[Federal Register Volume 77, Number 67 (Friday, April 6, 2012)]
[Notices]
[Pages 20844-20846]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-8265]


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INTERNATIONAL TRADE COMMISSION

[Investigation No. 337-TA-756]


Certain Reduced Ignition Proclivity Cigarette Paper Wrappers and 
Products Containing Same Determination to Partially Review the Final 
Initial Determination

AGENCY: U.S. International Trade Commission.

ACTION: Notice.

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SUMMARY: Notice is hereby given that the U.S. International Trade 
Commission has determined to partially review the final initial 
determination (``ID'') of the presiding administrative law judge 
(``ALJ'') in the above-captioned investigation under section 337 of the 
Tariff Act of 1930, as amended, 19 U.S.C. 1337 (``section 337''). The 
ALJ found no violation of section 337.

FOR FURTHER INFORMATION CONTACT: James A. Worth, Office of the General 
Counsel, U.S. International Trade Commission, 500 E Street SW., 
Washington, DC 20436, telephone (202) 205-3065. Copies of non-
confidential documents filed in connection with this investigation are 
or will be available for inspection during official business hours 
(8:45 a.m. to 5:15 p.m.) in the Office of the Secretary, U.S. 
International Trade Commission, 500 E Street SW., Washington, DC 20436, 
telephone (202) 205-2000. General information concerning the Commission 
may also be obtained by accessing its Internet server (http://www.usitc.gov). The public record for this investigation may be viewed 
on the Commission's electronic docket (EDIS) at http://edis.usitc.gov. 
Hearing-impaired persons are advised that information on this matter 
can be obtained by contacting the Commission's TDD terminal on (202) 
205-1810.

SUPPLEMENTARY INFORMATION: The Commission instituted this investigation 
on January 27, 2011, based on a complaint filed by Schweitzer-Mauduit 
International, Inc. (``Schweitzer'') of Alpharetta, Georgia. 76 FR 4935 
(January 27, 2011). The complaint alleges violations of Section 337 of 
the Tariff Act of 1930, as amended, 19 U.S.C. 1337, in the sale for 
importation, importation, or sale after importation of certain reduced 
ignition proclivity cigarette paper wrappers and products containing 
same by reason of infringement of certain claims of U.S. Patent Nos. 
5,878,753 (``the `753 patent'') and 6,725,867 (``the `867 patent''). 
The Commission's notice of investigation named Astra Tobacco 
Corporation of Chapel Hill, North Carolina; delfortgroup AG of Traun, 
Austria; LIPtec GmbH of Neidenfels, Germany; and Julius Glatz GmbH of 
Neidenfels, Germany as respondents.
    On April 15, 2011, the Commission issued notice of its 
determination not to review an ID (Order No. 5) granting Schweitzer's 
motion to amend the complaint and notice of investigation to add seven 
more respondents: Dr. Franz Feurstein GmbH of Traun, Austria; 
Papierfabrik Wattens GmbH & Co. KG of Wattens, Austria; Dosal Tobacco 
Corp. of Miami, Florida; Farmer's Tobacco Co. of Cynthia, Kentucky; 
KneX Worldwide, LLC of Charlotte, North Carolina; S&M Brands, Inc. of 
Keysville, Virginia; Tantus Tobacco LLC of Russell Springs, Kentucky.
    On December 1, 2011, the Commission determined not to review an ID 
(Order No. 30) of the administrative law judge terminating Respondents 
delfortgroup AG, Dr. Franz Feurstein GmbH, Papierfabrik Wattens GmbH & 
Co. KG, Astra Tobacco Corp., Dosal Tobacco Corp., Farmer's Tobacco Co., 
S&M Brands, Inc., and Tantus Tobacco LLC (collectively, the ``Delfort 
Respondents'') from the investigation. Respondents Julius Glatz GmbH, 
LIPtec GmbH, and KneX Worldwide LLC (collectively, ``Glatz'') remain in 
the investigation.
    An evidentiary hearing was held from October 31, 2011, to November 
8, 2011. On February 1, 2012, the presiding administrative law judge 
issued a final initial determination finding no violation of section 
337 in the above-identified investigation. Specifically, the ALJ found 
that there was no violation with respect to either the `753 patent or 
the `867 patent by Glatz. The ALJ also issued a recommended

