UNITED STATES INTERNATIONAL TRADE COMMISSION
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`Washington, D.C.
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`In the Matter of
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`CERTAIN FLOCKED SWABS, PRODUCTS
`CONTAINIG FLOCKED SWABS, AND
`METHODS OF USING SAME
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` Inv. No. 337-TA-1279
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`ORDER NO. 33:
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` INITIAL DETERMINATION TERMINATING INVESTIGATION
`AS TO STELLAR SCIENTIFIC, LLC; GRANTING JOINT
`MOTION TO LIMIT SERVICE OF CONFIDENTIAL
`SETTLEMENT AGREEMENT
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`(December 15, 2021)
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`On November 10, 2021, Complainants Copan Italia S.p.A. and Copan Industries, Inc.
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`(collectively, “Copan”) and Respondent Stellar Scientific, LLC (“Stellar”) filed a joint motion
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`(Mot. Dkt. No. 1279-027; EDIS Doc. ID 756335) to terminate this investigation as to Stellar
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`based upon settlement (“Mot. to Terminate”).1 On the same date, Copan and Stellar filed a joint
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`motion (Mot. Dkt. No. 1279-026; EDIS Doc. ID 756332) to limit service of the confidential
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`settlement agreement (“Mot. to Limit Service”). On November 22, 2021, the Office of Unfair
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`Import Investigation (“Staff”) filed a response (EDIS Doc. ID 757115) supporting both motions
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`(“Staff Resp.”). Although Copan and Stellar indicated that certain respondents “object[ed]” to
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`the motion to limit service of the confidential settlement agreement, no respondent filed a
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`1 Copan’s and Stellar’s Ground Rule 3.2 Certification states that “[n]o Respondent will take a
`position on the motion.” Mot. to Terminate at 1.
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`PUBLIC VERSION
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`response to either the motion to terminate or the motion to limit service of the confidential
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`settlement agreement.2 Mot. to Limit Service at 1 (internal quotation marks omitted).
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`I. MOTION TO TERMINATE
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`Under Commission Rule 210.21(a)(2), “[a]ny party may move at any time to terminate an
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`investigation in whole or in part as to any or all respondents on the basis of a settlement . . . .”
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`19 C.F.R. § 210.21(a)(2). In order to terminate the investigation on the basis of a settlement
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`agreement, the moving party or parties must file a motion to terminate with “copies of the
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`licensing or other settlement agreements, any supplemental agreements, any documents
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`referenced in the motion or attached agreements, and a statement that there are no other
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`agreements, written or oral, express or implied between the parties concerning the subject matter
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`of the investigation.” Commission Rule 210.21(b)(1) (19 C.F.R. § 210.21(b)(1)).
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`The joint motion complies with Commission Rule 210.21. In particular, the confidential
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`settlement agreement is attached to the motion to terminate as Exhibit B. The public version of
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`the settlement agreement is attached to the motion to terminate as Exhibit A.3 Copan and Stellar
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`“represent that there are no other agreements between them, whether written or oral, express or
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`implied, relating to the subject matter of this Investigation.” Mot. to Terminate at 2.
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`2 Respondents Wuxi NEST Biotechnology Co., Ltd.; NEST Scientific Inc.; NEST Scientific USA;
`Jiangsu Changfeng Medical Industry Co., Ltd.; BioTeke Corporation (Wuxi) Co., Ltd.; Fosun
`Pharma USA Inc. and Miraclean Technology Co., Ltd. “object[ed]” to the motion to limit service.
`Mot. to Limit Service at 1 (internal quotation marks omitted). The remaining respondents took no
`position regarding the motion. Id.
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`3 The settlement agreement is attached as Attachment 1 hereto.
