Public Version
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`UNITED STATES INTERNATIONAL TRADE COMMISSION
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`Washington, D.C.
`
`
`In the Matter of
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`CERTAIN VAPORIZER CARTRIDGES AND
`COMPONENTS THEREOF
`
`
`Inv. No. 337-TA-1211
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`
`
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`ORDER NO. 40:
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`
`
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`I.
`
`BACKGROUND
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`INITIAL DETERMINATION GRANTING JOINT MOTION
`TO TERMINATE THE INVESTIGATION WITH RESPECT
`TO RESPONDENT ECIG-CITY [MOTION DOCKET NO.
`1211-038]
`
`(February 1, 2021)
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`The Commission instituted this Investigation on August 14, 2020. 85 Fed. Reg. 49679
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`(Aug. 14, 2020). The Investigation was instituted based upon a Complaint filed on July 10, 2020
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`by Complainant Juul Labs, Inc. (“Complainant” or “JLI”) against, inter alia, Respondent eCig-
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`City (“Respondent” or “eCig-City,” and with Complainant, the “Settling Parties”).1 (See, e.g.,
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`Compl. at ¶¶ 14, 17.). Complainant accused eCig-City of violating Section 337 of the Tariff Act
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`of 1930, as amended (19 U.S.C. § 1337), based on the sale for importation into the United States,
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`the importation into the United States, or the sale after importation into the United States of
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`products alleged to infringe four (4) U.S. design patents (“Asserted Design Patents”). (Compl. at
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`¶ 10.).
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`On December 9, 2020, pursuant to Commission Rule 210.21(c)(1)(ii), JLI and eCig-City
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`1 The Complaint was supplemented on July 21, 2020 and July 31, 2020. (See Doc. ID Nos. 715095 (July
`21, 2020), 716127 (July 31, 2020).). The supplements did not alter the substance of the Complaint in any
`way.
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`filed a confidential and a public version of their joint motion to terminate this Investigation
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`(“Motion”) with respect to eCig-City based upon a consent order stipulation (“Stipulation”) and
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`a proposed consent order (“Proposed Order”). (Motion Docket No. 1211-038; Doc. ID No.
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`727569 (Dec. 9, 2020); Doc. ID No. 727571 (Dec. 9, 2020).).
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`On December 21, 2020, Commission Investigative Staff (“Staff”) filed a response (“Staff
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`Response”) in support of the confidential and public versions of the Settling Parties’ Motion.
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`(Doc. ID No. 728629 (Dec. 21, 2020).).
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`II.
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`APPLICABLE LAW
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`Commission Rule 210.21(a)(2) provides that “[a]ny party may move at any time to
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`terminate an investigation in whole or in part as to any or all respondents on the basis of a . . .
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`consent order.” 19 C.F.R. § 210.21(a)(2). A motion to terminate on the basis of a consent order
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`must be submitted “with a stipulation that includes a proposed consent order.” 19 C.F.R.
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`§ 210.21(c)(1)(ii). In addition, such a motion must include: (i) “copies of any licensing or other
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`settlement agreement, any supplemental agreements;”2 and (ii) “a statement that there are no
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`other agreements, written or oral, express or implied between the parties concerning the subject
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`matter of the investigation.” 19 C.F.R. § 210.21(c).
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`Commission policy generally “favors settlement to avoid needless litigation and to
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`conserve public resources.” Certain Access Control Sys. and Components Thereof, Inv. No. 337-
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`TA-1016, Order No. 36 at 3 (Oct. 17, 2017). Termination based on a consent order is routinely
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`granted when the requirements for a consent order are satisfied by the participating parties. See,
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`e.g., Certain Insect Traps, Inv. No. 337-TA-498, Order No. 9 at 5 (Apr. 9, 2004).
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`2 If the license or other settlement agreement contains confidential business information, a public
`version of the agreement must also be attached. 19 C.F.R. § 210.21(c).
