UNITED STATES INTERNATIONAL TRADE COMMISSION
`WASHINGTON, DC 20436
`Before the Commission
`
`PUBLIC VERSION
`
`CERTAIN AGRICULTURAL
`VEHICLES AND COMPONENTS
`THEREOF
`
`1
`1
`1
`1
`\
`
`‘? 3
`Investigation No. 337-TA-487
`
`71
`.ih
`iri
`LJ
`
`FOR REVIEW
`PETITION
`
`Pursuant to 19 C.F.R. Ej 210.43(a)( l), Respondents Fitzpatrick Farms, Co-Ag
`
`LLC, J&T Farm, Inc. and Stanley Farm (collectively, “Fitzpatrick Farms Respondents”
`
`or ”Respondents”), petition the Commission for review of the Final Initial and
`
`Recommended Determinations (“Initial Determination”) issued by the Administrative
`
`Law Judge (“ALJ”) in the above investigation on January 13, 2004. The ALJ found a
`
`violation of Section 337 in the importation and sale of gray market Deere forage
`
`harvesters and telehandlers that infringe Deere’s United States trademarks in violation
`
`of Section 337. As shown in the supporting Memorandum attached, there are urgent
`
`and compelling reasons for Commission review of the Initial Determination: The ALJ
`
`misconstrues and misapplies the governing law; key findings of material fact are clearly
`
`erroneous; and Commission policy is adversely impacted.
`
`The Respondents respectfully urge that the Commission grant their Petition for
`
`Review and provide for additional briefing and oral argument pursuant to Commission
`
`Rules 210.43 (d)‘ to allow for a more particularized presentation of the issues herein.
`
`1
`
`19 C.F.R. 5 210.43(d) (2003).
`
`

`
`PUBLIC VERSION
`Respondents seek remand and/or reversal and vacation of the ALJ’s determination that
`
`Section 337 was violated.’
`
`Dated: January 26, 2004
`
`William A. Zeitler, Esq.
`Thompson Coburn LLP
`1909 K Street, N.W.
`Washington, DC 20006
`(202) 585-6900
`(202) 585-6969 (Facsimile)
`
`Counsel for Fitzpatrick Respondents
`
`19 U.S.C. 5 1337(a)( I)(C) (2003). In relevant part, this statute declares the following practice
`2
`unlawful:
`
`The importation into the United States, the sale for importation, or the sale within the United States
`after importation by the owner, importer, or consignee, of articles that infringe a valid and enforceable
`United States trademark registered under the Trademark Act of 1946.
`
`2268761
`
`- 2 -
`
`

`
`PUBLIC VERSION
`
`UNITED STATES INTERNATIONAL TRADE COMMISSION
`WASHINGTON, DC 20436
`
`Before the Commission
`
`CERTAIN AGRICULTURAL
`VEHICLES AND COMPONENTS
`THEREOF
`
`1
`1
`1
`
`Investigation No. 337-TA-487
`
`MEMORANDUM IN SUPPORT OF
`PETITION FOR REVIEW
`
`William A. Zeitler, Esq.
`Thompson Coburn LLP
`1909 K Street, N.W.
`Washington, DC 20006
`(202) 585-6900
`(202) 585-6969 (Facsimile)
`
`Counsel for Fitzpatrick Respondents
`
`2268761
`
`