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`When considering a motion to terminate based upon a settlement agreement, the
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`Commission Rules require the Administrative Law Judge to “consider and make appropriate
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`findings in the initial determination regarding the effect of the proposed settlement on the public
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`health 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, and U.S. consumers.” 19 C.F.R. § 210.50(b)(2). Copan
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`and Stellar submit that “termination of this Investigation as to Stellar at this stage of the
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`proceedings poses no threat to the public interest” and “will not have any adverse impact on the
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`public health and welfare and/or competitive conditions in the United States.” Mot. to Terminate
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`at 2, 3. Staff states that it “is not aware of any evidence that termination will prejudice or
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`adversely impact the public interest.” Staff Resp. at 2. The movants and Staff further note that
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`the public interest generally favors resolving litigation through settlement so as to conserve both
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`public and private resources. Mot. to Terminate at 2-3; Staff Resp. at 2. The undersigned finds
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`that termination of this investigation does not impose any undue burdens on the public health and
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`welfare, competitive conditions in the United States economy, production of like or directly
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`competitive articles in the United States, or United States consumers.
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`Accordingly, it is the Initial Determination of the undersigned that Copan’s unopposed
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`motion to terminate this investigation as to Stellar (1279-027) is hereby GRANTED.
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`Respondent Stellar Scientific, LLC is hereby terminated from this Investigation.
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`This Initial Determination, along with supporting documentation, is hereby certified to
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`the Commission. Pursuant to 19 C.F.R. § 210.42(h), this Initial Determination shall become the
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`determination of the Commission unless a party files a petition for review of the Initial
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`PUBLIC VERSION
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`Determination pursuant to 19 C.F.R. § 210.43(a), or the Commission, pursuant to 19 C.F.R.
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`§ 210.44, orders, on its own motion, a review of the Initial Determination or certain issues,
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`herein.
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`II. MOTION TO LIMIT SERVICE OF THE CONFIDENTIAL SETTLEMENT
`AGREEMENT
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`Copan and Stellar seek to limit service of the confidential version of the settlement
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`agreement to (1) Copan and Stellar, (2) undersigned, and (3) Staff. Mot. to Limit Service at 1.
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`Under Commission Rule 210.21(b)(2), “the administrative law judge may limit the service of the
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`agreements to the settling parties and the Commission investigative attorney.” 19 C.F.R. §
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`210.21(b)(2).
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`Copan and Stellar argue that good cause exists for limiting service of the unredacted
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`settlement agreement. Copan and Stellar submit that “Stellar is a vigorous competitor in the
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`flocked swab market in which the remaining Respondents also participate,” and that the
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`“confidential Agreement is competitively sensitive, because it contains both sensitive financial
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`terms and other provisions regarding a business agreement reached by the Settling Parties that
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`are not known to the public.” Mot. to Limit Service at 2. As a result, Copan and Stellar argue
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`that disclosure of the agreement to the other respondents “is likely to cause substantial harm to
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`each [settling] party’s competitive position.” Id. at 3. Copan and Stellar further submit that
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`“[d]isclosure to the remaining Respondents of the precise financial terms of the Agreement
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`between the Settling Parties could discourage further settlement, which would run contrary to the
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`strong public interest in promoting resolution of litigation through private agreements and
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`thereby conserving both private and Commission resources.” Id.
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`Staff supports Copan and Stellar’s motion to limit service of the confidential settlement
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`agreement. According to Staff, Copan and Stellar’s “stated justifications for limiting service,
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`and the categories of confidential information for which they seek to limit service, are both
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`consistent with those in prior investigations limiting service of confidential settlement
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`agreements.” Staff Resp. at 3-4 (citing Certain Machine Vision Software, Machine Vision
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`Systems, and Products Containing Same, Inv. No. 337-TA-680, Initial Determination
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`Terminating the Investigation, Order No. 17 at 6 (Oct. 26, 2009) (EDIS Doc. ID 413372);
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`Certain Variable Speed Wind Turbines and Components Thereof, Inv. No. 337-TA-641, Order
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`No. 14 at 4 (Oct. 23, 2008) (EDIS Doc. ID 312690)). Staff further notes that it “is unaware of
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`any strong countervailing interests that would justify the compulsory disclosure of the Stellar
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`Scientific settlement agreement in full to the remaining Respondents in this investigation.” Id. 4
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`For good cause shown, Copan and Stellar’s motion (Mot. Dkt. No. 1279-027) to limit
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`4 Copan’s and Stellar’s Ground Rule 3.2 Certification states that Respondents Wuxi NEST
`Biotechnology Co., Ltd.; NEST Scientific Inc.; NEST Scientific USA; Jiangsu Changfeng Medical
`Industry Co., Ltd.; BioTeke Corporation (Wuxi) Co., Ltd.; Fosun Pharma USA Inc. and Miraclean
`Technology Co., Ltd. “object” to the motion to limit service. Mot. to Limit Service at 1 (internal
`quotation marks omitted). None of these Respondents, however, filed a response to the motion
`supporting or explaining their objection.
