March 1st Hearing Set for Special 301 Investigation

On January 11, 2016, the Office of the United States Trade Representative published in the Federal Register (81 FR 1277) 2016 Special 301 Review: Identification of Countries Under Section 182 of the Trade Act of 1974: Request for Public Comment and Announcement of Public Hearing

SUMMARY: Section 182 of the Trade Act of 1974 (Trade Act) requires the United States Trade Representative (Trade Representative) to identify countries that deny adequate and effective protection of intellectual property rights (IPR) or deny fair and equitable market access to U.S. persons who rely on intellectual property protection. The provisions of Section 182 are commonly referred to as the ``Special 301'' provisions of the Trade Act. The Trade Act requires the Trade Representative to determine which, if any, of these countries to identify as Priority Foreign Countries. Acts, policies, or practices that are the basis of a country's identification as a Priority Foreign Country can be subject to the procedures set out in sections 301-305 of the Trade Act.

In addition, the Office of the United States Trade Representative (USTR) has created a ``Priority Watch List'' and ``Watch List'' to assist the Administration in pursuing the goals of the Special 301 provisions. Placement of a trading partner on the Priority Watch List of Watch List indicates that particular problems exist in that country with respect to IPR protection, enforcement or market access for persons that rely on intellectual property protection. Trading partners placed on the Priority Watch List are the focus of increased bilateral attention concerning the problem areas.

USTR is hereby requesting written submissions from the public concerning foreign countries that deny adequate and effective protection of intellectual property rights or deny fair and equitable market access to U.S. persons who rely on intellectual property protection. USTR requests that interested persons provide the information described below in the ``Public Comments'' section, and identify whether a particular trading partner should be named as a Priority Foreign Country under Section 182 of the Trade Act or placed on the Priority Watch List or Watch List. Foreign governments that have been identified in previous Special 301 Reports or that are nominated for review in 2016 are considered interested parties, and are invited to respond to this request for public submissions. Interested persons and foreign governments wishing to submit information to be considered during the review or testify at the public hearing must adhere to the procedures and deadlines stet forth below.

DATES: The schedule and deadlines for the 2016 Special 301 review are as follows:

Friday, February 5, 2016 at midnight EST--Deadline for interested persons to submit written comments, notices of intent to testify at the Special 301 Public Hearing, and Hearing statements.

Friday, February 19, 2016 at midnight EST--Deadline for foreign governments to submit written comments, notices of intent to testify at the Special 301 Public Hearing, and although not mandatory, any prepared hearing statements.

Tuesday, March 1, 2016--Public Hearing--The Special 301 Subcommittee will hold a public hearing for interested persons, including representatives of foreign governments, at the Office of the United State Trade Representative, 1724 F Street, NW., Rooms 1&2, Washington, DC 20508. If necessary, the hearing may continue on the next business day. Please consult the USTR Web site for confirmation of the date and location and the schedule of witnesses.

Friday, March 4, 2016 at midnight EST--Deadline for submitting post-hearing written comments. Interested persons who testified at the public hearing may provide written comments after the hearing. To ensure consideration, comments must be received no later than Friday, March 4, 2016. Please submit additional written comments electronically via www.regulations.gov, docket number USTR-2015-0022.

On or about April 30, 2016--USTR will publish the 2016 Special 301 Report within 30 days of the publication of the National Trade Estimate (NTE) Report.

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Corsair Innovations, a company working with the University of Massachusetts Dartmouth that propels technology breakthroughs from idea to reality, and with the American Flock Association, recently announced that it was one of the $250,000 recipients in Phase Three of the Head Health Challenge....READ MORE.

Claims of Innocence

In my last post, I discussed the background of a recent 337 complaint made by AAVN, Inc., to the US International Trade Commission.  Within the complaint, AAVN alleges that AQ Textiles, LLC and Creative Textile Mills Pvt. Ltd are infringing on a patent owned by AAVN called the 790 patent.  The complaint requests a general exclusion order prohibiting the respondents from importing several marketed products that allegedly infringe on the 790 patent. 

