding GmBH, Wirtgen America, Inc. v. International Trade Commission, No. 2019-2320 (Fed. Cir.) Caterpillar Inc. and Caterpillar Paving Products Inc. are intervenors.

The danger to domestic industry and the divergent outcomes that can result from cases in which only the respondent and government participate is clearly illustrated by ArvinMeritor, Inc. v. United States, 29 C.I.T. 899 (Aug. 12, 2005) and Eaton Corp. v. United States, 29 C.I.T. 1149 (Sep. 5, 2005). Both cases involve CBP’s enforcement, or rather lack of, enforcement of the ITC’s limited exclusion order issued in investigation no. 337-TA-503 (“the 503 investigation”); particularly with respect to ArvinMeritor’s redesigned article. Eaton, 29 C.I.T. at 1149-50; 1154; 1158. In the 503 investigation, Eaton Corp. was the complainant and ArvinMeritor was the respondent. Id. at 1151.

ArvinMeritor, Inc. v. United States, 29 C.I.T. 899 (Aug. 12, 2005) was brought by ArvinMeritor against the United States. ArvinMeritor, 29 C.I.T. at 900. Eaton Corp. was not a party. Id. at 901. Even though the Commission had not yet completed its advisory opinion proceeding with respect to ArvinMeritor’s redesigned articles, CBP promulgated a form for certification that would allow ArvinMeritor to enter its redesigned articles into the United States. See generally Eaton, 29 C.I.T. at 1155-59. CBP later rescinded one form of certification in favor of another such form and that “revision became the object of ArvinMeritor, Inc.’s complaint in [ArvinMeritor, Inc. v. United States].” Id. at 1159. The filing of the complaint by ArvinMeritor swiftly resulted in “CBP’s return to [the certification’s] original language in conjunction with the immediate Stipulation of Settlement and Dismissal.” Id. at 1159. It was not until Eaton Corp. filed a motion to intervene in the action that it learned that the government and ArvinMeritor had already executed the Stipulation of Settlement and Dismissal. Id. at 1149. This led to the commencement of Eaton Corp. v. United States, 29 C.I.T. 1149 (Sep. 5, 2005) one week later. Id. at 1159.

Eaton Corp. v. United States, 29 C.I.T. 1149 (Sep. 5, 2005) was commenced by Eaton Corp. against the government. ArvinMeritor “interposed a motion for leave to intervene as a party,” which the court granted. Id. at 1150. Eaton Corporation alleged that while the limited exclusion order was in effect, ArvinMeritor was permitted by CBP to enter its redesigned articles, purportedly on the grounds that the redesigned system did not infringe the patent claims listed in the exclusion order. See, e.g., id. at 1149-50; 1158-61. Eaton Corp. asked the court for, inter alia, a preliminary injunction. Id. at 1160. Upon review, the court granted Eaton Corporation’s motion for a preliminary injunction and enjoined CBP from permitting entry of ArvinMeritor’s redesigned articles “that has been or still is within the purview of the investigation of the [ITC] pursuant to 19 U.S.C. § 1337 . . . and of the plain English of the Limited Exclusion Order . . . and written clarification sent by the [ITC] to [CBP].” Id. at 1167. In doing so, the court noted, “[u]ntil such time as the ITC issues the advisory opinion requested by the respondents before it, however, the court cannot find as a matter of public fact herein that they are no longer in violation of an Eaton Corporation patent.” Id. at 1166. The court further concluded that to “not grant that interim relief, and then to have the ITC formally determine that the redesigned [articles] still violates plaintiff’s patent, would engender the irreparable harm that the law is intended to prevent.” Id. at 1167.

