PUBLIC VERSION
`
`UNITED STATES INTERNATIONAL TRADE COMMISSION
`
`Washington, D.C.
`
`In the Matter of.
`
`CERTAIN INDUSTRIAL AUTOMATION
`SYSTEMS AND COMPONENTS THEREOF
`INCLUDING CONTROL SYSTEMS,
`CONTROLLERS, VISUALIZATION
`HARDWARE, MOTION CONTROL
`SYSTEMS, NETWORKING EQUIPMENT,
`SAFETY DEVICES, AND POWER
`SUPPLIES
`
`Inv. N0. 337-TA-1074
`
`ORDER NO. 39:
`
`INITIAL DETERMINATION GRANTING-IN-PART
`COMPLAINANT’S MOTION FOR SUMMARY
`DETERMINATION THAT IT HAS SATISFIED THE ECONOMIC
`PRONG OF THE DOMESTIC INDUSTRY REQUIREMENT
`
`(July 12, 2018)
`
`On May 25, 2018, Complainant Rockwell Automation, Inc. (“Rockwell”) filed a motion
`
`for summary determination that it has satisfied the economic prong of the domestic industry,
`
`requirement with respect to the asserted trademarks and copyrights (Motion Docket No. 1074
`
`026). Respondent Radwell International, Inc. (“Radwell”) filed a response in opposition on June
`
`7, 2018, but withdrew its opposition in part on June 26, 2018. The Commission Investigative
`
`Staff (“Staff”) filed a response in support of the motion on June 7, 2018. Rockwell filed a reply
`
`briefon June 12, 2018.
`
`I.
`
`BACKGROUND
`
`’
`
`~
`
`On October 10, 2017, the Commission ordered the institution of an investigation based
`
`on Rockwell’s complaint for alleged violations of section 337 “based upon the importation into
`
`the United States, the sale for importation, and the sale within the United States after importation
`
`
`
`
`
`UNITED STATES INTERNATIONAL TRADE COMMISSION
`
`Washington, D.C.
`
`In the Matter of.
`
`CERTAIN INDUSTRIAL AUTOMATION
`SYSTEMS AND COMPONENTS THEREOF
`INCLUDING CONTROL SYSTEMS,
`CONTROLLERS, VISUALIZATION
`HARDWARE, MOTION CONTROL
`SYSTEMS, NETWORKING EQUIPMENT,
`SAFETY DEVICES, AND POWER
`SUPPLIES
`
`Inv. N0. 337-TA-1074
`
`ORDER NO. 39:
`
`INITIAL DETERMINATION GRANTING-IN-PART
`COMPLAINANT’S MOTION FOR SUMMARY
`DETERMINATION THAT IT HAS SATISFIED THE ECONOMIC
`PRONG OF THE DOMESTIC INDUSTRY REQUIREMENT
`
`(July 12, 2018)
`
`On May 25, 2018, Complainant Rockwell Automation, Inc. (“Rockwell”) filed a motion
`
`for summary determination that it has satisfied the economic prong of the domestic industry,
`
`requirement with respect to the asserted trademarks and copyrights (Motion Docket No. 1074
`
`026). Respondent Radwell International, Inc. (“Radwell”) filed a response in opposition on June
`
`7, 2018, but withdrew its opposition in part on June 26, 2018. The Commission Investigative
`
`Staff (“Staff”) filed a response in support of the motion on June 7, 2018. Rockwell filed a reply
`
`briefon June 12, 2018.
`
`I.
`
`BACKGROUND
`
`’
`
`~
`
`On October 10, 2017, the Commission ordered the institution of an investigation based
`
`on Rockwell’s complaint for alleged violations of section 337 “based upon the importation into
`
`the United States, the sale for importation, and the sale within the United States after importation
`
`
`
`
`
`PUBLIC VERSION
`
`of certain industrial automation systems and components thereof including control systems,
`
`controllers, visualization hardware, motion and motor control systems, networking equipment,
`
`safety devices, and power supplies” under subsection (a)(l)(B) and (C) of section 337 by reason
`
`of infringement of various copyrights and trademarks.‘ 82 Fed. Reg. 481l3~15 (Oct. 16, 2017).
`
`The scope of the investigation includes a determination of “Whetheran industry in the United
`
`States exists as required by subsection (a)(2) of section 337.” Id.
`
`'
`
`Rockwell relies upon certain of its product lines to establish a domestic industry pursuant
`
`to subsection (a)(2) of section 337. With respect to the asserted trademarks, Rockwell relies
`
`upon its ControlL0gix®, CompactLogix®, and PanelView® product lines:
`
`Na me
`
`A-B (and Design)
`
`A-B (and Design)
`
`A-B (and Design)
`
`ALLEN-BRADLEY
`
`ALLEN-BRADLEY
`
`ALLEN-BRADLEY
`
`ROCKWELL AUTOMATION
`
`Reg. No.
