[Federal Register Volume 87, Number 93 (Friday, May 13, 2022)]
[Notices]
[Pages 29375-29377]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-10304]


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INTERNATIONAL TRADE COMMISSION

[Investigation No. 337-TA-1236]


Certain Polycrystalline Diamond Compacts and Articles Containing 
Same; Commission Determination To Review in Part a Final Initial 
Determination Finding No Violation of Section 337; Request for Written 
Submissions on the Issues Under Review and on Remedy, the Public 
Interest, and Bonding

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 review in part a final initial 
determination (``ID'') issued by the presiding administrative law judge 
(``ALJ''), finding no violation of section 337 of the Tariff Act of 
1930. The Commission requests written submissions from the parties on 
the issues under review and submissions from the parties, interested 
government agencies, and interested persons on the issues of remedy, 
the public interest, and bonding, under the schedule set forth below.

FOR FURTHER INFORMATION CONTACT: Cathy Chen, Office of the General 
Counsel, U.S. International Trade Commission, 500 E Street SW, 
Washington, DC 20436, telephone 202-205-2392. Copies of non-
confidential documents filed in connection with this investigation may 
be viewed on the Commission's electronic docket (EDIS) at https://edis.usitc.gov. For help accessing EDIS, please email 
<a href="/cdn-cgi/l/email-protection#71343538224239141d013104021805125f161e07"><span class="__cf_email__" data-cfemail="d297969b81e19ab7bea292a7a1bba6b1fcb5bda4">[email protected]</span></a>. General information concerning the Commission may 
also be obtained by accessing its internet server at https://www.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 December 29, 2020, based on a complaint filed by US Synthetic 
Corporation (``USS'') of Orem, Utah. 85 FR 85661 (Dec. 29, 2020). The 
complaint alleged violations of section 337 of the Tariff Act of 1930, 
as amended, 19 U.S.C. 1337, based upon the importation into the United 
States, the sale for importation, and the sale within the United States 
after importation of certain polycrystalline diamond compacts and 
articles containing same by reason of infringement of certain claims of 
U.S. Patent No. 10,507,565 (``the '565 patent''), U.S. Patent No. 
10,508,502 (``the '502 patent''), U.S. Patent No. 8,616,306 (``the '306 
patent''), U.S. Patent No. 9,932,274 (``the '274 patent''), and U.S. 
Patent No. 9,315,881 (``the '881 patent''). Id. The complaint further 
alleged that an industry in the United States exists as required by 
section 337. Id. The notice of investigation named as respondents: SF 
Diamond Co., Ltd., and SF Diamond USA, Inc. (collectively, ``SF 
Diamond''); Element Six Abrasives Holdings Ltd., Element Six Global 
Innovation Centre, Element Six GmbH, Element Six Limited, Element Six 
Production (Pty) Limited, Element Six Hard Materials (Wuxi) Co. 
Limited, Element Six Trading (Shanghai) Co., Element Six Technologies 
US Corporation, Element Six US Corporation, ServSix US, and Synergy 
Materials Technology Limited (collectively, ``Element Six''); Iljin 
Diamond Co., Ltd., Iljin Holdings Co., Ltd., Iljin USA Inc., Iljin 
Europe GmbH, Iljin Japan Co., and Ltd., Iljin China Co., Ltd. 
(collectively, ``Iljin''); Henan Jingrui New Material Technology Co., 
Ltd. (``Jingrui''); Zhenzghou New Asia Superhard Materials Composite 
