The Refund of Duties Paid on Imports of Certain Wool Products

On February 1, 2016, the U.S. Dept. of Agriculture Foreign Agriculture Service published in the Federal Register (81 FR 5093) The Refund of Duties Paid on Imports of Certain Wool Products.

The Foreign Agricultural Service (FAS) announces that it will accept affidavits from individuals or firms to substantiate eligibility for distributions from the Refund of Duties Paid on Imports of Certain Wool Products program (the Refund program) authorized under Section 12315 of the Agricultural Act of 2014 (Pub. L. 113-79) (the Act). For calendar year 2016 distributions, affidavits must be electronically filed with FAS no later than March 1, 2016.

For assistance is applying for a wool refund, contact David Trumbull, principal, Agathon Associates, at david@agathonassociates.com.

Legally Verified Text of the Trans-Pacific Partnership Has Been Released to the Public

The legally verified text of the Trans-Pacific Partnership (TPP) was released on 26 January 2016 and can be accessed by chapter below. (This supersedes the version of the TPP text that was initially released by TPP Parties on 5 November 2015.) The Agreement will be translated into French and Spanish language versions, and released on this website.

Tristar Products Recalls AquaRug Shower Rugs Due to Fall Hazard

Recall Details

Units: About 1.4 million (in addition 70,000 rugs were sold in Canada)

Description: This recall involves Aqua Rugs with four plastic suction cups. The rugs are intended to provide a slip-resistant surface in the shower or bathtub. The rugs were sold in beige and clear, and in two sizes: 29.5 inches by 17.25 inches for use in the bathtub, and 21.75 inches by 19.75 inches for use in a shower stall. The rugs have a plastic border and only four plastic suction cups, one affixed to the underside of each corner of the rug. “AquaRug” and “As Seen On TV” are printed on the front of the cardboard packaging.

Incidents/Injuries: Tristar has received 60 reports of consumers falling in the shower or bathtub while on the recalled four suction cup rugs, including 30 reports of injuries such as bruises, cuts, and fractured or broken bones.

Remedy: Consumers should immediately stop using the recalled shower rugs and contact Tristar for instructions on how to dispose of the rugs and to obtain a free replacement rug.

Sold at Bed Bath & Beyond, Dollar General and other retail stores nationwide, online at Amazon.com and BuyAquaRug.com, by Tristar through direct response television commercials, and through a live television show on QVC, from July 2012 to September 2015 for between $18 and $28.

Importer(s): Tristar Products Inc., of Fairfield, N.J.

Manufactured in China.

Tariff Classification of Flocked Doormat

In a January 16, 2016, Binding Ruling Letter (N271510) U.S. Customs and Border Protection stated the tariff classification of a flocked doormat is 5705.00.2030, Harmonized Tariff Schedule of the United States ("HTSUS"), which provides for "Other carpets and other textile floor coverings, whether or not made up: Other: Of man-made fibers." The rate of duty will be 3.3 percent ad valorem.

The doormat, which is imported from China by Big Lots Stores Inc. contains a fibrous top surface created by a 100 percent polyester flock and a crumb rubber base. The mat will measure 18 x 30 inches. It will be available in three styles. All of the mats include the word "Welcome" along with either a flower and brick design, pebble design, or large flower design.

The importer suggested classification of the subject doormats under subheading 4016.91, HTSUS, which provides for floor coverings and mats of vulcanized rubber. Were that correct the rate of duty would be 2.7%. The importer opined that as the rubber comprises the bulk of the mat's constituent material, it should be considered to impart the essential character to product. They cited New York Ruling Letter ("NYRL") 817629, dated January 11, 1996, which covered a doormat constructed of rubber and nylon flocking material, to support your position. However, the doormat covered by NYRL 817629 differs from the product at issue. The surface of this product is covered entirely by a layer of polyester flock, whereas only a portion of doormat's surface in NYRL 817629 was covered by flock. Additionally, the General Harmonized System Explanatory Notes to Chapter 40 states that the classification of rubber and textile combinations is essentially governed by Note 1(ij) to Section XI, Note 3 to Chapter 56, and Note 4 to Chapter 59, and indicates that the following products are covered by Chapter 40:

