Certain Personal Transporters, Components Thereof, and Packaging and Manuals Therefor and Certain Personal Transporters and Components Thereof; Notice of a Commission Final Determination of Violation of Section 337; Issuance of Remedial Orders; Termination of Investigation

Katherine M. Hiner
International Trade Commission
15 December 2017

[Federal Register Volume 82, Number 240 (Friday, December 15, 2017)]
[Notices]
[Pages 59649-59650]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-27030]


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 INTERNATIONAL TRADE COMMISSION

[Investigation No. 337-TA-1007; Investigation No. 337-TA-1021 
(Consolidated)]


Certain Personal Transporters, Components Thereof, and Packaging 
and Manuals Therefor and Certain Personal Transporters and Components 
Thereof; Notice of a Commission Final Determination of Violation of 
Section 337; Issuance of Remedial Orders; Termination of 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 (``the Commission'') has determined that there is a 
violation of section 337 of the Tariff Act of 1930, as amended in the 
above-captioned investigation. The Commission has issued a limited 
exclusion order (``LEO'') directed to products of respondents Swagway 
LLC of South Bend, Indiana (``Swagway'') and Segaway of Studio City, 
California (``Segaway''); and a cease and desist order (``CDO'') 
directed to respondent Swagway. The investigation has been terminated.

FOR FURTHER INFORMATION CONTACT: Michael Liberman, Esq., Office of the 
General Counsel, U.S. International Trade Commission, 500 E Street SW, 
Washington, DC 20436, telephone (202) 205-3115. 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 Inv. No. 337-TA-
1007, Certain Personal Transporters, Components Thereof, and Packaging 
and Manuals Therefor under section 337 of the Tariff Act of 1930, as 
amended, 19 U.S.C. 1337 (``section 337''), on June 24, 2016, based on a 
complaint filed by Segway, Inc. of Bedford, New Hampshire; DEKA 
Products Limited Partnership of Manchester, New Hampshire; and Ninebot 
(Tianjin) Technology Co., Ltd. of Tianjin, China (collectively, 
``Complainants''). 81 FR 41342-43 (Jun. 24, 2016). The complaint 
alleges a violation of section 337 by reason of infringement of certain 
claims of U.S. Patent Nos. 6,302,230 (``the '230 patent''); 6,651,763 
(``the '763 patent''); 7,023,330 (``the '330 patent''); 7,275,607 
(``the '607 patent''); 7,479,872 (``the '872 patent''); and 9,188,984 
(``the '984 patent''); and U.S. Trademark Registration Nos. 2,727,948 
(``the '948 TM'') and 2,769,942 (``the '942 TM''). The named 
respondents for Investigation No. 337-TA-1007 are (``Inventist''), Inc. 
of Camas, Washington; PhunkeeDuck, Inc. of Floral Park, New York; Razor 
USA LLC of Cerritos, California; Swagway; Segaway; and Jetson Electric 
Bikes LLC of New York, New York. The Commission's Office of Unfair 
Import Investigations (``OUII'') was also named as a party to this 
investigation. 81 FR 41342 (Jun. 24, 2016).
    On September 21, 2016, the Commission instituted Inv. No. 337-TA-
1021, Certain Personal Transporters and Components Thereof, based on a 
complaint filed by the same Complainants. 81 FR 64936-37 (Sept. 21, 
2016). The complaint alleges a violation of section 337 by reason of 
