02-5512. In the Matter of: Certain Oscillating Sprinklers, Sprinkler Components, and Nozzles; Notice of Commission Issuance of Limited Exclusion Order and Termination of Investigation

AGENCY:

International Trade Commission.

ACTION:

Notice.

SUMMARY:

Notice is hereby given that the U.S. International Trade Commission has issued a limited exclusion order and terminated the above-captioned investigation.

FOR FURTHER INFORMATION CONTACT:

Laurent de Winter, Esq., Office of the General Counsel, U.S. International Trade Commission, 500 E Street, SW., Washington, DC 20436, telephone [phone]. Copies of the limited exclusion order and all other nonconfidential 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 [phone]. General information concerning the Commission may also be obtained by accessing its Internet server (http://www.usitc.gov). The public record for this investigation may be viewed on the Commission's electronic docket (EDIS-ON-LINE) at http://dockets.usitc.gov/​eol.public. Hearing-impaired persons are advised that information on the matter can be obtained by contacting the Commission's TDD terminal on 202-205-1810.

SUPPLEMENTARY INFORMATION:

The Commission instituted this investigation, which concerns allegations of unfair acts in violation of section 337 of the Tariff Act of 1930 in the importation and sale of certain oscillating sprinklers, sprinkler components, and nozzles, on February 9, 2001. 66 FR 9721. In its complaint, filed on January 8, 2001, and amended on January 31, 2001, complainant L.R. Nelson Corp. (“Nelson”) alleged that Naan Sprinkler and Irrigation Systems, Inc., Watex International Co., Ltd., Lego Irrigation Equipment, Inc., Rain Bird Manufacturing Corporation, Gardena Krest + Kastner GmbH and Gardena's subsidiary Melnor, Inc., Ruey Ryh Enterprises Co,. Ltd., Yuan Mei Corp., Amagine Garden Inc., Aqua Star Industries Inc., Le Yuan Industrial Co. Ltd., Shin Da Spurt Water of Garden Tool Co. Ltd., and Orbit Irrigation Products, Inc. violated section 337 through the importation, sale for importation, and/or sale within the United States after importation of certain oscillating sprinklers, sprinkler components, and nozzles by reason of infringement of certain claims of U.S. Letters Patent Nos. 6,036,117 (“the '117 patent”), 5,645,218 (“the '218 patent”), and 5,511,727 (“the '727 patent”).

On May 3, 2001, complainant Nelson moved, pursuant to 19 U.S.C. 1337(g)(1) and Commission rule 210.16, for an order to show cause why respondent Watex International Co., Ltd. (“Watex”) should not be found in default for failing to respond adequately and properly to the amended complaint and notice of investigation, as required by Commission rule 210.13. The Commission investigative attorney (“IA”) supported complainant's motion to the extent that it requested an order to show cause against Watex. The presiding administrative law judge (“ALJ”) issued an ID (Order No. 4) on March 30, 2001, directing Watex to show cause why it should not be found in default. Watex did not respond to the show cause order.

On May 22, 2001, the ALJ issued an ID (Order No. 7) finding Watex in default pursuant to Commission rule 210.16, and ruling that it had waived its rights to appear, to be served with documents, and to contest the allegations at issue in the investigation. No petitions for review of the ID were filed. On June 12, 2001, the Commission determined not to review the ID, thereby allowing it to become the Commission's final determination.

On September 13, 2001,Nelson moved to withdraw all allegations related to the '117 patent from the investigation. No party responded to Nelson's motion and the IA supported the motion. On September 25, 2001, the ALJ issued an ID (Order No. 26) granting the motion to withdraw the allegations relating to the '117 patent, and on October 26, 2001, the Commission determined not to review that ID. This withdrawal terminated the investigation with respect to all respondents except Watex.

On October 1, 2001, Nelson filed a declaration seeking, pursuant to section 337(g)(1) and Commission rule 210.16(c)(1), entry of a limited exclusion order against Watex barring importation into the United States of Watex sprinklers infringing the claims in issue of the '218 and '727 patents. In its declaration, Nelson did not seek issuance of a cease and desist order against Watex. On December 11, 2001, the Commission issued a notice requesting briefing on the issues of remedy, public interest, and bonding. On January 10, 2002, Nelson, the IA, and Tekni-Plex, Inc., a purchaser of Watex sprinklers, submitted briefing on the issues of the public interest and bonding and proposed limited exclusion orders. No briefs were filed by any other person or government agency. Only the IA filed a reply brief.

Section 337(g)(1) of the Tariff Act of 1930 provides that the Commission shall presume the facts alleged in a complaint to be true, and upon request issue a limited exclusion order and/or cease and desist order if: (1) A complaint is filed against a person under section 337, (2) the complaint and a notice of investigation are served on the person, (3) the person fails to respond to the complaint and notice or otherwise fails to appear to answer the complaint and notice, (4) the person fails to show good cause why it should not be found in default, and (5) the complainant seeks relief limited to that person. Such an order shall be issued unless, after considering the effect of such exclusion, the Commission finds that such exclusion should not be issued.

The Commission found that each of the statutory requirements for the issuance of a limited exclusion order was met with respect to defaulting respondent Watex. The Commission further determined that the public interest factors enumerated in section 337(g)(1) did not preclude the issuance of such relief. Finally, the Commission determined that bond under the limited exclusion order during the Presidential review period shall be in the amount of one hundred (100) percent of the entered value of the imported articles.

This action is taken under the authority of section 337 of the Tariff Act of 1930, 19 U.S.C. 1337, and § 210.16 of the Commission's rules of practice and procedure, 19 CFR 210.16.

By order of the Commission.

Issued: March 4, 2002.

Marilyn R. Abbott,

Secretary.