Felt impregnated, coated, covered or laminated with rubber, containing 50% or less by weight of textile material, and felt completely embedded in rubber; Nonwovens, either completely embedded in rubber or entirely coated or covered on both sides with such material, provided that such coating or covering can be seen with the naked eye with no account being taken of any resulting change of color; Textile fabrics (as defined in Note 1 to Chapter 59) impregnated, coated, covered or laminated with rubber, weighing more than 1,500 g/m2 and containing 50% or less by weight of textile material; Plates, sheets or strip of cellular rubber, combined with textile fabrics (as defined in Note 1 to Chapter 59), felt or nonwovens, where the textile is present merely for reinforcing purposes.

The doormat at issue, consisting of a layer of polyester flock adhered to a base of rubber, does not meet any of the criteria listed above as flock is a textile material, but not a textile fabric. As a result, the article cannot be classified in heading 4016.

Chapter 57, Note 1 states that the term "carpets and other textile floor coverings" means floor coverings in which textile materials serve as the exposed surface of the article when in use. As the top surface of the doormat is made from a textile flock material the item will be classified under heading 5705, HTSUS, as "other carpets and other textile floor coverings, whether or not made up." The applicable subheading for Article 810299732 will be 5705.00.2030, HTSUS, which provides for "Other carpets and other textile floor coverings, whether or not made up: Other: Of man-made fibers." The rate of duty will be 3.3 percent ad valorem.

Two Free TPP Webinars Tomorrow

The U.S. Department of Commerce Office of Textiles and Apparel is offing two free webinars on the Trans-Pacific Partnership free trade agreement--

• Trans-Pacific Partnership (TPP) Agreement Textile and Apparel Rules of Origin, Tuesday, January 26, 2016 at 1:30 pm EST (Note the PDF says January 19th, but the webinar has been rescheduled to January 26th.

• Trans-Pacific Partnership (TPP) Agreement Textile and Apparel Market Access Commitments, Tuesday, January 26, 2016 at 2:30 pm EST

There is no cost to participate, but advance registration is required.

For more information, please contact Maria D’Andrea at (202) 482-1550 or Richard Stetson at (202) 482-2582.

Upholstery Fabric FTZ Application Filed

On January 20, 2016 the Foreign Trade Zone Board published in the Federal Register (81 FR 3100) Notification of Proposed Production Activity; Klaussner Furniture Industries, Inc.; Subzone 230D; (Upholstered Furniture); Asheboro and Candor, North Carolina.

Klaussner Furniture Industries, Inc. (KFI), operator of Subzone 230D, submitted a notification of proposed production activity to the FTZ Board for its facilities in Asheboro and Candor, North Carolina. The notification conforming to the requirements of the regulations of the FTZ Board (15 CFR 400.22) was received on January 5, 2016.

KFI currently has authority to conduct cut-and-sew activity using certain foreign micro-denier suede upholstery fabrics to produce upholstered furniture and related parts (upholstery cover sets) on a restricted basis (see Board Order 1745, 76 FR 11426, March 2, 2011). Board Order 1745 authorized the production of upholstered furniture (sofas, sleep sofas, and recliners) for a five-year period, with a scope of authority that only provides FTZ savings on a limited quantity (5.79 million square yards per year) of foreign origin, micro-denier suede upholstery fabric finished with a hot caustic soda solution process (i.e., authorized fabrics). All foreign upholstery fabrics other than micro-denier suede finished with a hot caustic soda solution process (i.e., unauthorized fabrics) used in KFI's production within Subzone 230D are subject to full customs duties.

The current request seeks to extend KFI's existing FTZ authority indefinitely (with no increase in the company's annual quantitative limit of 5.79 million square yards) and to add foreign-status leather and certain polyurethane-type fabrics to the scope of authority. KFI has also requested that the authority under Board Order 1745 be revised by modifying Condition #2 to allow KFI to admit unauthorized fabrics to Subzone 230D in privileged foreign status (19 CFR 146.41), which would preclude any change in customs classification through transformation under FTZ procedures. Pursuant to 15 CFR 400.14(b), additional FTZ authority would be limited to the specific foreign-status materials and components and specific finished products described in the submitted notification (as described below) and subsequently authorized by the FTZ Board.