infringement of certain claims of the '230 and '607 patents. The named 
respondents for Investigation No. 337-TA-1021 are Powerboard LLC of 
Scottsdale, Arizona; Metem Teknoloji Sistemleri San of Istanbul, 
Turkey; Changzhou Airwheel Technology Co., Ltd. of Jiangsu, China; 
Airwheel of Amsterdam, Netherlands; Nanjing Fastwheel Intelligent 
Technology Co., Ltd. of Nanjing, China; Shenzhen Chenduoxing 
Electronic, Technology Ltd., China, a.k.a. C-Star of Shenzhen, China; 
Hangzhou Chic Intelligent Technology Co., Ltd. of Hangzhou, China; 
Hovershop of Placentia, California; Shenzhen Jomo Technology Co., Ltd., 
a.k.a. Koowheel of Shenzhen City, China; Guanghzou Kebye Electronic 
Technology Co., Ltd., a.k.a. Gotway of Shenzhen, China; and Inventist. 
OUII was also named as a party to this investigation. 81 FR 64936 
(Sept. 21, 2016). The Commission directed the presiding ALJ to 
consolidate Inv. Nos. 337-TA-1007 and 337-TA-1021. See id. at 64937.
    Subsequently, the Commission determined not to review an initial 
determination (``ID'') finding respondents PhunkeeDuck, Inc. and 
Segaway in default. Order No. 9 (Sept. 1, 2016) (not reviewed Oct. 3, 
2016). The Commission further determined not to review an ID granting 
complainants' corrected motion to amend the complaint and notice of 
investigation to assert the '763, '330, and '872 patents against 
respondent Jetson Electric Bikes LLC, and to terminate the 
investigation with respect to all asserted claims of the '984 patent as 
to all respondents. Order No. 17 (Nov. 14, 2016) (not reviewed Dec. 7, 
2016). The Commission also determined not to review an ID terminating 
the investigation as to respondent Nanjing Fastwheel Intelligent 
Technology Co., Ltd. based on a Consent Order Stipulation. Order No. 18 
(Nov. 15, 2016) (not reviewed Dec. 7, 2016). The Commission likewise 
determined not to review an ID granting a motion to terminate the 
investigation as to the '763 patent. Order No. 19 (Dec. 16, 2016) (not 
reviewed Jan. 10, 2017). The Commission further determined not to 
review an ID finding respondents Shenzhen Chenduoxing Electronic, 
Technology Ltd., China, a.k.a. C-Star; Shenzhen Jomo Technology Co., 
Ltd., a.k.a. Koowheel; Guanghzou Kebye Electronic Technology Co., Ltd., 
a.k.a. Gotway; Metem Teknoloji Sistemleri San; and Airwheel Netherlands 
in default. Order No. 22 (Jan. 9, 2017) (not reviewed Feb. 7, 2017). 
The Commission also determined not to review an ID terminating this 
investigation with respect to all asserted claims of the '330 patent 
and the '872 patent as to all respondents. See Order No. 24 (Jan. 10, 
2017) (not reviewed Feb. 7, 2017).
    Furthermore, on January 17, 2017, Complainants and respondent 
Inventist filed a joint motion to terminate this investigation based on 
consent order stipulation and proposed consent order. On January 30, 
2017, the ALJ issued an ID (Order No. 25) granting the joint motion. 
The Commission determined to review Order No. 25 because the proposed 
Consent Order contained express provisions that were mutually 
inconsistent, and multiple typographical and formatting errors. See 
Notice of Review dated February 22, 2017. The Commission requested 
corrections to be made in the proposed Consent Order. See id. at 2. The