`
`Example Embodiment
`
`Domestic Industry Product Lines
`
`1172995
`
`696401
`
`693780
`
`1172994
`
`712800
`
`ALLEN-BRADLEY
`
`ControlLogix
`CompactLogix
`PanelView
`
`712836
`
`2510226
`
`ROCKWELL AUTOMATION
`
`2671196
`
`ROCKWELL AUTOMATION
`
`ROCKWELL AUTOMATION
`
`2701786
`
`Motion Memo. at 2 (citing Decl. of Rod Michael, 118)?
`
`' Rockwell’s complaint also alleges violations of subsection (a)(1)(A) of section 337.
`
`2 Asserted U.S. Trademark Reg. No. 2,412,742, is not addressed in Rockwel1’s motion See Staff
`Resp. at 3 n.l.
`
`2
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`
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`PUBLIC VERSION
`
`With respect to the asserted copyrights, Rockwell relies upon its ControlLogix® and
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`CompactLogix® product lines, which include certain copyrighted finnware:
`
`Name
`Fimiware (Version l6) for ControlLogix® L6
`Controllers
`Firmware (Version 20) for ControlLogix® L6
`Controllers
`Firmware (Version 20) for ControILogix® L7
`Controllers
`Firmware (Version 30) for ControlLogix® L7
`Controllers
`Firmware (Version 30) for ControlLogix® L8
`Controllers
`Firmware (Version 16) for CompactLogix® L3x
`Controllers
`Firmware (Version 20) for CompactLogix® L3x
`Controllers
`Firmware (Version 20) for Co1npactLogix® L3y
`Controllers
`Firmware (Version 30) for CompactLogix® L3y
`Controllers
`Firmware (Version 30) for CompactLogix® L3z
`Controllers
`
`Reg. N0. A
`
`TXOOO8389887
`
`'l'XOO08390077
`
`TX0008390088
`
`TX00083901ll
`
`Representative Product Line
`
`ControlL0gix L6 Products
`
`ControlLogix L7 Products
`
`TXO00839009l
`
`ControlLogix L8 Products
`
`TX000838989O
`
`TX0008390098
`
`TXOO08390094
`
`TXOO08390l l6
`
`CompactLogix L3XProducts
`
`C0mpactLogix L3y Products
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`TX00O8390084
`
`CompactLogix L32 Products
`
`Motion Memo. at 4 (citing Michael Decl., 1112).
`
`II.
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`LEGAL STANDARD
`
`The domestic industry requirement under section 337 arises from the statutory language
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`governing intellectual property-based proceedings in subsection 337(a)(2), which requires that a
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`complainant establish that “an industry in the United States, relating to the articles protected by
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`the patent, copyright, trademark, mask work, or design concerned, exists or is in the process of
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`being established.” l9 U.S.C. § 1337(a)(2). Subsection (3) of section 337(a) provides:
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`For purposes of paragraph (2), an industry in the United States shall be
`considered to exist if there is in the United States, with respect to the
`articles protected by the patent, copyright, trademark, mask work, or
`design concerned —
`
`3
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`
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`PUBLIC VERSION
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`(A) significant investment in plant and equipment;
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`(B) significant employment of labor or capital; or
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`(C) substantial investment in its exploitation, including engineering,
`research and development, or licensing.
`
`19 U.S.C. § 1337(a)(3). The domestic industry requirement consists of an “economic prong” and
`
`a “technical prong.” Certain Stringed Musical Instruments, Inv. No. 337-TA-586, Comm’n Op.
`
`at 13, 2009 WL 5134139, at *10 (May 16, 2008). The “economic prong” of the domestic
`
`industry requirement is satisfied when it is detennined that the economic activities and
`
`investments set forth in one of the subprongs of subsection 337(a)(3) has taken place. Certain
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`Variable Speed Wind Turbines & Components Thereofi Inv. No. 337-TA-376, USITC Pub. No.
`
`3003, Comm’n Op. at 21 (Nov. 1996).
`
`Commission Rule 210.18 states that summary determination shall be rendered if the
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`pleadings and evidence “show that there is no genuine issue as to any material fact and that the
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`moving party is entitled to a summary detennination as a matter of law.” 19 C.F.R. § 210.18(b).
`
`The evidence “must be viewed in the light most favorable to the party opposing the motion . . .