Production under FTZ procedures could exempt KFI from customs duty payments on the foreign-status fabrics used in export production. On its domestic sales, KFI would be able to apply the finished upholstery cover set (i.e., furniture part) or finished furniture duty rate (free) for the authorized fabrics and the additional fabrics (indicated below). Customs duties also could possibly be deferred or reduced on foreign-status production equipment.

Authority to admit imported fabrics to Subzone 230D in non-privileged foreign status (19 CFR 146.42)--under which the fabrics' customs classification could change through transformation under FTZ procedures--would only involve micro-denier suede upholstery fabrics finished with a hot caustic soda solution process (classified within HTSUS Headings 5407, 5512, 5515, 5516, 5801, 5903, 6001, 6005, and 6006), polyurethane fabrics backed with ground leather (5903.20.2500), upholstery leather (Heading 4107), and wet coagulation process, 100 percent polyurethane coated fabrics (5903.20.2500), as detailed in the notification (duty rate ranges from free to 17.2%).

Public comment is invited from interested parties. Submissions shall be addressed to the FTZ Board's Executive Secretary at the address below. The closing period for their receipt is February 29, 2016.

Walt Disney Parks and Resorts Recalls Infant Bodysuits Due to Choking Hazard

Photos available at http://www.cpsc.gov/en/Recalls/2016/Walt-Disney-Parks-and-Resorts-Recalls-Infant-Bodysuits/

Units: About 10,000

Description: This recall involves two styles of infant one-piece bodysuits with a three snap button closure. The garments are 100 percent cotton.

The Darth Vader Infant Bodysuits were sold in five sizes: 3M, 6M, 12M, 18M and 24M. The garment has a gray body with black sleeves and trim. The artwork on the front of the bodysuit shows an infant Darth Vader holding a light saber with the text: “If you only knew the power of THE DARK SIDE.”

The Disneyland 60th Infant Bodysuits have a light blue body with royal blue sleeves and trim. The artwork on the front of the bodysuit includes Mickey Mouse, Goofy, Donald Duck and Pluto in front of the Disneyland Castle. The Disneyland 60th bodysuits were sold in four sizes: 6M, 12M, 18M and 24 M. The text on the front of the garment reads “60th Disneyland Resort, Diamond Celebration.”

Incidents/Injuries: None reported

Sold at: Walt Disney World® Resort in Lake Buena Vista, Florida, Disneyland® Resort in Anaheim, California, the Treasure Ketch Shop on the Disney Wonder® and Mickey’s Mainsail located on the Disney Magic®, Disney Dream® and Disney Fantasy® cruise ships from February 2015 through November 2015 for about $20.

Importer: Walt Disney Parks and Resorts, of Lake Buena Vista, Fla.

Manufactured in: Guatemala

CPSC Meeting with AHFA to Discuss Flammable Fabrics Rule

This week two Consumer Product Safety Commission ("CPSC") Commissioners and staff are scheduled to meet with representatives of American Home Furnishings Alliance ("AHFA") the law offices of Kelley Drye & Warren, LLP, to discuss the merits of the petition filed by AHFA requesting CPSC to initiate a rulemaking under the Flammable Fabrics Act to adopt the performance standard and test methods prescribed in California Technical Bulletin 117-2013 on upholstered furniture flammability.

Customs Publishes Final Rule for U.S.-Australia FTA

On January 15, 2016, U.S. Customs and Border Protection published in the Federal Register (81 FR 2085) United States-Australia Free Trade Agreement; Final rule.

SUMMARY: This document adopts as a final rule, with one change, interim amendments to the U.S. Customs and Border Protection (CBP) regulations that were published in the Federal Register on February 10, 2015, as CBP Dec. 15-03, to implement the preferential tariff treatment and other customs-related provisions of the United States-Australia Free Trade Agreement.

DATES: Effective February 16, 2016.

Clients of Agathon Associates and subscribers to Agathon Associates' Trade Advisor Service can find more information relating to Australia and the free trade agreement at www.agathonassociates.com/textile-pri/australia/. You will need to enter your username and password. If you do not know your username and password email David Trumbull at david@agathonassociates.com.