`
`TABLE OF CONTENTS
`
`PUBLIC VERSION
`
`Page
`
`THE PARTIES SEEKING COMMISSION REVIEW OF THE INITIAL
`I.
`DETERMINATION ............................................................................................................... .1
`THERE ARE URGENT AND COMPELLING REASONS FOR
`11.
`COMMISSION REVIEW OF THE INITIAL DETERMINATION .................................... 2
`The ALJ misconstrues the legal standard applicable to gray market
`A.
`investigations ..............................................................................................................
`The ALJ’s findings of “material” differences are based on application of an
`1.
`erroneous legal standard. ........................................................................................................
`3
`The ALJ misinterprets the Federal Circuit’s holding in Gamut ............................. 5
`2.
`The ALJ misapplies the legal standard applicable to gray market
`B
`investigations ..............................................................................................................
`The ALJ erred in finding material differences where these differences are
`1.
`present in both the U.S. and European Version forage harvesters and
`telehandlers .............................................................................................................................
`The ALJ fails to address testimony by Deere’s key witness that consumers
`2.
`are indifferent to safety features. .......................................................................................... 11
`The ALJ erred in failing to address modifications made to European
`3.
`version forage harvesters subsequent to importation. .......................................................
`C.
`The findings of fact underlying the Initial Determination are clearly
`erroneous ..................................................................................................................
`There is no evidence that any differences between the U.S. Version and
`1.
`European Version forage harvesters are significant to the purchasing decision of
`consumers. .............................................................................................................................
`.15
`There is no evidence of consumer confusion ........................................................... 16
`2.
`The Initial Determination fails to address evidence that differences have
`3.
`been eliminated. ....................................................................................................................
`Findings of material differences based on warranty coverage and
`4.
`enrollment in the SIS system are unsupported by evidence in the record.. ....................
`The ALJ’s findings as to the sophistication of consumers is clearly
`5.
`erroneous and should be set aside ........................................................................................ 18
`D. The ALJ’s Initial Determination adversely affects Commission policy. ............ 20
`111. CONCLUSION ..........................................................................................................
`.2 1
`
`2
`
`8
`
`.8
`
`.13
`
`15
`
`.17
`
`.17
`
`

`
`PUBLIC VERSION
`
`UNITED STATES INTERNATIONAL TRADE COMMISSION
`WASHINGTON, DC 20436
`
`Before the Commission
`
`CERTAIN AGRICULTURAL
`VEHICLES AND COMPONENTS
`THEREOF
`
`1
`1
`1
`1
`1
`
`Investigation No. 337-TA-487
`
`MEMORANDUM IN SUPPORT OF
`PETITION FOR REVIEW
`
`I.
`
`THE PARTIES SEEKING COMMISSION REVIEW OF THE INITIAL
`DETERMINATION
`
`The parties seeking Commission review of the Initial Determination are four
`
`Respondents named in the Commission’s Notice of Investigation3 who
`participated in the proceedings before the ALJ. These Respondents are:
`
`A.
`
`B.
`
`C.
`
`Fitzpatrick Farms (Fitzpatrick)
`12210 Stone Road
`Fowler, MI 48835
`
`Co-Ag LLC (CO-&)
`894 County Road
`Theresa, WI 53091
`
`J &. T Farm, Inc. (J & T)
`370 Spring Grove Road
`Ephrata, PA 17522
`
`In the Matter of Certain Agncultural Vehicles and Components Thereof, Notice of Investigation
`3
`(Feb. 13, 2003) 68 Fed. Reg. 7388
`
`

`
`D.
`
`Stanley Farm (Stanley)
`3821 County Highway H
`Stanley, WI 54768
`
`PUBLIC VERSION
`
`Collectively styled the “Fitzpatrick Farms Respondents” or “Respondents, ” these
`
`parties are importers and dealers involved with both U.S. and European Version Deere
`
`self-propelled forage harvesters (hereinafter “U. S. Version forage harvesters” and
`
`“European Version forage harvesters”). Two of these Respondents (Fitzpatrick and
`
`Stanley Farm) at one time imported and sold telehandlers but have since ceased dealing
`
`with this product.
`
`The Respondents are also end-users, or consumers, of forage harvesters.
`THERE ARE URGENT AND COMPELLING REASONS FOR
`COMMISSION REVIEW OF THE INITIAL DETERMINATION
`
`11.
`
`A.
`
`The ALT misconstrues the legal standard applicable to gray market
`investigations
`
`The ALJ’s finding of “material” differences between the U.S. and European
`
`Version forage harvesters and telehandlers is based upon a clearly erroneous
`
`interpretation of the materiality standard. The applicable law on gray market products
`
`requires a showing, first, of differences, and, second, if differences are established, a
`
`further showing that these differences are “material.” If “material” differences are
`
`shown to exist, a likelihood of confusion is pre~umed.~
`
`Gamut Trading Co. v. United States International Trade Commission, 200 F3d 775, (Fed. Cir.
`
`4
`1999).
`
`