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`service of the confidential settlement agreement is hereby GRANTED. Service of the
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`unredacted settlement agreement shall be limited to Copan, Stellar, and Staff.
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`SO ORDERED.
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`___________________________________
`Monica Bhattacharyya
`Administrative Law Judge
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`PUBLIC VERSION
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`ATTACHMENT 1
`ATTACHMENT1
`PUBLIC
`PUBLIC
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`SETTLEMENT AGREEMENT
`
`This Settlement and Agreement (“Agreement”) is made as of November __, 2021
`(“Effective Date”) between Copan Italia S.p.A., of Brescia, Italy, and its Affiliates (“Copan”),
`on the one hand, and Stellar Scientific, LLC, of Owings Mills, Maryland, and its Affiliates
`(“Stellar”), on the other hand. As used in this Agreement, “Party” refers to either Copan or
`Stellar, and “Parties” refers to Copan and Stellar collectively.
`
`WHEREAS, Copan filed a complaint entitled Certain Flocked Swabs, Products
`Containing Flocked Swabs, and Methods of Using Same, in the United States International Trade
`Commission on July 9, 2021, seeking to institute an investigation, which named Stellar
`Scientific, LLC as respondent; and an investigation pursuant to the complaint was instituted on
`August 27, 2021 as No. 337-TA-1297 (“ITC Proceeding”);
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`WHEREAS, the ITC Proceedings concern and address the importation into the United
`States and sale after importation into the United States of flocked swab(s) and/or any product(s)
`that contain at least one imported flocked swab as packaged for commercial sale;
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`WHEREAS, Copan’s complaint alleges that the flocked swabs infringe one or more
`claims of U.S. Patent Nos. 9,011,358; 9,173,779; and 10,327,741 (“Asserted Claims”):
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`WHEREAS, Copan and Stellar now desire to settle and resolve the dispute between them
`concerning the ITC Proceeding, on the terms and conditions set forth in this Agreement; and,
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`WHEREAS, Copan and Stellar desire and agree to expand their commercial relationship;
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`NOW, THEREFORE, in consideration of the above premises and the mutual agreements
`and other good and valuable consideration, the receipt and sufficiency of which are
`acknowledged by the Parties, the Parties intending to be legally bound, agrees as follows:
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`1.0
`
`DEFINITIONS
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`“Affiliates” means, with respect to a person, corporation, or other entity, any other
`1.1
`person, corporation or entity that directly or indirectly controls, or is controlled by, or is under
`common control with such corporation or entity. For the purposes of this definition, “control”
`means the ownership, directly or indirectly, of fifty percent (50%) or more of the voting equity of
`such entity, but such person, corporation, or entity shall be an Affiliate only for so long as such
`control exists.
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`“Accused Product” means (i) any flocked swab that is imported into the United
`1.2
`States, and/or (ii) any product that, as packaged for commercial sale in the United States,
`contains at least one flocked swab that was imported in the United States.
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`“Domestically Manufactured Products” means any flocked swab manufactured in
`1.3
`the United States, and/or any product that, as packaged for commercial sale in the United States,
`contains only flocked swab(s) that were manufactured in the United States.
