[Federal Register Volume 76, Number 202 (Wednesday, October 19, 2011)]
[Rules and Regulations]
[Pages 64803-64810]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-26664]
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INTERNATIONAL TRADE COMMISSION
19 CFR Part 210
[Docket No. MISC-032]
Rules of Adjudication and Enforcement
AGENCY: International Trade Commission
ACTION: Final rule.
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SUMMARY: The United States International Trade Commission
(``Commission'') amends its Rules of Practice and Procedure concerning
rules of adjudication and enforcement. The amendments are necessary to
gather more information on public interest issues arising from
complaints filed with the Commission requesting institution of an
investigation under Section 337 of the Tariff Act of 1930. The intended
effect of the amendments is to aid the Commission in identifying
investigations that require further development of public interest
issues in the record, and to identify and develop information regarding
the public interest at each stage of the investigation.
DATES: Effective November 18, 2011.
FOR FURTHER INFORMATION CONTACT: Megan M. Valentine, Office of the
General Counsel, United States International Trade Commission,
telephone 202-708-2301. Hearing-impaired individuals are advised that
information on this matter can be obtained by contacting the
Commission's TDD terminal at 202-205-1810. General information
concerning the Commission may also be obtained by accessing its
Internet server at http://www.usitc.gov.
SUPPLEMENTARY INFORMATION:
Background
Section 335 of the Tariff Act of 1930 (19 U.S.C. 1335) authorizes
the Commission to adopt such reasonable procedures, rules, and
regulations as it deems necessary to carry out its functions and
duties. This rulemaking seeks to update certain provisions of the
Commission's existing Rules of Practice and Procedure. The Commission
is amending its rules covering investigations under Section 337 of the
Tariff Act of 1930 (19 U.S.C. 1337) (``Section 337'') in order to
increase the efficiency of its Section 337 investigations.
Specifically, the changes to the Commission's Rules are for the purpose
of improving the Commission's procedures and ensuring the completeness
of the record with respect to the required analysis concerning the
public interest under Sections 337(d)(1) and (f)(1). There is no change
in the Commission's substantive practice with respect to its
consideration of the public interest factors in its determinations
relating to the appropriate remedy.
The Commission published a notice of proposed rulemaking (``NOPR'')
in the Federal Register at 75 FR 60671 (Oct. 1, 2010), proposing to
amend the Commission's Rules of Practice and Procedure to gather more
information on public interest issues. Consistent with its ordinary
practice, the Commission invited the public to comment on all the
proposed rules amendments. This practice entails the following steps:
(1) Publication of an NOPR; (2) solicitation of public comments on the
proposed
[[Page 64804]]
amendments; (3) Commission review of public comments on the proposed
amendments; and (4) publication of final amendments at least thirty
days prior to their effective date.
The NOPR requested public comment on the proposed rules within 60
days of publication of the NOPR. In response to requests from the
American Intellectual Property Law Association (``AIPLA'') and the
Intellectual Property Owners Association (``IPO''), the Chairman
granted an extension by letter of December 2, 2010, to allow those
entities to submit comments until January 7, 2011. The Commission
received a total of eight sets of comments from corporations or
organizations, including one each from the ITC Trial Lawyers
Association (``ITCTLA''); Microsoft Corp. (``Microsoft''); Intellectual
Ventures, LLC (``Intellectual Ventures''); the Ministry of Commerce of
the People's Republic of China (``MOFCOM''); the China Chamber of
Commerce for Light Industrial Products & Arts-Crafts (``CCCLA''); the
Computer & Communications Industry Association (``CCIA''), and the IPO.
In addition, the law firm of Adduci, Mastriani & Schaumberg LLP
(``AMS'') filed a set of comments. Three sets of comments were received
from persons writing in their individual capacities, viz., Ms. Mary
White, Mr. Steven Beard, and a group of economists including Messrs.
Fei Deng, Greg Leonard, and Mario Lopez. The IPO's comments were filed
one week late on January 14, 2011. The AIPLA did not submit comments.
The Commission has carefully considered all comments that it
received. The Commission's response is provided below in a section-by-
section analysis. The Commission appreciates the time and effort of the
commentators in preparing their submissions.
As required by the Regulatory Flexibility Act, the Commission
certifies that these regulatory amendments will not have a significant
impact on small business entities.
Overview of the Amendments to the Regulations
The final regulations contain eleven (11) changes from those
proposed in the NOPR. These changes are summarized here.
