Usitc Publication 1101 October: I Washington, D.C
Usitc Publication 1101 October: I Washington, D.C
Usitc Publication 1101 October: I Washington, D.C
OCTOBER 1980
. 1
In the Matter of 1
) Investigation No. 337-TA-37
CERTAIN SKATEBOARDS AND )
PLATFORMS THEREFOR 1
1
the Tariff Act of 1930 ( 1 9 U.S.C. 13371, the U.S. International Trade
Commission determined on November 13, 1978, that there were no unfair methods
platforms therefor into the United States, or in their sale in the United
determination was appealed t o the U.S. Court of Customs and Patent Appeals
pursuant to section 337(c) (19 U.S.C. 1337(c)). On December 20, 1979, that
section 337, and remanded the case to the Commission for action consistent
Determination
in the importation into and sale in the United States of certain skateboards
United States for the term of said patent, except where such importation is
3. That, after considering the effect of such exclusion upon the public
health and welfare, competitive conditions in the U.S. economy, the production
entry; and
Order
7, or 8 of U.S. Letters patent 3,565,454 are excluded from entry into the
3
l i c e n s e d b y t h e owner o f s a i d p a t e n t ;
By order o f t h e Commission
i ;
Seck e t a r y
I s s u e d : October 9 , 1 9 8 0
4
Trocedural History
November 13, 1978, that there was no violation of section 337 in the
importation into and sale in the United States of certain skateboards and
investigation ("the Stevenson patent") were, for the purpose of section 337,
1979, the CCPA reversed the Commission's determination that there was no
violation of section 337, and remanded the case to the Commission " f o r action
--
1/ The Stevenson patent is directed to a skateboard, the aft section of
whrch comprises an inclined foot-depressible lever (commonly referred to as a
kicktail) sloped upwardly and rearwasdly from the skateboard. B y depressing
the lever with h i s rear f o o t , a rider of the skateboard is able to facilitate
turning the board through various spinning maneuvers known in the sport as
wheelies or kick turns.
2/ Stevenson v. U . S . International Trade Commission et al., 612 F.2d 5 4 6 ,
20z USPQ 276 (CCPA 1979).
5
On October 24, 1979, the District Court for the Central District of
3/
firms. - The District Court's ruling, which granted defendants' motion f o r
summary judgment of patent invalidity, was appealed to the U.S. Circuit Court
currently pending.
appeal, filed a petition for rehearing with the CCPA regarding its decision in
the Stevenson appeal. That petition was denied without opinion on February
28, 1980, and the CCPA's mandate remanding the case to the Commission issued
on March 7, 1980.
the Federal Register of March 27, 1980 (45 F.R. 20252)) stating in part as
follows:
investigative attorney.
violation of section 337 has been established. Before this investigation can
Remedy
Exclusion has been the usual remedy applied in patent-based section 337
foreign exporters and/or domestic importers as would be the case with a cease
and desist order. An exclusion order thus relieves the patent owner of the
design and relatively low production cost of the product involved, the number
skateboards is large.
7
Bending
Two o f u s ( C h a i r m a n A l b e r g e r a n d V i c e Chairman C a l h o u n ) b e l i e v e t h a t
i , f r i n g i n g s k a t e b o , r d s and p l a t f o r m s t h e r e f o r s h o u l d b e allowed e n t r y i n t o
t h e U n i t e d S t a t e s w i t h o u t bond d u r i n g t h e P r e s i d e n t i a l review p e r i o d . 1/ I
We
f i n d t h e r e c o r d i n t h i s p r o c e e d i n g t o b e l a c k i n g i n t h e t y p e of e v i d e n c e
of c o m p e t i t i o n o r u n f a i r a c t e n j o y e d by p e r s o n s b e n e f i t i n g from t h e
i m p o r t a t i o n of t h e a r t i c l e . " -
2/ Under t h e c i r c u m s t a n c e s , w e b e l i e v e t h a t
3/
i m p o s i t i o n o f a bond would b e u n w a r r a n t e d . -
The p u b l i c i n t e r e s t
In c a s e s w h e r e i t h a s d e t e r m i n e d t h a t t h e r e i s a v i o l a t i o n o f t h e
s t a t u t e , t h e Commission i s d i r e c t e d by s e c t i o n 337(d) t o e x c l u d e t h e a r t i c l e s
i n q u e s t i o n " u n l e s s , a f t e r c o n s i d e r i n g t h e e f f e c t o f s u c h e x c l u s i o n upon t h e
p u b l i c h e a l t h and w e l f a r e , c o m p e t i t i v e c o n d i t i o n s i n t h e United S t a t e s
economy, t h e p r o d u c t i o n o f l i k e o r d i r e c t l y c o m p e t i t i v e a r t i c l e s i n t h e U n i t e d
S t a t e s , and U n i t e d S t a t e s c o n s u m e r s , i t f i n d s t h a t s u c h a r t i c l e s s h o u l d n o t b e
-11 A m a j o r i t y o f t h e Commission i s o f t h i s v i e w .