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`1
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`PUBLIC VERSION
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`2.0
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`SALE AND DISTRIBUTION OF PRODUCT
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`No Sale or Distribution of Accused Products. Stellar agrees that as of the
`2.1
`Effective Date, Stellar will cease to market, advertise, offer for sale, and/or distribute Accused
`Products, unless authorized by Copan to do so; except that Stellar shall be entitled to exhaust
`Stellar’s existing inventory of Accused Products by no later than March 31, 2022. The existing
`inventory shall be the inventory of Accused Products in Stellar’s possession as of the Effective
`Date. Stellar agrees and acknowledgesthat a breach of Section 2.1 shall constitute a material
`breach of the agreement.
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`Nolater than fourteen
`Copan Product Presence in Stellar Website Catalogue.
`2.2
`(14) days after the Effective Date, Stellar shall add Copan catalog numbers and descriptions to
`their website catalog for the Copan products that are comparable to the Accused Products
`presently offered for sale on the website catalog. For each Accused Productthat Stellar ceases to
`offer for sale, in accordance with Section 2.1, Stellar agrees to provide on its website a link to a
`comparable Copanproduct.
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`Sale and Distribution of Domestically Manufactured Products. Copan agrees not
`2.3
`to seek to enjoin any third party from which Stellar procures or sources Domestically
`Manufactured Products. Copan further agreesthatit shall not seek damagesdirectly from Stellar
`related to, or resulting from, a claim of patent infringement concerning a Domestically
`Manufactured Product. Forclarity, this section applies exclusively to Stellar, and shall not be
`construed as providing any benefits or rights to any other third party from which Stellar procures
`or sources Domestically Manufactured Products, nor shall it be construed to exhaust or
`extinguish any available damagesarising outof, or resulting from, any such third-party’s
`infringement of a patent owned orassigned to Copan.
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`Sales and Inventory Disclosure; Requirements Forecasting. No later than seven
`2.4
`(7) days after the Effective Date:
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`2.4.1.
`fulfill the order as requested in the purchase order, and
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`If Stellar issues a purchase orderfor flocked swabs or products containing flocked
`2.5
`swabs to Copan, which provides,inter alia, a commercially reasonable lead time for Copan to
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`PUBLIC VERSION
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`3.0
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`COVENANT
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`Copanandits Affiliates covenant not to sue Stellar, or Stellar’s downstream
`3.1
`distributors and customers, for a claim of patent infringement concerning the marketing,
`advertisement, offer for sale, importation, sale after importation, or distribution of Accused
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`Products within the United States for
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`Copan andits Affiliates release, acquit and forever discharge Stellar, together
`3.2.
`with Stellar’s Affiliates, predecessors, successors, agents, attorneys, insurers, servants,
`employees,officers, directors, distributors and customers(collectively, “Releasees”) from any
`andall actions, causes of action, claims or demands,liabilities, losses, damages, attorneys’ fees,
`court costs or other form of claim or compensation concernin
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`4.0
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`TERMINATION FROM ITC PROCEEDING
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`Promptly uponfull execution of the Agreement, the Parties agreeto file jointly a
`4.1.
`Motion to Terminate Pursuant to Settlement Agreement, which shall request the dismissal ofall
`allegations and claimsasserted against Stellar in the ITC Proceeding.
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`5.0
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`TERM AND TERMINATION
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`This Agreementshall not be binding on the Parties until it has been signed below
`5.1
`by both Parties, at which timeit shall be deemed effective as of the Effective Date. The
`Agreementshall remain in full force and effect until April 1, 2024. At that time, the releases of
`Section 3.1 and 3.2 shall remain in effect in perpetuity.
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`Other thanasset forth Section 5.1, this Agreement may only be terminated by
`5.2.
`mutual written agreementof the Parties.
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`6.0
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`ASSIGNABILITY
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`Neither Party may grant or assign any rights or delegate any duties under this
`6.1
`Agreement to any third party without the prior written consent of the other, and any attempted
`assignment without such consent shall be null and void.