While Eaton Corp. was successful in protecting its domestic industry at the CIT and undoing the potential irreparable harm ArvinMeritor v. United States would have caused it, since Eaton v. United States other “domestic industries” have not been successful in bringing actions and advocating for their interests at the CIT. See, e.g., Funai Electric Co., Ltd. v. United States, 33 C.I.T. 1496, 1503-4 (2009) (the court acknowledged that it granted an injunction in Eaton, but it explained that a “subsequent reading” of relevant precedent” does not lead this court to conclude that the current state of the law supports” a finding of jurisdiction). Hence, in this instance, under the protest framework that Wirtgen is attempting to use, in lieu of the procedures available under 19 U.S.C. § 1337 that permit participation by Caterpillar, Caterpillar will be deprived of an opportunity to participate.24 It follows then that this administrative protest procedure that Wirtgen is attempting to utilize is not well suited to serve the objectives of 19 U.S.C. § 1337 and not in line with the statutory text of 19 U.S.C. § 1514(a)(4). Wirtgen’s remedy in this instance is an appeal or action under 19 U.S.C. § 1337 where participation by the “domestic industry” is permitted. See e.g., 19 U.S.C. § 1514(a)(4); 19 U.S.C. § 1337(c); 19 U.S.C. § 1337(k).

Administrative and Judicial Difficulties

Competing review of CBP’s exclusions of articles pursuant to an exclusion order issued by the Commission under 19 U.S.C. § 1337 by the CIT and the Commission, 25 albeit improper review on the part of the CIT, raises serious practical problems.

First, Congress provided a structure for review of Section 337 Orders that does not include an ex parte protest before CBP with subsequent review by the CIT. There are multiple administrative procedures available at the Commission to determine whether a particular article is within the scope of an exclusion order. See, e.g., 19 U.S.C. § 1337(k). Wirtgen’s attempt to employ CBP’s general protest framework to bypass, or circumvent, review by the Commission is not only improper, but also has the potential to weaken the Commission’s effectiveness by encouraging disregard of its procedures and orders. A protest is better suited to challenging application of the customs laws in classification or valuation transactions involving a single party

24 Upon consent of the parties, CBP conducts requests for a prospective ruling under 19 C.F.R. part 177 on an inter partes basis involving both parties with a demonstrable interest in the question presented by the request. Although, CBP has offered multiple times (the first time in August 2019), and despite significant lead time with the 1088 LEO issuing back in June 27, 2019 with no bond required during the 60 day review period, Wirtgen has refused to ask CBP for a ruling under 19 C.F.R. part 177 with respect to its “modified” 1810 series milling machines, preventing CBP from fully considering these articles in an adversarial proceeding involving the patent owner.

25 Both final decisions of the United States Court of International Trade and final determinations of the United States International Trade Commission relating to unfair practices in import trade, made under section 337 of the Tariff Act of 1930 are appealable to the United States Court of Appeals for the Federal Circuit. See 28 U.S.C. § 1295. rather than the order of another agency entered after a full hearing where both parties in interest were permitted to participate. Wirtgen may not ignore the scope of the exclusion order26, and instead, attempt to argue its position anew before CBP followed by seeking de novo review by the CIT (notably, without the participation of the original complainant or the agency designated by Congress to determine whether there has been a violation of Section 337). This appears to be exactly what happened here. Here, Wirtgen had multiple opportunities to take advantage of an administrative process, yet they chose to disregard them all:

In the 1088 investigation, while Wirtgen presented “alternate swing-leg designs,” the Administrative Law Judge (“ALJ”) found “’[they] [had] not been implemented in any imported articles,’ and as such, ‘[t]hese alternate swing-leg designs’ are not ripe for a determination of infringement or non-infringement in this investigation.” FID at 24–25; Comm’n Op. at 10 n. 22. Wirtgen did not petition for review of the FID’s findings on this issue, and the Commission determined not to review this issue. Comm’n Op. at 10 n.22.

On August 13, 2019, and again, on August 15, 2019, the IPR Branch offered Wirtgen an opportunity to submit a request for an administrative ruling under 19 C.F.R. part 177 to obtain guidance as to whether its redesign falls within the scope of the limited exclusion order issued in the 1088 investigation. The IPR Branch further noted that there were also administrative procedures available at the Commission.