Commissioner P a u l a S t e r n , f o o t n o t e 1.
-
See D i s s e n t i n g Opinion o f
public interest.
and that any future possible adverse effect exclusion would have on
competitive conditions in the U.S. economy will be considered if and when the
invalid has been appealed to the Ninth Circuit and may subsequently be
insulate themselves from liability for compensatory damages should they later
d e n i e d , t h e N i n t h C i r c u i t , u n l i c e n s e d domestic manufacturers o f k i c k t a i l
where no c o n f l i c t i n g F e d e r a l c o u r t d e c i s i o n s were p r e s e n t .
discussion.
Commission under s e c t i o n 3 3 7 ( d ) .
tion of public interest and, therefore, from the decision reached at this
issuance of exclusion or cease and desist orders, sections 337(d), (e) and
(f) require the Commission to take into account the impact such measures might
have on the public health and welfare, competitive conditions in the United
States economy, the production of like or directly competitive articles in
the United States, and United States consumers. In my view, these consid-
11 I
- concur with all four of my fellow Commissioners as to the procedural
history, the issue of violation, and the remedy in this investigation. I
concur with Chairman Alberger and Vice Chairman Calhoun that no bond is re-
quired during the PresidLntial review period.
21 19
- U.S.C. 1337(b)(1),
-3/ In Certain Poultry Disk Picking Machines and Components Thereof, Inv, No,
337-TA-78, the Commission voted to suspend and approved an opinion stating
that public interest factors are to be considered when a 337 investigation
is suspended. However, the parties entered a settlement agreement and filed
a motion to terminate the investigation and, thus, the Commission revoked its
suspension action and did not issue an opinion.
- 11 -
337 cases. A/ Like this case, these earlier cases all involved concur-
all occurred before the Commission had ruled on validity and infringement.
suspension in this case as were the questions of law and fact relevant
before the federal courts have produced a final judgment regarding the
the United States economy and until such time as the courts resolve the
issue of the validity of the Stevenson patent, the public interest is not
4/
- Inv. 337-TA-3, Doxycycline; Inv. 337-TA-23, certain Color Television Re-
ceiving Sets; Inv. 337-TA-36, Certain Plastic Fastener Assemblies; and Inv.
337-TA-64, Certain High-Voltage Circuit Interrupters and Components Thereof,
5/
- U.S.Senate, Trade Reform Act of 1974; Report of the Committee on Finance
.. , Repti No. 93-1298 (93d Cong., 2d Sess.), 1974, p. 197, --
, S. See also
McDermid, The Trade Act of 1974; Section 337 of the Tariff Act and the Public
Interest, 11 Vand. J. Transnat'l L. 421 (1978); Rosenthal & Sheldon, Section
,337: A View from Two within the Department of Justice, 8 Ga. J. Int'l &
Comp. L. 47 (1978).
- 12 -
The District Court action in this case has weakened, if not re-
the issue of validity is collaterally estopped from ever again suing anyone
could be liable for compensatory damages at some point in the future, should
certainly be more willing to take this risk than in a situation where there
6 / See
- Blonder-Tongue Laboratories v. University of Illinois Foundation,
402 U . S .
313 (1971). A judgment of invalidity in a suit against one in-
fringer accrues to the benefit of any other accused infringer unless the
patent owner shows that he did not have a fair opportunity procedurally,
substantively and evidentially to pursue his claim the first time. Chisum,
Patents (New York: Mathew Bender, 1979), vol. 4, p . 19-21; Rosenberg,
Patent Law Fundamentals (New York: Clark Boardman Co., Ltd., 1975), p. 305.
- 13 -
and Vice Chairman Calhoun recognize and accept that the issue of trade
They state "that a Commission exclusion order does not currently create a
Alberger and Vice Chairman Calhoun in that I believe that the time to act
and the Commission has never before reopened a previously terminated section
337 case.
A remedy should not be issued in this case until the adverse impact
has the authority to resolve this issue. Commissioners Moore and Bedell
correctly point out that this factual situation could also lead to the
- 14 -
-7 / , 19 U.S.C. 1337(g)(2).