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`with doubts resolved in favor of the nonmovant.” Crown Operations Int ’Z,Ltd. v. Solutia, Inc.,
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`289 F.3d 1367, 1375 (Fed. Cir. 2002) (citations omitted); see also Xerox Corp. v. 3Com Corp,
`
`267 F.3d 1361, 1364 (Fed. Cir. 2001) (“When ruling on a motion for summary judgment, all of
`
`the nonmovant’s evidence is to be credited, and all justifiable inferences are to be drawn in the
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`nonmovant’s favor.”). “Issues of fact are genuine only ‘if the evidence is such that a reasonable
`
`[fact finder] could return a verdict for the nonmoving party?” Crown Operations, 289 F.3d at
`
`1375 (quoting Anderson v. Liberty Lobby, [nc., 477 U.S. 242, 248 (1986)). The trier of fact
`
`shou1d'“assureitself that there is no reasonable version of the facts, on thc summary judgment
`
`record, whereby the nomnovant could prevail, recognizing that the purpose of summary
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`4
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`PUBLIC VERSION
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`judgment is not to deprive a litigant of a fair hearing, but to avoid an unnecessary trial.” EM1
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`Gr0upN. Am., Inc. v. Intel Corp, 157 F.3d 887, 891 (Fed. Cir. 1998) (citations omitted). “In
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`other words, ‘[s]un1maryjudgment is authorized when it is quite clear what the truth is,’ and the
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`law requires judgment in favor of the movant based upon facts not in genuine dispute.” Paragon
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`Podiatry Lab, Inc. v. KLMLabs., Inc, 984 F.2d 1182, l 185 (Fed. Cir. 1993) (citations omitted).
`
`III.
`
`DISCUSSION
`
`-
`
`For its domestic industry, Rockwell relies on investments in its ControlLogiX®,
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`CompactLogix®, and PanelView® product lines that are alleged to be protected by nine of the
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`asserted trademarks in this investigation. Motion Memo. at 1-3. Rockwell further alleges that
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`certain ControlLogix® and CompactLogix® products are protected by the asserted copyrights.
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`Id. at 3-4. Rockwell relies on a declaration by Dr. Stephen D. Prowse, who identifies significant
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`employment of labor and capital with respect to these products. Id. at 10-14 (citing Prowse
`
`Decl., 1H9-38). There is no opposition to Rockwell’s motion with respect to the asserted
`
`trademarks, but Radwell opposes the motion with respect to the asserted copyrights.
`
`A. R0ckWell’sDomestic Industry Investments
`
`Rockwell relies on three categories of domestic industry investments described by
`
`Rodney Michael, Rockwell’s Director of Global Market Access Strategy: (1) manufacturing of
`
`certain domestic industry products, (2) customer support and maintenance for its products, and
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`(3) research and development, and engineering of its products. Motion Memo. at 4-9 (citing
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`Michael Decl.1l1]15-33).
`
`1. Domestic Manufacturing
`
`With respect to the manufacturing of domestic industry products, Mr. Michael explains
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`that “Rockwell’s_Contro1Logix® and most of its PanelView® product lines are manufactured,
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`5
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`
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`PUBLIC VERSION
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`assembled and tested entirely in Rockwe11’sTwinsburg, Ohio facility.” Michael Decl. 1115.3The
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`Twinsburgfacilityspansover-
`
`squarefeet and includesheavyequipmentusedfor
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`manufacturingRockwe11’sproducts. Id. 1118.The facility also houses-
`
`employees,
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`including-
`
`engineers,qualitycontrolanalysts,andtechniciansthatworkon the
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`C0ntro1L0gix® and PanelView® product lines. Id. ‘£11116-17.Mr. Michael further explains that
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`Michael Decl. $119.
`
`'
`
`Dr. Prowse relies on R0ckwe1l’s intemal tracking for expenditures attributed to the
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`C0ntrolLogix® and PanelView® product lines. Prowse Decl. {H19-11.For the C0ntr0lL0gix®
`productline,Dr.Prowseidentifies—
`capitalexpendituresand_
`labor
`
`expenditures at Twinsburg between FY 2013 and FY 2017. Id. W 12-13. For the Pane1View®
`productline,Dr.Prowseidentifies—
`capitalexpendituresand_
`labor
`
`expenditures at Twinsburg between FY 2013 and FY 2017. Id.
`
`2. Customer Support and Maintenance
`
`Withrespectto customersupportandmaintenance,Mr.Michaelstatesthat—
`
`Michael Decl. 1|22. For the Contro1Logix® product line, warranty expenditures were
`_
`fromFY2015toFY2017,a.ndrepairexpenditureswere
`—.
`ProwseDecl.1116.ForthePane1View®productline,warranty
`expenditureswere—
`inthesametimeframe,andrepairexpenditures
`
`3Rockwell notes that one of its PanclVicw® products is manufactured overseas, but costs
`associated with this product have not been counted in the motion. See Michael Decl. 1'34.
