Certain Motorized Self-Balancing Vehicles; Commission Determination To Review-in-Part an Initial Determination Finding No Violation of Section 337; on Review, To Vacate One Portion of the Initial Determination and Take No Position on One Issue; and Affirmance of the Finding of No Violation and Termination of the Investigation

Lisa R. Barton
International Trade Commission
3 August 2017

[Federal Register Volume 82, Number 148 (Thursday, August 3, 2017)]
[Notices]
[Pages 36153-36154]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-16325]


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INTERNATIONAL TRADE COMMISSION

[Investigation No. 337-TA-1000]


Certain Motorized Self-Balancing Vehicles; Commission 
Determination To Review-in-Part an Initial Determination Finding No 
Violation of Section 337; on Review, To Vacate One Portion of the 
Initial Determination and Take No Position on One Issue; and Affirmance 
of the Finding of No Violation and Termination of the Investigation

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'') of the presiding administrative law judge 
(``ALJ'') finding no violation of section 337. On review, the 
Commission has determined to vacate one portion of the ID and to take 
no position with respect to one issue. The Commission has also 
determined to affirm the ID's finding of no violation of section 337 
and has terminated the investigation.

FOR FURTHER INFORMATION CONTACT: Clint Gerdine, Esq., Office of the 
General Counsel, U.S. International Trade Commission, 500 E Street SW., 
Washington, DC 20436, telephone (202) 708-2310. Copies of non-
confidential documents filed in connection with this investigation are 
or will be available for inspection during official business hours 
(8:45 a.m. to 5:15 p.m.) in the Office of the Secretary, U.S. 
International Trade Commission, 500 E Street SW., Washington, DC 20436, 
telephone (202) 205-2000. General information concerning the Commission 
may also be obtained by accessing its Internet server at https://www.usitc.gov. The public record for this investigation may be viewed 
on the Commission's electronic docket (EDIS) at https://edis.usitc.gov. 
Hearing-impaired persons are advised that information on this matter 
can be obtained by contacting the Commission's TDD terminal on (202) 
205-1810.

SUPPLEMENTARY INFORMATION: The Commission instituted this investigation 
on May 26, 2016, based on a complaint filed on behalf of Razor USA LLC 
of Cerritos, California; and Inventist, Inc. and Shane Chen, both of 
Camas, Washington. 81 FR 33548-49. The complaint alleged violations of 
section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. 1337, by 
reason of infringement of certain claims of U.S. Patent No. 8,738,278 
(``the '278 patent''). The complaint further alleged violations of 
section 337 based upon false advertising, misrepresentation, and unfair 
competition, the threat or effect of which is to destroy or 
substantially injure an industry in the United States or to prevent the 
establishment of such an industry. The Commission's notice of 
investigation named the following twenty-eight respondents: Contixo Co. 
of Ontario, California and ZTO Store a.k.a. ZTO Trading, Inc. of 
Monterey Park, California (collectively, ``Contixo''); Joy Hoverboard 
a/k/a Huizhou Aoge Enterprise Co. Ltd (``Joy Hoverboard'') of Huizhou, 
China; Shenzhen Chenduoxing Electronic Technology Ltd. 
(``Chenduoxing''), Shareconn International, Inc. (``Shareconn''), and 
Shenzhen R.M.T. Technology Co., Ltd. (``RMT''); all of Guangdong, 
China; Cyboard LLC a/k/a Shark Empire Inc. (``Cyboard'') of Glendale, 
California; GyroGlyder.com (``GyroGlyder'') of Stockton, California; 
Soibatian Corporation d.b.a. IO Hawk and d.b.a. Smart Wheels 
(``Soibatian'') of Glendale, California; PhunkeeDuck, Inc. 
(``PhunkeeDuck'') of Floral Park, New York; Shenzhen Jomo Technology 
Co., Ltd. (``Jomo'') of Shenzhen City, China; Shenzhen Kebe Technology 
Co., Ltd. (``Kebe'') and Shenzhen Supersun Technology Co. Ltd., a.k.a. 
Aottom (``Supersun''), both of Shenzhen, China; Twizzle Hoverboard 
(``Twizzle'') of La Puente, California; Uwheels of Santa Ana, 
California; InMotion Entertainment Group LLC (``InMotion'') of 
Jacksonville, Florida; HoverTech of Hebron, Kentucky; Leray Group a/k/a 
ShanDao Trading Co., Ltd. (``Leray'') of Beijing, China; Spaceboard USA 
(``Spaceboard'') of Norcross, Georgia; Genius Technologies a.k.a. Prime 
Capital (``Genius Technologies'') of Hastings, Minnesota; Hangzhou Chic 
Intelligent Co., Ltd. (``Chic'') of Hangzhou, China; Swagway, LLC 
(``Swagway'') of South Bend, Indiana; Modell's Sporting Goods, Inc. 
(``Modell's'') of New York City, New York; Powerboard a.k.a. Optimum 
Trading Co. (``Powerboard'') of Hebron, Kentucky; United Integral, Inc. 
dba Skque Products (``Skque'') of Irwindale, California; Alibaba Group 
Holding Ltd. of Causeway Bay, Hong Kong and Alibaba.com Ltd. of 
Hangzhou, China (collectively, ``Alibaba''); Jetson Electric

[[Page 36154]]

