United States Court of Appeals 

for the Federal Circuit ______________________ 

LAERDAL MEDICAL CORP., LAERDAL 

MEDICAL AS,

Appellants

v.

INTERNATIONAL TRADE COMMISSION,

Appellee

______________________ 

2017-2445

______________________ 

Appeal from the United States International Trade 

Commission in Investigation No. 337-TA-1008.

______________________ 

Decided: December 7, 2018

______________________ 

JEFFREY I. KAPLAN, Kaplan, Breyer, Schwarz, LLP, 

Matawan, NJ, argued for appellants. Also represented by 

JOSEPH W. BAIN, Shutts & Bowen LLP, West Palm Beach, 

FL. 

 ROBERT JOHN NEEDHAM, Office of the General Counsel, United States International Trade Commission, 

Washington, DC, argued for appellee. Also represented 

by DOMINIC L. BIANCHI, WAYNE W. HERRINGTON. 

 ______________________ 
2 LAERDAL MEDICAL CORP. v. ITC

Before LOURIE, O’MALLEY, and STOLL, Circuit Judges.

O’MALLEY, Circuit Judge. 

Laerdal Medical Corp. and Laerdal Medical AS (collectively, “Laerdal”) appeal from the U.S. International 

Trade Commission’s final determination denying Laerdal 

relief based on claims of trade dress infringement against 

defaulting respondents. Certain Carbon Spine Board, 

Cervical Collar, CPR Masks and Various Med. Training 

Manikin Devices, USITC Inv. No. 337-TA-1008 (June 14, 

2017). After instituting an investigation during which the 

named parties failed to participate and were deemed to be 

in default, the Commission concluded that Laerdal’s trade 

dress allegations had not been adequately pleaded, and 

therefore, denied Laerdal any remedy against the named 

parties. 

We conclude that the Commission erred in reassessing the sufficiency of Laerdal’s complaint against 

defaulting respondents post-institution and in failing to 

assess the appropriate remedy to impose under the circumstances. We, therefore, reverse the Commission’s

determination as to Laerdal’s trade dress claims and 

vacate and remand for the Commission to determine the 

proper remedy. 

I. BACKGROUND

Laerdal is a manufacturer and distributor of medical 

devices, medical training products, and manikins. J.A. 

2159, 2333. On March 21, 2016, Laerdal filed a complaint

at the U.S. International Trade Commission (the “Commission”) asserting violations of 19 U.S.C. § 1337 by

eleven respondents. Laerdal amended its complaint on 

May 18, 2016 and filed a supplement to the amended 

complaint on June 7, 2016. J.A. 2358. 

Laerdal’s complaint, as amended and supplemented, 

alleged that the respondents were infringing Laerdal’s 

patent, trademark, trade dress, and copyright rights by
LAERDAL MEDICAL CORP. v. ITC 3

importing, selling for importation, or selling within the 

United States certain spine boards, cervical collars, CPR 

masks, training manikins, and accompanying product 

literature. J.A. 2140–261. Laerdal sought a general 

exclusion order covering the various infringing products, a 

limited exclusion order “as an addition, or in the alternative” to the general exclusion order, and a cease and 

desist order directed to each respondent. J.A. 2259–60. 

On June 2, 2016, in response to the complaint, the 

Commission’s Office of Unfair Import Investigations 

(“Staff”) requested supplemental information on certain of 

Laerdal’s allegations related to one asserted patent and 

three asserted trademarks. J.A. 2349–50. Laerdal provided the requested information on June 7, 2016 and

requested that, if the additional evidence was insufficient, 

the Commission institute an investigation as to the remaining patent, trademark, trade dress, and copyright 

allegations. J.A. 2353–57. Thirteen days later, the Commission did exactly that, instituting an investigation on 

some, but not all, of Laerdal’s claims. Specifically, the 

Commission instituted an investigation on Laerdal’s trade 

dress claims, one patent claim, two copyright claims, and 

one trademark claim, excluding all others. J.A. 2358–62. 