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`6
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`
`
`, PUBLIC VERSION
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`were
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`Id. For the CompactLogix® product line, warranty
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`expenditureswere—
`
`—-
`
`Id-'
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`inthistimefiarne,andrepairexpenditureswere
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`There are additional post-sale services performed by a Planned Labor Services group and
`
`a FieldLaborgroup.MichaelDecl.W23-24.Mr.Michaelexplainsthat_
`
`Id ‘H25
`
`Dr. Prowse allocated these expenditures based on the sales revenue for each domestic industry
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`product. Prowse Decl. W17-21. Between FY 2014 and FY 2017, the ControlLogix® product
`
`line accountedfor -
`
`of Rockwell’issales, the Compact/Logix®product line accountedfor
`
`2
`
`of sales,andthe PanelView®productlineaccountedfor2
`
`of sales. Id.fil2O.i
`
`Applying these allocations to Rockwell’s total planned labor and field labor expenditures
`
`hetweenFY2015andFY2017,Dr.ProwseestimatesthatRockwellincurred—
`
`plannedlaborand—
`
`fieldlaborfortheControlLogix®productline,_
`
`plannedlaborand—
`
`fieldlaborfortheCompact_Logix®productline,and
`
`—
`
`plannedlaborand_
`
`fieldlaborforthePanelView®productline.Id.1121.
`
`3. Research & Development
`
`Rockwell claims investments in research and development for the ControlL0giX®,
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`CompactLogix®,' and PanelView® product lines in its facilities in Milwaukee, Wisconsin and
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`Mayfield Heights, Ohio. Michael Decl. W29-32. For the ControlLogix® product line, all
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`hardware design and prototyping as well as software development is performed in the United
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`States, at both tho Milwaukee and Mayfield Heights facilities. Id. 1l29. For the PanelView®
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`product line, the vast majority of Rockwell’s research and development activities occur at the
`
`7
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`
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`PUBLIC VERSION
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`Milwaukee facility, including hardware, firmware, and software development.
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`Id. 1l3O.For the
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`CoinpactLogix® product line, design and development of hardware and firmware take place in
`
`the Mayfield Heights facility. Id.
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`Rockwell’s‘research and development investments are tracked by project and product line
`
`in the ordinary course of business. Michael Decl. 1l33. From FY 2015 to FY 2017, Rockwell
`
`invested
`productline,including:
`
`in research and development for the ControlLogix®
`internallaborcostsand=
`thirdparty
`
`services.ProwseDecl.1l24,Ex.3. Overthe sametimeperiod,Rockwellinvested—
`
`—
`
`—
`
`inresearchanddevelopmentforthePanelView®productline,including
`
`intemallaborcostsand—
`
`thirdpartyservices.Id. Rockwellinvested
`
`fortheCompactL0gix®productline,including—
`
`internallaborcostsand—
`
`thirdpartyservices.Id.
`
`B. Significance of Rockwell’s Investments
`
`Rockwell contends that it has satisfied the economic prong of the domestic industry
`
`requirement through significant employment of labor and capitalpursuant to subsection (B) of
`
`section 337(a)(3) and substantial investments in engineering and research and development
`
`pursuant to subsection (C). Motion Memo. at 10-18. The Commission has recently held,
`
`however, that all such expenditures may be counted under subsection (B). See Certain Solid
`
`State Storage Drives, Stacked Electronics Components, and Products Containing Same (“Solid
`
`State Storage Drives”), lnv. No. 337-TA-1097, Comni’n Op. at 14 (Jun. 29, 2018) (“[W]e find
`
`that the text of the statute, the legislative history, and Commission precedent do not support
`
`narrowing subsections (A) and (B) to exclude non-manufacturing activities, such as investments
`
`8
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`
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`PUBLIC VERSION
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`in engineering and research and development”). Accordingly, all of Rockwell’s asserted
`
`investments in the present motion will be cotmted together under subsection (B).
`
`Rockwell allocates its expenditures among different product lines and specific products
`
`protected by the asserted trademarks and copyrights. Motion Memo. at 10-18. This accords with
`
`the requirement that domestic industry expenditures be countedi“with respect to the articles
`
`protected by the patent, copyright, trademark, mask work, or design concerned.” 19 U.S.C. §
`
`1337(a)(3). Expenditures may be counted toward satisfaction of the domestic industry prong “as
`
`long as those investments pertain to the complainant’s industry with respect to the articles
`
`protected by the asserted IP rights.” Certain Television Sets, Television Receivers, Television
`
`Tuners, and Components Thereo)’,lnv. No. 337-TA-910, Cornm’n Op. at 68, 2015 WL 6755093,
`
`at *36 (Oct. 30, 2015); accord e.g., Certain Marine Sonar Imaging Devices, Including
`
`1
`
`Downscan and Sidescan Devices, Prods. Containing the Same, and Components Thereof Inv.
`
`No. 337-TA-921 (Comm’n Op. at 61) (“Navico’s allocation methodology reasonably
`
`approximates the warranty and technical customer support expenditures relating tothe LSS-l
`
`product”) (citing Certain Ground Fault Circuit Interrupters and Prods. Containing Same, lnv.
`
`No. 337-TA-739, Comm’n Op. at 74-75, 79-81 (June 8, 2012)). Accordingly, Rockwell’s claims
`
`will be separately addressed with respect to the asserted trademarks and copyrights, and the
`
`products claimed to embody the relevant intellectual property.