On its face, the complaint makes a compelling case of infringement.  AAVN purchased Sterling Manor sheets and bedding products imported by AQ Textiles, LLC and Creative Textile Mills Pvt. Ltd and submitted them to a test lab for a point by point comparison of the Sterling Manor products against the 790 patent.  The results from the lab test would appear to be conclusive that, in every measurable sense, the imported products infringe on the patent.

However, I have reservations that this will be a slam dunk for AAVN. 

Let me say upfront, that I am just second guessing from the bleachers.  I have full confidence in the legal team that both prosecuted the patent and that is prosecuting the 337 complaint.  From what I see, these teams have impeccable reputations, exceptional qualifications and excellent experience and competence.  In short:   there are plenty of dead lawyers on the letterheads.  Let me also say clearly that I have no inside knowledge of the details of this case or about the parties participating in the case. 

My concerns are instead based on the scope of protection that was granted by the USPTO.  The actual complaint alleges infringement of seven claims made in the patent but, if I were betting, the success of this case will hinge on the first claim so I will focus on that. 

As I have written in prior posts, claims are specific statements of what has to be done to infringe on a patent. Moreover, in order to be an infringing act against a patent every element of the claim must occur.  In the case of the 790 patent, the first claim contains several claim elements which can be summarized as follows:

1) the warp yarn density ranges from 90 to 235 warp ends per inch;

2) the weft yarn density ranges range from 100 to 765 picks per inch;

3) the picks woven into the fabric contain two separate polyester weft yarns running parallel to each other;

4) the two weft yarns are wound on a multi yarn package;

5) the two weft yarns are inserted into the fabric as a single pick insertion event;

6) the two weft yarns are inserted using an air jet insertion method;

7) the two weft yarns are wound at a package angle of between 15 and 20 degrees; and,

8) the shore hardness of the multi yarn package is between 65 and 70.

In general, when writing a claim it is usually best whenever possible to limit claim elements to the characteristics of the actual product and to avoid claims elements that involve how the product was produced.  This is because when claim elements are limited to the actual product, it is relatively easy to determine whether a specific claim element has been violated.   It is much more difficult to determine when a production claim has been violated without specific knowledge of the product’s production process.  This is because information about the production process is much more difficult to get.

The first claim of the 790 patent provides a good example as to why this is true.  I have no problems with the first three claim elements.  They are simple, specific and easily checked in the commercially available product.  But claim elements 4 and 5 are more problematic.  To know whether these elements have been violated, the patent holder will have to determine the loom set up and the type of weft packages that were used in the production of the product.  These are manufacturing details that can’t be determined from the end product.  Since it may be possible to determine that the fabric was formed on an air jet loom I am less concerned with claim element 6.  While the problems with claim elements 7 and 8 are essentially the same as with claim elements 4 and 5, I am much more concerned with these claim elements because of their specificity.  For example, if the respondent can demonstrate that either the package angle used in the production of the product was not between 15 and 20 degrees or that the shore hardness of the packages was not between 65 and 70 then they will have effectively proven that they have not infringed on the 790 patent.  And even if the respondents can’t make the above demonstration, a relatively minor modification in the packaging specification may very well result in future production that will not infringe on the patent. 

So it is fair to ask why patent claims would be written this way.  Unfortunately, the answer usually is that there wasn’t much choice.  When a technology is new and the competition is limited it is relatively easy to differentiate patented products.  However, over time related technologies will converge and differences between newer patents become slimmer.  In addition, the number of patents issued in the technology accumulates to the point where there is a large body of prior art against which the newer patent applications are judged.  This accumulation of prior art makes it difficult to differentiate new patents that are entering into the space.  This accumulation of prior art is what people are referring to when they speak of a crowded art.  And as a rule, textile patents belong to crowded arts.