Despite being served with the amended complaint and 

notice of investigation, no respondent submitted any 

response, appeared, or otherwise participated in any way 

in any of the proceedings. J.A. 2478–99. On October 20, 

2016, therefore, Laerdal moved for an order requiring 

Respondents to show cause why they should not be found 

in default under § 1337(g)(1). J.A. 2550–59. The Administrative Law Judge (“ALJ”) granted Laerdal’s motion and 

issued the Order to Show Cause on November 7, 2016. 

J.A. 2584–86. Respondents again failed to respond to or 

acknowledge that order. Two weeks later, the ALJ issued 

an initial determination finding all respondents in default. J.A. 2589–95. 
4 LAERDAL MEDICAL CORP. v. ITC

On December 1, 2016, in response to the ALJ’s initial 

determination, Laerdal modified its requested relief from 

a general exclusion order to “immediate entry of limited 

exclusion orders (and cease and desist orders, where 

appropriate) against the defaulting Respondents.” J.A. 

2599.

The Commission ultimately determined not to review 

the ALJ’s initial determination finding all respondents in 

default and requested that Laerdal and the Staff provide 

briefing on remedy, the public interest, and bonding, and 

submit proposed remedial orders. J.A. 2609–12. The 

Commission did not request information on any other 

issue. 

Laerdal and the Staff each responded that public interest factors did not preclude relief and requested a 100 

percent bond rate, a cease and desist order against the 

sole domestic respondent, and limited exclusion orders

directed to all respondents. J.A. 2618–25, 2629–35, 2744–

52, 2778–86, 2789–95, 2796–804. Both Laerdal and the 

Staff, moreover, expressed that, because Laerdal satisfied 

the requirements of § 1337(g)(1), the Commission was 

required to presume the facts alleged in the complaint to 

be true and issue an exclusion order, cease and desist 

order, or both, unless such relief was precluded by public 

interest concerns. See J.A. 2621–22, 2780–81.

On June 14, 2017, the Commission issued its final determination, granting Laerdal limited exclusion orders 

against three respondents and a cease and desist order 

against one respondent, all based on Laerdal’s patent and 

trademark claims. J.A. 1–13. The Commission issued no 

relief, however, on Laerdal’s trade dress and copyright 

claims, finding Laerdal’s allegations in those claims 

inadequate. J.A. 5–11. Specifically, the Commission

concluded that, even when the pleaded facts were presumed true, Laerdal failed to show that any respondent 
LAERDAL MEDICAL CORP. v. ITC 5

violated § 1337 with respect to the alleged trade dresses 

and copyrights. J.A. 8, 11. 

As to Laerdal’s trade dress claims—the only claims at 

issue in this appeal—the Commission found that Laerdal 

failed to plead sufficiently (1) that it suffered the requisite 

harm, (2) the specific elements that constitute its trade 

dresses, and (3) that its trade dresses were not functional. 

J.A. 8–11. Thus, despite approving the ALJ’s initial 

determination finding all respondents in default and 

despite requesting supplemental briefing solely related to 

the appropriate remedy, the Commission issued Laerdal 

no relief on those claims or against any of the respondents 

named in those claims. 

Laerdal appeals the Commission’s termination of its 

trade dress claims, contending the Commission acted in 

violation of § 1337(g)(1) by terminating the investigation 

and issuing no relief for its trade dress claims against

defaulting respondents.1 We have jurisdiction pursuant 

to 28 U.S.C. § 1295(a)(6).

II. DISCUSSION

Statutory interpretation is a question of law reviewed 

de novo. Belkin Int’l, Inc. v. Kappos, 696 F.3d 1379, 1381 

(Fed. Cir. 2012); PS Chez Sidney, L.L.C. v. U.S. Int’l 

Trade Comm’n, 684 F.3d 1374, 1379 (Fed. Cir. 2012) 

(“[W]hether the ITC’s determination was based on a 

proper interpretation of the [law] is 

a question of law which we review de novo.”).