`
`1. Domestic Industry in Asserted Trademarks
`
`With respect to its trademark claims, Rockwell relies on investments in its
`
`ControlLogix®, CompactLogix®, and PanelVicw® product lines, all of which are asserted to
`
`embody each of the nine trademarks identified in Rockwell’s motion. Radwcll has withdrawn its
`
`opposition to Rockwell’s motion with respect to the asserted trademarks.
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`9
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`
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`PUBLIC VERSION
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`a) ControlL0gix® Products
`
`Relying on the expenditures that Dr. Prowse obtained directly from Rockwel1’s records
`
`thataretrackedbyproductline,Rockwellhasmade—
`
`capitalexpendituresand
`
`-
`
`laborexpendituresforthemanufactureof the ControlLogix®productlinebetweenFY
`
`2013 and FY 2017. Prowse Decl. 111112-13.Also, warranty expenditures for the Contr0lLogix®
`
`product line
`
`.
`
`from FY 20.15to FY 2017, and repair expenditures
`
`
`
`Id.1116.4Inaddition,Rockwellinvested3
`
`:
`
`in internallaborcosts for researchand developmentfor the ControlLogix®productline
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`from FY 2015 to FY 2017. Id. 1124.5Neither Radwell nor Staff challenge the reliability of these
`
`investments by Rockwell in manufacturing, service and repair, and research and development.
`
`As evidence of significance, Rockwell submits that the Contro1Logix® product line is
`
`manufactured entirely in the United States, and all hardware design and prototyping as well as
`
`software development
`
`is performed in the United States. Michael Decl. 111115,29. The
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`ControlLogix®product line accountedfor -
`
`of Rockwel1’ssales betweenFY 2014 and FY
`
`2017. Prowse Decl. 1120.Dr. Prowse performed an analysis comparing the domestic labor
`
`expenditures to the total cost of goods sold for two ControlLogix® products and found that the
`
`domesticlaborexpendituresaccountedfor -
`
`of the total costof oneproductand-
`
`of the
`
`cost of a second product. Id. 1130.Rockwell further contends that its investments are
`
`qualitatively significant because its customer support and maintenance includes engineers who
`
`4 Dr. Prowse also estimated expenditures on planned labor services and field labor using a sales
`allocation, Prowse Decl. 11117-21,but it is not clear that these estimates are reliable, as discussed
`infra in the context of the CompactLogix® products.
`
`thirdpattyservices,butas.discussedinfi/ainthe
`5Rockwellalsoidentifies_
`context of the CompactLogix® products, it is unclear from this record whether these third party
`services qualify as investments under subsection (B).
`
`110
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`
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`PUBLIC VERSION
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`assist customers in installing and running the products and its research and development includes
`
`engineers who conceive, design and develop the products. Motion Memo. at 12; Prowse Dec].
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`1134.
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`There is no genuine dispute with respect to the significance of Rockwell’s investments in
`
`manufacturing, service and repair, and research and development for the Contr0lLogix® product
`
`line. Theseinvestmentsare_
`
`dollarsandoccurentirelyintheUnitedStates,and
`
`sales of ControlLogix® products accounts for a significant proportion of Rockwell’s sales.
`
`Moreover, Dr. Prowse’s analysis shows Rockwell’s domestic labor expenditures account for
`
`I
`
`of the total manufacturingcost, which represents a “value added” consistentwith the
`
`amount recognized by the Commission in Certain Male Prophylactic Devices, Inv. No. 337-TA
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`546, Comm’n Op. at 43 (Aug. 1, 2007) (finding avalue added of 34%). These investments are
`
`thus quantitatively significant in the context of the manufacturing of the ControlLogix® product
`
`line and in the context of Rockwell’s overall business. See Solid Slate Storage Drives, Comnfn
`
`Op. at 30 (finding domestic industry investments to be significant where revenue from a product
`
`accounts for a significant proportion ofcomplainanfs total revenue). Rockwell’s evidence of
`
`qualitative significance further supports this conclusion. Accordingly, Rockwell’s investments
`
`in manufacturing, service and repair, and research and development are significant enough to
`
`establish a domestic industry with respect to the ControlLogix® product line under subsection
`
`(B) of section 337(a)(3).
`
`b) PanelVieW®Products
`
`Rockwell’s evidence for the PanelView® products is similar to that discussed above for
`
`theControlLogix®products.Rockwellhasmade_
`
`domesticcapitalexpenditures
`
`and—
`
`domesticlaborexpendituresforthemanufactureofthePanelView®
`
`ll
`
`
`
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`PUBLIC VERSION
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`product line between FY 2013 and FY 2017. Prowse Decl. 111112-13.Warranty expenditures for
`thePane1\/iew®productlineintheUnitedStateswere—
`fromFY
`
`2015 to FY 2017, and repair expenditures were
`
`Id. 1116.In addition,
`
`Rockwell invested
`
`in domestic labor costs for research and
`
`development for the PanelView® product line from FY 2015 to FY 2017. Id. 1124.Neither
`
`Radwell nor Staff challenge the reliability of these investments in the PanelView® products.