First, with regard to rule 210.12, relating to the complaint, the
Commission has determined that it will not require complainants to
include public interest allegations in the complaint. Second, the
Commission has determined to add final rule 210.8(b) to require
complainants to file a separate statement of public interest
concurrently with the complaint. Final rule 210.8(b) contains a list of
the issues that a complainant should address in its public interest
statement, which is similar to the list contained in proposed rule
210.12(a)(12). Third, the Commission has determined to add final rule
210.8(c)(1) to provide for the responses to a Commission pre-
institution Federal Register notice that will solicit comments
regarding the public interest, including addressing complainant's
filing under rule 210.8(b), from proposed respondents and the public
upon receipt of a complaint. Included in this section is a requirement
that public interest submissions are due eight (8) calendar days after
publication of the pre-institution notice in the Federal Register.
Fourth, the Commission has added final rule 210.8(c)(2) to provide that
complainants may file reply submissions to responses submitted by the
public and proposed respondents in response to the Commission's pre-
institution Federal Register notice under final rule 210.8(c)(1). Any
such replies are due within three (3) calendar days following the
filing of submissions by proposed respondents and the public. Fifth,
current rule 210.8(b) is redesignated 210.8(d).
Sixth, with regard to proposed rule 210.13(b), the Commission has
determined that respondents will likewise not be required to address
the public interest in their response to the complaint. Therefore,
proposed rule 210.13(b) will not appear in the final rules. Seventh,
the Commission has determined to add final rule 210.14(f) to require
respondents to submit a statement of public interest in response to
complainants' filings under Sec. 210.8(b) and (c)(2) when the
Commission has delegated the matter of public interest to the presiding
administrative law judge (``ALJ'').
Eighth, the Commission has determined to amend proposed rule
210.50(a)(4) to clarify that the parties are requested, but not
required, to file comments on the public interest thirty (30) days
after issuance of the presiding ALJ's recommended determination
(``RD'') on remedy, bonding, and where ordered, the public interest.
These comments may include any information relating to the public
interest, including any updates to the information provided pursuant to
sections 210.8(b) and (c) and 210.14(f), and are limited to five (5)
pages, inclusive of attachments. Members of the public will be given an
opportunity to comment on the RD in response to a Federal Register
notice that will be issued by the Commission after issuance of the
presiding ALJ's RD. Ninth, the Commission has determined to redesignate
the currently undesignated paragraph following current rule
210.50(a)(4) as final rules 210.50(a)(4)(i), (ii), (iii), and (iv).
Tenth, the Commission has determined to amend rule 210.10(b) to
indicate that the comments received during the pre-institution period--
under final rules 210.8(b) and (c)--are the general basis for the
Commission's determination as to whether to delegate the issue of
public interest to the ALJ. Rule 210.10(b) is also amended to clarify
the limits on discovery when the Commission orders the ALJ to consider
the public interest. Eleventh, the Commission has determined to add
final rule 210.42(a)(1)(ii)(C) to clarify that, when ordered to take
evidence on the public interest, the ALJ shall include analysis of the
public interest in his RD.
A comprehensive explanation of the rule changes is provided in the
section-by-section analysis below. The section-by-section analysis
includes a discussion of all modifications suggested by the
commentators. As a result of some of the comments, the Commission has
determined to modify several of the proposed amendments and to add
several new sections to the final rule as summarized above. The
section-by-section analysis will refer to the rules as they appeared in
the NOPR. Any new rules will be discussed with respect to the
previously proposed rules.
Section-by-Section Analysis
19 CFR Part 210
Subpart C--Pleadings
Section 210.12
The NOPR proposed to amend Sec. 210.12 by adding a subsection (12)
to Sec. 210.12(a) to require that the complainant provide in its
complaint specific information regarding how issuance of an exclusion
order and/or a cease and desist order in an investigation could affect
the public health and welfare in the United States, competitive
conditions in the United States economy, the production of like or
directly competitive articles in the United States, or United States
consumers.
The NOPR further proposed adding a paragraph (k) to Sec. 210.12 to
provide that, when a complaint is filed, the Secretary to the
Commission will publish a notice in the Federal Register soliciting
comments from the public and the proposed respondents on any public
interest issues arising from the complaint. Under the proposed rules,
these comments would be limited to
[[Page 64805]]
five pages and would be required to be filed within five days of
publication of the notice. The purpose of the proposed amendments to
210.12 was to gather information for the Commission to consider in
deciding whether to refer the public interest issues to the ALJ.
Microsoft, Intellectual Ventures, and AMS contend that if the
Commission seeks more information on the public interest, it would be
sufficient to allow the parties and the public to comment in response
to a pre-institution Federal Register notice published immediately
after the filing of the complaint. Microsoft, Intellectual Ventures,
and AMS are of the view that it would be unnecessary and burdensome to
require the complaint and the respondents' responses to the complaint
to include information on the public interest in addition to any
submissions the parties might file in response to the pre-institution
Federal Register notice.