 

1 Laerdal also appeals the Commission’s failure to 

provide it notice or an opportunity to amend before finding that Laerdal’s trade dress allegations were pleaded 

insufficiently. Because our conclusion regarding Laerdal’s 

argument under § 1337(g)(1) is dispositive, we do not 

reach these questions. 
6 LAERDAL MEDICAL CORP. v. ITC

Section 1337(g), titled “Exclusion from entry or cease 

and desist order; conditions and procedures applicable,” 

provides, in relevant part: 

If— 

(A) a complaint is filed against a person 

under this section;

(B) the complaint and a notice of investigation are served on the person;

(C) the person fails to respond to the complaint and notice or otherwise fails to appear to answer the complaint and notice;

(D) the person fails to show good cause 

why the person should not be found in default; and

(E) the complainant seeks relief limited 

solely to that person;

the Commission shall presume the facts alleged in 

the complaint to be true and shall, upon request, 

issue an exclusion from entry or a cease and desist 

order, or both, limited to that person unless, after 

considering the effect of such exclusion or order 

upon 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, 

the Commission finds that such exclusion or order 

should not be issued.

19 U.S.C. § 1337(g)(1) (emphases added). 

According to Laerdal, the Commission acted outside of 

its statutory authority by sua sponte terminating 

Laerdal’s trade dress investigation at the final determination stage based on an assessment of the adequacy of its 

pleadings. Under § 1337(g)(1), Laerdal asserts, once the 
LAERDAL MEDICAL CORP. v. ITC 7

Commission found all respondents in default, it was 

required to accept all facts pleaded in the complaint as 

true and issue a remedy, subject only to the public interest concerns outlined above. Brief for Laerdal at 10.

The Commission responds that, even in the case of defaulting respondents, where facts alleged in the complaint 

must be presumed true, it must still find unlawful activity 

before issuing relief. Brief for Commission at 18, 22–23. 

The decision to institute an investigation, it argues, is not 

substantive approval that the complaint established a 

§ 1337 violation. Brief for Commission at 24–25. If a 

complaint does not adequately plead a § 1337 violation, it 

argues, no relief is warranted—even if its allegations are

unopposed. 

We conclude that the statute, on its face, unambiguously requires the Commission to grant relief against 

defaulting respondents, subject only to public interest 

concerns, if all prerequisites of § 1337(g)(1) are satisfied. 

The statute’s plain text, surrounding context, purpose, 

and legislative history, as well as the Commission’s own 

prior decisions, support this conclusion.

Through use of the word “shall,” the statute unambiguously requires the Commission to, upon finding that

elements (A) through (E) are satisfied, (1) presume the 

facts alleged in the complaint to be true and (2) upon 

request, issue an exclusion order, cease and desist order, 

or both, subject to public interest concerns. See SAS Inst., 

Inc. v. Iancu, 138 S. Ct. 1348, 1354 (2018) (finding that 

the word “shall” means “must” because it “generally 

imposes a nondiscretionary duty”); Kingdomware Techs., 

Inc. v. United States, 136 S. Ct. 1969, 1977 (2016) (“Unlike the word ‘may,’ which implies discretion, the word 

‘shall’ usually connotes a requirement.”); see also Converse, Inc. v. U.S. Int’l Trade Comm’n, — F.3d —, 2018 

WL 6164571, at *14 (Fed. Cir. Oct. 30, 2018) (O’Malley, J., 

concurring in part and dissenting in part) (“This language 
8 LAERDAL MEDICAL CORP. v. ITC

requires the ITC to presume the facts alleged in the 

complaint to be true and to provide some form of relief 

against any parties found to be in default . . . .”). 