`
`2
`
`All but one of the PanelView® products is manufactured entirely in the United States.
`
`Michael Decl. 111115,34. The domestic R&D expenditures reflect the vast majority of
`
`Rockwell’s worldwide R&D expenditures for the PanelView® products. Id. 1130.The
`
`PanelView®product line accountedfor !
`
`of Rockwell’ssalesbetweenFY 2014 and FY
`
`2017. Prowse Decl. 1120.Dr. Prowse performed an analysis comparing the domestic labor
`
`expenditures to the total cost of goods sold for three PanelView® products and found that the
`
`domesticlaborexpendituresaccountedfor—
`
`ofthetotalcostofthese
`
`products. Id. 1130.Rockwell further contends that its investments are qualitatively significant
`
`because its customer support and maintenance includes engineers who assist customers in
`
`installing and running the products and its research and development includes engineers who
`
`conceive, design and develop the products. Motion Memo. at 12; Prowse Decl. 1134.
`
`R0ckWell’s investments in the PanelView® product line are smaller than its investments
`
`in the ControlLogix® product line, and the indicia of significance are also weaker. Nevertheless,
`
`the manufacturing expenses claimed by Rockwell correspond to PanelView® products that are
`
`manufactured entirely in the United States, and Dr. Prowse’s analysis shows a modest but
`
`substantial “value added” for Rockwell’s domestic labor investments. Accordingly, Rockwe1l’s
`
`investments in manufacturing are significant enough to establish a domestic industry in the
`
`12
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`PUBLIC VERSION
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`PanelView® product line under subsection (B) of section 337(a)(3). The expenditures on service
`
`and repair and research and development may not be significant on their own, but these
`
`additional investments further support this finding.
`
`c) CompactL0gix® Products
`
`The CompactLogix® products are not manufactured in the United States, and Rockwell
`reliesonwarrantyexpenditures_
`
`andrepairexpendituresI
`
`§
`
`—
`
`fromFY2015toFY2017.ProwseDecl.1116.Rockwellalsoidentifies
`
`internallaborcostsrelatedto researchanddevelopment.Id.1124.The
`
`CompactLogix®product lineaccounted for K
`
`of Rockwell’ssales betweenFY 2014 and
`
`FY 2017.
`
`Id. 1120.
`
`l
`
`Rocl<we11’sdomestic investments in the CompactLogix® products are small in
`
`comparison to the ControlLogix® and PanelView® products discussed above, but Rockwell and
`
`Staff still contend that these are significant. Motion Memo. at 10~12;Staff Resp. at 12-13.
`
`Rockwell’s and Staff’s calculations rely on counting some additional expenditures, including
`
`-
`
`additionalinvestmentsin serviceandrepaircomputedby Dr. Prowse’sapplicationof a
`
`sales allocation. Prowse Decl. 1121.Although the Commission has recognized that a sales-based
`
`allocation can be an appropriate Wayto allocate investments to a particular domestic industry
`
`product, it is not clear that this method is reliable here. See Certain Collapsible Socketsfor
`
`Mobile Electronics Devices and Components Thereof (“Collapsible Sockets”), lnv. No. 337-TA
`
`1056, Comm’n Op. at 16 (July 9, 2018) (“A sales-based allocation may be applied to determine,
`
`under each subsection, the investments ‘relating to the articles protect by the patent.’”). As
`
`argued by Radwell, Rockwell’s other service and repair expenditures are not proportional to
`
`sales revenue—while the sales revenue for the CompactLogix® and PanelView® products are
`
`13
`
`
`
`PUBLIC VERSION
`
`very similar, Rockwell’s own service and repair records show investments in the
`
`C0mpactLogix® product line that are ten times smaller than the amount invested for the
`
`PanelView® product line., Radwell_Opp. at 9-10. A different allocation method would likely
`
`reduce the claimed amounts by a substantial margin.
`
`i
`
`Rockwellalsoidentifies_
`
`thirdpartyservicesrelatedtoresearchand
`
`development of the CompactLogix® product line. Id. 1127,Ex. 3. But there is not enough
`
`l
`
`evidence in the record to determine whether these third parties provide qualifying “specialized
`
`services” or whether these third parties provide generic parts and supplies that do not qualify
`
`under subsection (B). Compare Solid Stare Storage Drives, Com1n’n Op. at 24-25 (recognizing
`
`payments to third parties under subsection (B) where the third parties “provide specialized
`
`‘
`
`services” rather than “off-the-shelf” products) to Collapsible Sockets, Comrn’n Op. at 18-19
`
`(rejecting payments to third party where the complainant “has not shown what portion of its
`
`payments [] pertains to labor or capital”). When viewed in the light most favorable to Radwell,
`
`these additional investments cannot be reliably cotmted as part of Rockwell’s domestic industry.