AMS states that the Commission's recent practice of soliciting
comments at the beginning of the investigation is a good one and should
be made a permanent part of Section 337 procedure. AMS notes that many
parties and members of the public have taken advantage of the
opportunity to file such comments since the Commission began soliciting
them in 2010. AMS states that ``[i]t would not be consistent with the
remedial purpose of Section 337 if potential complainants were deterred
from coming to the ITC due to concerns about the burdens associated
with addressing public interest issues before there has been any
adjudication of violation or the scope of the remedy.''
Microsoft states that requiring information on the public interest
in the complaint and responses thereto would be unduly burdensome in
light of the rare instances where the public interest has been a factor
in deciding whether to issue relief. Microsoft states that to the
extent the Commission believes amendment to its rules is necessary, the
pre-institution Federal Register notice alone would identify to the
Commission the few instances warranting early development of public
interest information. Microsoft, however, urges the Commission to make
clear that the Commission is not expanding the breadth of the statutory
public interest factors with any amendment. It believes that open-ended
and undefined submissions regarding ``competitive conditions in the
United States economy'' would provide little guidance to the
Commission.
According to Intellectual Ventures, the public interest information
required in the complaint under the proposed rules may not be in the
possession of many complainants and determining the potential public
interest impact of a hypothetical remedy is a highly speculative
endeavor, particularly at the outset of an investigation. Moreover, the
proposed rules could place a burden upon potential complainants to
conduct extensive research on subjects far outside their businesses and
expertise. Intellectual Ventures believes a pleading requirement would
not only burden the parties, but would run the risk of reintroducing at
least the perception that the Commission is making a determination of
injury as part of the determination of violation, which is in direct
opposition to the Congressional mandate that there is no longer an
injury requirement in Section 337 investigations. Intellectual Ventures
is particularly concerned about domestic industries that are based on
the exploitation of intellectual property through engineering, research
and development, and licensing. Intellectual Ventures also states that
``by placing a de facto burden on complainant to deny the existence of
public interest concerns--a burden which the statute does not require
them to meet--this proposal may deter some complainants from coming to
the ITC at all, which would be contrary to the purpose and intent of
Section 337 to protect domestic industries from unfair import
competition.'' While Intellectual Ventures is opposed to any change in
the current rules, it states that it is better to solicit comments
through the Federal Register during the pre-institution stage of the
investigation than to require the information in the pleadings.
Although not part of the official comments, on January 19, 2011,
during the Third Annual Live at the ITC--Forum on Section 337 of the
Tariff Act of 1930, panelists expressed concerns that ordering a
complainant to act against its own interest by listing public interest
issues in the complaint is essentially unfair because the statute
directs the issuance of an exclusion order unless, upon consideration
of the public interest, the Commission decides not to do so. Another
concern was the burden such a requirement would place on non-practicing
entities (NPEs) which might not actually know what their licensees are
doing with the asserted patented technology. One panelist raised the
possibility that NPEs might be subject to sanctions if they could not
truthfully answer the public interest questions in the complaint.
On the other hand, the ITCTLA does not object to requiring public
interest information in the complaint.
Commission Response
The Commission has determined that it will not require complainants
to include public interest allegations in the complaint. Instead, the
Commission will obtain public interest information from the parties
early in the investigation in a format different from that which was
proposed in the NOPR. Specifically, instead of including public
interest information in the complaint, complainants will be required to
file a separate statement of public interest concurrently with the
filing of the complaint. If a complainant includes information which it
deems confidential in the submission, it will be required to also file
a nonconfidential version concurrently with its complaint. This final
rule will be designated as 210.8(b). Current rule 210.8(b) will be
redesignated as 210.8(d), as discussed below.
The ITCTLA suggests that the Commission solicit even more specific
information concerning the public interest. In particular, the ITCTLA
suggests that the complainant identify, to the best of its knowledge,
the ``like or directly competitive articles,'' and how the
complainant's requested relief would affect consumers in the United
States. The ITCTLA also suggests different language for some of the
Commission's final rules. For instance, it suggests that the amendments
be more consistent with the statutory public interest factors and
proposes that a fifth provision be included that would require a
statement as to how a company's requested relief would affect consumers
in the United States. The ITCTLA also suggests that the comments be
directed to the ``requested'' exclusion order and cease and desist
order rather than to a generic exclusion order and cease and desist
order.
MOFCOM suggests that the public interest considerations be expanded
to include the sales of upstream and downstream products of the subject
articles, and the operation condition of the importer, exporter, and
retailer of the subject articles. The CCCLA suggests that the public
interest factors include market conditions and the competitiveness of
importers, distributors and retailers in the upstream and downstream
industry related to the subject articles.