Granting the Commission discretion to issue relief 

under § 1337(g)(1), moreover, runs contrary to the surrounding statutory language. See King v. Burwell, 135 

S. Ct. 2480, 2489 (2015) (“[W]e must read the words in 

their context and with a view to their place in the overall 

statutory scheme.” (internal quotation marks omitted)). 

In § 1337(g)(2), Congress granted the Commission discretion to issue a general exclusion order against defaulting 

respondents through use of the term “may.” By using 

“shall” in subsection (g)(1), though, Congress limited the 

Commission’s discretion in the case of petitioners seeking 

more limited relief—such as a limited exclusion order or 

cease and desist order or both—against defaulting respondents. 

And, while the Commission contends that it must find 

a § 1337 violation properly pleaded before it can issue 

relief under subsection (g)(1), only subsections (d)(1) and 

(g)(2)—neither of which are implicated here—require that 

additional layer of review post-institution. Subsection 

(g)(2) provides that relief “may be issued if . . . such a 

violation is established by substantial, reliable, and 

probative evidence.” And subsection (d)(1), which is 

implicated when respondents participate in the litigation, 

requires the Commission to determine “that there is a 

violation of this section” before it issues any relief. No 

such requirement is found in subsection (g)(1); instead, 

the Commission must “presume the facts alleged in the 

complaint to be true” and, upon request, issue relief after 

considering any relevant public interest concerns. See S. 

Rep. No. 100-71, at 132 (1987) (Subsection (g)(1) “authorizes the Commission to presume the facts alleged in the 

complaint to be true insofar as they involve a defaulting 

respondent, and to then issue relief limited to that respondent. . . . Relief in the form of a general exclusion 
LAERDAL MEDICAL CORP. v. ITC 9

order [under (g)(2)] must be supported by a Commission 

determination of violations of the Act based on substantial, reliable, and probative evidence.”); H.R. Rep. No. 

100-576, at 636 (1988) (Conf. Rep.). 

To be sure, the Commission must find a violation of 

§ 1337 before it can issue a remedy, but that analysis in 

the context of the defaulting respondent occurs, by statute

and through the Commission’s regulatory regime, upon 

default. Through the pre-requisites of subsection (g)(1)—

elements (A) through (E)—relief against defaulting respondents is only possible if the Commission has already 

determined, pre-institution, that the complaint was 

pleaded adequately and instituted an investigation thereof. After institution, the question of the adequacy of the 

pleadings is no longer a live one absent a challenge thereto by a responding party. 

The Commission’s rules are consistent with this understanding. Commission Rule 210.9, for example, requires that, prior to instituting an investigation, the 

Commission “shall examine the complaint for sufficiency 

and compliance with the applicable sections of this chapter.” 19 C.F.R. § 210.9 (emphases added). When a notice 

of investigation issues, therefore, the Commission must 

have already ensured that the complaint sufficiently 

pleaded a statutory violation. 

Under the pre-requisites to (g)(1), relief is both permitted and mandated only after, inter alia, a notice of 

investigation is served, implying that the Commission has 

completed its preliminary review and found the complaint 

sufficiently pleaded, and after the respondents are found

to be in default. See 19 U.S.C. § 1337(g)(1)(B), (D). If a 

violation is not pleaded adequately in the complaint, the 

Commission can decline institution and dismiss the 

complaint, thereby never implicating relief under subsection (g)(1)—or any other subsection. See 19 C.F.R. 

§ 210.10(c) (“If the Commission determines not to insti-
10 LAERDAL MEDICAL CORP. v. ITC

tute an investigation on the basis of the complaint, the 

complaint shall be dismissed, and the complainant and all 

proposed respondents will receive written notice of the 

Commission’s action and the reason(s) therefor.”). But 

the Commission may not institute an investigation and 

then decide post-hoc that it is dissatisfied with an unchallenged complaint upon which the investigation was predicated.