Monday is Martin Luther, Jr. King Day

Monday, January 18th, U.S. government offices, and much of private business other than retail, will close in observance of Martin Luther King, Jr. Day.

When President Ronald Reagan, on November 2, 1983, signed into law the Martin Luther King, Jr. holiday he reminded his listeners that—

Martin Luther King was born in 1929 in an America where, because of the color of their skin, nearly one in ten lived lives that were separate and unequal…taught in segregated schools…could find only poor jobs, toiling for low wages…refused entry into hotels and restaurants, made to use separate facilities. In a nation that proclaimed liberty and justice for all, too many black Americans were living with neither.

If we consider the time from the arrival of the first slaves in the Virginia Colony in 1619 to the achievement of full civil rights for all African-Americans in every one of the 50 states in the 1960s, it was a very long struggle to achieve full civil equality. The modern African-American Civil Rights Movement that Dr. King was so important a leader in, on the other hand, was, for a major societal and legal change, relatively swift. It is generally considered to occupy the period from 1955 (Rosa Parks and the Montgomery Bus Boycott) to 1968 (King assassination and the Poor People's March). To those in the struggle it was long. But looking back, from 1955 to 1983, not quite 30 years, is, roughly, a generation. In one generation we advanced from a nation that tolerated legal discrimination against part of our citizenry based on the color of their skin, to a nation in which such as thing is not only forbidden, but absolutely unthinkable. It was Dr. King, more than any other single leader in the civil rights movement, who, with his insistence on non-violence, and his prophet-like call to the conscience of White American, who brought about such a marvelous and much needed change. That is why he is up there with Columbus and Washington as one of just three men who so influenced our nation that we honor them with a federal holiday.

President Reagan went on to remark that "Dr. King had awakened something strong and true, a sense that true justice must be colorblind." And Mr. Reagan pointed to both the progress made—and yet to be made—in the struggle for an America that lives up to her noble sentiment that all men are created equal, citing the passage of the Civil Rights Act of 1964 and Voting Rights Act of 1965. Reagan, as he so often did, then called on Americans to embrace and enlarge upon their better nature, and exhorted his listeners—

But most important, there was not just a change of law; there was a change of heart. The conscience of America had been touched. Across the land, people had begun to treat each other not as blacks and whites, but as fellow Americans.

Traces of bigotry still mar America. So, each year on Martin Luther King Day, let us not only recall Dr. King, but rededicate ourselves to the Commandments he believed in and sought to live every day: Thou shall love thy God with all thy heart, and thou shall love thy neighbor as thyself. And I just have to believe that all of us —- if all of us, young and old, Republicans and Democrats, do all we can to live up to those Commandments, then we will see the day when Dr. King's dream comes true.

New Address for U.S. Customs

The National Commodity Specialist Division ("NCSD"), Regulations and Rulings, in the Office of International Trade, U.S. Customs and Border Protection ("CBP"), is relocating. While the relocation process is underway, the address provided for the Director, National Commodity Specialist Division, Regulations and Rulings, in the Office of International Trade, at section 177.2(a) of title 19 of the Code of Federal Regulations (19 CFR 177.2(a)), will be inaccurate. Until the relocation process is complete, a temporary mailing location has been established and all correspondence to the NCSD should be sent to the following address: Director, National Commodity Specialist Division, Regulations and Rulings, Office of International Trade, 1100 Raymond Boulevard, Newark, New Jersey 07102. Mail received at this temporary location will be delivered to the appropriate NCSD location. Please note that e-rulings procedures will remain the same and will not be affected by the temporary change in office location.

When the relocation process is complete and a permanent address is established, CBP will publish in the Federal Register amendments to the regulations to reflect the new mailing address (see 19 CFR 177.2(a)) and announce the cessation of mail forwarding operations through the address provided in this notice.

Next Up

In October 2015, AAVN, Inc., filed a 337 compliant to the US International Trade Commission (USITC).  Within the complaint, AAVN alleges that AQ Textiles, LLC and Creative Textile Mills Pvt. Ltd, known as the respondents, are infringing on a patent owned by AAVN, called the 790 patent.  In my prior two posts, I have discussed the technology involved in the complaint and the specific allegations being made by AAVN about how the respondents are infringing the patent underlying this technology. 