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`Commission Rule 210.21(c)(3)(i) provides that a consent order stipulation must include
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`the following:
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`
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`(A) An admission of all jurisdictional facts;
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`(B) A statement identifying the asserted patent claims, copyright, trademark, mask work,
`boat hull design, or unfair trade practice, and whether the stipulation calls for cessation of
`importation, distribution, sale, or other transfers (other than exportation) of subject
`articles in the United States and/or specific terms relating to the disposition of existing
`U.S. inventories of subject articles[;]
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`(C) An express waiver of all rights to seek judicial review or otherwise challenge or
`contest the validity of the consent order;
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`(D) A statement that the signatories to the consent order stipulation will cooperate with
`and will not seek to impede by litigation or other means the Commission’s efforts to
`gather information under subpart I of this part;
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`(E) A statement that the enforcement, modification, and revocation of the consent order
`will be carried out pursuant to subpart I of this part, incorporating by reference the
`Commission’s Rules of Practice and Procedure;
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`(F) A statement that the signing thereof is for settlement purposes only and does not
`constitute admission by any respondent that an unfair act has been committed, if
`applicable; and
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`(G) A statement that the consent order shall have the same force and effect and may be
`enforced, modified, or revoked in the same manner as is provided in section 337 of the
`Tariff Act of 1930 and this part for other Commission actions, and the Commission may
`require periodic compliance reports pursuant to subpart I of this part to be submitted by
`the person entering into the consent order stipulation.
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`19 C.F.R. § 210.21(c)(3)(i).
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`In addition, when alleged unfair acts relate to intellectual property rights, a consent order
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`stipulation must also include the following:
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`(A) A statement that the consent order shall not apply with respect to any claim of any
`intellectual property right that has expired or been found or adjudicated invalid or
`unenforceable by the Commission or a court or agency of competent jurisdiction,
`provided that such finding or judgment has become final and nonreviewable; [and]
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`(B) A statement that each signatory to the stipulation who was a respondent in the
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`investigation will not seek to challenge the validity of the intellectual property right(s), in
`any administrative or judicial proceeding to enforce the consent order.
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`19 C.F.R. § 210.21(c)(3)(ii).
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`Finally, a consent order stipulation must include a proposed consent order that, pursuant
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`to Commission Rule 210.21(c)(4), includes the following:
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`(i) A statement of the identity of complainant, the respondent, and the subject articles,
`and a statement of any allegation in the complaint that the respondents sell for
`importation, import, or sell after importation the subject articles in violation of section
`337 by reason of asserted patent claims, copyright, trademark, mask work, boat hull
`design, or unfair trade practice;
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`(ii) A statement that the respondents have executed a consent order stipulation (but the
`consent order shall not contain the terms of the stipulation);
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`(iii) A statement that the respondent shall not sell for importation, import, or sell after
`importation the subject articles, directly or indirectly, and shall not aid, abet, encourage,
`participate in, or induce the sale for importation, the importation, or the sale after
`importation except under consent, license from the complainant, or to the extent
`permitted by the settlement agreement between complainant and respondent;
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`(iv) A statement, if applicable, regarding the disposition of existing U.S. inventories of
`the subject articles[;]
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`(v) A statement, if applicable, whether the respondent would be ordered to cease and
`desist from importing and distributing articles covered by the asserted patent claims,
`copyright, trademark, mask work, boat hull design, or unfair trade practice;
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`(vi) A statement that respondent shall be precluded from seeking judicial review or
`otherwise challenging or contesting the validity of the Consent Order;
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`(vii) A statement that respondent shall cooperate with and shall not seek to impede by
`litigation or other means the Commission’s efforts to gather information under subpart I
`of the Commission’s Rules of Practice and Procedure, 19 CFR part 210;
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`(viii) A statement that [r]espondent and its officers, directors, employees, agents, and any
`entity or individual acting on its behalf and with its authority shall not seek to challenge
`the validity or enforceability of the claims of the asserted patent claims, copyright,
`trademark, mask work, boat hull design, or unfair trade practice in any administrative or
`judicial proceeding to enforce the Consent Order;
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`(ix) A statement that when the patent, copyright, trademark, mask work, boat hull design,
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`or unfair trade practice expires the Consent Order shall become null and void as to such;
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`(x) A statement that if any claim of the patent, copyright, trademark, mask work, boat
`hull design, or other unfair trade practice is held invalid or unenforceable by a court or
`agency of competent jurisdiction or as to any articles that has been found or adjudicated
`not to infringe the asserted right in a final decision, no longer subject to appeal, this
`Consent Order shall become null and void as to such invalid or unenforceable claim; and
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`(xi) A statement that the investigation is hereby terminated with respect to the
`respondent; provided, however, that enforcement, modification, or revocation of the
`Consent Order shall be carried out pursuant to Subpart I of the Commission’s Rules of
`Practice and Procedure, 19 CFR part 210.