Economists Deng, Leonard, and Lopez suggest that the Commission
refrain from seeking information on an exhaustive list and instead lay
out general types of information that might prove fruitful. Some
examples of information they deem relevant in evaluating the impact of
an exclusion
[[Page 64806]]
order, are as follows: (1) The costs and time it would take a consumer
to switch to substitute products, (2) the loss in consumer welfare due
to reduction in product variety in differentiated product industries,
(3) the potential for a price increase from the reduction in
competition, (4) the ability of non-infringing firms to offer close
substitutes and the time required to do so, (5) potential entrants,
i.e., potential new suppliers of substitute goods, and (6) the
potential profit lost by vertically-related firms versus the potential
profit gained by competitors and competitors' vertically-related firms.
The CCIA suggests that the Commission adopt for its public interest
rules the standard for obtaining a permanent injunction in a federal
district court laid out by the Supreme Court in eBay Inc v.
MercExchange, L.L.C., 547 U.S. 388 (2006) (``eBay''). The CCIA
suggested that the Commission would need to do so in order to comply
with United States obligations under Article III: 4 of the GATT,
specifically, a GATT decision, United States--Section 337 of the Tariff
Act of 1930 (Nov. 7, 1989).
Commission Response
The Commission has determined that complainants' statement
concerning the public interest under final rule 210.8(b) should be
focused as follows: (a) Explain how the articles potentially subject to
the order are used in the United States; (b) identify any public
health, safety, or welfare concerns relating to the requested remedial
orders; (c) identify like or directly competitive articles that
complainant, its licensees, or third parties make which could replace
the subject articles if they were to be excluded; (d) indicate whether
the complainant, its licensees, and/or third parties have the capacity
to replace the volume of articles subject to the potential orders in a
commercially reasonable time in the United States; and (e) state how
the requested relief would impact consumers. These topics will replace
those currently listed in proposed rule 210.12(a)(12). The Commission
has determined that the final rules will not adopt the test for
permanent injunctions articulated in eBay.
Several parties (Mary White, the ITCTLA, AMS, MOFCOM, and the
CCCLA) state that five days is too short a time for proposed
respondents and the public to respond to the pre-institution Federal
Register notice soliciting comments. The ITCTLA suggests extending this
time period to seven business days; MOFCOM suggests 10 calendar days;
and AMS and the CCCLA suggest 15 calendar days. ITCTLA suggests that an
additional period of seven (7) business days be allowed for responses
to these early comments.
Commission Response
The Commission has determined to provide more time for public
comment beyond what was proposed in the NOPR (rule 210.12(k)).
Specifically, the Commission will require that public interest
submissions be due eight (8) calendar days after publication of the
pre-institution notice in the Federal Register. If any such submission
includes information which the submitting entity deems confidential, it
will be required to also file a nonconfidential version concurrently
with its confidential submission. This requirement will appear in final
rule 210.8(c)(1).
Steven Beard suggests that public comments in response to the pre-
institution Federal Register notice should be forwarded to the parties
in the adjudicative proceeding.
Commission Response
The Commission has determined that public interest comments should
not be forwarded by the Commission to the complainant and proposed
respondents, since the Commission's Electronic Document Information
System (EDIS) is available to allow access to any comments that are
filed. No amendments to the final rules will be made in this regard.
MOFCOM criticizes the ``and/or'' language of the proposed amendment
to Sec. 210.12(k), which it believes suggests that in some cases
either, but not both, the public or the proposed respondents will have
the right to comment on the public interest.
Commission Response
This is not the intent of the amendments, so to address this
comment, final rule 210.8(c)(1) states that both proposed respondents
and the public may respond to complainants' filings under 210.8(b).
The ITCTLA points out that under the proposed amendment to rule
210.13, respondents are permitted to submit a formal response to any
public interest submissions made by members of the general public
pursuant to proposed rules 210.12(k), but that no such opportunity
exists as a matter of right for the complainant to do so. The ITCTLA
proposes that Rule 210.12(a)(13) be added to afford a complainant an
opportunity to file a reply to any comments received from the general
public and respondents.
Commission Response
The Commission has determined that the complainant will be allowed
under final rule 210.8(c)(2) to file a reply submission to responses
submitted by the public and proposed respondents to the Commission's
pre-institution notice. Any such replies are due within three (3)
calendar days of the filings under final rule 210.8(c)(1) and are
limited to five (5) pages, inclusive of attachments. If a complainant
includes information that it deems confidential in the submission, it
will be required to also file a nonconfidential version concurrently
with its confidential submission.
Section 210.13
The NOPR proposed adding a subsection (4) to section 210.13(b) to
require respondents' response to the complaint to address the public
interest statements made in the complaint and any comments received
from the public with respect to the public interest.
The ITCTLA proposes that the respondent be allowed to amend or
supplement the public interest statement contained in its response to
the complaint and notice of investigation to respond to any replies
that might be filed by complainants. The ITCTLA recommends that since
this submission is made early in the investigation, the respondent be
permitted to supplement its public interest submission under proposed
Rule 210.13(b)(4), where necessary and with good cause shown.