So in the end it is very likely that the patent representative was forced to use the production claim elements because that is where the novelty of the invention lied.  Sheets, bedding and high end count fabrics are all well known in the textile industry.  Double insertion of independent weft yarns is also a well-established technique.  However, winding multiple yarns on a single package and using a single weft carrier to carry two yarns are relatively unusual practices.  And, depending on the market, further limiting the patent to air jet technology could have significantly increased the probability of being granted the patent for relatively little loss of generality.  I could also see situations where an examiner would give an applicant little choice but to specify patent angles and shore hardness. 

It really just depends on what came before you.

Jim Carson is a principal of RB Consulting, Inc and a registered patent agent.  He has over 30 years of experience across multiple industries including the biotechnology, textile, computer, telecommunications, and energy sectors.  RB Consulting, Inc specializes in providing management, prototyping, and IP services to small and start-up businesses.  He can be reached via email at jim@rbconsulting.us or by phone at (803) 792-2183.

Smart Fabrics Summit

Recent advances in technology have brought together the apparel, technology, and textile industries to develop new capabilities in fabrics with the potential to change how athletes, patients, soldiers, first responders, and everyday consumers interact with their clothes and other textile products.

To foster greater collaboration between the U.S. apparel, technology, and textile industries and to identify the public policies that could accelerate the design and manufacture of smart fabrics products by U.S. companies, the Department of Commerce in partnership with the Industrial Fabrics Association International will host the Smart Fabrics Summit on Monday, April 11, 2016.

Flock School Announced

Join with other industry members on the beautiful University of Massachusetts campus for the 9th triennial American Flock Association FLOCK SCHOOL. The entire flocking process will be covered from choice of flock, substrate, and adhesive to coating and application techniques, as well as drying, curing, and post treatments. Break out sessions will address specific needs of the attendees.

Comments on Moroccan Short Supply Request Relating to Swimsuit Fabric

On November 16, 2015, the Government of the United States received a request from the Swimsuit Commission Corporation ("SCC"), that the United States and Morocco consider revising the rules of origin for certain women’s and girls’ swimwear to address availability of supply of certain printed and piece-dyed warp knit fabrics of polyester or nylon fibers classified under HTSUS subheading 6004.10 containing between 3 percent and 41 percent elastomeric yarns, in which the elastomeric yarns were engineered for chlorine resistance, which the SCC alleges cannot be supplied by the U.S. and Moroccan industries in commercial quantities in a timely manner.

Public comments were due today. Agathon Associates submitted the following comments--

I write as a consultant to the U.S. textile industry to oppose the request to modify the rules of origin for certain swimwear made of certain warp knit fabric under the U.S. Morocco Free Trade Agreement ("MFTA"), published December 7, 2015, at 80 FR 75999. I understand that my clients, Elastic Fabrics of American and the Darlington division of the George C. Moore will be filing their own comments as domestic U.S. manufacturers of the subject fabrics.

The request from the Swimsuit Commission Corporation should be rejected "out of hand" as failing to present any factual basis for the request. No attempt is made in the request to demonstrate short supply of the fabric in the region. No evidence is presented of any attempt to contact potential suppliers in the U.S. or Morocco. Indeed, my associates in the warp knit industry in the U.S. state that they were at no time contacted by the Swimsuit Commission Corporation, Gottex Swimwear Brands LTD, or any Moroccan swimwear manufacturers. Had the requestors made any attempt to locate regional suppliers they would have known that the fabric is indisputably not in short supply.

The sole justification given in the request for modifying the rules of origin is the fact that such warp knit fabric for use in the production of swimwear is on the short supply list of a negotiated, but not enacted, let alone implemented, free trade agreement, the Trans-Pacific Partnership ("TPP"). I believe it is a misuse of the negotiated TPP and the MFTA to suggest that the mere appearance of an article on the TPP short supply list is compelling and sufficient evidence for the article being short supply under the terms of another agreement.

My clients who make warp knit swimwear fabric in the U.S. believe that the U.S. negotiators erred in allowing this fabric on the TPP short supply list. However, we understand that the TPP list was the result of negotiations and compromises. Perhaps the negotiators, in "giving up" that fabric in TPP, believed they were getting something for textiles in return that was worth the damage it would do to America's warp knit industry. Whether what they got was worth it is not the point. The point is that the Moroccans now want the same concession without having to give up anything in return.