`
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`19 C.F.R. § 210.21(c)(4).
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`The proposed consent order may not include terms beyond or inconsistent with those set
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`forth by Commission Rule 210.21(c)(4). Id.
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`III. ANALYSIS
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`The Motion requesting termination of the Investigation as to all asserted claims against
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`eCig-City should be granted because eCig-City satisfied the requirements set forth in
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`Commission Rules 210.21(c)(3) and 210.21(c)(4).
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`eCig-City has executed a Stipulation, attached as Exhibit A to the Motion that complies
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`with Commission Rule 210.21(c)(3). (Mot. at Ex. A.). The Stipulation incorporates a Proposed
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`Order, attached as Exhibit B to the Motion, that complies with Commission Rule 210.21(c)(4).
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`(Id. at Ex. B.). The Proposed Order does not appear to have terms beyond, or materially
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`inconsistent with, those provided for in Commission Rule 210.21(c)(4). (Id.). The Settling
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`Parties have also attached to their Motion confidential and non-confidential (redacted) copies of
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`their Settlement Agreement, as Exhibit C. (Id. at Ex. C.). Finally, the Settling Parties state in the
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`Motion that “there are no other agreements, written or oral, express or implied, relating to the
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`subject matter of this Investigation.” (Mot. at 1.).
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`A.
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`Stipulation
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`In compliance with 19 C.F.R. § 210.21(c)(3)(i)(A), eCig-City stipulates that the
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`Commission has in rem jurisdiction over the subject matter of this Investigation, subject matter
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`jurisdiction over the allegations set forth in Complainant’s Complaint, and personal jurisdiction
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`over it for purposes of the Consent Order. (Stipulation, p. 2 at ¶ 1.).
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`In compliance with 19 C.F.R. § 210.21(c)(3)(i)(B), the Stipulation identifies the asserted
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`patent rights and provides that:
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`eCig-City . . . will not sell for importation, import into the United States or sell in
`the United States after importation . . . [certain] vaporizer cartridges and
`components thereof that infringe any of the claims of the Asserted Claims, except
`under consent or license from JLI.3
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`(Id., p. 1, p. 2 at ¶ 2.).
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`In compliance with 19 C.F.R. § 210.21(c)(3)(i)(C), eCig-City stipulates that it “expressly
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`waives all right to seek judicial review or otherwise challenge the validity of the Consent Order.”
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`(Id., p. 2 at ¶ 4.).
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`In compliance with 19 C.F.R. § 210.21(c)(3)(i)(D), eCig-City stipulates that it “will
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`cooperate with and will not seek to impede by litigation or other means the Commission’s efforts
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`to gather information under Subpart I of the Commission’s Rules of Practice and Procedure, 19
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`C.F.R. Subchapter C, Part 210.” (Id., p. 2 at ¶ 5.).
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`In compliance with 19 C.F.R. § 210.21(c)(3)(i)(E), eCig-City stipulates that
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`“enforcement, modification and revocation of the Consent Order will be carried out pursuant to
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`Subpart I of the Commission’s Rule of Practice and Procedure, 19 C.F.R. Subchapter C, Part
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`210.” (Id., p. 3 at ¶ 6.).
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`3 “Asserted Claims” was defined in page 1 of the Stipulation.
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`In compliance with 19 C.F.R. § 210.21(c)(3)(i)(F), eCig-City stipulates that “[t]he
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`signing of this Stipulation is for settlement purposes only and does not constitute admission by
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`eCig-City that an infringement of the Asserted Claims and/or an unfair act has been committed.”
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`(Id., p. 3 at ¶ 7.).
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`In compliance with 19 C.F.R. § 210.21(c)(3)(i)(G), eCig-City stipulates that “[t]he
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`Consent Order shall have the same force and effect and may be enforced, modified, or revoked in
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`the same manner as is provided in section 337 of the Tariff Act of 1930 and for this part for other
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`Commission actions” and that “the Commission may require periodic compliance reports
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`pursuant to subpart I of this part to be submitted by eCig-City.” (Id., p. 3 at ¶ 8.).