`
`Rockwell’s reply brief does not address the CompactLogix® products separately, and
`
`Dr. Prowse does not provide any quantitative analysis of the significance of Rockwell’s
`
`investments in the CompactLogix® products separate from the ControlLogix® and PanelView®
`
`products. Mr. Michael provides some qualitative evidence, explaining that the domestic research
`
`and development activities include design and development of hardware and firmware, and “[a]1l
`
`of the fundamental development, decisions and design for . . . CompactLogix® occurs in the
`
`United States.” Michael Decl. W30-31. Although Radwell has withdrawn its opposition to the
`
`motion with respect to the asserted trademarks, there is insufficient evidence in the record to
`
`14
`
`
`
`PUBLIC VERSION
`
`place the CompactLogix® investments in a relevant context to determine the significance of
`
`Rockwell’s domestic industry with respect to these products.
`
`Nevertheless, because the ControlLogix® and PanelView® products are asserted to
`
`practice each of the nine trademarks identified in Rockwell’s motion, Rockwell has satisfied the
`
`economic prong of the domestic industry requirement with respect to these trademarks.
`
`2. Domestic Industry in Asserted Copyrights
`
`Rockwell contends that the asserted copyrights are embodied in firmware used on
`
`particular ControlLogix® and CompactLogix® controllers. Motion Memo. at 3-4. As discussed
`
`above, Rockwell has failed to show that its investments with respect to the CompactLogix®
`
`products are significant, and Rockwell is relying on those same investments with respect to
`
`certain of the asserted copyrights. Accordingly, Rockwell has failed to carry its burden on the
`
`economic prong with respect to the asserted copyrights on firmware used in CompactLogix®
`
`controllers.
`
`P
`
`With respect to the firmware used on ControlLogix® controllers, Rockwell relies on
`
`Dr. Prowse to allocate its investments in the ControlLogix® product line among specific
`
`ControlLogix® products. Prowse Decl. 111129,36. Dr. Prowse applies a sales-based allocation to
`
`divide Rockwell’s total investments in the ControlLogix® product line among the
`
`C0ntrolLogix® L6, L7, and L8 products that use versions of the copyrighted firmware.
`
`Id. Dr. Prowse does not identify any source for the percentages he applies for these sales
`
`allocations, however, and it is unclear whether his calculations are reliable. When providing a
`
`sales allocation for planned labor and field labor, Dr. Prowse referenced Exhibit l attached to
`
`Rockwell’s motion, which shows sales volumes for all of Rockwell’s products, including
`
`products not asserted as part of the domestic industry in this investigation. See Prowse Decl.
`
`15
`
`
`
`PUBLIC VERSION .
`
`$120.In contrast, Rockwell did not attach any exhibit reporting sales figures for individual
`
`products within the ControlLogix® product line. As a result, there is no evidence in the record
`
`regarding the timeframe for the sales figures relied upon in Dr. Prowse’s allocation, or even
`
`whether the ControlLogix® L6, L7, and L8 products are the only ControlLogiX® products sold
`
`by Rockwell in the relevant timeframe. On this record, there is no way to determine whether
`
`Dr. Prowse’s allocations are accurate or reliable. This failure of proof in Rockwell’s allocations
`
`precludes summarydetermination with respect to the specific ControlLogiX®products that are
`
`alleged to embody the asserted copyrights.
`
`'
`
`IV.
`
`CONCLUSION
`
`For the reasons discussed above, Motion Docket No. 1074-O26is GRANTED-TN-PART
`
`and DENIED-IN-PART. Pursuant to Commission Rule 210.18(f), it is my initial determination
`
`that Rockwell has satisfied the economic prong of the domestic industry requirement with
`
`respect to the ControlLogix® and PanelView® products that are alleged to embody each of the
`
`nine trademarks identified in Rockwell’s motion. 19 U.S.C. .§210.l8(i). The motion is denied
`
`with respect to the CompactLogix® products and the individual ControlLogix® products alleged
`
`to embody the asserted copyrights.
`
`'
`
`0
`
`Pursuant to Commission Rule 210.42(h), the initial determination portion of this order
`
`shall become the determination of the Commission unless a party files a petition for review
`
`pursuant to Commission Rule 210.43(a), or the Commission orders, on its own motion, a review
`
`of the initial determination or certain issues herein pursuant to Commission Rule 210.44. 19
`
`C.F.R. §§ 210.4201), 210.43(a), 210.44.
`
`This order is being issued with a confidential designation, and pursuant to Ground Rule
`
`1.10, each party shall submit to the Administrative Law Judge a statement as to whether or not it
`
`16
`
`
`
`PUBLIC VERSION
`
`seeks to have any portion of this order deleted from the public version Withinseven (7) days.
`
`See 19 C.F.R. § 2l0.5(t). A party seeking to have a portion of the order deleted from the public
`
`version thereof must attach to its submission a copy of the order with red brackets indicating the
`
`portion(s) asserted to contain confidential business information.6 The parties’ submissions under
`
`this subsection need not be filed with the Commission Secretary but shall be submitted by paper
`
`copy to the Administrative Law Judge and by e-mail to the Administrative Law Judge’s attorney
`
`advisor.