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`7.0
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`CONFIDENTIALITY
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`Except to the extent required by any applicable securities regulation or accounting
`7.1
`rule, the Parties agree that the terms and provisions of this Agreement shall be kept confidential,
`and shall not be disclosed in any manner. The Parties agree, however, that if asked by a third-
`party about Stellar and the ITC Proceedings, the Parties may respond that the Parties have
`resolved the dispute between them and have agreed on an expanded commercial relationship
`going forward; and that Stellar has agreed to cease importing, distributing, an/or offering for sale
`the Accused Products within the United States. Each Party shall also have the right, at its sole
`discretion, to issue a press release, subject to the terms and restrictions of this section.
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`If either Party receives a subpoena or discovery order from a court or
`7.2
`agency of competent jurisdiction, compliance with which would require the production of this
`Agreement, the receiving Party shall give the other Party to this Agreement at least ten (10)
`business days advance notice of its intent to comply with the subpoena or discovery order, so
`that the non-receiving Party may take whatever steps it deems necessary to protect the
`confidentiality of this Agreement.
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`8.0
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`NOTICE
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`All notices required or permitted to be given in accordance with this Agreement
`8.1
`shall be in writing and shall be deemed delivered (i) upon receipt if delivered by hand, (ii) the
`next business day after being sent by prepaid, nationally-recognized , overnight air courier or
`service, (iii) five (5) business days after being sent by registered or certified mail, return receipt
`requested and postage prepaid, or (iv) upon transmittal when transmitted by electronic mail with
`confirmation of receipt.
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`8.2 All notices shall be addressed as follows:
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`8.2.1 For Stellar Scientific, LLC:
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`James B. Astrachan
`Astrachan Gunst Thomas, P.C.
`One South Street
`19th Floor
`Baltimore, MD 21202
`410.783.3550
`(jastrachan@agtlawyers.com)
`
`Kenneth Golub, Chief Executive Officer
`Stellar Scientific, LLC
`10715 Red Run Boulevard
`Suite 111-112
`Owings Mills, MD 21117
`410-764-2225
`(kennyg@stellarscientific.com)
`
`4
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`8.2.2 For Copan:
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`James M. Wodarski
`Mintz Levin
`One Financial Center
`Boston, MA 02111
`617.348.1855
`(jwodarski@mintz.com)
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`9.0 MISCELLANEOUS
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`Lorenzo Fumagalli, General Counsel
`Copan Group
`Via Francesco Perotti, 10, 25125
`Brescia, BS, Italia
`+39 030 2687203
`(Lorenzo.Fumagalli@copangroup.com)
`
`The Agreement may be executed in several counterparts, each of which is deemed
`9.1
`to be an original but all of which constitute one and the same instrument.
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`Each Party and its counsel have reviewed and approved the Agreement, and
`9.2
`accordingly any presumption or rule of construction permitting ambiguities to be resolved
`against the drafting party shall not be employed in the interpretation or application of the
`Agreement.
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`The headings inserted into this Agreement are for reference only and are not
`9.3
`intended to form any part of the operative portion of the Agreement, and they shall not be
`employed in the interpretation or application of the Agreement.
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`The Agreement shall be construed, and the relationship of the Parties determined,
`9.4
`in accordance with the laws of the State of New York, notwithstanding any choice-of-law
`principle that might dictate the use of a different governing law.
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`Agreement to Arbitrate. The Parties agree that any and all disputes arising out of,
`9.5
`or resulting from, or related to, this Agreement, shall be resolved through arbitration before a
`single arbitrator, under the auspices of the American Arbitration Association, and in accordance
`with the AAA Commercial Arbitration Rules. The location of the arbitration hearing shall be
`New York, New York. For clarity, the Parties understand and agree that this arbitration
`provision shall be given its broadest possible interpretation and scope. The prevailing Party in
`any arbitration proceeding shall be entitled to an award of its attorneys’ fees and costs associated
`with the arbitration.
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`SIGNATURES ON THE FOLLOWING PAGE
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`5
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`PUBLIC VERSION
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`IN WITNESS WHEREOF,this Agreementhas been duly executed by the Parties to be
`effective as of the Effective Date.
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`COPANITALIA, §
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`Its:|Chief Executive Officer
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`STELLARSCIENTIFIC, LLC,
`By: Keateth Golub
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`Name: Kenneth Golub
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`Dated: 11/1/2021
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