of you here may know we've recently changed into manically decreased halfway towards confidentiality markings at the resource center to our new orders and i guess i can turn to my colleagues if they have any comments but we really thought it was not a peerage to us but certain of the confidentiality markings which seemed kind of central to the way we would want to talk about this case when mark confidential having but one one thing that immediately comes to mind and seemed to be of fairly significant importance to the case is the whole question of  expectancy for their retorts and that was marked confidential which we found puzzling and also extremely inconvenient it would be difficult i think to write an opinion that would make sense without counsel for g m and the court and we indicated our opposition friday afternoon is one day before the argument we prepared for an argument that was going to be a preserve the existing confidentiality designations that have been in the case since the administrative information and if it had been there all sorts of documents we would like as well but the up offer to waive confidential information was applicable only with respect to documents not other documents found in the record  just with respect to the extent to which you're willing to waive i hope you would recognize that i mean better late than never as we say but not much better only because for our own purposes i hope you can appreciate that we get peer for these cases and we take seriously the confidential markings and therefore we're thinking about what we can ask interesting about what we can write it's we wasted a lot of time doing that by a bit you know a release on the morning of argument and notwithstanding the extent to which our court goes very strongly that the public has a right to know about everything in the record in the absence of there being a good recent not to do so even though you're willing to talk about the stuff in open court used in the production of magnesium using the pigeon process is based on substantial record evidence and is otherwise an orange law it is not congress determination was a results driven exercised it was arbitrary and show affidavit u s magnesium submitted the declaration of mr haq mr haq was a managing member of macro l l c he spent seven years improving the thermal process for the production of magnesium and he testified in a quote from the back affidavit that to accurately account for the costs of producing magnesium using the pigeon process retorts should be treated as a direct material input because they are central to the production process of a short degree by the commerce department and held against us magnesium this document was central to our case it was not considered by commerce it was not considered by commerce during in the final determination it was not considered by commerce remain determination it was not considered by the court of international trade and it wasn't even acknowledged in the briefing before this court by counsel for the government and by counsel for g m i this is a and a compelling piece of evidence in our view it was a sworn a direct material or not if you go to the final determination what converse at is well equipped or relative cost is something that we normally consider however we normally consider it when we're talking about  factory equipment but about other things indirect materials for example in this case this is factory equipment so relative costs are not that important to our consideration the costs are irrelevant here because we've already decided in essence it's a result oriented before they even looked at the evidence how they were coming out and then and then some and whatever they had on the side that they wanted to reach and i think that's a if for reasons that i'm not privy to and more or less concluded that we're going to not go in there are going to be overhead either equipment or indirect materials not right materials and then they started going through the evidence and then when the evidence didn't was not consistent with their understanding they disregarded the evidence another example trace ability we had lots of evidence in the record on traceability we put in evidence about the consumption rate of magnesium using t m i zone processes we put in information about c m c in c b c to other pigeon process manufacturers consumption rates we put in evidence showing that the material out specification sheet and the kashi both of which were part of g m eyes accounting records show that the exact amount of reach work the value of reports coming out of warehouse in december two thousand and nine was the amount retorts being used in the production of magnesium during the same period with all of which goes to how one would trace costs through to the final magnesium product one of the considerations ecommerce is it's one conversation about the final determination there is no record is chinese many of magnesium corp a chinese maybe's a producer using the same pigeon process c v is a militia manufacturer using the same pigeon process both of them have reach work consumption rates that are consistent with t m i traceability what you think i mean they did it address the malaysian numbers that they know that they dress that that came up under the context of industry practice so one of the criterion criteria that congress considers when it decides whether or not a material is a direct material or not is whether what the industry how the industry treats the input we put in evidence of five manufacturers c v s the magnesium manufacturers when  from c m c again not mentioned in the final mention final determination c v c m c was also not mentioned in the remit determination they like c v m had calculated a per unit cost of may niecy i'm together we should meet it evidence from southern magnesium they had several years of information three years ninety three ninety four ninety four ninety five ninety five ninety six all had information in the record showing that directed retorts were considered to be direct material commerce focused on a later year the year before southern magnesium ceased producing magnesium to decide that there might be something in the record that indicates that direct mature retorts are not direct materials but if you look at the record what they said was that southern magnesium stopped recording retorts as direct materials because it collapsed two of its categories accounting categories all they had was other direct materials and concluded that retorts are still being classified by southern magnesium as a direct material and we calculated ratios out into the out years showing exactly the same thing congress got ahold of that information and said well the numbers vary over time and if the numbers vary that means retorts may or may not be in the in the category of direct materials anymore that's not so if you look at the financial