HQ 474182 - Exclusion Order; Lens-Fitted Film Packages; International Trade Commission (ITC) Investigation No. 337-TA-406 - United States International Trade Commision Rulings

United States International Trade Commision Rulings And Harmonized Tariff Schedule

faqs.org Rulings By Number Rulings By Category Tariff Numbers

faqs.org > Rulings and Tariffs Home > Rulings By Number > 2003 HQ Rulings > HQ 229963 - HQ 548239 > HQ 474182

Previous Ruling Next Ruling
HQ 474182

November 6, 2003

ENF 4-02 RR:IT:IP 474182 PBP

CATEGORY: UNFAIR COMPETITION 19 U.S.C. ' 1337

Peter A. Quinter, Esq.
Becker & Poliakoff, P.A.
P.O. Box 9057
Ft. Lauderdale, FL 33310-9057

RE: Exclusion Order; Lens-Fitted Film Packages; International Trade Commission (ITC) Investigation No. 337-TA-406

Dear Mr. Quinter:

This is in response to your letter dated April 30, 2003, on behalf of Vastfame Camera Limited of North Point, Hong Kong, in which you request a ruling as to whether certain refurbished single use cameras (also known as lens-fitted film packages) preloaded with 35-mm film are excluded from entry into the United States under the above referenced ITC exclusion order.

Determinations of patent infringement in Unfair Import Investigations are the responsibility of the U.S. International Trade Commission (ITC) and, therefore, proceedings conducted before the ITC and/or review of those proceedings by the Federal Courts may ultimately impact the admissibility of articles subject to an exclusion order issued by the ITC. An importer seeking to import articles that may come within the scope of an exclusion order issued by the ITC may seek an advisory opinion from the ITC in order to avoid any potential future adverse action by the ITC. This ruling letter reflects the opinion of U.S. Customs and Border Protection (CBP) regarding admissibility of the articles discussed herein.

FACTS:

Pursuant to the above-referenced investigation, the ITC determined that there was a violation of 19 U.S.C. § 1337 regarding certain lens-fitted film packages (LFFPs), also known as one-time use cameras, single use cameras, and disposable cameras, that infringed claims under one or more of fifteen patents owned by Fuji Photo Film Co., Inc. including claims 1, 5, 6, 9, and 11 of U.S. Letters Patent No. 4,833,495; claims 14 and 15 of U.S. Letters Patent No. 4,855,774; claims 1, 7, 8, and 15 of U.S. Letters Patent No. 4,884,087; claims 1, 19, and 22 of U.S. Letters Patent No. 4,954,857; claims 1 and 9 of U.S. Letters Patent No. 4,972,649; claims 14 and 16 of U.S. Letters Patent No. 5,063,400; claims 1 and 11 of U.S. Letters Patent No. 5,235,364; claim 1 of U.S. Letters Patent No. 5,361,111; claims 1, 15, 23, and 25 of U.S. Letters Patent No. 5,381,200; claims 1 and 7 of U.S. Letters Patent No. 5,408,288; claims 1 and 28 of U.S. Letters Patent No. 5,436,685; claims 1 and 13 of U.S. Letters Patent No. Re. 34,168; the claim of U.S. Letters Patent No. Des. 345,750; the claim of U.S. Letters Patent No. Des. 356,101; and the claim of U.S. Letters Patent No. Des. 372,722. Certain Lens-Fitted Film Packages, Inv. No. 337-TA-406, General Exclusion Order (June 2, 1999) at 1-2.

Vastfame Camera Limited seeks to import licensed “”one time use” or ‘disposable’ cameras” (LFFPs) that were sold to consumers in the U.S., purchased from photo developing labs after the cameras’ film supplies have been spent, exported to China, and refurbished. You describe the refurbishing process as follows:

[b]riefly, the camera shells are opened and certain parts such as the film and the battery (for flash cameras) are replaced and the unit is resealed. . . . The camera is then shipped to, imported into, and sold in the United States with the reloaded new film inside the original camera shell.

ISSUE:

The issue presented is whether licensed LFFPs for which the patent rights were exhausted by first sale in the United States, that are refurbished by the aforementioned process are LFFPs which would fall within the scope of the ITC’s general exclusion order issued pursuant to Inv. No. 337-TA-406, such that they are excluded from entry for consumption into the United States.

LAW AND ANALYSIS:

Section 337 of the Tariff Act of 1930, as amended (19 U.S.C. § 1337), prohibits, inter alia, the importation, 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 U.S. patent. 19 U.S.C. § 1337(a)(1)(B)(i). The ITC has authority to investigate alleged violations of section 337. If the ITC determines that there has been a violation of section 337, it shall, subject to certain potential exceptions, direct that the articles concerned be excluded from entry into the United States and, accordingly, notify the Secretary of the Treasury who shall, through its proper officers, refuse such entry. 19 U.S.C. § 1337. See also, 19 CFR § 12.39.

In Investigation No. 337-TA-406, the ITC determined that certain LFFPs infringed claims under one or more of fifteen patents owned by Fuji Photo Film Co., Inc. The ITC therefore ordered that LFFPs that infringed any of the aforementioned fifteen patents be excluded from entry for consumption into the United States, and notified Customs accordingly. General Exclusion Order, Certain Lens-Fitted Film Packages, Inv. No. 337-TA-406 (June 2, 1999), at 2.