`
`1.
`
`PUBLIC VERSION
`The ALJ’s findings of ”material” differences are based on
`application of an erroneous legal standard.
`The ALJ found the following differences to be ”material” differences between
`
`U.S. and European Version forage harvesters: seat switches, lighting configurations,
`
`safety decals and warning labels, operators’ manuals, hydraulic lockouts, travel speed,
`
`seat belts, warranty coverage, participation in Deere’s Service Information System (SIS)
`
`and Product Improvement Programs (PIPS), towing hitches, back-up alarms, and
`
`cutterhead rotational alarms. The ALJ also found that load moment indicatorsfload
`
`charts constitute a “material” difference between U.S. and European Version
`
`telehandlers .
`
`It is not clear what legal standard the ALJ applied. Nothing in the record shows
`
`that these differences are sigmficant to the purchasing decisions of consumers. Nor
`
`does anything in the record support the view that these differences in any way
`
`contribute to confusion over the source and origin of the products at issue
`
`(ie.,
`
`whether a consumer is purchasing a U.S. or European Version forage harvester). The
`
`facts the AL,J cited (consisting essentially of isolated complaints and concerns over
`
`certain features) are not probative of either point. Respondents, themselves consumers
`
`of Deere’s forage harvesters, testified that neither they, nor their customers, are
`
`confused by the differences that Deere alleged are “material.’f5 The ALJ ignores this
`
`testimony.
`
`The evidence upon which he relied consists essentially of
`
`the
`
`A farmer seeking to invest in a forage harvester or telehandler will typically spend at least 2-3
`5
`hours during an initial visit with a dealer, sometimes up to half a day, and will return to a dealer’s place
`of business several times before actually purchasing a forage harvester or telehandler. (Fitzpatrick, Tr.
`1893:18-23; Reiff, Tr. 2055:7-10).
`
`-3-
`
`

`
`PUBLIC VERSION
`uncorroborated testimony of Deere officials and employees (none of whom was an end-
`
`user or consumer) .6 The ALJ disregarded Respondents’ arguments that affirmative
`
`evidence of actual consumer confusion, like that presented in Gamut, is necessary to
`
`establish that these differences result in a likelihood of consumer confusion. H e also
`
`disregarded Respondents’ arguments that a consumer survey is needed to establish a
`
`likellhood of confusion.
`
`Unsupported by any facts (1) showing that certain differences are ”material”
`
`differences significant to the decisions of consumers to purchase U.S. or European
`
`Version forage harvesters and telehandlers, or (2) showing that consumers are likely to
`
`be confused in their decisions to purchase U.S. or European Version forage harvesters
`
`and telehandlers, the ALJ’s determination cannot be upheld. This determination can
`
`result in the anomalous situation where, despite an absence of confusion over which
`
`products consumers are purchasing, consumers will nonetheless be presumed likely to
`
`be confused over the product they have purchased because the ALJ has found without a
`
`basis in the record that there are ”material” differences between the U.S. and European
`
`Version machines. T h s result is counterintuitive, contrary to principles underlying
`
`U.S. trademark law, defies Commission policy, and is confusing for the public.
`
`As seen below, the explanation for the deficiencies in, and lack of evidentiary
`
`support for, the ALJ’s determination may be found in the ALJ’s misinterpretation and
`
`misapplication of the law. Because the ALJ misconstrued the materiality standard,
`
`clearly erroneous and incomplete findings of fact pertaining to the differences alleged to
`
`6
`
`See e.g., Initial Determination at 28-31.
`
`-4-
`
`