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`In compliance with 19 C.F.R. § 210.21(c)(3)(ii)(A), eCig-City stipulates that “if any
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`asserted patent claim has expired or is held invalid or unenforceable by a court or agency of
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`competent jurisdiction or if any article has been found or adjudicated not to infringe the asserted
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`right in a final decision, no longer subject to appeal, this Consent Order shall become null and
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`void as to such expired, invalid, or unenforceable claim or as to any adjudicated article.” (Id., p.
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`3 at ¶ 9.).
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`In compliance with 19 C.F.R. § 210.21(c)(3)(ii)(B), eCig-City stipulates that it “will not
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`seek to challenge the validity or enforceability of the patents that form the basis for the complaint
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`in any administrative or judicial proceeding to enforce the Consent Order.” (Id., p. 3 at ¶ 10.).
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`The Stipulation thus meets the requirements of Commission Rule 210.21(c)(3). 19
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`C.F.R. § 210.21(c)(3).
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`B.
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`Proposed Order
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`In compliance with 19 C.F.R. § 210.21(c)(4)(i), the Proposed Order identifies: (i)
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`Complainant Juul Labs, Inc.; (ii) Respondent eCig-City; and (iii) the subject articles as certain
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`vaporizer cartridges and components thereof that are alleged to infringe U.S. Design Patent No.
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`D842,536 (“the ’D536 patent”), U.S. Design Patent No. D858,870 (“the ’D870 patent”), U.S.
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`Design Patent No. D858,869 (“the ’D869 patent”), and U.S. Design Patent No. D858,868 (“the
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`’D868 patent”). (See Proposed Order, p. 1.).
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`In compliance with 19 C.F.R. § 210.21(c)(4)(ii), the Proposed Order provides that eCig-
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`City has executed a consent order stipulation. (Id.).
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`In compliance with 19 C.F.R. § 210.21(c)(4)(iii), the Proposed Order provides that eCig-
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`City “shall not sell for importation, import into the United States, or sell in the United States
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`after importation, directly or indirectly, or aid, abet, encourage, participate in, or induce the sale
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`for importation, importation into the United States or sale in the United States after importation
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`of certain vaporizer cartridges and components thereof that infringe any of the claims of the
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`Asserted Claims, except under consent or license from JLI.” (Id., pp. 1-2 at ¶ 1.).
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`The Proposed Order provides that eCig-City does not have any existing U.S. inventories
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`of vaporizer cartridges and components thereof. (Id., p. 2 at ¶ 6.).
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`In compliance with 19 C.F.R. § 210.21(c)(4)(vi), the Proposed Order provides that eCig-
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`City shall be precluded from seeking judicial review or otherwise challenging or contesting the
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`validity of the Consent Order. (Id., p. 2 at ¶ 3.).
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`In compliance with 19 C.F.R. § 210.21(c)(4)(vii), the Proposed Order provides that eCig-
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`City shall cooperate with and shall not seek to impede by litigation or other means the
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`Commission’s efforts to gather information under Subpart I of the Commission’s Rules of
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`Practice and Procedure, 19 C.F.R. Part 210. (Id., p. 2 at ¶ 4.).
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`In compliance with 19 C.F.R. § 210.21(c)(4)(viii), the Proposed Order provides that
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`eCig-City and its officers, directors, employees, agents and any entity or individual acting on its
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`behalf and with its authority shall not seek to challenge the validity or enforceability of the
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`Asserted Claims in any administrative or judicial proceeding to enforce the Consent Order. (Id.,
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`p. 2 at ¶ 5.).
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`In compliance with 19 C.F.R. § 210.21(c)(4)(ix), the Proposed Order provides that upon
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`expiration of any of the Asserted Design Patents, the Consent Order “shall become null and void
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`as to such expired patent.” (Id., p. 2 at ¶ 7.).
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`In compliance with 19 C.F.R. § 210.21(c)(4)(x), the Proposed Order provides that if any
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`claim of the Asserted Design Patents is held invalid or unenforceable by a court or agency of
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`competent jurisdiction or if any article has been found or adjudicated not to infringe the asserted
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`right in a final decision, no longer subject to appeal, this Consent Order shall become null and
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`void as to such invalid or unenforceable claim or adjudicated article. (Id., p. 3 at ¶ 8.).