statements it's clear that the ratio of direct materials to total materials went up and if the ratio of direct materials to total materials went up that means that reports are still in the category of other direct materials it's arithmetic it's not a question of interpretation it's a question of math and if that number went up the ratio went up that means retorts are still part of direct materials  specification sheet the c e o piece of ledger in a reconciliation document that you can trace indirect materials all the way through every single one of the statements and reports are not in that classification t m i does not keep its reach where it's a record retorts as indirect materials as claimed by the government it's right there in the accounting documents we've also submitted  evidence again of mr haq showing that retorts are kept it pursuant to industry practice as a direct material and not as an interim material and certainly not as is equipment and overhead reasonable number for the period of use of the piece of equipment before it needed to be replaced with about a year is that is that year ero break point for calling it question that comes up in the context of valuing equipment in other words is equipment replaced so frequently that no we consider to be a direct material or reconsider but i'm looking to you for what you think is the minimum piece of equipment as equipment rather than a direct material paint and it largely has to do with amortization schedules and depreciation all the rest we cited three decisions in our brief laminated woman sacks on diamond saw blades and they all sort nails all of which talked about the production for the use of materials during the period of review or during the production run of the period review and in those cases the period of review was either secure twelve months depending on the determination so when commerce in the past pursuit was precedent has looked at what constitutes an appropriate period of review or length of time for frequency replacement it's said that products become inputs become overhead in the six to twelve month range and that's consistent with accounting principles it's consistent with the idea behind a quit being an appreciable asset and it's consistent with the basically what they've done again in the last last three determinations in our situation the frequency of replacement is sixty days which is considerably less than the six month period or the twelve month period that the congress department standard they cited to diamonds all blades but there's nothing in that i'm softly standard that says what's the other sixty days enough too much too long too short of you know the congress has to have a reason basis for making this decision it can't just willy nilly pick and choose the facts that it would for the united states this is a substantial evidence case us magnet the bottom line is that us magnesium disagrees with the factual determination made by commerce every torts should be treated as an indirect input when identifying the factors what commerce considers in you know in this type of piece is it's a case by case inquiry so what commerce can consider and of various and of various review is prof can consider many factors and they can identify the ones that it believes to be the most probative as to whether or not something's an indirect input or not an indirect input and that's exactly what congress did in this case it provided a and extensive explanation for its decision in the issues and decision memorandum which is contained in the joint append and explain all the factors that are considered that very same arguments made by the parties and then identified certain factors that you know out of a larger package that sound to be particularly probative in this case commerce looked at you know i number things but the fifty two things they found to be most appropriate probative were the first the lack of physical incorporation no part of the skill or tort is contained in the finished magnesium product and the second one lasted right now and it doesn't necessarily it's on a serially there's no rule there is and there's no commerce there's no commerce regulation that wasn't followed in this case with respect to you how long there must be for a useful light which the portions of the graphite were ultimately contained in the final product versus the steel molds where no coarseness you know mr gelb reference the hack declaration and and also in their ministry of case brief you know what they say is that the retort was consumed by the process the value of the retort was consumed by the process that's different that's very different then when the then having the retort itself  supply it's the producers the manufacturer i guess calculates useful life of about sixty days how many cycles does that represent of the big medium production  steps that congress took the evidence to consider and it's past practice all of the truck or two of concluded that the commerce this decision was based on substantial evidence and in accordance with the law  again one other point i'd like to highlight is us maybes and did a really nice job of describing the development of the record in the skis now there was a very extensive factual record that was developed by the par that congress relied on there are multiple questionnaires that were provided to the information and so based on this very extensive record you know how murs you know it has to be you know president presume to have considered all the information that's presented and it's its own issues and decision memorandum contained in the joint appendix really does reflect how seriously congress took this issue and us mini's and not may not agree with the we assigned to the various evidence that was placed on the five there's the financial statements that were placed on the record were necessary conclude necessarily conclusive one way or the other the the description of there's i mean there's really the the evidence that's on the record that supports that the determination that there are indirect input you know other than the lack of physical incorporation in other than the  sensory a container or a chemical reaction takes place it's not a raw material that's constantly being you know being being input into the product in order to make sure magnesium it's another it's a vessel in which a chemical reaction can occur is there any documentary evidence that favors actually affirmatively favors the outcome that commerce reached a supposed to simply being as you expressed it a moment ago treated as an indirect material you know the other are there any is there any documentary evidence from other manufacturers that would support commerce is out from other manufacturers what a lot of the other movement mr philip is with list of other documents that he thinks are supportive of the position that u s magnesium takes effect to other manufacturers