`
`PUBLIC VERSION
`be material were adopted. This amounts to an abuse of discretion that significantly
`
`affects Commission policy as to gray market imports, and the public’s understanding of
`
`when a difference is, in fact, “material.”
`
`The ALJ misinterprets the Federal Circuit’s holding in Gamut.
`
`2.
`Although the ALJ cites Gamut as controlling precedent and professes to follow it
`in this case, he does not properly apply Gamut in his Initial Determination. The ALJ
`
`states:
`
`In Gamut Trading, the Federal Circuit concluded that the basic question
`in determining infringement in gray market cases concerning goods of
`foreign origin is “whether there are differences between the foreign and
`domestic product and if so whether the differences are material.” a. 200
`F.3d at 799. This conclusion was based on the Federal Circuit’s reference
`to court decisions which decisions were said to:
`
`Implement the reasoning that the consuming public,
`associating a
`trademark with goods having certain
`characteristics, would be likely to be confused or deceived by
`goods bearing
`the same mark but having materially
`different characteristics; this confusion or deception would
`also erode the goodwill achieved by the United States
`trademark holder’s business.
`An analysis of the Initial Determination shows that the ALJ misinterprets the
`
`requirements of Gamut. The “basic question” in Gamut is ”whether there are
`
`differences and if so whether the differences are material”’ Relief is proper only if the
`
`consuming public “would be likely to be confused or deceived by goods bearing the
`same mark but having materially different characteristic^."^ The primary focus in
`
`7
`
`8
`
`9
`
`Initial Determination at 22.
`
`Id.
`-
`
`- Id.
`
`-5-
`
`

`
`PUBLIC VERSION
`Gamut is thus on the materiality of the differences, not on the evidence of differences
`
`as such. Moreover, the key test is whether the consuming public is likely to be
`
`confused by the source or origm of the goods. Obviously, confusion over a feature that
`
`does not affect a consumer’s decision to purchase a U.S. or European Version forage
`
`harvester one way or another does not quallry as a “material” difference.
`
`The ALJ indicates that he is applying a “low” threshold of materiality in this
`
`case.” However, by collapsing the separate showings required under the law into a
`
`single unsupported conclusion that there are “material” differences between the U. S.
`and European Version forage harvesters,” the ALJ ignores the required nexus between
`
`the alleged differences and their impact on the purchasing decision of consumers. He
`
`also ignores the critical nexus between differences and the likelihood of confusion-a
`
`key element of trademark law. As it stands, the evidence in the record provides
`
`support for neither.
`
`The ALJ essentially uses evidence of mere differences to support an ultimate
`
`conclusion of “material” differences (and thus a presumption of a likelihood of
`
`confusion) without indicating how he concluded this.12 He thereby avoids malung
`
`separate findings supporting the positions that 1) the alleged differences are significant
`
`enough to affect the purchasing decisions of consumers, and 2) the alleged differences
`
`are of a type that demonstrate consumer confusion between the products. However,
`
`10
`
`11
`
`12
`
`Initial Determination at 27.
`
`Id. at 38-75.
`-
`
`Id.
`-
`
`-6-
`
`

`
`PUBLIC VERSION
`such findings are critical to any presumption that consumers are likely to be confused
`
`over which products they are purchasing.
`In effect, the ALJ reads the requirements of materiality and confusion out of
`
`U.S. trademark law. He dramatically lowers Complainants’ burden of proof in Section
`
`337 gray market cases to the point where Complainants must only prove the existence
`
`of differences.
`
`If allowed to stand, the Initial Determination will likely result in
`
`automatic affirmative determinations under Section 337 in future cases whenever a
`
`trademark holder establishes the existence of differences. This interpretation also
`
`invites findings of violations based on trivial differences that have no bearing on a
`
`consumer’s decision to purchase a product. As noted earlier, findings of violations
`
`could also be made even where it is otherwise established that there is no consumer
`
`confusion over which product is being purchased.
`
`The ALJ’s interpretation of the law is at odds with the very purposes of U. S.
`
`trademark law: (1) to avoid consumer confusion between the authorized domestic
`
`products and the gray market products, and (2) to maintain the goodwill of the
`
`trademark’s owner.
`
`-7-
`
`