Commission Response
Since the Commission has determined that complainants will not be
required to include public interest information in the complaint,
respondents will likewise not be required to address the public
interest in the response to the complaint. The Commission has, however,
determined that respondents must submit a mandatory statement of public
interest if the Commission has delegated the matter of public interest
to the ALJ, as discussed below in conjunction with proposed amendments
to rule 210.50. This provision is reflected in final rule 210.14(f).
Subpart G--Determinations and Actions Taken
Section 210.50
The NOPR further proposed to add language to section 210.50(a)(4)
to provide that, after the service of the presiding ALJ's RD on remedy
and bonding, the parties are instructed to submit to the Commission
within thirty (30) days any information relating to the
[[Page 64807]]
public interest, including any updates to the information provided in
the complaint and response, as required by the proposed amendments to
Sec. Sec. 210.12 and 210.13. Members of the public would also be
permitted to submit information with respect to the public interest
under the proposed rule.
The NOPR further proposed to amend section 210.50(b)(1) to provide
that unless the Commission orders otherwise, an ALJ shall not take
evidence on the issue of the public interest for purposes of the RD
under Sec. 210.42(a)(1)(ii). If the Commission orders the ALJ to take
evidence on the public interest, the extent of the taking of discovery
by the parties shall be at the discretion of the presiding ALJ.
The ITCTLA, IPO, Microsoft, and Intellectual Ventures are concerned
that, by requiring public interest submissions subsequent to the
issuance of the RD but prior to the issuance of the Commission's notice
of review, a misperception may be created that the Commission is
weighing public interest information as part of its threshold merits
inquiry on review. The ITCTLA further points out that at this stage of
the investigation, it is not known what, if any, portions of the final
initial determination (``ID'') the Commission has taken under review.
Thus, if the Commission determines not to review a final ID finding no
violation, or determines to review and remand issues to the ALJ, any
submissions on the public interest at this time would be irrelevant or
untimely.
Commission Response
The Commission has determined to implement in its final regulations
its current practice of requesting party comments on the public
interest within thirty (30) days after the RD issues, under final rule
210.50(a)(4). Solicitation of these comments is not limited to cases in
which the Commission has delegated the public interest issue to the
ALJ. Final rule 210.50(a)(4) has been amended to clarify that the
parties are requested, but not required, to file comments under this
provision. Such submissions are limited to five (5) pages, inclusive of
attachments. The final rule does not allow members of the public to
submit similar comments. Rather, the Commission will issue a Federal
Register notice soliciting comments from the public after an RD issues.
Additionally, the Commission has determined to amend rule 210.50(a)(4)
to clarify that the undesignated paragraph following current rule
210.50(a)(4) will be preserved as rule Sec. 210.50(a)(4)(i), (ii),
(iii), and (iv) in compliance with Federal Register requirements.
With respect to the proposed amendments to rule 210.50(b)(1), while
generally supporting the Commission's efforts to develop a better
record on the public interest, the ITCTLA states that it expects that
the Commission will rarely refer the public interest issue to the ALJ
and that the proposed rules will not change the Commission's practice
substantively. The ITCTLA believes the proposed rules balance the
interests of complainants, respondents, and the public by giving each a
fair opportunity to present public interest issues early in the
investigation and to update information at each stage of the
investigation. The ITCTLA warns that delegation of the issue of public
interest to the ALJ has the ``potential for a significant expansion of
the scope of discovery in Section 337 investigations, particularly with
respect to third-party discovery.'' The ITCTLA and Intellectual
Ventures state that discovery regarding the public interest may lead to
significant party and non-party costs, and the ITCTLA notes that
discovery could lead to an extension of the time required to complete
investigations. In this connection, the ITCTLA suggests that the
Commission limit the scope of the public interest issue that it may
delegate to the ALJ in a given case based on the complainant's
statement of what articles are like or directly competitive.
Specifically, the ITCTLA suggests that the Commission include a
preamble stating that it expects ALJs to limit such discovery
appropriately, with particular consideration for the interests of third
parties, and to ensure that public interest discovery does not delay
the investigation and is not used improperly.
Intellectual Ventures, Microsoft, and AMS state that the current
rules, which solicit comments on the public interest and analysis of
public interest evidence only after a final ID and RD is issued by the
presiding ALJ, are adequate. Intellectual Ventures believes that
consideration of the public interest as implemented in the NOPR would
have a detrimental effect on Section 337 by increasing the burdens on
Commission resources, particularly those of the ALJs, and on the
parties. Intellectual Ventures submits that Section 337's statutory
framework puts the public interest in issue only near the end of an
investigation, after a violation is found and an appropriate remedy is
determined. It argues that, given the infrequency with which genuine
public interest concerns have been implicated in Section 337
investigations, early consideration of the factors is neither necessary
nor appropriate in most investigations. It points out that
consideration of the public interest at an early stage may encompass
investigations where public interest considerations are non-existent,
or will not have an impact by the time the Commission reaches a
determination on violation, e.g., some issues could be mooted if
patents are found not infringed or invalid.