In the final post of this trilogy, I want to discuss the details of how a 337 complaint is processed at the USITC.  Readers who would like an overview of the 337 law and its implementation by the USITC are referred to the link provided. 

The process for evaluating a 337 complaint within the USITC has five steps and a wild card.  The five steps are:  1) the filing of the complaint; 2) the assignment of an investigative attorney by the USITC; 3) the collection and hearing of the evidence by an administrative law judge; 4) the recommendation of action by the administrative law judge; and, 5) the approval of the recommended action by the commission that leads the USITC. 

The initial process in a 337 complaint is the filing of the complaint.  Once the 337 complaint is filed the USITC reviews the actual complaint.  In order to be approved for investigation, a 337 complaint must:  1) provide a prima facie case that an investigation is warranted; 2) demonstrate that the investigation is in the public interest (or at least will not harm the general public); and, 3) identify specific products against which the remedy will be applied.  

Once the complaint is filed and the investigation is approved, an investigating attorney and an administrative law judge are assigned to the case.  In one of the great misnomers of modern governance, the investigating attorney does not actually investigate the case.  The investigating attorney represents the government through the process.  The investigating attorney is a full participant in the case and can request discovery, make motions and file briefs on behalf of the US government throughout the process.  If this seems a little strange, that is because it is.  While, technically, the government has nothing at stake in the outcome of the case, it does have an interest in the results of investigations which can potentially be used in other legal proceedings.  The role of the investigating attorney is to insure that a complete investigative record is compiled during the judicial proceedings.  Put another way, the goal of the investigating attorney is to make sure that the investigation addresses all the relevant questions of the case – not just the questions relevant to the matters of law being addressed.  

The actual collection of evidence and investigation is done as a judicial proceeding that is managed by the administrative law judge.  The tools of the judicial proceeding includes the standard legal tools and proceedings of discovery, motions, and briefs.  Under the statute, the penalties for a respondent not participating in the judicial proceedings are steep.  In such an instance, the administrative law judge is permitted to assume that all the allegations stated in the complaint are true when making the final ruling.  Once the collection of evidence is completed the case is argued as to whether the patent in question has been infringed.  

After the arguments have been made the administrative law judge makes a ruling on the matters of law.  If the administrative law judge determines that the patent has been infringed, he or she can choose a remedy from the following options:

General Exclusion Order:  This is a general exclusion order that prohibits the importation of the infringing product without restriction. 

Restricted Exclusion Order:  The restricted exclusion order is similar to the general exclusion order except that its application is limited, or restricted, in some way.  Typically, a restricted exclusion order is limited to one or more specific companies. 

Temporary Exclusion Order:  The administrative law judge has the option to issue a temporary exclusion order to limit the importation of a product pending the completion of the 337 process.  The administrative law judge has the discretion to require a bond in lieu of a temporary exclusion order if that is more appropriate.

Cease and Desist Order:  The administrative law judge has the option to issue a cease and desist order.  I am a little fuzzy on this but I believe that this option is limited to US companies. 

Consent Order:  The case can be disposed of through the approval of a consent order between the parties. 

After the administrative law judge makes the decision, the decision is forwarded to the Commission for final approval.  If for some reason the Commission fails to act on the decision then the judge’s decision is final and has the force of law. 

Finally, we need to discuss the wild card: all exclusion orders generated by the 337 process are subject to presidential review and can be overturned by an administration.  This is not an insignificant risk.  For example, in June 2013, the USITC determined that Apple had violated the 337 act by importing technology that was infringing on a patent owned by Samsung.  Because of the impact the decision and the resulting import exclusions would have on existing Apple customers the administration disapproved the exclusion order.  The decision only impacted the USITC proceedings and had no impact on Samsung’s ability to pursue their infringement suit in Federal Court.

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.

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.

Corsair Innovations’ Revolutionary FEAM Material is a special Flock construction that helps absorb, dissipate, and transfer momentum to lessen the impact of head injuries.

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.