[[Page 20845]]

determination on remedy, the public interest, and bonding.
    Schweitzer filed a petition for review of the final ID. Glatz filed 
a contingent petition for review. Each of the parties filed a response 
to the petitions for review.
    Having examined the final ID, the petitions for review, the 
responses thereto, and the relevant portions of the record in this 
investigation, the Commission has determined to review the final ID as 
follows. With respect to the `753 patent, the Commission has determined 
to review the construction of the term ``gradually'' in the asserted 
claims and the issues of direct and indirect infringement, obviousness, 
definiteness, utility, and the technical prong of the domestic industry 
requirement in the ID. With respect to the `867 patent, the Commission 
has determined to review the construction of the term ``film forming 
composition'' in the asserted claims and the issues of direct and 
indirect infringement, priority date, statutory bar under 35 U.S.C. 
102(b), anticipation, obviousness, written description, enablement, and 
the technical prong of the domestic industry requirement in the ID.
    The parties are requested to brief their positions on only the 
following questions, with reference to the applicable law and the 
evidentiary record:
    (1) In the asserted claims of the `753 patent, the ALJ defined the 
term ``gradually'' to mean ``incrementally.''
    (a) Does the term ``incrementally'' carry a connotation of a change 
that occurs in discrete increments, such as in a staircase, that is 
unnecessarily limiting? In your answer, please address the reference to 
a ``ramp-like profile'' in dependent claim 3 and assume that the 
Commission concurs with the ALJ's determination that ``ramp-like 
profile'' refers to the physical shape of the claimed bands.
    (b) Assuming that the term ``incrementally'' is unnecessarily 
limiting, would the term ``gradually'' be construed to mean an increase 
or decrease in permeability that occurs in small steps or degrees and 
that is not abrupt or sudden?
    (c) How would a person of ordinary skill in the art distinguish 
between an increase or decrease that is in small steps or degrees from 
one that is abrupt or sudden? If such a person would be unable to make 
such a distinction, are the asserted claims indefinite as insufficient 
``to permit a potential competitor to determine whether or not he is 
infringing''? Exxon Research and Eng'g Co. v. United States, 265 F.3d 
1371, 1375 (Fed. Cir. 2001). What slopes would be considered gradual? 
For example, is a slope of 89 degrees considered gradual rather than 
abrupt? Please respond with citations to the record.
    (d) Address how, if at all, adoption of the claim construction 
indicated in (b) above would affect the ALJ's analysis of infringement, 
validity, and the domestic industry.
    (2) As to the `753 patent, what is the significance of points that 
fall entirely within the treated area?
    (3) Is the iodine test an independent basis for establishing 
infringement of the asserted claims of the `753 patent and for 
satisfying the technical prong of the domestic industry requirement 
with respect to the `753 patent?
    (4) The Commission has determined not to review the ALJ's 
construction of the term ``film forming composition'' as it appears in 
the asserted claims of the `753 patent. Is the Commission bound by the 
parties' stipulation that the term should be construed in the same way 
in the `867 patent? See Exxon Chemical Patents v. Lubrizol Corp., 64 
F.3d 1553, 1555 (Fed. Cir. 1995) (``In the exercise of that duty, the 
trial judge has an independent obligation to determine the meaning of 
the claims, notwithstanding the views asserted by the adversary 
parties.'').
    (5) Assume for purposes of argument that the Commission is not 
bound by the stipulation, and note that the specification of the `753 
patent but not the `867 patent contains the sentence ``Fibrous slurries 
applied from an aqueous solution are also effective.'' `753 patent at 
col. 4, ll.59-60. Does that distinction warrant a different outcome in 
construing ``film forming composition'' in the `867 patent?
    (6) If ``applying'' in claim 36 of the `867 patent is construed to 
refer to both single applications and multiple applications, is claim 
36 invalid for failure to satisfy the written description or enablement 
requirements of 35 U.S.C. 112?
    (7) Did Schweitzer request samples of all accused products? On 
provision of the samples, were representations made by Glatz as to the 
representativeness of the samples provided? Did Schweitzer make further 
attempts to obtain samples of the other accused products? Please 
respond with a discussion of any relevant interrogatories, requests for 
production, motions practice (including motions to compel), and any 
pretrial conferences (excluding any settlement or mediation 
conferences).
    In connection with the final disposition of this investigation, the 
Commission may issue (1) an order that could result in the exclusion of 
the subject articles from entry into the United States, and/or (2) 
cease and desist orders that could result in respondents being required 
to cease and desist from engaging in unfair acts in the importation and 
sale of such articles. Accordingly, the Commission is interested in 
receiving written submissions that address the form of remedy, if any, 
that should be ordered. If a party seeks exclusion of an article from 
entry into the United States for purposes other than entry for 
consumption, the party should so indicate and provide information 
establishing that activities involving other types of entry either are 
adversely affecting it or are likely to do so. For background 
information, see the Commission Opinion, In the Matter of Certain 
Devices for Connecting Computers via Telephone Lines, Inv. No. 337-TA-
360.
    If the Commission contemplates some form of remedy, it must 
consider the effects of that remedy upon the public interest. The 
factors the Commission will consider include the effect that an 
exclusion order and/or cease and desist orders would have on (1) the 
public health and welfare, (2) competitive conditions in the U.S. 
economy, (3) U.S. production of articles that are like or directly 
competitive with those that are subject to investigation, and (4) U.S. 
consumers. The Commission is therefore interested in receiving written 
submissions that address the aforementioned public interest factors in 
the context of this investigation.
    If the Commission orders some form of remedy, the U.S. Trade 
Representative, as delegated by the President, has 60 days to approve 
or disapprove the Commission's action. See Presidential Memorandum of 
July 21, 2005, 70 FR 43251 (July 26, 2005). During this period, the 
subject articles would be entitled to enter the United States under 
bond, in an amount determined by the Commission and prescribed by the 
Secretary of the Treasury. The Commission is therefore interested in 
receiving submissions concerning the amount of the bond that should be 
imposed if a remedy is ordered.
    Written Submissions: The parties to the investigation are requested 
to file written submissions on the issues under review. The submissions 
should be concise and thoroughly referenced to the record in this 
investigation, including references to exhibits and testimony. 
Additionally, the parties to the investigation, interested government 
agencies, and any other interested persons are encouraged to file 
written submissions on the issues of remedy,