Bikes LLC (``Jetson'') of New York City, New York; and Newegg, Inc. 
(``Newegg'') of City of Industry, California. The Office of Unfair 
Import Investigations (``OUII'') is also a party to the investigation. 
Id. Eight respondents remain in the investigation, i.e., Chic, Swagway, 
Modell's, Powerboard, Skque, Alibaba, Jetson, and Newegg (collectively, 
``respondents''). Every other respondent was terminated from the 
investigation based on a consent order stipulation and proposed consent 
order or good cause, or was found in default.
    On August 10 and November 17, 2016, respectively, the Commission 
issued notice of its determinations not to review the ALJ's IDs (Order 
Nos. 11 and 22) terminating the investigation as to Contixo based on a 
consent order stipulation and proposed consent order, and as to 
InMotion based on a consent order stipulation, proposed consent order, 
and settlement agreement. On October 19 and 27, 2016, respectively, the 
Commission issued notice of its determinations not to review the ALJ's 
IDs (Order Nos. 19 and 20) terminating the investigation as to claim 9 
of the '278 patent and claim 4 of the patent. On September 7, October 
11, and December 13, 2016, respectively, the Commission issued notice 
of its determinations not to review the ALJ's IDs (Order Nos. 14, 18, 
and 26) finding respondents GyroGlyder, Soibatian, PhunkeeDuck, Jomo, 
Kebe, Supersun, Twizzle, and Uwheels in default, respondents Joy 
Hoverboard, Chenduoxing, Shareconn, RMT, and Cyboard in default, and 
respondents HoverTech, Leray, and Spaceboard in default, respectively. 
On January 17, 2017, the Commission issued notice of its determination 
not to review the ALJ's ID (Order No. 27) terminating the investigation 
as to Genius Technologies for good cause. On February 15, 2017, the 
Commission issued notice of its determination not to review the ALJ's 
ID (Order No. 42) granting complainants' unopposed motion to terminate 
the investigation as to their Lanham Act, common law, and state unfair 
and deceptive trade practices allegations under section 337(a)(1)(A).
    On May 26, 2017, the ALJ issued his final ID and recommended 
determination (``RD'') on remedy and bonding. The ID finds that Alibaba 
is not an agent of the other respondents and therefore is not within 
the jurisdiction of section 337. It also finds that none of the 
respondents' accused products infringe the '278 patent, but that all of 
the defaulting respondents' accused products infringe the asserted 
patent based on taking the allegations in the complaint as true. The ID 
also finds that the technical prong of the domestic industry 
requirement was not satisfied with respect to the '278 patent. The 
cover page of the ID/RD, however, states that a violation of section 
337 was found, page 75 of the ID/RD states that a violation was found 
as to the defaulting respondents, and the separately issued ``Notice 
Regarding Initial Determination on Violation of Section 337 and 
Recommended Determination on Remedy and Bond'' (May 26, 2017) (``Notice 
Regarding the ID'') states that a violation of section 337 was found. 
On June 5, 2017, the ALJ issued an erratum clarifying that there was no 
violation of section 337 because complainants had not satisfied the 
technical prong of the domestic industry requirement. He also issued a 
corrected ID/RD and Notice Regarding the ID on June 5, 2017; however, 
the error on page 75 of the ID/RD was not corrected. The Commission 
clarifies that the erratum also applies to (1) page 75 of the ID/RD and 
corrects that page to delete the statement that a violation has been 
found as to the defaulting respondents; and (2) footnote 47 on the same 
page, and corrects the footnote by striking ``infringe the '278 
patent'' and substituting ``violate section 337''.
    On June 12, 2017, OUII, complainants, respondent Chic, and a group 
of three respondents (Swagway, Modell's, and Newegg) filed separate 
petitions for review of the final ID. On June 20, 2017, OUII, 
complainants, respondent Jetson, respondent Alibaba, and a group of 
four respondents (Swagway, Modell's, Chic, and Newegg) filed separate 
responses to the opposing petitions.
    Having examined the record of this investigation, including the ID, 
the parties' petitions for review, and the responses thereto, the 
Commission has determined to review-in-part the final ID. Specifically, 
the Commission has determined to review (1) the ID's finding that the 
Commission has no jurisdiction over Alibaba; and (2) the ID's analysis 
regarding infringement by the defaulting respondents. The Commission 
has determined not to review the remainder of the final ID.
    On review with respect to issue (1), the Commission determines to 
take no position on the ID's finding that the Commission has no 
jurisdiction over Alibaba. On review with respect to issue (2), the 
Commission vacates the ID's findings in the last paragraph on page 39 
(and paragraph 5 on page 72, as well as the first sentence on page 83) 
that complainants have established that the defaulting respondents 
infringe the '278 patent. These respondents have been found in default 
by virtue of their failure to respond to the complaint and notice of 
investigation. See Comm'n Notice (September 7, 2016); Comm'n Notice 
(October 11, 2016); Comm'n Notice (December 13, 2016). Section 
337(g)(1), 19 U.S.C. 1337(g)(1), provides the conditions and procedures 
applicable for issuing a default remedy. In light of the Commission's 
determination not to review the remainder of the final ID, including 
but not limited to the finding that the technical prong of the domestic 
industry requirement for the '278 patent has not been satisfied, the 
analysis under Section 337(g)(1) is moot.
    The Commission therefore affirms the ID's finding of no violation 
of section 337 and terminates the investigation.
    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: July 28, 2017.
Lisa R. Barton,
Secretary to the Commission.
[FR Doc. 2017-16325 Filed 8-2-17; 8:45 am]
BILLING CODE 7020-02-P