Products may be circumventing antidumping and countervailing duties even if they aren’t named in the original scope of an AD/CVD order and were available in another country at the time the order was issued, the Court of Appeals for the Federal Circuit recently ruled. Overturning a 2013 ruling by the Court of International Trade (see 13102804), the Federal Circuit’s April 5 opinion (here) held that 4.75mm diameter steel wire rod from Deacero is circumventing duties on steel wire rod from Mexico, despite the fact that the scope of the AD duty order is limited to rods 5mm to 19mm in diameter and 4.75mm wire rod was commercially available in Japan at the time the scope was written in 2002. Circumvention inquiries are meant to capture products that may not be named in the scope, and only specifically excluded products cannot be found to be circumventing, said CAFC. Although the 4.75mm wire rod was available in Japan, the smallest diameter available in the countries investigated in 2002 was 5.5mm, it said. “That some quantity of small-diameter steel wire rod may have been in existence at some time in non-investigated countries does not limit Commerce’s" circumvention analysis, said the appeals court as it reinstated the Commerce Department's original finding of circumvention.
Trademarks do not have to be registered with the Patent and Trademark Office in order to qualify for less stringent CBP country of origin marking rules, said the Court of Appeals for the Federal Circuit in a March 2 decision (here). In a dispute over how prominently a jeans importer with “U.S.A.” in its brand name must mark jeans made in China, CAFC overturned the Court of International Trade in holding the company’s unregistered marks are sufficient to allow the country of origin be listed on a small tag rather than in large letters next to the brand name.
The sale abroad of a good patented in the U.S. does not “exhaust” the patent and allow the good’s unrestricted sale in the U.S., said the Court of Appeals for the Federal Circuit in a recent decision. In the wake of a 2013 Supreme Court decision that found the “first sale” abroad removes copyright restrictions (see 13032521), the CAFC held Feb. 12 (here) that the same does not apply to patents. The Federal Circuit sided with Lexmark in finding an importer that purchased spent printer cartridges abroad before refilling them and selling them in the U.S. infringed Lexmark’s patents. “Loss of U.S. patent rights based on a foreign sale remains a matter of express or implied license,” it said. The importer, Impression Products, said it plans to appeal to the Supreme Court, according to a report by Reuters (here).
International Trade Today is providing readers with some of the top stories for Jan 4-8 in case they were missed.
The U.S. Court of Appeals for the Federal Circuit affirmed the denial of NAFTA treatment to Ford auto parts imported from Canada (here), finding CBP can apply different certificate of origin waiver requirements to reconciliations than it does to regular post-importation claims. The Jan. 6 decision was marked by a lengthy dissent from Circuit Judge Jimmie Reyna, one of the few Federal Circuit judges with a background in trade.
The government cannot seek Section 1592 customs penalties in court at a different level of culpability than alleged by CBP in a penalty notice, said the U.S. Court of Appeals for the Federal Circuit on Dec. 1 (here). Affirming a Court of International Trade decision from 2012 (see 12041647), the appeals court held a government penalty claim for negligence is barred because the pre-penalty and penalty notices CBP issued to Nitek Electronics alleged only gross negligence.
Camelbak hydration packs imported without the water-delivery components are classifiable as an insulated beverage bags, said CBP in an Aug. 19 internal advice ruling (here). The ruling, HQ H248811, makes use of classification instructions handed down by the U.S.Court of Appeals for the Federal Circuit in 2011 (see 11062315). In that case, the CAFC shot down a classification approved by CBP and the Court of International Trade of hydration packs as back packs. The CAFC has since used that ruling as precdent for considering use as a factor for "eo nomine" tariff provisions (see 14080420).
Interest accrues on customs bonds that are subject to ongoing lawsuits for recovery of antidumping and countervailing duties, ruled the U.S. Court of Appeals for the Federal Circuit on June 17. Overturning a January 2014 decision from the Court of International Trade, the court found that the law on interest for bonds subject to lawsuits applies to all “duties,” and not just customs tariffs.
The requirement that importers pay duties before bringing tariff classification cases to court is an unconstitutional hurdle that allows CBP to disregard rulings “with impunity” if the duties imposed are too much for the affected importer to bear, said Gregory Teufel, attorney for International Custom Products (ICP), in oral argument before the U.S. Court of Appeals for the Federal Circuit on May 8. The pay to play scheme is an unconstitutional bar to importers’ right to due process because it allows CBP to deprive them of a “property interest” in the form of a binding ruling without any notice or the opportunity to be heard, said Teufel.
A controversial case on the liability of compliance and corporate officers for their employer’s customs violations now goes to the Supreme Court justices’ chambers for a decision on whether to hear the appeal, after Harish Shadadpuri, owner of Trek Leather, filed a final brief on April 27 in favor of his petition for certiorari. Shadadpuri's lawyer, Al Daniel, argued that a decision from the Court of Appeals for the Federal Circuit misinterpreted the customs penalty laws and was unsupported by the facts of the case. Daniel expects a decision from the Supreme Court on whether to consider the case by the end of June.