Co., Ltd., and International Diamond Services, Inc. (collectively, 
``New Asia/IDS''); CR Gems Superabrasives Co., Ltd. (``CR Gems''); FIDC 
Beijing Fortune International Diamond (``FIDC''); Fujian Wanlong 
Superhard Material Technology Co., Ltd. (``Wanlong''); Zhujau Juxin 
Technology (``Juxin''); \1\ and Shenzhen Haimingrun Superhard Materials 
Co., Ltd. (``Haimingrun'') (together, ``the Respondents''). Id. at 
85662. The Office of Unfair Import Investigations is not participating 
in the investigation. Id.
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    \1\ On February 8, 2021, Guangdong Juxin Materials Technology 
Co., Inc. was substituted in place of Zhuhai Juxin Technology. ID at 
1 n.1 (citing Order No. 8).
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    USS moved to terminate the investigation as to Element Six and FIDC 
over the course of the investigation. All of the motions were granted 
by non-final IDs, and the Commission did not review them. ID at 2 
(citing Order Nos. 6, 8, 10, and 16). Thus, the only remaining 
respondents are Iljin, SF Diamond, New Asia/IDS, Haimingrun, Juxin, CR 
Gems, Jingrui, and Wanlong.
    USS also moved for partial termination of the investigation with 
respect to certain asserted patents and claims. All the motions were 
granted by non-final IDs, and the Commission did not review them. ID at 
3 (citing Order Nos. 26, 32, and 57). As such, the '274 and '881 
patents have been terminated from the investigation. Claims 1, 2, 4, 6, 
and 18 of the '565 patent; claims 1, 2, 11, 15, and 21 of the '502 
patent; and claim 15 of the '306 patent remain in this investigation 
(collectively, ``the Asserted Patents'').
    On May 24, 2021, Order No. 23 issued, which construed certain claim 
terms of the asserted patents. An evidentiary hearing was held on 
October 18-22, 2021.
    On March 3, 2022, the ALJ issued his final ID, finding no violation 
of section 337 by Respondents. Specifically, the ID found at least one 
accused product infringes all asserted claims of the Asserted Patents, 
but those claims are invalid under 35 U.S.C. 101 and/or 102. The ID 
also found that Complainants have shown that the domestic industry 
requirement has been satisfied with respect to the Asserted Patents.
    On March 15, 2022, Complainant filed a petition for review seeking 
review of certain patent invalidity findings. That same day, 
Respondents filed two contingent petitions for review. The first 
petition submitted by all active Respondents seeks review of certain 
findings related to infringement, the technical prong of the domestic 
industry requirement, and invalidity. The second petition submitted by 
Respondents New Asia, Haimingrun, and Juxin seeks review of Order No. 
46, which allowed Complainant to present evidence regarding its 
revenue-based investment allocation method for the economic prong of 
the domestic industry requirement. On March 23, 2022, the parties filed 
separate replies to the petitions for review. On March 31, 2022, the 
Iljin Respondents submitted their public interest statement. The 
Commission solicited submissions from the public on public interest 
issues raised by the recommended determination. No submissions were 
filed.
    Having reviewed the record of the investigation, including the 
final ID, the parties' submissions to the ALJ, the petitions for 
review, and the responses thereto, the Commission has determined to 
review the ID in part. Specifically, the