`
`B.
`
`PUBLIC VERSION
`The ALT misapplies the legal standard applicable to grav market
`investigations.
`
`1.
`
`The ALJ erred in finding material differences where these
`differences are present in both the U.S. and European Version
`forage harvesters and telehandlers.
`
`The ALJ disregards the Fitzpatrick Farms Respondents' arguments that,
`
`although the U.S. and European Version forage harvesters may contain several distinct
`
`features when compared on a model-to-model basis, many authorized U.S. Version
`
`forage harvesters are no different than European Version forage harvesters as to certain
`
`features. Yet Deere maintains that these features nonetheless constitute "material"
`
`differences between European Version and other U.S. Version forage harvesters.
`Despite the contradictions in this argument, the ALJ erroneously finds that seatbelts,
`
`seat switches, cutterhead rotational alarms, and hydraulic lockout devices constitute
`
`"material" differences between U.S. and European Version forage harvester versions,
`
`and that load moment indicatorsAoad charts constitute "material " differences between
`
`U.S. and European Version telehandlers.
`The ALJ is wrong as a matter of law. Deere admits that, like the European
`
`Version forage harvesters, the 5000 series U.S. Version forage harvesters do not come
`
`equipped with factory installed seat belts.13 Similarly, like the European Version forage
`
`harvesters, the 5000 series U.S. Version forage harvesters sold by Deere in the United
`
`States have neither seat switches nor cutterhead rotational alarms in~ta1led.l~ The
`
`13
`
`14
`
`See, e.g., ComDlainant's Rehearing Statement at 23.
`
`Id.
`-
`
`-8-
`
`

`
`PUBLIC VERSION
`absence of differences between the 5000 series U.S. and European Version forage
`
`harvesters should be dispositive as to infringement by the 5000 series European
`
`Version forage harvesters based on those features. It should also weigh heavily against
`
`a finding of “material” differences between other (ie., 6000 series) U.S. Version and
`
`European Version forage harvesters with respect to the same features, because to the
`
`extent U. S. customers are confused, they are as likely to be confused by differences
`
`between the 5000 and 6000 series U.S. Version forage harvesters involving the same
`
`features as they are between the U.S. and European Version forage harvesters.
`
`Deere also alleges that the presence of a hydraulic lockout device on the
`
`European Version forage harvesters constitutes a “material” difference with U.S.
`
`Version forage harvesters. However, Respondents provided evidence that Deere’s 7000
`
`series U.S. Version self-propelled forage harvesters are now being sold to customers in
`
`the United States with the hydraulic lockout device.15 This eliminates any difference
`
`between the U.S. and European Version 7000 series forage harvesters as to t h s feature
`
`and should weigh heavily against any finding of infringement by other European
`
`Version forage harvesters based on differences concerning hydraulic lockout devices.
`However, the ALJ ignores Respondents’ arguments and finds ”material” differences
`
`between U.S. and European Version forage harvesters as to this feature.
`The ALJ also ignores Respondents’ arguments that the U.S. and European
`
`Version telehandlers are identical in that both versions come with load charts
`
`15
`
`Wiedmeyer, Tr. 201 l j Klassen, Tr.1284.
`
`-9-
`
`