The doctrine of permissible repair provides an affirmative defense to a claim of patent infringement that must be proven by the party asserting such defense by clear and convincing evidence. See RCA Corp. v. Applied Digital Data Sys, Inc., 221 U.S.P.Q. 385, 387 (Fed. Cir. 1984); see also Symbols Techs v. Opticon, Inc., 935 F. 2d 1569, 1580 (Fed. Cir. 1991). Under the patent laws one may extend the useful life of a patented article so long as one does not engage in impermissible reconstruction of that article. See Jazz Photo Corp. v. ITC, 264 F. 3d 1094, 1102-1104 (Fed. Cir. 2001).

Regarding the issue of permissible repair, in Investigation No. 337-TA-406 the administrative law judge found in his Initial Determination that the processes utilized by the respondents to effect the alleged permissible repair (remanufacture) of these articles went beyond “simply adding film, battery and paper as argued by Jazz and OptiColor . . . .” Final Initial and Recommended Determinations, Certain Lens-Fitted Film Packages, Inv. No. 337-TA-406, (February 24, 1999), at 118. The administrative law judge further found that the respondents involved in the remanufacture “must go through several steps to ‘replace, configure and integrate’ the parts of a single use camera to make a ‘remanufactured’ single use camera . . . and that in their ‘remanufacturing’ processes, they manipulate a variety of parts of the single use camera directly reading on the claim elements in issue.” Id. at 118, 119. That opinion held that: the respondents involved in the alleged ‘remanufacture’ of single use cameras sold by the complainant and its licensees and which have already had one roll of film exposed by the original purchaser, have not sustained their burden in proving by clear and convincing evidence that their ‘remanufacture’ is a permissible repair. Rather the administrative law judge finds that the evidence established that those respondents are effectively recreating the patented single use camera of complainant and its licensees, and hence are involved in impermissible reconstruction.

Id. at 164.

Several of the respondents in the initial investigation appealed the ITC’s decision which held that their “refurbishment” of used LFFPs amounts to a “prohibited reconstruction” and not “permissible repair” of those articles. Jazz Photo Corp. v. ITC, 264 F. 3d 1094 (Fed. Cir. 2001). The Court of Appeals for the Federal Circuit (CAFC) held that
for used cameras whose first sale was in the United States with the patentee’s authorization, and for which the respondents permitted verification of their representations that their activities were limited to the steps of (1) removing the cardboard cover, (2) cutting open the plastic casing, (3) inserting new film and a container to receive the film, (4) replacing the winding wheel for certain cameras, (5) replacing the battery for flash cameras, (6) resetting the counter, (7) resealing the outer case, and (8) adding a new cardboard cover, the totality of these procedures does not satisfy the standards required by precedent for prohibited reconstruction; precedent requires . . . that the described activities be deemed to be permissible repair.

Id. at 1098, 1099. The Court concluded that:

[t]he judgment of patent infringement is reversed with respect to LFFPs for which the patent right was exhausted by first sale in the United States, and that were permissibly repaired. Permissible repair is limited, as discussed herein, to the steps of removing the cardboard cover, cutting open the casing, inserting new film and film container, resetting the film counter, resealing the casing, and placing the device in a new cardboard cover. Included in permissible repair is replacement of the battery in flash cameras and the winding wheel in the cameras that so require. For these products the Commission's orders are vacated. LFFPs whose prior sale was not in the United States, or LFFPs remanufactured by procedures more extensive than those we hold to constitute repair, or whose remanufacturing procedures were withheld or insufficiently disclosed to the Commission, remain subject to the Commission's orders. For these products the Commission's orders are affirmed.

Id. At 1110, 1111.

With respect to the Vastfame cameras that are subject of this ruling request, it is claimed that the refurbishing process is to be performed on cameras that are purchased in the United States and is to include opening the camera shells, replacing the film and (for flash cameras) the battery, and then resealing the cameras. Because this process is limited to the steps that the CAFC has determined to constitute permissible repair of the articles, the process, as you describe it, appears to come within the scope of the affirmative defense of permissible repair of the patented articles.

HOLDING:

In conformity with the foregoing, single use cameras or lens-fitted film packages that have been permissibly repaired (i.e. whose first sale was in the United States with the patentee’s authorization, and for which the importers permit verification of their representations that the refurbishing activities were limited to the steps of (1) removing the cardboard cover, (2) cutting open the plastic casing, (3) inserting new film and a container to receive the film, (4) replacing the winding wheel for certain cameras, (5) replacing the battery for flash cameras, (6) resetting the counter, (7) resealing the outer case, and (8) adding a new cardboard cover may be entered for consumption into the United States.

Further to this end, appropriate CBP officials at the individual ports of entry, considering available CBP resources, may develop procedures designed to verify that the aforementioned requirements for the defense of permissible repair are met as a condition to importation of these articles. Such procedures may include, but are not limited to, requiring evidence establishing that the subject refurbished cameras were acquired in the United States prior to undergoing the refurbishment process, evidence establishing that the refurbished cameras were originally licensed by the patent holder, and evidence that the refurbishment process used was not more extensive than that approved by the Court of Appeals for the Federal Circuit. The ports of entry, at their discretion, may require documentary evidence of the foregoing, certification by the importer that he is in compliance with the foregoing, or any other type of evidence tending to prove that an importer has permissibly repaired the imported articles.

Sincerely,

Previous Ruling Next Ruling