i'm just looking to you to see if there's anything on the other side of that ledger well in some of the in the other evidence that that night that one particular manufacturer did treat retorts as and as a direct material and then following that later financial statements don't show that retorts were treated as a direct materials which were to  on that point that that there are still folded into the even though not specifically identified they're still folded in to the cost sheet in a way that not one consistent practice i mean you look at most host of financial statements some of them treat retorts one way some them retreat retorts that they don't they don't know say identify them as or a direct material and you would not also the same company that treated them as a direct material identify them as a direct material for a certain period of years and then stopped identified early specifically identifying them as a direct material so when you look at the facts that are actually known that ones tipped the scales you know in the direction of identifying them isn't it as an indirect employee you know again result minds can differ you can look at a two piece of evidence in the same way and come up with different conclusions but the conclusion like manufacturing e what and finally with regard to the cost of the reports they considered this but did not consider it to be the important and important factor so they did consider these things unreasonable ascension it was a reasonable decision could someone else have found another way yes of course but that's not the question the question is whether they made a reasonable this decision based on the record before them and we argue that they did it so the the decision is reasonable and then the court should allow that apartment to exercise its discretion in this case and i think my of the record we don't know that from the record what we know is that they will rent and so we can get the number of days because they paid for the rebel on that until the average number of days was about sixty but we don't know how many discloses with respect to just the general prosecution process roughly how long it takes for one one cycle unless it's obviously some discussion of the pigeon process in the abstract as opposed to in this particular capacity until it's refurbish right but that doesn't tell us how many runs there are in that six make it tons of magnesium right i mean i and i'm wondering how many how many times of the empty the to put it back run the process empty the to put it back run the process and so forth until they get to the point that they need to replace the two well in the case of a c m c where you have one retort consumed every five m in the government's brief and much discussion today about whether or not these decisions can be made on a case by case analysis i understand there are some latitude administrative adjudication from the deeper case by case determinations but it's not unfettered discretion you can't refer to case by case determinations in order to do away with the scanner to reveal in this general review there is whether there are substantial record evidence and whether there's evidence on the record that detracts from the finding you can't get around that by saying simply this is a case that has to be decided on a case by case basis considered hack affidavit it was not considered relative cost information not considered traceability getting it wasn't considered because it wasn't discussed with respect to traceability both the commerce department and the court of international trade said there is no record evidence regarding traceability no record evidence is what they said not we looked at the evidence some was in favor some to tracks it said no record evidence c m c not discussed in the final or the remain determination that's an important prospectus that talks quite a bit about the manufacturing process for magnesium using the pigeon process material out specification she not in the final determination not in the riemann determination it's a critical accounting document not there that evidence detracts from the final determination it detracts from the decision and it wasn't considered in our review your honor respectfully that's reversible error you have to consider that evidence counsel for the government referred to you asked counsel for the government what else is on the record that supports the determination other than physical incorporation and the sixty day period or average useful life of a retort there isn't any it's the struggle to answer that question because he each in the evidence presents the other evidence doesn't support the decision and it is part of the problem that we have this case which is that the congress department act of all is different factors in all the different tests a test for indirect materials the test for direct materials the test for equipment the test for process materials they pick two things to focus on and those are the two things where they found evidence that they believe supported their i don't know terminations you can't go pick the criteria that you want just because those are the ones for which evidence you can find evidence of the record of the supporting and say we don't need to commerce basically said even if the input is not physically incorporated into the final product still it can be considered a direct material you only have to look at russian or silicon metal from russia is a perfect example in that case electrodes consumed in the production process and the cost of such materials constitute a significant portion of the cost of the final product that's what the government said in this brief to this court about what is a process of that area that's our case substantial quantities were used consumed in production posset process and significant portion of the costs are and retorts comprise a significant portion of the cost of the final magnesium product that's our case it's a process material and it should be considered that way by the court three factual findings that are not supported by fact by substantial evidence and second even if the board had presented a prima facie case of obviousness the applicant samina evidence of unexpected results that was sufficient rebut the promise thanks for showing more specifically on that point the board erred as a matter of law and requiring direct comparative evidence of unexpected results and in failing to give the evidence of secondary considerations do  teach or reasonably suggest oral inhalation three pages of on its team two at pages a to eighty seven through eighty to ninety of the appendix there is a first and a general introductory paragraph that describes inhalation is never used in the paragraph that describes the appropriate modes of oral inhalation instead what it says is that all of ministration can be capsules cache's tablets or oral liquid preparations that include