`
`SO ORDERED.
`
`I
`Dee Lord
`Administrative Law Judge
`
`6Redactions should be limited to avoid depriving the public of the basis for understanding the
`result and reasoning underlying the decision. Parties who submit excessive redactions may be
`required to provide an additional written statement, supported by declarations from individuals
`with personal knowledge, justifying each proposed redaction and specifically explaining Whythe
`information sought to be redacted meets the definition for confidential business information set
`forth in Commission Rule 201.6(a). 19 C.F.R. § 201.6(a).
`
`17
`
`
`
`CERTAIN INDUSTRIAL AUTOMATION SYSTEMS AND
`COMPONENTS THEREOF INCLUDING CONTROL
`SYSTEMS, CONTROLLERS, VISUALIZATION
`HARDWARE, MOTION CONTROL SYSTEMS,
`NETWORIGNG EQUIPMENT, SAFETY DEVICES, AND
`POWER SUPPLIES
`
`-
`
`Inv. N0. 337-TA-1074
`
`'
`
`PUBLIC CERTIFICATE OF SERVICE
`
`I, Lisa R. Barton, hereby certify that the attached ORDER has been served by hand upon
`the Commission Investigative Attorney, Brian Koo, Esq., and the following parties as indicated,
`on 7/20/2018
`r
`,
`
`Lisa R. Barton, Secretary
`U.S. International Trade Commission
`500 E Street, SW, Room 112
`.
`Washington, DC 20436
`
`On Behalf of Complainants Rockwell Automation. Inc.:
`
`Adam D. Swain
`ALSTON & BIRD LLP
`950 F Street NW
`Washington, DC 20004
`
`On Behalf of Respondent Radwell International
`d/b/a PLC Center:
`
`Deanna Tanner Okun
`ADDUCI, MASTRIANI & SCHAUMBERG LLP
`1133 Connecticut Ave., NW
`Washington, DC 20036
`
`Respondents:
`
`Can Electric Limited
`No. 2 Danan Rd, Yueziu District
`Guangzhou, Guangdong, 510115
`China
`A
`
`Capnil (HK) Company Limited
`Unit 603 6/F Koon Wah Mirrow
`Factory 3 Ind Bldg 5-9 Ka Hing
`Rd Kin Hk
`.
`Hong Kong
`
`C
`
`|:l Via Hand Delivery
`El/Via Express Delivery
`III Via First Class Mail
`III Other:
`
`Cl Via Hand Delivery
`El/Via Express Delivery
`[1 Via First Class Mail
`U Other:
`
`Cl Via Hand Delivery
`lZ{ViaExpress Delivery
`III Via First Class Mail
`U Other:
`
`U Via Hand Delivery
`|l7{ViaExpress Delivery
`El Via First Class Mail
`U Other:
`
`.
`
`
`
`CERTAIN INDUSTRIAL AUTOMATION SYSTEMS AND
`COMPONENTS THEREOF INCLUDING CONTROL
`SYSTEMS, CONTROLLERS, VISUALIZATION
`HARDWARE, MOTION CONTROL SYSTEMS,
`NETWORKING EQUIPMENT, SAFETY DEVICES, AND
`POWER SUPPLIES
`.
`
`i Inv. N0. 337-TA-1074
`
`Certificate of Service —Page 2
`
`Fujian Dahong Trade Co., Ltd.
`A15-23 O3Taihongyu Pushang Road
`Cangshan Fuzhou Fujian
`Fujian 350008
`China
`
`Huang Wei Feng dfb/a A-O-M Industry
`Room 201 No. 55 2.Qu,
`Tdngshuiwei, Minzhi,
`Longhua, B0a’An, Shenzhen 511700
`China
`
`PLC-VIP Shop d/b/a VIP Tech Limited
`95 Fuk Wing Street,
`Cheung Sha Wan, Kowloon
`Hong Kong
`
`I
`
`'
`
`Wenzhou Sparker Group C0. Ltd.
`d/b/a Sparker Instmments
`Room 503, Oujiang Masion, Wenzhou Road,
`Wenzhou, 325000, China
`
`Yaspro Electronics (Shanghai) Co., Ltd.
`Roorn l808E,,No. 488, Vaohua Road
`Pudong New District
`Shanghai, China
`
`_
`
`El Via Hand Delivery
`IE’Via Express Delivery
`III Via First Class Mail
`U Other:
`
`l:] Via Hand Delivery
`[YlViaExpress Delivery
`1:]Via First Class Mail
`U Other:
`'
`
`l:l Via Hand Delivery
`El Via Express Delivery
`El Via First Class Mail
`II] Other:
`
`III Via»Hand Delivery
`Ij Via Express Delivery
`U Via First Class Mail
`l:| Oth
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