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`In compliance with 19 C.F.R. § 210.21(c)(4)(xi), the Proposed Order states that the
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`Investigation is terminated with respect to eCig-City, provided, however, that enforcement,
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`modification, or revocation of the Consent Order shall be carried out pursuant to Subpart I of the
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`Commission’s Rules of Practice and Procedure, 19 C.F.R. Part 210. (Id., p. 3 at ¶ 10.).
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`The Proposed Order thus meets the requirements of Commission Rule 210.21(c)(4). 19
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`C.F.R. § 210.21(c)(4).
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`C.
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`Settlement Agreement
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`In addition to the Stipulation and Proposed Order, the Settling Parties have also entered
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`into a Settlement Agreement (Exhibit C). The Settling Parties’ public version of the Motion,
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`filed on December 9, 2020, has attached a redacted version of their Settlement Agreement that
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`complies with 19 C.F.R. § 201.6(a). (Doc. ID No. 727571 (Dec. 9, 2020).).
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`D.
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`Public Interest
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`Commission Rules require consideration and appropriate findings with respect to the
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`potential impact of any settlement or consent order on the public interest. 19 C.F.R.
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`§§ 210.50(b)(2), 210.21(c)(2)(ii). The Settling Parties have not submitted any information that
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`would indicate that termination of this Investigation with respect to Respondent eCig-City on the
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`basis of the Proposed Order and Settlement Agreement would be contrary to the public health
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`and welfare, competitive conditions in the U.S. economy, the production of like or directly
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`competitive articles in the United States, or U.S. consumers. See 19 U.S.C. § 1337(d). The
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`public interest generally favors termination of an investigation when it will avoid needless
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`litigation and conserve public and private resources. See, e.g., Certain Electronic Paper Towel
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`Dispensing Devices and Components Thereof, Inv. No. 337-TA-718, Order No. 25 at 4 (Dec. 1,
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`2010); Certain Compact Disc and DVD Holders, Inv. No. 337-TA-482, Order No. 11 at 3 (Mar.
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`7, 2003) (“termination of litigation under these circumstances as an alternative method of dispute
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`resolution is generally in the public interest.”); accord Certain Gel-Filled Wrist Rests and Prods.
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`Containing Same, Inv. No. 337-TA-456, Order No. 16, at 5 (May 21, 2002). Thus, there is no
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`apparent public interest reason why the Investigation should not be terminated.
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`V.
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`RECOMMENDATION
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`Because I know of no extraordinary circumstances that would prevent termination of this
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`Investigation with respect to eCig-City, it is my Initial Determination that for good cause shown,
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`and because it is in the public interest, that this Investigation be terminated with respect to eCig-
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`City, and that Motion Docket No. 1211-038 should be granted.
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`This Initial Determination is hereby certified to the Commission. Pursuant to 19 C.F.R.
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`§ 210.42(h), this Initial Determination shall become the determination of the Commission unless
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`a party files a petition for review of the Initial Determination pursuant to 19 C.F.R. § 210.43(a),
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`or the Commission orders on its own motion a review of the Initial Determination or certain
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`issues herein pursuant to 19 C.F.R. § 210.44.
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`SO ORDERED.
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`EXHIBIT A
` Consent Order Stipulation
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`

`

`(cid:22)(cid:16)(cid:12)(cid:21)(cid:8)(cid:7)(cid:1)(cid:20)(cid:21)(cid:4)(cid:21)(cid:8)(cid:20)(cid:1)(cid:12)(cid:16)(cid:21)(cid:8)(cid:19)(cid:16)(cid:4)(cid:21)(cid:12)(cid:17)(cid:16)(cid:4)(cid:14)(cid:1)(cid:21)(cid:19)(cid:4)(cid:7)(cid:8)(cid:1)(cid:6)(cid:17)(cid:15)(cid:15)(cid:12)(cid:20)(cid:20)(cid:12)(cid:17)(cid:16)(cid:1)
`UNITED STATES INTERNATIONAL TRADE COMMISSION
`(cid:24)(cid:4)(cid:20)(cid:11)(cid:12)(cid:16)(cid:10)(cid:21)(cid:17)(cid:16)(cid:2)(cid:1)(cid:7)(cid:3)(cid:6)(cid:3)(cid:1)
`WASHINGTON, D.C.