Because this fabric is available from domestic U.S. sources that will be harmed were the request granted, and because no U.S. textile industry interests can possibly be aided by the requested change, I urge in the strongest terms that the U.S. reject this request.

Comments were also submitted by:

• Darlington Fabrics, a Moore Company,
• Elastic Fabrics of America,
• McMurray Fabrics,
• Joint comments from the American Fiber Manufacturers Association and the National Council of Textile Organizations, and
• The Government of Morocco.

To read public versions of all comments received CLICK HERE and you will be redirected the website of the U.S. Department of Commerce Office of Textiles and Apparel.

Nextt In Line

On October 1, 2015, AAVN, Inc., filed a 337 complaint to the US International Trade Commission, naming AQ Textiles, LLC and Creative Textile Mills Pvt. Ltd as respondents, requesting a general exclusion order prohibiting the import of several marketed products including the Prescott 600 brand of bed sheets sold by Macy’s and the Sterling Manor brand by Belk’s.  Within the complaint, AAVN alleges that the imported goods are infringing on US Patent 9131790B1, which is also referred to as the “790” patent.  The 337 complaint is in addition to a series of patent infringement law suits that were filed in September 2015 against the respondents as well as Indo Count Global, Inc., GHCL Ltd., and Globe Cotyarn Private, Ltd.  The 790 patent was granted in September 15, 2015.  According to the filed complaint, no patents corresponding to the 790 patent have been filed in other jurisdictions.

This patent got a good bit of news coverage (for a patent at least) for protecting “Alpha Cotton^TM” which is a $500 million dollar product line that is marketed by Nextt Inc. and that is expected to grow into a $2 billion dollar market.  Nextt is a wholly owned subsidiary of AAVN, Inc.  Alok Industries, Ltd manufactures under license the Alpha Cotton^TM sheets and bedding products sold by Nextt within the US. 

I have covered 337 procedures in previous posts, so I will defer a discussion of the 337 process in this case to a later post.  In this post, I will focus on the details of the 790 patent in question.  In my next post, I will discuss the specific allegations of the case and my (somewhat ambivalent) feelings about the case. 

The 790 patent itself directly addresses high thread count sheets and bed linens.  In the US, thread counts are defined as individual yarns per square inch of fabric.  The higher the thread counts the more comfortable the sheets and bed linens will be to sleep in.  Companies will tend to use finer yarns in order to increase the yarn count of the fabric.  The disadvantage of this approach is that the use of finer sizes of popular sheet and bedding yarns tends to highlight disadvantages of the yarns being used.  For example, fine cottons are less durable and fine polyesters tend to break easily.  In the past, some manufacturers would get around this by plying yarns together and counting each ply as a thread in the thread count.  This practice is considered by the Federal Trade Commission to be a level of deception that lies in the grey area between very naughty and illegal. 

The innovation of the 790 patent is to prepare and wind two fine denier polyester yarns on a single cone and to then feed the two fine denier polyester yarns as a single weft yarn that leaves the two fine denier polyester yarns lying side by side within the fabric.  In order to accomplish this, the 790 patent discloses a process wherein two fine denier polyester yarns are simultaneously drawn and processed and then wound on the same cone.  In order to draw the two fine denier polyester yarns properly off the cone and through the weft insertion process, the two fine denier polyester yarns have to be wound on a cone with an angle of degree on the cone between 15 and 20 degrees and the cone has to be wound within a fairly tight shore hardness tolerance.

Jim Carson is a principal of RB Consulting, Inc and a registered patent agent.  He has over 30 years of experience across multiple industries including the biotechnology, textile, computer, telecommunications, and energy sectors.  RB Consulting, Inc specializes in providing management, prototyping, and IP services to small and start-up businesses.  He can be reached via email at jim@rbconsulting.us or by phone at (803) 792-2183.