In the Commission’s Order issued September 12, 2019 denying Wirtgen’s motion for a stay of the Commission’s remedial orders pending appeal, the Commission noted the procedures available to Wirtgen at the Commission to “obtain a timely ruling regarding whether its redesign falls within the scope of the remedial order.” Commission Order at 6, n.8 (Sept. 12, 2019) (Public Version) (EDIS Doc. No. 688119) (“Wirtgen states that it ‘is attempting to bring to market a redesign that would not be subject to the Commission’s exclusion order.’ Wirtgen’s Mot. at 19 n.1. The Commission notes that there are procedures available under Commission Rules 210.76 and 210.79 through which Wirtgen may obtain a timely ruling regarding whether its redesign falls within the scope of the remedial order. See 19 C.F.R. §§ 210.76, 210.79.”).

Wirtgen neither used the procedures available under Commission Rules 210.76 and 210.79 to obtain a determination from the Commission regarding whether its redesign falls within the

26 The Commission found that the exclusion order should include an explicit carve-out for Wirtgen’s series 1310 machines based on a finding that they do not infringe the ‘693 patent. Comm’n Op. at 47. The Commission also found that Wirtgen presented sufficient evidence “to support their request for an exemption for the importation of service and repair components used in serving or repairing road construction machines already in the possession of consumers.” Id. at 47-48. However, the Commission did not find any reason to limit the scope of the exclusion order to only accused road milling machines. Id. at 50; see also FID at 79-80. scope of the limited exclusion order issued in the 1088 investigation.27 Nor did Wirtgen request guidance from CBP under 19 C.F.R. part 177 on that issue.

Instead, Wirtgen opted to submit an informal memorandum with unilateral attorney argument28 to the IPR Branch on September 5, 2019, stating that they “will be importing a road milling machine that has been modified to be outside the scope of the limited exclusion order . . . issued by the U.S. International Trade Commission . . . in Investigation No. 337-TA-1088.” Exhibit 6 of Wirtgen Protest at 1. In a later email, Wirtgen further stated that this memorandum was not a request for an administrative ruling under 19 C.F.R. part 177, but rather only a “courtesy” to let CBP know that an XFi machine “is already on the way.” Wirtgen further noted that “[s]hould Customs determine to exclude that machine [described in the memorandum], Wirtgen intends to file an administrative protest under 19 C.F.R. [part] 174.” See also, generally, Section I.B. supra.

Second, not only do protests deprive the “domestic industry” from advocating for their interests, the practical problem also arises of the reliability of the evidence and arguments presented by Wirtgen in their protest and also their memorandum dated September 5, 2019. In contrast to the protest framework that Wirtgen is attempting to use; Commission determinations on violation are made on the record after notice and opportunity for a hearing in conformity with the provisions of the APA (subchapter II of chapter 5 of title 5). See 19 U.S.C. §1337(c). For example, not only was the 1088 investigation adversarial in nature involving both parties in interest, but “Caterpillar’s infringement allegations rel[ied] on the expert testimony of Dr. Reinholtz, who provided element-by element analysis of the accused products” and “Wirtgen’s non-infringement contentions rel[ied] on expert testimony of Mr. Arnold.” FID at 15. The ALJ’s subsequent findings were based on this expert testimony. See, e.g., FID at 22 and 24. However, in stark contrast, the memorandum submitted to CBP on September 5, 2019 by Wirtgen consisted entirely of attorney argument. Even the protest submitted by Wirtgen on December 24, 2019 contains only attorney argument along with a declaration from Wirtgen’s Vice President of Product Support. See Wirtgen Protest. see also One World Techs. v. United States, 357 F. Supp. 3d 1278, 1290–93 n.3 (C.I.T. 2018) (noting that although the Court lacked jurisdiction to review “the ITC’s infringement findings . . . application of the ITC’s Limited Exclusion Order to the excluded entry” required consideration of expert testimony and prior art in order for “[t]he court [to] construe[] [a] Limitation” for which “the ITC [had already] adopted [a] construction[].”).29

27 However, on January 16, 2020, the Commission determined to institute a modification proceeding pursuant to 19 U.S.C. § 1337(k). Commission Notice to Institute Modification at 2.