`
`PUBLIC VERSION
`installed.” There can be no differences between the products in this situation
`(this
`feature is the only “material” difference the ALJ found as to telehandlers). That the
`
`European Version telehandlers also have a load moment indicators is irrelevant, since a
`
`load moment indicator is the full equivalent of a load chart.
`
`Clearly, if Deere’s authorized U.S. Version forage harvesters have (or lack) the
`
`same features that are alleged to constitute material differences when compared to
`
`European Version forage harvesters, the products are identical with respect to those
`
`features, and there can be no infringement. In such a case, any consumer confusion is
`
`created by Deere itself because it sells models of authorized U.S. Version forage
`
`harvesters in the United States that have the same features as European Version forage
`
`harvesters. There cannot as a matter of law be a finding of trademark infringement in
`
`such a case, because the products are identical with respect to those features.
`
`Commission Rule 210.42(d) requires the ALJ to make findings and conclusions
`
`as to “all material issues of fact, law, or discretion presented in the record . . .’I (19
`
`C.F.R. 210.42(d)). By ignoring the arguments of the Fitzpatrick Respondents, the ALJ
`
`fails to meet the requirements of this rule. Dispositive of four key “material”
`
`differences upon which the ALJ relied, the aforementioned arguments and evidence in
`support thereof are clearly “material” issues that the ALJ should have considered in his
`
`Initial Determination.
`
`16
`
`Fitzpatrick, Tr. 193 1.
`
`-10-
`
`

`
`2.
`
`PUBLIC VERSION
`The ALJ fails to address testimony by Deere’s key witness that
`consumers are indifferent to safety features.
`
`Deere’s case is essentially built on the testimony of Timothy Meister, a Division
`
`Marketing Manager for Deere. Meister is neither a technical nor legal expert. He has a
`
`bachelor’s degree in general studies and an MBA.” Notwithstanding, the ALJ
`
`unconditionally accepts Meister’s opinion testimony concerning U.S. standards and
`
`regulations, European regulations, the production process involved in producing forage
`
`harvesters in Germany, and mechanical specifications. As the ALJ noted, “[tlhe
`
`administrative law judge finds Meister’s testimony, which is based on Meister’s
`
`experience, credible and that it should be given full weight (emphasis supplied).”
`
`Although Timothy Meister, Deere’s key witness in this proceeding, clearly
`
`testified during his deposition that consumers do not think safety features are
`
`important to consumer^,'^ the ALJ erroneously disregards this testimony and finds
`
`“material” differences in the following safety features: (1) seat switches, (2) safety decals
`
`17
`
`18
`
`19
`
`Initial Determination at 35.
`
`Id. at 37.
`-
`
`During his deposition, Meister testified as follows:
`
`Are you aware of any customer complaints or concerns with
`Q.
`respect to a European Version forage harvester’s failure to have a slow-
`moving vehicle sign?
`Customers do not usually complain about safety
`A.
`noncompliance, no.
`Q.
`So the answer is no with respect to that?
`Correct.
`A.
`Q.
`So are you aware of whether the presence or absence of a slow-
`moving vehicle sign is significant to a consumer’s purchasing decision
`with respect to European Version forage harvesters versus U.S. Version
`forage harvesters?
`In repeat of my former answer: usuallv, safetv items are not
`A.
`simificant to the customer. (Emphasis supplied)
`
`-1 1-
`
`

