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Archived updates for Tuesday, March 04, 2008

ITC Section 337: Injury to Domestic Industry for Trade Dress Infringement

In Certain Digital Multimeters, Inv. No. 337-TA-588 (Order No. 22 Granting Summary Determination on Violation; January 14, 2008), Administrative Law Judge Bullock held that Fluke's domestic industry had been substantially injured due to the importation of products having infringing trade dress:

As for Fluke’s trade dress, Fluke must prove that the respondents’ practices have caused substantial injury to the domestic industry or that the presence of the accused imported products demonstrate relevant conditions or “circumstances from which probable future injury can be inferred.” [citing Certain Electric Power Tools, Battery Cartridges &Battery Chargers, Inv. No. 337-TA-284, Unreviewed Initial Determination at 246,248 (USITC Pub. 2389 (February 20,1990))(“PowerTools”);
see also Textron, Inc. v. US. Int’I Trade Comm ’n, 753 F.2d 1019, 1029 (Fed. Cir. 1985)(“Textron”).] In addition, Fluke must prove nexus between the respondents’ unfair acts and the injury to the domestic industry.” [citing Power Tools at 246; see also Certain Nut Jewelry and Parts Thereof; Inv. No. 337-TA-229, Initial Determination at 33, (USITC Pub. 1929, (Nov. 1986)) (unreviewed in relevant part)
(“Nut Jewelry”)].

. . . The Commission has considered a “broad range of indicia” in determining whether unfair acts have the effect of substantially injuring the domestic industry, including:

  1. the respondent’s volume of imports and penetration into the market,
  2. the complainant’s lost sales,
  3. the respondent’s volume of imports and penetration into the market,
    underselling by the respondent, and
  4. the complainant’s declining production, profitability and sales.

Additionally, the Commission has considered harm to goodwill and reputation
in determining if there has been substantial injury.

The injury requirement can also be met “[wlhen an assessment of the market in
the presence of the accused imported products demonstrates relevant conditions or circumstances from whichprobable future injury can be inferred.” Such circumstances may include:

  1. foreign cost advantages and production capacity,
  2. the ability of the imported product to undersell the domestic product, or
  3. substantial foreign manufacturing capacity combined with the respondent’s
    intention to penetrate the United States market.

Additionally, the threatened injury must be “substantive and clearly foreseen” and the complainant must show a causal connection between the respondent’s unfair act and the alleged future injury.

Fluke asserts that the evidence supports a finding that Fluke has a domestic industry in DMMs and products with multimeter functionality as to the trade dress at issue in this investigation and that there are relevant conditions or circumstances from which probable hture injury can be inferred exists in this investigation. Specifically, Fluke asserts that the evidence shows that the defaulting respondents’ and Fluke’s DMMs and/or products with multimeter functionality having the trade dress at issue are available in some of the same catalogs and websites, and therefore are found in the same distribution channels and directly compete with each other. Fluke also asserts that the defaulting respondents’ products are sold at significantly lower prices than Fluke’s products. Staff agrees with Fluke.

In addition, Fluke asserts that the evidence shows that the respondents have a large manufacturing capacity and maintain large inventories of DMMs in the United States.” Fluke also asserts that there is harm to its goodwill and business reputation. Fluke asserts that its name is widely known and that consumers associate the Fluke name with quality, reliability, and ruggedness. Consumers, believing that they are purchasing a Fluke DMM when purchasing a respondents’ DMM, may experience post-purchase confusion and experience dissatisfaction with the DMM’s performance and durability.”

The undersigned agrees with Fluke and Staff that the evidence of record clearly shows that the defaulted respondents’ importation and sale after importation into the United States of infringing DMMs and products with multimeter functionality has caused and/or threatens to cause injury to Fluke’s domestic industry. Furthermore, because Fluke has demonstrated that it’s ‘480 mark and its common law trade dress are valid and infringed, it has shown that its domestic industry has been substantially injured.

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