28 Nothing in the email or memorandum was designated as confidential.

29 Under such an interpretation, any article adjudicated by the ITC could, with minor modification, be brought before the Court of International Trade for adjudication, despite “[t]he Commissions’s long-standing practice [of] direct[ing] its remedial orders to all products covered by the patent claims as to which a violation has been found, rather than . . . only to those specific models selected for infringement analysis.” Certain Optical Disk Controller Chips and Chipsets, Inv. No. 337-TA- 506, Comm’n Op. at 56–57, USITC Pub. 3935, Doc ID 287263 (July 2007); see Hyundai Elecs. Indus. Co. v. U.S. Int’l Trade Comm’n, 899 F.2d 1204, 1210 (Fed. Cir. 1990) (“exclusion order[s] Wirtgen failed to obtain a non-infringement finding in the underlying violation phase of the 1088 investigation with respect to its “alternate swing-leg designs” to support an exception from the exclusion order because Wirtgen did not present to the Commission a product demonstrating its alleged redesign was “ripe” for adjudication at that time. See e.g., FID at 25 (“The alternate swing-leg designs are not ripe for a determination of infringement or non- infringement in this investigation.”). Wirtgen cannot rely on its failure in this regard to do an end- run around the exclusion order. Wirtgen’s failure before the Commission merely deprived CBP of a valid basis to allow entry in this case.

Third, the Commission already has multiple procedures to determine whether a particular article is within the scope of an exclusion order, see, e.g., 19 U.S.C. § 1337(k), and in fact, the Commission has, on its own initiative, used one of those procedures to determine whether the articles at issue are subject to the 1088 LEO. See Commission Notice to Institute Modification at 2 (“The modification proceeding is addressed to . . . Wirtgen’s redesigned Models XFi and XTi machines . . . .”). Although we find the instant case is not protestable under 19 U.S.C. § 1514(a), if the CIT were to somehow find jurisdiction to review Wirtgen’s challenge of CBP’s exclusion of the articles at issue pursuant to a section 337 exclusion order, the CIT and the Commission could reach different conclusions with respect to the same article, thus creating administrative difficulties. This is further complicated in cases, like the instant case, where the Commission has issued a seizure and forfeiture order pursuant to 19 U.S.C. § 1337(i); particularly when the underlying denial of entry leading to the issuance of the seizure and forfeiture order is being reviewed by the CIT rather than the Commission. Seizure and forfeiture orders are rescinded only when the Commission finds that the conditions, which led to the exclusion from entry underlying the issuance of the seizure and forfeiture order, no longer exist. See 19 U.S.C. § 1337(k)(1) (“. . . any exclusion from entry . . . under this section [i.e., section 1337] shall continue in effect until the Commission finds. . . .”) (emphasis added). Hence, any findings by the CIT regarding that underlying denial of entry will not automatically lead to a rescission of the seizure and forfeiture order. This conflict, again, creates administrative difficulties, not only for CBP, but also the importer.

Fourth, many of Wirtgen’s arguments in the protest implicate the Commission’s interests, which creates the potential problem that should the CIT somehow find jurisdiction to review Wirtgen’s protest, notwithstanding CBP’s finding that the instant protest is not a proper protest under 19 U.S.C. § 1514(a), the CIT would be faced with deciding questions that implicate the Commission’s interests. For example, in Wirtgen’s protest, Wirtgen argues, inter alia, that “the Commission’s authority extends only to adjudicated products.”30 Wirtgen Protest at 4. This

. . . effectively shift[] to would-be importers of potentially infringing articles, as a condition of entry, the burden of establishing noninfringement.”).

30 However, this is slightly baffling as Wirtgen America’s Reply to Respondents’ Statement on Remedy, the Public Interest, and Bonding in investigation no. 337-TA-1067 appears to assert the exact opposite. See e.g., Certain Road Milling Machines and Components Thereof, Investigation No. 337-TA-1067, Wirtgen America’s Reply to Respondents’ Statement on Remedy, the Public Interest, and Bonding (Public Version) at 1-2 (May 15, 2019) (“Caterpillar’s contention . . . that argument directly implicates the Commission’s interests; however neither CBP nor the CIT are the appropriate places to address questions of this type; rather this is precisely the type of issue that should be appealed to the Court of Appeals for the Federal Circuit under 19 U.S.C. § 1337.

