Regarding the 337 investigation, LED export companies need to know those things!
Release date: 2018-04-04 Source : arrogant LED network share: 
On March 29th, GDLED concentratedly reported that the US companies borrowed the opportunity of the Sino-US trading war and filed 337 enquiries, and 11 Chinese LED companies were included in the policy.
This is not the first 337 inquiry encountered by LED companies in China. As early as March 6, the US company Fraen Corporation filed a petition with the US World Trade Commission in accordance with the 337th Rule of the US 1930 Tariff Act, accusing the US export. The United States imported or sold in the United States LED lighting equipment and components (Certain LED Lighting Devices and Components Thereof) invaded its patent rights, pleading with the US World Trade Commission to issue sweeping orders and stop orders.
Guangzhou Haoyang Electronics Co., Ltd., Guangzhou Lefox Electronics Co., Ltd., Guangzhou Caiyu Lighting Co., Ltd., Guangzhou Xuanxuan Lighting Equipment Co., Ltd., Guangzhou Feixing Lighting Equipment Co., Ltd., Wuxi Changsheng Special Light Source Electrical Appliance Factory Our domestic enterprises are listed companies.
In a single month, China's LED companies suffered from 2 337 inquiries. For LED companies, it is very important to deepen understanding of the 37 queries.
337 query the underlying program
The basic procedures for 337 enquiries include, for example, representations, filings, disclosure procedures, hearings, preliminary judgement of administrative judges, review and final ruling, out-of-court courtesy, and presidential inspections.
Fundamental Procedural Representation: The US company filed a petition with the US World Trade Commission in accordance with Section 337 of the US Tariff Act of 1930, pleading with the US World Trade Commission to issue sweeping orders and stop orders. For example, it is: March 6, 2018 (the following is an example of the matter 1).
Filing: Within 30 days of the release of the statement (around April 4). After the case was filed, an administrative judge was appointed. The administrative judge set a date for issuing the ruling 45 days after filing the case. The defendant argued in writing within 30 days of receiving the complaint.
According to the opening procedure: According to the exchange, arguing, this period of 4-5 months hearing: pre-trial hearing before the hearing, the basis of the preliminary trial, etc.; the speech, the evidence, the inquiry, etc.; Submit all grounds and arguments. This phase lasts for a few days or months depending on the circumstances.
The beginning of the judgment: the administrative judge made a preliminary ruling on whether the beggar's act violated Section 337. (around March 2019).
Review and final ruling: Any party may file a review request within 10 days after the preliminary decision of the administrative judge. ITC may accept or refuse to plead, or may automatically resolve the review. ITC may maintain, revoke, modify, reject, or return a preliminary resolution or a full resolution.
Out-of-court courtesy: Near-folding 337 is closed by this method, and the parties agree to suspend the inquiry procedure (such as signing the agreement, agreeing not to export, importing related products, etc.). With the approval of the ITC (issuing the consent order), the inquiry procedure is aborted.
Presidential inspection: Within 60 days after receiving the final ruling, agree or not to pass immediately.
2337 Querying the results of the disposition If ITC concludes that imported products invade intellectual property rights in US stores, the possible disciplinary results are as follows:
1
This is the most influential of all the disciplinary results, not only for the products of the beggars, but also to prevent all similar infringing products from entering the US shopping malls, without the difference of origin or producers, together with current and future uncertainties. Producers and importers.
2
The Limited Sweeping Order prevents the infringing product of the solicited person from entering the United States. It can be applied to all types of products that are betrayed by the beneficiary now and in the future. The effectiveness can be extended to the upstream parts and components containing the infringing articles, and the downstream. Or a subordinate product.
3
The order to stop the order is to stop the continued sale, inventory, publicity, advertising and other infringing products that have been imported into the United States. The difference with the sweeping order is that the sweeping order is primarily executed by the customs to stop the entry of infringing products, and has not yet imported products from the United States; and the restraining order is implemented by ITC itself for products that have been imported into the United States. The restraining order can be applied on its own or with the sweeping order.
4
In favor of the "337 Enquiry", in addition to the lenient method, the two parties can also agree to the method to suspend the inquiry. The approval order is generally submitted jointly by the beggar and the beggar, or it can be submitted by the beggar on its own. The approval order is similar to the lenient agreement, but retains the jurisdiction of ITC.
5
Seizure and confiscation orders If ITC has issued a sweeping order for a product and the company attempts to export it to a US mall again, ITC can issue a seizure and confiscation order. US Customs can seize and confiscate all infringing products that are intended to be exported to US stores.
6
Fines After the issuance of the sweeping order and the restraining order, if the party concerned violates the ITC order, it will face a fine of 100,000 USD/day or a civil penalty equivalent to twice the domestic value of the US product that is illegally imported into the US product. Take the highest one.
7
Temporary assistance methods can be submitted to the request for enquiry, perhaps before the ITC officially filed an inquiry, requesting ITC to adopt a temporary rescue method, including a temporary restraining order and a sweeping order. ITC agrees that the reasons for adopting the temporary assistance method include: beginning to conclude that there is a violation of Section 337, and if the temporary assistance method is not adopted, the domestic industry in the United States may be immediately damaged, and the establishment of domestic industry may be possible. I was embarrassed.
