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September 12, 2013 02:00 AM

ITC to review judge's ban on Sino Legend

Miles Moore
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    WASHINGTON—The International Trade Commission will review the determination of an administrative law judge to institute a 10-year ban on certain rubber tackifier resins manufactured by Sino Legend (Zhangjiagang) Chemical Co. Ltd.

    The ITC issued its notice of review Sept. 9. The agency seeks comments on the matter by Sept. 23 and replies to comments by Sept. 30.

    The agency granted review despite the arguments of SI Group Inc., the company that petitioned for import relief, and the ITC's own Office of Unfair Import Investigations that the June 17 initial ruling was correct.

    Sino Legend filed a petition for review of Judge Robert K. Rogers Jr.'s decision July 1, followed by a "notice of new authority" July 16 that attached a copy of a decision from the Shanghai No. 2 Intermediate People's Court. That decision, handed down the same day as Rogers' ruling, found no factual or legal basis for SI Group's patent infringement suit against Sino Legend.

    Sino Legend and SI Group disagreed on the significance of the ITC's decision.

    "The importance of this full review should not be underestimated," said Corey Xie, Sino Legend general manager, in a statement from company headquarters in Zhangjiagang City, China. "We're confident that the ITC will find that its administrative law judge's initial determination is in error, while confirming the prior decision of the Chinese court."

    SI Group, however, said it is reasonably common for the ITC to review an initial determination.

    "In most cases where the commission is going to issue an exclusion order, the commission invites briefing on at least the remedy," the Schenectady, N.Y.-based company said. "SI Group has also sought review of issues that may expand the import ban. Therefore, the commission's review is not entirely unexpected or unwelcome."

    In his decision, Rogers said SI Group's evidence supported a finding that SI Group could not compete with Sino Legend's lower prices.

    "The evidence also supports a finding that Respondent's lower costs of production arise, at least in part, from costs they were able to avoid as a result of their misappropriation of Complainant's trade secrets," he wrote.

    Sino Legend blasted Rogers' decision in its July 1 petition for review.

    "It is clear the administrative law judge ultimately relieved Complainant of its burden of proof by relying on faulty evidence and improperly conflating the issues instead of requiring Complainant to prove its claims for each of the alleged products," Sino Legend said.

    In a July 9 reply, the Office of Unfair Import Investigations said Roger's findings of the misappropriation of 11 separate trade secrets were based on substantial evidence.

    "Respondents repeatedly assert that the administrative law judge simply 'ignores' evidence that the Respondents believe supports their position that the information in the 11 valid trade secrets is generally known and/or not misappropriated," the office said.

    "However, in (the office's) view, the initial determination reflects careful consideration of the evidence presented at trial," it said.

    Meanwhile, SI Group submitted a July 24 document saying that Sino Legend's "notice of new authority" had no credible basis.

    "The Chinese decision is not 'new' because it was issued the same exact day as, and within hours of, the initial determination," SI Group said. "Thus, Respondents had ample time to include it (along with any related arguments) in their petition for review."

    Also, a Chinese court decision is not "authority" under U.S. law, and the decision can't be considered "new authority" because Sino Legend could not show how it changed Chinese law, SI Group said.

    Related Articles
    ITC extends target date for SI Group-Sino investigation
    ITC approves limited ban on Sino Legend-made rubber resins
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