Rather than allow challenges to CBP’s exclusion of merchandise under 19 U.S.C. § 1337 to potentially be made in two forums; we should “allow an administrative agency to perform functions within its special competence.” See, e.g., Parisi v. Davidson, 405 U.S. 34, 37 (1972). Challenges to CBP’s exclusion of merchandise under 19 U.S.C. § 1337 should only be adjudicated by the Commission, the agency that issued the exclusion order under 19 U.S.C. § 1337, which led to the exclusion of merchandise by CBP. The Commission drafted and issued the order, the order’s meaning and scope are issues particularly within the expertise of that agency. In interpreting its own order, the Commission is performing functions within its special competence. For example, Wirtgen argues as to what the “plain language” of paragraph 4 of the 1088 LEO means. See, e.g., Wirtgen Protest at 21. This question is best answered by the Commission. See, e.g., Eaton Corp. v. United States, 29 C.I.T. 1149, 1164-65 (“[The court] recognizes, as it must, that the Commission has paramount authority and responsibility under section 337 of the Tariff Act. Its opinion and resultant orders have set the substantive law of this case, and its post-hearing submission quoted above31 has added to that law.”).32 Moreover, in doing so through an adjudicative proceeding, the Commission will provide an interpretation having the force of law. Cf. NLRB v. Bell Aerospace Co., 416 U.S. 267, 294 (1974).

In summary, we find that the instant exclusions made by CBP pursuant to the 1088 LEO issued by the Commission under 19 U.S.C. § 1337 is not a subject matter subject to protest. See e.g., 19 U.S.C. § 1514(a)(4). First, this is consistent with the plain text of 19 U.S.C. § 1514(a) and 19 C.F.R. § 174.11. Second, this is supported by the legislative history. Third, this best serves the fundamental statutory objectives of 19 U.S.C. § 1337 to protect industries in the United States from unfair methods of competition and unfair acts in the importation of articles into the United States. See e.g., 19 U.S.C. § 1337(a). Fourth, this prevents the administrative and judicial difficulties created by potentially permitting review of “a determination appealable under section 1337 of this title [i.e., title 19]” in two forums. Wirtgen’s remedy in this instance is an appeal as provided by 19 U.S.C. § 1337. See e.g., 19 U.S.C. § 1514(a)(4); 19 U.S.C. § 1337(c); 19 U.S.C. § 1337(k).

‘[a]ny exclusion order should be limited to the importation of infringing products accused in this Investigation’ and should exclude other products that were not adjudicated by the Commission ignores this well-settled precedent. The Commission has rejected time and again the argument that exclusion orders be ‘limit[ed] . . . to specific models,’ . . . and it should do so again here.”). 31 The post-hearing submission quoted states, inter alia, “An interpretation of the subject certification provision such that the provision would apply to redesigned [articles] for which no determination on infringement has been made by either the Commission or Customs would be contrary to the Commission’s long-standing practice.” Id.

32 We note that similar to Eaton, CBP in this instance also sent a written request to the ITC for clarification with respect to the 1088 investigation. Id. at 1163 (“CBP sent a written request to the ITC for clarification. . . .”). See EDIS Doc. No. 699429 and EDIS Doc. No. 699436. HOLDING

We conclude that Wirtgen’s Protest is not a proper protest according to 19 U.S.C. § 1514(a). See e.g., 19 U.S.C. § 1514(a)(4). Accordingly, this protest should be denied as not protestable.

We further note any determination of the Commission is binding authority on CBP and, in the case of conflict, will by operation of law modify or revoke any contrary CBP ruling or decision.

In accordance with the Protest/Petition Processing Handbook (CIS HB, December 2007), you are to mail this decision to the Protestant. Sixty days from the date of the decision, Regulations and Rulings of the Office of Trade will make the decision available to CBP personnel, and to the public on the CBP website at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Charles R. Steuart