`
`PUBLIC VERSION
`and warning labels, (3) seat belts, (4) cutterhead rotational alarms, (5) lighting
`
`configurations, (6) back-up alarms, (7) operator’s manuals, (8) safety PIP’S, and (9) the
`
`hydraulic
`
`As a matter of law, the ALJ cannot decide that Meister’s testimony should “be
`
`gven full weight”21 and simultaneously refuse to consider key elements of Meister’s
`
`testimony that support Respondents’ case2’.
`As in the preceding section, the ALJ has not complied with the requirements of
`
`Section 210.42(d). The ALJ relies on Meister’s testimony but does not address the
`
`issue of whether the rest of Meister’s testimony is undermined by his statement that
`
`consumers do not believe safety features are important, or whether his deposition
`
`testimony supports Respondents’ argument that safety features Deere alleged to be
`
`“material” differences actually are insignificant to consumers. By
`ignoring this
`testimony, the ALJ fails to address “material issues of fact, law or discretion presented
`
`in the record.” A fair assessment of Meister’s testimony should have resulted in a
`
`finding of no “material” differences between the U.S. and European Version forage
`
`harvesters with respect to the eight items listed.
`
`Meister, Tr. 2169:3-5; Tr. 2406:l-2, 6-12, 20-22; JX-172, Meister Deposition at 238:4-18.
`
`20
`
`21
`
`Initial Determination at 38-61, 67-71, and 73-75.
`
`Id. at 37
`-
`
`While an appellate court could not make a determination as to the credibility of a witness, it is
`22
`permissible to point out that the testimony of a witness is ”blatantly inconsistent.” U.S. v. Jones, 49
`F.3d 628, 634 (loth Cir. 1995).
`
`-12-
`
`