If ITC is subject to a request, a temporary injunction will be issued within 90 days of the start of the inquiry (within 150 days of the messy case). If ITC believes that the basis for the request is not sufficient, or that the adoption of the temporary injunction would cause serious damage to the beneficiary, the beneficiary can be required to provide a deposit. During the implementation of the temporary rescue method, if the importer continues to import the products involved, the deposit must be paid by the ITC and can be sufficient to protect the interests of the beneficiary. If the infringement is determined after all, the deposit will be blamed for everything.
How to prevent getting involved in 337 queries?
The key is to adopt a preventive approach. Beginning to prevent patent infringement at the stage of designing a product prototype or skill concept.
First, it is crucial to understand what competitors are doing:
(1) This means discussing the patents they have;
(2) The principles of patents, the areas of skill touched, and what they specifically cover.
2. If the company has received the Ceaseand Desist letter from the other party's lawyer:
(1) The first and most important thing is to check whether the patent is properly registered. The most powerful defense against the 337 query lawsuit is invading the usefulness of the patent. This strategy is successful. Because the patent is messy, it is entirely possible that the submission is incorrect. It may not actually include the other party's role.
(2) If the patent is correct and your product is indeed infringed, the company can still choose to prevent lengthy litigation: 1) suspend production of infringing products; 2) seek patent approval. While paying for self-developed skills can be worrying, reaching an agreement with a patent holder may be preferable to a more expensive lawsuit.
How to deal with 337 queries?
In response to the "337 query", it is necessary to look at the intellectual property rights of enterprises and win the "337 inquiry", which requires the intellectual property strength of LED enterprises. Experts have shown that active response is the best response. It should be a "fighting clause", but it also encourages LED companies to cope with it from another aspect.
In recent years, Chinese enterprises have succeeded in responding to the “337 enquiry†process. For example, Chinese steel companies have obtained three complaints about anti-monopoly, trade secret infringement and anti-evasion in the US 337 inquiry steel case. success. The majority of the 337 inquiries filed in 2016 were concluded in 2017. In the course of the year, the number of successful enterprises in China (including the withdrawal of complaints from the other party) reached 22, the highest in history.
However, for the "337" inquiry, most Chinese companies responded to the failure. The deputy researcher of the Research Institute of the Americas and Oceania of the Ministry of Commerce of the Ministry of Commerce said that it is difficult to say that it is necessary to respond to the requirements of enterprises, and it is still necessary to look at the strength of enterprises - such as steel companies, which have great interests in the United States, Certainly, they will respond to the lawsuit; some small and medium-sized LED companies may directly abandon the American shopping malls and turn to European shopping malls.
Generally, once a company chooses to respond, many follow-up questions come one after another. One is that the fees are very high, and the "337 inquiries" are attributed to the world lawsuits. The lawyers of both China and the United States are required to follow up. The other is that it is possible to win or not. Once you lose the case, you will not only have to pay high legal fees, but you will also be fined 300% of the reward and punishment tariffs.
There are many ways to deal with the "337 query". One of the most useful weapons is to hold a group to negotiate a weight. For example, in the steel industry of the previous year, dozens of occupations were searched at one time, and professional associations in China would organize themselves and hold groups to respond. In addition to "tear", the sum is also a method of processing. When Chinese enterprises suffer from "337 inquiries", they can negotiate with the rival companies to interpret the patents to achieve a wide range. It should be said that this does not lose a useful treatment.
Strengthening the responding mechanism according to the "337" query throughout the sweeping order rules, a loser, together with other companies in the country that produce the product, also to withdraw from the US mall. 337 The damage caused by the inquiry is very large. If it is not refusal, it will lose the relevant shopping malls and damage the development of the whole profession. It seems to be a kind of large-scale anti-personnel weapon, and its damage is not inferior to anti-dumping.
In response to 337 enquiries, the company should actively respond to the lawsuit, and responding does not mean confessing the other party’s allegations. Just suspending the import will not end the inquiry (unless the defendant signs the approval order), it will have a serious impact, and it should only be withdrawn from the US mall.
First, contact professional associations, unite individual enterprises, and strengthen the response system. The US 337 inquiry case has a professional procedure, complicated procedures, cumbersome procedures, and a lot of manpower, material resources and financial resources. The total cost of the entire response process is generally 1.5 million US dollars. Between the four million dollars, and the United States World Trade Commission can not make a monetary compensation ruling, the company is small, limited funds, and can not afford high responding fees. Although the large and medium-sized enterprises with stronger strengths are willing to respond, it is also a problem to pay high fees, which makes the quality of responding appeals greatly reduced. In the response process, the responding company had more than enough funds, but it was unable to go to the United States in time when the demand was heard in court, which led to the US World Trade Commission losing the judgment in absentia.
Some Chinese enterprises still have the idea of ​​“free rider†that should not be complained. Regarding the delay of enterprises, the opportunity cost of participating in the response is higher than the opportunity cost of abandoning the response. The rational choice of a single enterprise is often to abandon the defense and turn to other export stores. The selection of such individual rational choices combined is irrational. If so, the related products will be forced to withdraw from the US mall. This has led to the contradiction between individual rationality and group rationality, which fully reflects the imperfection of China's response mechanism.
Second, improve the responding mechanism from the upstream, establish an intellectual property inspection mechanism and communicate with the enterprises or occupations with the possibility of litigation in Section 337, do a good job of preventing the operation, and conduct relevant searches through the Chinese law firm before exporting the goods, and determine whether there is any touch. The possibility of intellectual property infringement litigation of the product.
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