[[Page 59650]]

corrected proposed Consent Order was filed with the Commission on 
February 27, 2017. On October 12, 2017, the Commission determined to 
affirm Order No. 25 based on the corrected proposed Consent Order.
    As a result, the following two patents (with 13 asserted claims) 
and two trademarks remain at issue in this investigation: Claims 1, 3-
5, and 7 of the '230 patent; claims 1-4 and 6 of the '607 patent; the 
'948 TM; and the '942 TM. See ID at 5.
    The evidentiary hearing on the question of violation of section 337 
was held from April 18 through April 21, 2017. The final ID finding a 
violation of section 337 was issued on August 10, 2017. On August 10, 
2017, the ALJ issued his final ID finding a violation of section 337. 
The ID found that the accused products do not infringe the asserted 
claims of the '230 and '607 patents which were not found to be invalid. 
The ID also found that the technical prong of the domestic industry 
requirement was not satisfied for the '230 or '607 patents, and 
therefore the domestic industry requirement was not satisfied for those 
patents. The ID further found that the Swagway accused products 
infringe the '948 TM and '942 TM, for which the domestic industry 
requirement was satisfied. ID at 192-93; 82; 147.
    The ALJ issued his recommended determination on remedy, the public 
interest and bonding on August 22, 2017. The ALJ recommended that if 
the Commission finds a violation of section 337 in the present 
investigation, the Commission should: (1) Issue a GEO covering accused 
products found to infringe the asserted patents; (2) issue a LEO 
covering accused products found to infringe the asserted patents if the 
Commission does not issue a GEO; (3) issue an LEO covering accused 
products found to infringe the asserted trademarks; (4) issue CDOs; and 
(5) not require a bond during the Presidential review period. RD at 1-
18.
    On August 23, 2017, the Commission issued a Notice of Request for 
Statements on the Public Interest. No written submissions from the 
public were filed with the Commission. Complainants timely filed a 
public interest submission on September 21, 2017. 19 CFR 210.50(a)(4).
    All parties to this investigation that participated in the 
evidentiary hearing (with the exception of respondent Powerboard LLC) 
filed timely petitions for review of various portions of the final ID. 
The parties likewise filed timely responses to the petitions.
    The Commission determined to review various portions of the final 
ID and issued a Notice to that effect. 82 FR 48724-26 (Oct. 19, 2017) 
(``Notice of Review''). In the Notice of Review, the Commission also 
set a schedule for the filing of written submissions on the issues 
under review, including certain questions posed by the Commission, and 
on remedy, the public interest, and bonding. The parties have briefed, 
with initial and reply submissions, the issues under review and the 
issues of remedy, the public interest, and bonding.
    Having examined the record in this investigation, including the 
parties' submissions filed in response to the Notice of Review, the 
Commission has determined as follows:
    (1) To affirm the ID's determination that the claim term ``maximum 
operating velocity'' should be construed to mean ``a variable maximum 
velocity where adequate acceleration potential is available to enable 
balance and control of the vehicle,'' ID at 44;
    (2) To affirm the ID's determination that ``nothing in the plain 
language of the disputed limitation [`the motorized drive arrangement 
causing, when powered, automatically balanced operation of the system'] 
in claim 1 of the '230 patent requires the operation by a rider. The 
claim only requires the `motorized drive arrangement causing, when 
powered, automatically balanced operation of the system,' '' see ID at 
82;
    (3) To affirm the ID's infringement, validity, and domestic 
industry (technical prong) determinations pertaining to the '230 
patent, with the exception of the ID's findings and analysis pertaining 
to the discussion of the non-infringement determination regarding the 
'230 patent that are based on Complainants' incorrect construction of 
the term ``maximum operating velocity,'' see ID at 51-77. The 
Commission takes no position on these findings and analysis. See Beloit 
Corporation v. Valmet Oy, 742 F.2d 1421, 1423 (Fed. Cir.1984);
    (4) To modify, as detailed in the accompanying Commission Opinion, 
the ID's discussion and conclusion with respect to the ``actual 
confusion'' factor regarding the SEGWAY mark on pages 171-172 of the 
ID, to find that the ``actual confusion'' factor does not weigh in 
favor of a finding of a likelihood of confusion.
    Having reviewed the submissions on remedy, the public interest and 
bonding filed in response to the Commission's Notice of Review, and the 
evidentiary record, the Commission has determined that the appropriate 
form of relief in this investigation is: (1) An LEO prohibiting the 
importation into the United States of (a) SWAGWAY-branded personal 
transporters, components thereof, and packaging and manuals thereof 
manufactured outside the United States that infringe one or more of the 
'948 TM and '942 TM and that are manufactured abroad by or on behalf 
of, or imported by or on behalf of, Respondent Swagway; and (b) 
personal transporters, components thereof, and packaging and manuals 
therefor manufactured outside the United States that infringe one or 
more of the '948 TM and '942 TM, which cover the ``SEGWAY'' marks, and 
that are manufactured by or on behalf of, or imported by or on behalf 
of, Respondent Segaway; and (2) a CDO directed against Respondent 
Swagway.
    The Commission has further determined that the public interest 
factors enumerated in subsections (d)(l), (f)(1), and (g)(1) (19 U.S.C. 
l337(d)(l), (f)(1), (g)(1)) do not preclude issuance of the above-
referenced remedial orders. Finally, the Commission has determined to 
set the bond amount at zero (0) percent of the entered value of 
Respondent Swagway's accused products and at 100 percent of the entered 
value of defaulted Respondent Segaway's accused products during the 
Presidential review period (19 U.S.C. 1337(j)). The investigation is 
terminated.
    The Commission's orders, opinion, and the record upon which it 
based its determination were delivered to the President and to the 
United States Trade Representative on the day of their issuance. The 
Commission has also notified the Secretary of the Treasury of the 
orders.
    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: December 11, 2017.
Katherine M. Hiner,
Supervisory Attorney.
[FR Doc. 2017-27030 Filed 12-14-17; 8:45 am]
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