Intellectual Ventures suggests that the final version of rule
210.50 provide for the Commission to delegate only the gathering of
evidence to the ALJ, such that the ALJ would collect information and
forward it to the Commission without analyzing or addressing the issue
himself. Intellectual Ventures expresses concern that allowing the ALJ
to both take evidence on the public interest and analyze that evidence
would run afoul of Congress's decision, reflected in the 1988
amendments to the Trade Act, to eliminate the injury requirement in
Section 337 investigations. Intellectual Ventures also notes that the
costs associated with public interest discovery could potentially
discourage potential complainants from making use of Section 337
proceedings particularly due to the broad nature of the public interest
factors addressed in Sec. 337(d) and (f). Intellectual Ventures
expresses concern at the implication that the public will not have any
input on the public interest issue during discovery, while also
questioning the feasibility of having non-parties present evidence
concerning the public interest during discovery. Intellectual Ventures
further submits that leaving discovery on the public interest to the
ALJs' discretion will lead to inconsistent practices among the ALJs,
and ostensibly, inconsistent results in the analysis of public interest
evidence.
The IPO supports the Commission's intent of furthering its efforts
under the statute to consider the effect of any remedial relief granted
in Section 337 investigations. It is concerned, however, that the
proposed rule delegates a new obligation to the ALJs, who are already
faced with challenging time lines. According to the IPO, delegating the
collection of evidence to the ALJs places a significant, and in the
vast majority of cases, a needless burden on them at a time when
caseloads are growing and target dates have lengthened. It is also
concerned that the new rules interject the public interest
consideration into the investigation too early, creating a situation
where the violation determination would be improperly
[[Page 64808]]
influenced by the public interest considerations.
Microsoft is concerned that the proposed amendments will
unnecessarily interject ``additional (and potentially burdensome)
factual, contention, and expert discovery in the name of `public
policy' '' that does not truly correspond with the purpose of the
statute. It notes that the public interest has overridden a Commission
order in only a few cases, and states that the application of any new
rules should be correspondingly limited to the narrow instances in
which public interest concerns are truly relevant. Microsoft asserts
that information received at the beginning of the investigation may be
out of date or otherwise irrelevant by the time any exclusion order
would issue.
AMS states that, historically, the public interest rarely has been
relevant in the administration of Section 337. It asserts that
referring the public interest issue to the ALJ would, in most cases, be
superfluous and premature, noting that a large percentage of cases
settle or result in a determination of no violation. The IPO and
Intellectual Ventures comment that referring the public interest issue
to the ALJ will increase the instances of discovery abuse, particularly
in regard to third parties. The ITCTLA also warns that the proposed
rules could have the unintended consequence of discovery abuse,
particularly in regard to third parties. Intellectual Ventures and
Microsoft believe that the proposed rules amendments could overwhelm
the Commission process at all stages, particularly by overburdening the
ALJ, and lead to longer target dates for the completion of
investigations.
Mary White suggests that the Commission clarify that the ALJ would
not be allowed to take public interest evidence, or consider the public
interest comments, unless ordered to do so by the Commission.
On the other hand, Steven Beard suggests that an ALJ should be able
to take evidence on the issue of the public interest, without
restrictions, in all investigations and should be mandated to address
the substantive issues raised in the public comments when writing their
decisions. MOFCOM also believes the ALJ should always be empowered to
take evidence on and to address the public interest without reliance on
a Commission order.
Commission Response
Rule 210.10(b) has been amended to indicate that the comments
received during the pre-institution period--under final rules 210.8(b)
and (b)--are the general basis for the Commission's determination as to
whether to delegate the issue of public interest to the ALJ. Since
proposed rule 210.50(b)(1) clearly states that ``[u]nless the
Commission orders otherwise, an ALJ shall not take evidence on the
issue of the public interest * * *[,]'' the final rule will not be
amended in that respect. The amendment to rule 210.10(b), however,
makes clear that, when directed to consider the public interest, the
ALJ is expected to limit public interest discovery appropriately, with
particular consideration for third parties, and not allow such
discovery to delay the investigation or be used improperly. The
Commission notes that, when the ALJ is not directed to consider the
public interest, the proposed amendments do not expand scope of
discovery beyond the issues bearing upon violation. Furthermore, the
Commission has amended current rule 210.42(a)(1)(ii) to include Sec.
210.42(a)(1)(ii)(C), which provides that, when ordered to take evidence
on the public interest, the ALJ shall include analysis of the public
interest in his RD.