The purpose and legislative history of subsection 

(g)(1) confirm this conclusion. Prior to Congress’s 1988 

Amendment to the Trade Act, the Commission was required to find a violation under § 1337 before issuing

relief against a defaulting respondent, even if the facts of 

the complaint were uncontested. See Converse, 2018 WL 

6164571, at *14; Certain Elec. Slow Cookers, USITC Inv. 

No. 337-TA-42, at 7 (Mar. 15, 1979) (relying on 19 C.F.R. 

§ 210.21(d) (1976)). A complainant, therefore, faced

essentially the same burden of proof regardless of the 

respondent’s participation. See Converse, 2018 WL 

6164571, at *14; see also Certain Elec. Skin Care Devices, 

USITC Inv. No. 337-TA-959, 2017 WL 8683854, at *14 

(Feb. 13, 2017).

In 1988, however, Congress added § 1337(g) to the 

statute to address default judgments, acknowledging that, 

without the respondent’s participation, a complainant 

faced difficulties proving facts sufficient to establish a 

violation of § 1337. See Converse, 2018 WL 6164571, at 

*14; Certain Elec. Skin Care Devices, 2017 WL 8683854, 

at *14 (“The legislative history of Section 337(g) notes 

that the addition of the provision for ‘Default Judgments’ 

was motivated by the fact that discovery is usually difficult, if not impossible, to obtain from named respondents 

who have chosen not to participate in an investigation.”). 

Through the addition of subsection (g), therefore, Congress “require[d] the Commission, in cases involving 

defaulting respondents, to presume the facts alleged in 

the complaint to be true and, upon request, to issue relief 
LAERDAL MEDICAL CORP. v. ITC 11

against the defaulting respondents, unless the enumerated public interest factors . . . preclude[d] relief.” S. Rep. 

No. 100-71, at 132; H.R. Rep. No. 100-576, at 636 (Conf. 

Rep.) (“[W]hen a respondent fails to appear, the ITC shall 

presume the facts alleged in the complaint to be true and 

shall, upon request, issue appropriate relief solely against 

that person.”). 

The Commission contends that its approach of reviewing pleading sufficiency prior to a final determination is 

consistent with district court practice, which requires a 

court to review a plaintiff’s allegations to ensure the 

defaulter’s liability as a matter of law. Brief for Commission at 21. But the Commission overlooks an important 

distinction between district court and ITC practice—the 

Commission must conduct a preliminary review that 

district courts do not, and only then may institute an 

investigation. Rule 55, moreover, governing default 

judgment in district court litigation, is unlike § 1337(g)(1); 

it does not require the court to grant relief, it grants the 

court discretion to “conduct hearings or make referrals” in 

evaluating whether to “enter or effectuate judgment.” 

Fed. R. Civ. P. 55(b)(2). We presume that Congress was 

aware of the discretion granted to district courts under 

Rule 55 when it later drafted subsection (g) to § 1337. See 

Miles v. Apex Marine Corp., 498 U.S. 19, 32 (1990) (“We 

assume that Congress is aware of existing law when it 

passes legislation.”).

Our interpretation is also supported by the Commission’s own prior application of the statute. In Certain 

Electric Skin Care Devices, the Commission—referring to 

the same legislative history addressed above—explained 

that it “distinguishes between default situations, in which 

the remedy is governed by Section 337(g), and contested 

situations, in which the remedy is governed by Sections 

337(d) and (f).” Certain Elec. Skin Care Devices, 2017 WL 

8683854, at *14 n.9. The Commission clarified that “the 

mandatory language of [subsection (g)(1),] (‘shall’), cou-
12 LAERDAL MEDICAL CORP. v. ITC

pled with the use of the coordinating conjunction ‘or,’ 

requires the Commission to issue relief as to the defaulting 

respondent in the form of three alternative choices—an 

exclusion order, a cease and desist order, or both—when 

the conditions and applicable procedures of this provision 

are satisfied.” Id. at *14 (emphasis added). And the 

Commission acknowledged that “the grant of this appropriate relief can be overcome only by evidence pertaining 

to the statutory public interest factors.” Id. at *14 n.9. 