`(cid:1)
`(cid:5)(cid:30)(cid:31)(cid:38)(cid:39)(cid:30)(cid:1)(cid:41)(cid:33)(cid:30)(cid:1)(cid:11)(cid:38)(cid:37)(cid:38)(cid:39)(cid:26)(cid:27)(cid:35)(cid:30)(cid:1)(cid:15)(cid:26)(cid:39)(cid:45)(cid:13)(cid:38)(cid:26)(cid:37)(cid:1)(cid:15)(cid:28)(cid:16)(cid:26)(cid:36)(cid:26)(cid:39)(cid:26)(cid:1)
`Before the Honorable MaryJoan McNamara
`(cid:4)(cid:29)(cid:36)(cid:34)(cid:37)(cid:34)(cid:40)(cid:41)(cid:39)(cid:26)(cid:41)(cid:34)(cid:43)(cid:30)(cid:1)(cid:14)(cid:26)(cid:44)(cid:1)(cid:13)(cid:42)(cid:29)(cid:32)(cid:30)(cid:1)
`Administrative Law Judge
`
`
`(cid:28)(cid:55)(cid:63)(cid:46)(cid:60)(cid:61)(cid:50)(cid:48)(cid:42)(cid:61)(cid:50)(cid:56)(cid:55)(cid:1)(cid:32)(cid:56)(cid:7)(cid:1)(cid:12)(cid:12)(cid:16)(cid:6)(cid:37)(cid:21)(cid:6)(cid:10)(cid:11)(cid:10)(cid:10)(cid:1)
`Investigation No. 337-TA-l2l 1
`
`(cid:1)(cid:1)(cid:1)
`
`(cid:1) (cid:28)
`
`(cid:55)(cid:1)(cid:61)(cid:49)(cid:46)(cid:1)(cid:31)(cid:42)(cid:61)(cid:61)(cid:46)(cid:59)(cid:1)(cid:56)(cid:47)(cid:1)
`In the Matter of
`
`(cid:1)(cid:6)
`
`(cid:8)(cid:19)(cid:21)(cid:4)(cid:12)(cid:16)(cid:1)(cid:23)(cid:4)(cid:18)(cid:17)(cid:19)(cid:12)(cid:25)(cid:8)(cid:19)(cid:1)(cid:6)(cid:4)(cid:19)(cid:21)(cid:19)(cid:12)(cid:7)(cid:10)(cid:8)(cid:20)(cid:1)
`CERTAIN VAPORIZER CARTRIDGES
`(cid:4)(cid:16)(cid:7)(cid:1)(cid:6)(cid:17)(cid:15)(cid:18)(cid:17)(cid:16)(cid:8)(cid:16)(cid:21)(cid:20)(cid:1)(cid:21)(cid:11)(cid:8)(cid:19)(cid:8)(cid:17)(cid:9)(cid:1)
`AND COMPONENTS THEREOF
`
`(cid:1)(cid:1)
`
`
`
`(cid:6)(cid:17)(cid:16)(cid:20)(cid:8)(cid:16)(cid:21)(cid:1)(cid:17)(cid:19)(cid:7)(cid:8)(cid:19)(cid:1)(cid:20)(cid:21)(cid:12)(cid:18)(cid:22)(cid:14)(cid:4)(cid:21)(cid:12)(cid:17)(cid:16)(cid:1)
`CONSENT ORDER STIPULATION
`(cid:1)
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`WHEREAS, the United States International Trade Commission on August 10, 2020 (85
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`Fed. Reg. 49,679 (Aug. 14, 2020)), instituted the above-captioned investigation under Section
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`337 of the Tariff Act of 1930, as amended, (19 U.S.C. § 1337) based upon complaint filed by
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`Complainant Juul Labs, Inc. (“JLI”), which alleged unfair acts in the importation into the United
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`States, the sale for importation into the United States, and the sale within the United States after
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`importation of certain vaporizer cartridges and components thereof, by, among others,
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`Respondent eCig-City, (“eCig-City”), in violation of Section 337 with respect to the sole claim
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`of each of US. Patent Nos. D842,536 (“’536”), D858,870 (“’870”), D858,869 (“’869”),
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`D858,868 (“’868”) (collectively the “Asserted Claims”);
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`WHEREAS, eCig-City is willing to accept entry of the Consent Order submitted
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`concurrently herewith by the International Trade Commission and agrees to all waivers and other
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`provisions as required by 19 CPR. § 210.21; and
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`WHEREAS, eCig-City agrees to all terms set forth in the Consent Order.
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