[[Page 20846]]

the public interest, and bonding. Such submissions should address the 
ALJ's recommended determination on remedy and bonding. Complainant and 
the Commission investigative attorney are also requested to submit 
proposed remedial orders for the Commission's consideration. 
Complainant is requested to supply the expiration dates of the patents 
at issue and the HTSUS numbers under which the accused products are 
imported. The written submissions and proposed remedial orders must be 
filed no later than the close of business on April 16, 2012. Written 
submissions should be no longer than 60 pages. Reply submissions must 
be filed no later than the close of business on April 23, 2012, and 
should be no longer than 30 pages. No further submissions will be 
permitted unless otherwise ordered by the Commission.
    Persons filing written submissions must do so in accordance with 
Commission rule 210.4(f), 19 CFR 210.4(f), which requires electronic 
filing. The original document and eight true copies thereof must also 
be filed on or before the deadlines stated above with the Office of the 
Secretary. Any person desiring to submit a document (or portion 
thereof) to the Commission in confidence must request confidential 
treatment unless the information has already been granted such 
treatment during the proceedings. All such requests should be directed 
to the Secretary of the Commission and must include a full statement of 
the reasons why the Commission should grant such treatment. See 19 CFR 
201.6. Documents for which confidential treatment is granted by the 
Commission will be treated accordingly. All nonconfidential written 
submissions will be available for public inspection at the Office of 
the Secretary and on EDIS.
    This action is taken under the authority of section 337 of the 
Tariff Act of 1930, as amended (19 U.S.C. 1337), and under sections 
210.42-210.46, 210.50(a) of the Commission's Rules of Practice and 
Procedure (19 CFR 210.42-210.46, 210.50(a)).

    Dated: Issued: April 2, 2012.

    By order of the Commission.
James R. Holbein,
Secretary to the Commission.
[FR Doc. 2012-8265 Filed 4-5-12; 8:45 am]
BILLING CODE 7020-02-P