Recognizing that its discretion lay only in determining the 

appropriate remedy against defaulting respondents, not 

in deciding whether a remedy was warranted, the Commission concluded that, since the respondents were found 

in default, it did not need to “address whether there [wa]s 

a violation of Section 337” as the “claim [wa]s deemed 

established based on the allegations in the complaint.” 

Id. at *7.

Here, it is undisputed that Laerdal met the prerequisites for § 1337(g)(1). The amended complaint and 

notice of investigation were served on all respondents, the 

respondents failed to respond or appear in any way and 

failed to show good cause why they should not be found in 

default, and Laerdal limited the relief it sought to exclusion orders and cease and desist orders against only the 

respondents. J.A. 2478–99, 2550–59, 2584–86, 2589–95, 

2599, 2609–12. Subject only to public interest concerns, 

therefore, the Commission was required under 

§ 1337(g)(1) to presume all facts alleged in the complaint 

as true and issue an exclusion order, cease and desist 

order, or both. 

While the Commission contends that Laerdal did not 

properly plead a § 1337 violation in the complaint, the 

time for that assessment was pre-institution. Had the 

Commission found Laerdal’s trade dress claims insufficient, it should have requested additional information or 

denied institution under Rules 210.9 and 210.10. In fact, 

that is precisely what the Commission did with respect to 
LAERDAL MEDICAL CORP. v. ITC 13

certain of Laerdal’s patent and trademark claims by not 

including them in the investigation. J.A. 2358–62. For 

those claims, the Staff highlighted pleading insufficiencies

to Laerdal, Laerdal was provided an opportunity to supplement the complaint, and the Commission ultimately 

declined institution as to three of the four identified 

insufficiently pleaded allegations. J.A. 2349–50, 2353–57, 

2358–60. As the Commission conceded during oral argument, “ideally that [same process] would have happened” 

with Laerdal’s trade dress claims as well. Oral Arg. at 

25:00, 

http://oralarguments.cafc.uscourts.gov/default.aspx?fl=20

17-2445.mp3. Beyond improperly reaching the merits of 

Laerdal’s trade dress claims post-institution, the Commission also raised concerns about the adequacy of those 

trade dress claims that neither the Staff nor the ALJ—

both of whom had previously considered the claims—

shared. While we question the Commission’s actions in 

this regard, we do not reach the issue here.

Having approved Laerdal’s trade dress claims without 

any additional questioning and instituted an investigation 

thereof, see J.A. 2358–62, the Commission cannot now,

post-institution and without opposition or appearance

from respondents, assert insufficient pleading as a basis 

for denying relief. After the respondents were found in 

default, the Commission was required to issue relief upon 

Laerdal’s request, unless precluded by public interest 

concerns. 

While both Laerdal and the Staff asserted that no 

public interest concerns precluded relief, J.A. 2618–25,

2778–86, we recognize that “the Commission has broad 

discretion in selecting the form, scope and extent of the 

remedy,” and therefore, remand for the Commission to 

determine the appropriate remedy. Viscofan, S.A. v. U.S. 

Int’l Trade Comm’n, 787 F.2d 544, 548 (Fed. Cir. 1986). 
14 LAERDAL MEDICAL CORP. v. ITC

III. CONCLUSION

For the foregoing reasons, we reverse the Commission’s determination that Laerdal failed to plead its trade 

dress claims with adequate detail, vacate the Commission’s decision that no relief was warranted for those 

claims, and remand for the Commission to determine the 

appropriate remedy after consideration of public interest 

concerns, in light of Laerdal and the Staff’s submissions.

REVERSED IN PART, VACATED IN PART, AND 

REMANDED

COSTS

No costs.