Regulatory Analysis of Proposed Amendments to the Commission's Rules
The Commission has determined that the final rules do not meet the
criteria described in section 3(f) of Executive Order 12866 (58 FR
51735, Oct. 4, 1993) and thus do not constitute a significant
regulatory action for purposes of the Executive Order.
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) is
inapplicable to this rulemaking because it is not one for which a
notice of final rulemaking is required under 5 U.S.C. 553(b) or any
other statute. Although the Commission chose to publish a notice of
proposed rulemaking, these regulations are ``agency rules of procedure
and practice,'' and thus are exempt from the notice requirement imposed
by 5 U.S.C. 553(b).
These final rules do not contain federalism implications warranting
the preparation of a federalism summary impact statement pursuant to
Executive Order 13132 (64 FR 43255, Aug. 4, 1999).
No actions are necessary under the Unfunded Mandates Reform Act of
1995 (2 U.S.C. 1501 et seq.) because the final rules will not result in
the expenditure by State, local, and tribal governments, in the
aggregate, or by the private sector, of $100,000,000 or more in any one
year, and will not significantly or uniquely affect small governments.
The final rules are not major rules as defined by section 804 of
the Small Business Regulatory Enforcement Fairness Act of 1996 (5
U.S.C. 801 et seq.). Moreover, they are exempt from the reporting
requirements of the Contract With America Advancement Act of 1996 (Pub.
L. 104-121) because they concern rules of agency organization,
procedure, or practice that do not substantially affect the rights or
obligations of non-agency parties.
The amendments are not subject to section 3504(h) of the Paperwork
Reduction Act (44 U.S.C. 3501 et seq.), because it is part of an
administrative action or investigation against specific individuals or
entities. 44 U.S.C. 3518(c)(1)(B)(ii).
List of Subjects in 19 CFR Part 210
Administration practice and procedure, Business and industry,
Customs duties and inspection, Imports, Investigations.
For the reasons stated in the preamble, 19 CFR part 210 is amended
as set forth below:
PART 210--ADJUDICATION AND ENFORCEMENT
0
1. The authority citation for part 210 continues to read as follows:
Authority: 19 U.S.C. 1333, 1335, and 1337.
0
2. Amend Sec. 210.8 by redesignating paragraph (b) as paragraph (d),
and adding new paragraphs (b) and (c) to read as follows:
Sec. 210.8 Commencement of reinstitution proceedings.
* * * * *
(b) Provide specific information regarding the public interest.
Complainant must file, concurrently with the complaint, a separate
statement of public interest, not to exceed five pages, inclusive of
attachments, addressing how issuance of the requested relief, i.e., a
general exclusion order, a limited exclusion order, and/or a cease and
desist order, in this investigation could affect the public health and
welfare in the United States, competitive conditions in the United
States economy, the production of like or directly competitive articles
in the United States, or United States consumers. In particular, the
submission should:
(1) Explain how the articles potentially subject to the requested
remedial orders are used in the United States;
(2) Identify any public health, safety, or welfare concerns
relating to the requested remedial orders;
(3) Identify like or directly competitive articles that
complainant, its licensees, or third parties make
[[Page 64809]]
which could replace the subject articles if they were to be excluded;
(4) Indicate whether the complainant, its licensees, and/or third
parties have the capacity to replace the volume of articles subject to
the requested remedial orders in a commercially reasonable time in the
United States; and
(5) State how the requested remedial orders would impact consumers.
(c) Publication of notice of filing. (1) When a complaint is filed,
the Secretary to the Commission will publish a notice in the Federal
Register inviting comments from the public and proposed respondents on
any public interest issues arising from the complaint and potential
exclusion and/or cease and desist orders. In response to the notice,
members of the public and proposed respondents may provide specific
information regarding the public interest in a written submission not
to exceed five pages, inclusive of attachments, to the Secretary to the
Commission within eight (8) calendar days of publication of notice of
the filing of a complaint. Comments that substantively address
allegations made in the complaint will not be considered. Members of
the public and proposed respondents may address how issuance of the
requested exclusion order and/or a cease and desist order in this
investigation could affect the public health and welfare in the United
States, competitive conditions in the United States economy, the
production of like or directly competitive articles in the United
States, or United States consumers. Submissions should:
(i) Explain how the articles potentially subject to the requested
remedial orders are used in the United States;
(ii) Identify any public health, safety, or welfare concerns
relating to the requested remedial orders;
(iii) Identify like or directly competitive articles that
complainant, its licensees, or third parties make which could replace
the subject articles if they were to be excluded;
(iv) Indicate whether the complainant, its licensees, and/or third
parties have the capacity to replace the volume of articles subject to
the requested remedial orders in a commercially reasonable time in the
United States; and
(v) State how the requested remedial orders would impact consumers.