`
`PUBLIC VERSION
`
`3.
`
`The ALJ erred in failing to address modifications made to
`European version forage harvesters subsequent to importation.
`
`Although Respondents argue that modifications made to European Version
`
`forage harvesters subsequent to importation but prior to sale are relevant to the issue of
`whether there are “material” differences between the products, the ALJ does not
`
`address modifications made to European Version forage harvesters in his Initial
`
`Determination.
`
`The Initial Determination, citing the Commission’s Opinion in Tractors, 23
`
`states only that “for purposes of establishng a violation of section 337, the question of
`
`whether an item is infringing should be determined “at the time of its importation and
`
`sale, not in some later point in time.”24 This statement does not appear to be a
`
`limitation on the Commission’s jurisdiction. Rather, this statement is consistent with
`
`Commission policy to decide each case on its own merits.
`
`The ALJ’s position that the Commission may not reach beyond the point of
`
`importation to determine the existence of differences, material or otherwise, is not
`
`supported by a reading of Section 337. The statute broadly grants the Commission
`
`jurisdiction over the importation and domestic sale of the imported
`
`Clearly,
`
`the relevant time for assessing the existence of material differences in gray market
`
`Certain Aaicultural Tractors Under 50 Power Take-Off HorseDower, Inv. No. 337-TA-380,
`23
`Commission Opinion (March 5, 1997), USITC Pub. 3026 (March 1997).
`
`24
`
`25
`
`Initial Determination, at 24.
`
`19 U.S.C. § 1337(a)(l)(C).
`
`-13-
`
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`PUBLIC VERSION
`cases should be at the time of sale, rather than at the time of import. It is at the point
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`of sale when the products are sold to customers. This is the time when customer
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`expectations are formed, and when any customer confusion, if it exists, will be found.
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`Respondents provided evidence that European Version forage harvesters are (and
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`have been) modified to conform to North American homologation standards prior to
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`sale to the customer.26 In some cases, Deere admitted that it is possible to make these
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`modifications. According to Respondents, most of these modifications were made, not
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`in an effort to remedy or mitigate “material” differences because consumers find them
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`confusing, but as a part of the detailing process Respondents undertake to sell an
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`attractive, and clean used vehicle. Such modifications are made to the safety decals
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`and warning labels. New Enghsh language operating manuals appropriate for the
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`particular forage harvester are also provided with the machines.
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`In other cases, Respondents make post-import, pre-sale modifications to
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`European Version forage harvesters so that the machme will perform the way a
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`customer prefers. Such modifications are made to towing hitches and travel speed. In
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`the case of seat switches and cutterhead rotational alarms, the modifications were
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`actually made by Deere, who undertook to install these features on all European
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`Version forage harvesters that it could locate in the United States.
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`See, e.g., Meister, Tr. 2134; Fitzpatrick, Tr. 1929; Meister, Tr. 2144; RX- 19, Deere Admissions
`26
`36 and 37; JX-171, Meister Deposition at 175-176, 181-182.
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`PUBLIC VERSION
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`C. The findings of fact underlvinn the Initial Determination are clearly
`erroneous
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`1.
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`There is no evidence that any differences between the U.S.
`Version and European Version forage harvesters are significant
`to the purchasing decision of consumers
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`Evidence that “material” differences are s i d i c a n t to the purchasing decision of
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`consumers is a key element of materiality. However, materiality has not been
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`established as to any alleged difference by the record in this case. This evidentiary
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`issue arises from the ALJ having misconstrued and misapplied the appropriate legal
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`standard for materiality. The Initial Determination contains an exhaustive description
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`of differences .27 However, differences alone are not sufficient to establish materiality.
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`In order to be “material,” these differences must be shown to affect the consumer’s
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`purchasing decision. There is no evidence that any of the differences found to exist
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`affect the purchasing decision of the consumer. Deere’s inability to document
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`instances of consumer dissatisfaction or failed expectations resulting from operating
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`European Version forage harvesters supports the insignificance to consumers of the
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`allegedly “material” differences Deere alleged.
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`Because the ALJ’s findings of thirteen ”material” differences are unsupported by
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`evidence, they are clearly erroneous and should be set aside.
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`27
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`Initial Determination at 38-75.
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`2.
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`There is no evidence of consumer confusion
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`PUBLIC VERSION
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`Consumer confusion is the key element of trademark infringement cases. This
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`is no less true in the case of trademark infringement involving gray market imports.28
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`No evidence in the record demonstrates that consumers are confused over
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`whether they are purchasing a U.S. or a European Version forage harvester. Deere has
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`offered no documented customer complaints, surveys or other evidence demonstrating
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`consumer confusion, or even supporting an inference that consumers are confused.
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`What evidence exists consists of self-serving assumptions, speculation and coni ecture
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`by testdying Deere officials that consumers may, in isolated instances, complain and be
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`concerned about the operation of specific, discrete features. This evidence alone does
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`not show a likelihood of confusion between U.S. and European Version forage
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`harvesters and telehandlers.
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`Respondents, who are consumers as well as dealers of forage harvesters, testified
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`that there is no confusion over alleged differences between U.S. and European version
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`forage harvesters. To the extent any evidence of confusion exists in the record, it is
`rebutted by Respondents’ testimony. However, the ALJ fails to address this testimony.
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`The ALJ’s findings are clearly erroneous because they are not based on any firm
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`evidence of customer confusion in the record. These findings are also clearly erroneous
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`because they ignore respondent’s testimony establishing a lack of consumer confusion.
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`28
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`See Gamut Trading, 200 F.3d. at 782 (referring to actual evidence of consumer confusion).
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`3.
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`PUBLIC VERSION
`The Initial Determination fails to address evidence that
`differences have been eliminated.
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`As previously discussed in the context of the ALJ’s misapplication of the legal
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`standard for the finding of “material” differences, the Initial Determination ignores
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`evidence that differences in 1) seat switches, 2) cutterhead alarms, 3) seat belts, 4)
`back-up alarms, 5) travel speed, and 6) hitches have been eliminated. The ALJ simply
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`does not refer to this evidence. Failure to address evidence establishing that material
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`differences no longer exist is clearly erroneous.
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`4.
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`Findings of material differences based on warranty coverage and
`enrollment in the SIS system are unsupported by evidence in the
`record
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`The forage harvesters sold by Respondents are almost exclusively used, not new
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`machines. Like U.S. Version forage harvesters that are over two years old, they are not
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`covered by Deere’s warranty,29 and purchasers have no expectation that they will be.
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`Deere’s SIS system is primarily intended to facilitate work that is done under Deere’s
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`warranty program. The benefits of registration in the SIS system typically favor