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TianRui Group Co. v. ITC

United States Court of Appeals for the Federal Circuit

October 11, 2011, Decided

2010-1395

Opinion

 [***1402]   [*1323]  Bryson, Circuit Judge

This appeal arises from a determination by the International Trade Commission  [*1324]  that the importation of certain cast steel railway wheels violated section 337 of the Tariff Act of 1930, 19 U.S.C. § 1337. The Commission found that the wheels were manufactured using a process that was developed in the United States, protected under domestic trade secret law, and misappropriated abroad. We are asked to decide whether the Commission's statutory authority over "[u]nfair methods of competition and unfair acts in the importation of articles . . . into the United States," as provided by section 337(a)(1)(A), allows the Commission to look to conduct occurring in China in the course of a trade secret misappropriation investigation. We conclude that the Commission has authority to investigate and grant relief based in part on extraterritorial conduct insofar as it is necessary to protect domestic industries from injuries arising out  [***1403]  of unfair competition in the domestic marketplace.

We are also asked to decide whether the Commission erred by finding that the imported wheels would injure a domestic industry when no domestic manufacturer is currently  [**3] practicing the protected process. In light of the evidence before the Commission regarding the market-place for cast steel railway wheels, we affirm the Commission's determination that the wheel imports threaten to destroy or substantially injure an industry in the United States, in violation of section 337.

Amsted Industries Inc. is a domestic manufacturer of cast steel railway wheels. It owns two secret processes for manufacturing such wheels, the "ABC process" and the "Griffin process." Amsted previously practiced the ABC process at its foundry in Calera, Alabama, but it no longer uses that process in the United States. Instead, Amsted uses the Griffin process at three of its domestic foundries. Amsted has licensed the ABC process to several firms with foundries in China.

TianRui Group Company Limited and TianRui Group Foundry Company Limited (collectively, "TianRui") manufacture cast steel railway wheels in China. In 2005, TianRui sought to license Amsted's wheel manufacturing technology, but the parties could not agree on the terms of a license. After the failed negotiations, TianRui hired nine employees away from one of Amsted's Chinese licensees, Datong ABC Castings Company  [**4] Limited. Some of those employees had been trained in the ABC process at the Calera plant in Alabama, and others had received training in that process at the Datong foundry in China.

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661 F.3d 1322 *; 2011 U.S. App. LEXIS 20607 **; 100 U.S.P.Q.2D (BNA) 1401 ***; 33 Int'l Trade Rep. (BNA) 1385

TIANRUI GROUP COMPANY LIMITED AND TIANRUI GROUP FOUNDRY COMPANY LIMITED, Appellants, and STANDARD CAR TRUCK COMPANY, INC. AND BARBER TIANRUI RAILWAY SUPPLY, LLC, Appellants, v. INTERNATIONAL TRADE COMMISSION, Appellee, and AMSTED INDUSTRIES INCORPORATED, Intervenor.

Subsequent History: Rehearing denied by, Rehearing, en banc, denied by Tianrui Group Co. v. ITC, 2012 U.S. App. LEXIS 4790 (Fed. Cir., Feb. 1, 2012)

Prior History:  [**1] On appeal from the United States International Trade Commission in Investigation No. 337-TA-655.

Amsted Indus. v. ITC, 391 Fed. Appx. 879, 2010 U.S. App. LEXIS 17731 (Fed. Cir., 2010)

Disposition: AFFIRMED.

CORE TERMS

secret, unfair, misappropriation, domestic, extraterritorial, patent, wheels, abroad, manufacturer, confidential, railway, Annual, commerce, sentence, foundry, cast, immigration, steel, infringement, marketplace, predecessor, proprietary, disclosure, flexible, license

International Trade Law, Trade Agreements, Intellectual Property Provisions, Governments, Legislation, Interpretation, Banking Law, Federal Acts, Federal Trade Commission Act, Unfair Competition & Practices, Patent Law, Infringement Actions, Defenses, General Overview