(2) Complainant may file a reply to any submissions received under
paragraph (c)(1) of this section not to exceed five pages, inclusive of
attachments, to the Secretary to the Commission within three (3)
calendar days following the filing of the submissions.
* * * * *
0
3. Amend Sec. 210.10 by revising paragraph (b) to read as follows:
Sec. 210.10 Institution of investigation.
* * * * *
(b) An investigation shall be instituted by the publication of a
notice in the Federal Register. The notice will define the scope of the
investigation and may be amended as provided in Sec. 210.14(b) and
(b). The Commission may order the administrative law judge to take
evidence and to issue a recommended determination on the public
interest based generally on the submissions of the parties and the
public under Sec. 210.8(b) and (c). If the Commission orders the
administrative law judge to take evidence with respect to the public
interest, the administrative law judge will limit public interest
discovery appropriately, with particular consideration for third
parties, and will ensure that such discovery will not delay the
investigation or be used improperly. Public interest issues will not be
within the scope of discovery unless the administrative law judge is
specifically ordered by the Commission to take evidence on these
issues.
* * * * *
0
4. Amend Sec. 210.14 by revising the section heading and adding
paragraph (f) to read as follows:
Sec. 210.14 Amendments to pleadings and notice; supplemental
submissions; counterclaims; respondent submissions on the public
interest.
* * * * *
(f) Respondent submissions on the public interest. When the
Commission has ordered the administrative law judge to take evidence
with respect to the public interest under Sec. 210.50(b)(1),
respondents must submit a statement concerning the public interest,
including any response to the issues raised by the complainant pursuant
to Sec. 210.8(b) and (c)(2), at the same time that their response to
the complaint is due. This submission must be no longer than five
pages, inclusive of attachments.
0
5. In Sec. 210.42, revise the heading of paragraph (a)(1)(ii) and add
paragraph (a)(1)(ii)(C) to read as follows:
Sec. 210.42 Initial determinations.
(a)(1)(i) * * *
(ii) Recommended determination on issues concerning permanent
relief, bonding, and the public interest. * * *
* * * * *
(C) The public interest under sections 337(d)(1) and (f)(1) in
investigations where the Commission has ordered the administrative law
judge under Sec. 210.50(b)(1) to take evidence with respect to the
public interest.
* * * * *
0
6. In Sec. 210.50, revise paragraph (a)(4) and (b)(1) to read as
follows:
Sec. 210.50 Commission action, the public interest, and bonding by
respondents.
(a) * * *
(4) Receive submissions from the parties, interested persons, and
other Government agencies and departments with respect to the subject
matter of paragraphs (a)(1), (a)(2), and (a)(3) of this section. After
a recommended determination on remedy is issued by the presiding
administrative law judge, the parties are requested to submit to the
Commission, within 30 days from service of the recommended
determination, any information relating to the public interest,
including any updates to the information requested by Sec. Sec.
210.8(b) and (c) and 210.14(f). Any submissions under this section are
limited to 5 pages, inclusive of attachments.
(i) When the matter under consideration pursuant to paragraph
(a)(1) of this section is whether to grant some form of permanent
relief, the submissions described in paragraph (a)(4) of this section
shall be filed by the deadlines specified in the Commission notice
issued pursuant to Sec. 210.46(a).
(ii) When the matter under consideration is whether to grant some
form of temporary relief, such submissions shall be filed by the
deadlines specified in Sec. 210.67(b), unless the Commission orders
otherwise.
(iii) Any submission from a party shall be served upon the other
parties in accordance with Sec. 210.4(g). The parties' submissions, as
well as any filed by interested persons or other agencies shall be
available for public inspection in the Office of the Secretary.
(iv) The Commission will consider motions for oral argument or,
when necessary, a hearing with respect to the subject matter of this
section, except that no hearing or oral argument will be permitted in
connection with a motion for temporary relief.
(b)(1) With respect to an administrative law judge's authorization
to take evidence or other information and to hear arguments from the
parties and other interested persons on the issues of appropriate
Commission action, the public interest, and bonding by the respondents
for purposes of an initial determination on temporary relief, see
Sec. Sec. 210.61, 210.62, and 210.66(a). For purposes of the
[[Page 64810]]
recommended determination required by Sec. 210.42(a)(1)(ii), an
administrative law judge shall take evidence or other information and
hear arguments from the parties and other interested persons on the
issues of appropriate Commission action and bonding by the respondents
upon order of the Commission. Unless the Commission orders otherwise,
and except as provided for in paragraph (b)(2) of this section, an
administrative law judge shall not take evidence on the issue of the
public interest for purposes of the recommended determination under
Sec. 210.42(a)(1)(ii).
* * * * *
Issued: October 11, 2011.
By order of the Commission.
James R. Holbein,
Secretary to the Commission.
[FR Doc. 2011-26664 Filed 10-18-11; 8:45 am]
BILLING CODE 7020-02-P