[[Page 29376]]

Commission has determined to review: (1) The ID's finding that the 
asserted claims are invalid under 35 U.S.C. 101; (2) the ID's finding 
that the asserted claims of the '565 patent are not entitled to an 
earlier priority date and, thus, they are invalid as anticipated by the 
sale of the CT-57 product; (3) the ID's finding that the Mercury 
product anticipates claims 1 and 2 of the '565 patent and claims 1 and 
11 of the '502 patent; (4) the ID's finding that Respondents did not 
prove that the asserted claims are not enabled; and (5) the ID's 
findings regarding the economic prong of the domestic industry 
requirement (including the ruling allowing USS to supplement its 
domestic industry contentions with a revenue-based allocation method). 
The Commission has determined not to review any other findings 
presented in the final ID, including the ID's finding of no violation 
of section 337 with respect to the '306 patent.
    In connection with its review, Commission requests responses to the 
following questions. The parties are requested to brief their positions 
with reference to the applicable law and the existing evidentiary 
record.
    1. Is each of the asserted patent claims directed to an abstract 
idea under the step one analysis of Alice Corp. v. CLS Bank Int'l, 573 
U.S. 208 (2014) and, if so, what do you allege is the abstract idea? 
Are the claims directed to the abstract idea of ``enhanced'' or a 
``high-degree'' of diamond-to-diamond bonding?
    2. Is each of the individual claimed ``performance standards'' and 
``electrical and magnetic side effects,'' as discussed in the ID, 
directed to an abstract idea? For each of the claimed PDC 
characteristics (including coercivity, specific magnetic saturation, 
specific permeability, average electrical conductivity, G-Ratio, and 
thermal stability), please discuss the expert testimony and any other 
record evidence relevant to whether that characteristic is indicative 
of ``the extent of diamond-to-diamond bonding,'' ``the amount of the 
metal-solvent catalyst present,'' or any other physical characteristics 
of the diamond microstructure as discussed in the patent 
specifications.
    3. For any asserted claim that you allege invokes a judicial 
exception to patentability for being an abstract idea, does the claim 
recite additional elements that integrate the judicial exception into a 
practical application under step two of Alice? Please discuss whether 
the structures recited in each claim are well-known, routine, and 
conventional. See Yu v. Apple Inc., 1 F.4th 1040, 1045 (Fed. Cir. 
2021).
    4. Do the specifications of U.S. Patent No. 7,866,418 (``the '418 
patent'') and the '565 patent disclose, either expressly or inherently, 
an exemplary PDC exhibiting ``an average electrical conductivity of 
less than about 1200 S/m'' as required, for example, in claim 1 of the 
'565 patent? Please cite the relevant portions of the specification and 
expert testimony.
    5. USS argues that the ID erred in relying on Dr. German's 
electrical conductivity measurements of other PDCs because there is no 
information confirming these other PDCs were manufactured in the same 
way as the disclosed examples in the '418 and '565 patents. See Compl. 
Pet. at 46. Is the way a PDC is manufactured relevant to USS's argument 
that electrical conductivity is inherently disclosed in the '418 
patent? If it is relevant, please discuss whether Dr. Barron's 
mathematical model to predict the electrical conductivity from cobalt 
content assumes the same materials and manufacturing conditions as 
described in the '418 patent. Is USS's argument consistent with its 
contention that the electrical conductivity of a PDC is indicative of 
``a PDC's microstructure''? See id. at 39.
    6. Respondents argue that even if the '418 patent discloses example 
PDCs having specific electrical conductivities of less than 1200 S/m, 
those examples are insufficient to provide written description support 
for the entire claimed electrical conductivity range of ``less than 
about 1200 S/m.'' See Resp. Response at 34-37. Was this argument timely 
raised before the ALJ? Should the Commission find this argument is 
waived? If not waived, please discuss whether the '418 patent 
specification provides written description support for the entire 
claimed electrical conductivity range.
    7. What evidence in the record supports the ID's finding that the 
Mercury 1613 sample tested by Mr. Bellin is prior art to the '565 and 
'502 patents? Please discuss whether and to what extent Mr. Gledhill's 
testimony regarding manufacturing practices at Diamond Innovations, 
including his testimony at Tr. 525:17-540:19, was admitted into the 
record in view of Order No. 48 and the ALJ's oral order at the 
evidentiary hearing, Tr. 667:5-72:22).
    8. Please explain what appropriate methods of valuation provide a 
reliable estimate of the Complainant's investments in plant and 
equipment with respect to the articles protected by the '565 and '502 
patents, including an explanation of any adjustments that are necessary 
to approximate those investments based on the record evidence and legal 
authority for such adjustments. For equipment that is purchased and 
placed into service years before the DI products are manufactured as 
described in the ID at page 148, please explain whether governing legal 
authority requires that the purchase price of the equipment be 
amortized or depreciated in order to be counted as an ``investment in . 
. . equipment'' under section 337(a)(3)(A). Discuss, with relevant 
legal authority, whether replacement costs may be used as a basis to 
estimate investments in equipment and if so must any adjustments be 
made to rely on such replacement costs.
    The parties are invited to brief only the discrete issues requested 
above. The parties are not to brief other issues on review, which are 
adequately presented in the parties' existing filings.
    In connection with the final disposition of this investigation, the 
statute authorizes issuance of, inter alia, (1) an exclusion 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 the 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 likely to do so. 
For background, see Certain Devices for Connecting Computers via 
Telephone Lines, Inv. No. 337-TA-360, USITC Pub. No. 2843, Comm'n Op. 
at 7-10 (Dec. 1994).
    The statute requires the Commission to consider the effects of that 
remedy upon the public interest. The public interest factors the 
Commission will consider include the effect that an exclusion order 
and/or a cease and desist order 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

[[Page 29377]]

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, 
disapprove, or take no action on the Commission's determination. 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 identified in this notice. 
The parties' opening submissions should not exceed 100 pages, and their 
reply submissions should not exceed 60 pages. Parties to the 
investigation, interested government agencies, and any other interested 
parties are encouraged to file written submissions on the issues of 
remedy, the public interest, and bonding. Such submissions should 
address the recommended determination by the ALJ on remedy and bonding.
    In their initial submissions, Complainant is also requested to 
identify the remedy sought and Complainant and OUII are requested to 
submit proposed remedial orders for the Commission's consideration. 
Complainant is further requested to provide the HTSUS subheadings under 
which the accused products are imported, and to supply the 
identification information for all known importers of the products at 
issue in this investigation. The initial written submissions and 
proposed remedial orders must be filed no later than close of business 
on Monday, May 23, 2022. Reply submissions must be filed no later than 
the close of business on Tuesday, May 31, 2022. No further submissions 
on these issues will be permitted unless otherwise ordered by the 
Commission.
    Persons filing written submissions must file the original document 
electronically on or before the deadlines stated above. The 
Commission's paper filing requirements in 19 CFR 210.4(f) are currently 
waived. 85 FR 15798 (March 19, 2020). Submissions should refer to the 
investigation number (Inv. No. 337-TA-1236) in a prominent place on the 
cover page and/or the first page. (See Handbook for Electronic Filing 
Procedures, https://www.usitc.gov/documents/handbook_on_filing_procedures.pdf). Persons with questions regarding 
filing should contact the Secretary, (202) 205-2000.
    Any person desiring to submit a document to the Commission in 
confidence must request confidential treatment by marking each document 
with a header indicating that the document contains confidential 
information. This marking will be deemed to satisfy the request 
procedure set forth in Rules 201.6(b) and 210.5(e)(2) (19 CFR 201.6(b) 
& 210.5(e)(2)). Documents for which confidential treatment by the 
Commission is properly sought will be treated accordingly. Any non-
party wishing to submit comments containing confidential information 
must serve those comments on the parties to the investigation pursuant 
to the applicable Administrative Protective Order. A redacted non-
confidential version of the document must also be filed with the 
Commission and served on any parties to the investigation within two 
business days of any confidential filing. All information, including 
confidential business information and documents for which confidential 
treatment is properly sought, submitted to the Commission for purposes 
of this investigation may be disclosed to and used: (i) By the 
Commission, its employees and Offices, and contract personnel (a) for 
developing or maintaining the records of this or a related proceeding, 
or (b) in internal investigations, audits, reviews, and evaluations 
relating to the programs, personnel, and operations of the Commission 
including under 5 U.S.C. Appendix 3; or (ii) by U.S. government 
employees and contract personnel, solely for cybersecurity purposes. 
All contract personnel will sign appropriate nondisclosure agreements. 
All nonconfidential written submissions will be available for public 
inspection on EDIS.
    The Commission vote for this determination took place on May 9, 
2022.
    The authority for the Commission's determination is contained in 
section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. 1337, and 
in part 210 of the Commission's Rules of Practice and Procedure, 19 CFR 
part 210.

    By order of the Commission.

    Issued: May 9, 2022.
Lisa Barton,
Secretary to the Commission.
[FR Doc. 2022-10304 Filed 5-12-22; 8:45 am]
BILLING CODE 7020-02-P


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