US CHINA TRADE WAR DEVELOPMENTS–TRADE, FALSE CLAIMS ACT, PATENTS, US/CHINESE ANTITRUST AND SECURITIES

US Capital Pennsylvania Avenue After the Snow Washington DCANNOUNCEMENT

On December 3, 2013, former Congressman Don Bonker of APCO and I will be speaking in Vancouver, Canada at a breakfast conference held by the American Chamber of Commerce on “The Trans-Pacific Partnership Demystified: A Discussion of Trade Opportunities for American and Canadian  Businesses”.

Attached is a copy of the Speech announcement.  AMCHAM – Dec 3 TPP Event – INVITE (2)  Hope to see some of you in Vancouver, Canada. 

Dear Friends,

There have been some major developments in the trade, False Claims Act, Customs fraud, patents, antitrust, Chinese antitrust and securities areas.

The big news is that after two and a half weeks, on October 17, 2013, the US Government reopened. As a result of the shutdown, in most trade cases, the Commerce Department and the US International Trade Commission (“ITC”) have tolled, pushed up, all deadlines in trade investigations and review investigations, by the number of days that the Government was shutdown.  Attached are  a Commerce Department and an ITC memo announcing their decisions to toll all deadlines in antidumping and countervailing duty and other trade cases by 16 days, which are the days the US government was shut down.  COMMERCE TOLLING MEMO  ITC TOLLING DEADLINES

TRADE

SOLAR CELLS—SETTLEMENT AND THIRD COUNTRY CELLS LOOPHOLE

Apparently, negotiations between the US and China in the Solar Cells case have slowed down because of the US government shutdown. Meanwhile, the U.S. Department of Commerce is continuing to press Chinese exporters of solar panels to demonstrate that their products fall outside of existing antidumping (AD) and countervailing duty (CVD) orders by proving that they contain  solar cells in Chinese panels and modules that are produced in third countries.

The Commerce Department has not launched a formal circumvention inquiry, but it has issued 3 to 4 questionnaires, and Chinese solar companies, Wuxi Suntech, Renesola, Yingli, LDK and Trina have responded.  Commerce has requested extensive documentation from the Chinese companies to prove not only that the solar cells are sourced from outside of China, but actually to trace those cells through their foreign production to insertion into Chinese modules and panels and then exported to the United States.  Not only is Commerce requesting the documents, we also have reports that Customs is requiring similar documents to prove that the solar cells were actually produced outside of China.

Although Chinese companies and US importers are not happy with the volume of documents requested by Commerce, in its final determination in the initial investigation, Commerce indicated that it would require importers to certify and then prove that the imported solar cells are actually produced outside of China.  Commerce has gone so far as to request that Chinese firms submit computer screenshots – or image captures of their computer  monitor – showing how they track sales and receipts of their inventory through their accounting system. Commerce  officials routinely print out screenshots from companies’ systems when they conduct on-site verifications of their claims during investigations.

Solar cells produced in countries like Taiwan and Malaysia fall outside the scope of the trade remedy orders imposed  by Commerce, even if they are assembled into panels and shipped by companies in China. Many Chinese companies  – even those that manufacture cells – have thus begun incorporating cells made in third countries in order to make sure those products shipped to the U.S. are not affected.

See also antitrust section below describing the recent antitrust complaint filed against Chinese solar companies.

CHINESE EXPORT TARIFS ON RARE EARTH METALS AND OTHER PRODUCTS

On October 10, 2013, Stewart & Stewart, a well-known law firm for US petitioners/domestic producers and US unions in antidumping and countervailing duty cases, released the attached report complaining about the Chinese government’s failure to lift export taxes on exports of raw materials, including rare earth metals.  CHINESE EXPORT TARIFFS ON RARE EARTH METALS AND OTHER RAW MATERIAL PRODUCTS

The Stewart firm argues that these export tariffs on tungsten, various metal products and wood and pulp products have been put in place to give Chinese producers an unfair advantage because they get access to cheaper raw materials.

What the Stewart firm does not mention is the fact that many of these export tariffs have been put in place by the Chinese government to deter US antidumping cases, including antidumping cases against Tungsten Ore and Silicon Carbide, antidumping orders on Magnesium, all Magnesium Products and Silicomanganese, and the new antidumping and countervailing duty orders against hardwood plywood.  All magnesium, magnesium products, including manganese metal and magnesium bricks, and silicomanganese, have been shut out of the US market not by Chinese export taxes, but by US antidumping orders.

In early 2000s, the US Magnesium Die Casting industry warned the US International Trade Commission at the Sunset Review on Magnesium that if they left the antidumping order on Magnesium from China in place, the US industry would contract. According to one magnesium die castor, in 2002, there were 16 US die cast producers in the US industry. There are now 4 producers left with the loss of 11,000 US production jobs.

What Stewart is proposing that China must dance to the US tune. But with the impact of these US antidumping and countervailing duty orders on US producers of downstream products, these antidumping and counterduty orders are truly cutting off US producers’ nose to spite their face.

NEW ANTIDUMPING AND COUNTERVAILING DUTY INVESTIGATIONS

NON-ORIENTED ELECTRICAL STEEL

On September 30, 2013, AK Steel Corporation filed antidumping and countervailing duty petitions against non-oriented electrical steel. See notice below.
Docket No: 2985
Document Type: 701 & 731 Petition
Filed By: Joseph W. Dorn
Firm/Org: King and Spalding
Behalf Of: AK Steel Corporation
Date Received: September 30, 2013
Commodity: Non-Oriented Electrical Steel
Countries: China, Germany, Japan, Korea, Sweden, and Taiwan
Description: Letter to Lisa R. Barton, Secretary, USITC; requesting the Commission to conduct an investigation under sections 701 and 731 of the Tariff Act of 1930 regarding the imposition of antidumping and countervailing duties on imports of Non-Oriented Electrical Steel from the People’s Republic of China, The Federal Republic of Germany, Japan, The Republic of Korea, the Kingdom of Sweden, and the People’s Republic of China (Taiwan).

The Chinese producers are: Angang Group International Trade Corp, Anshan Iron & Steel Group Corporation, Anyang Iron & Steel Group Co. Ltd. (AISCO), Baosteel Group Corporation and Baoshan Iron & Steel Company, Ltd., Baotou Iron & Steel (Group) Co., Ltd., Chongqing Iron & Steel (Group) Co., Ltd., Jiangsu Shagang Group, Jianlong Group, Fujian Xinjiu Technology Group, Foshan Jinxi Jinlan Cold Rolled Steel Sheets Co., Ltd., Jiangsu Jijing Metal Technology Co., Ltd. , Maanshan Iron & Steel Co., Ltd., Shougang Qian’an Iron & Steel Co., Ltd., Shunde POSCO Coated Steel (SHUNPO), Tianjin Jiyu Steel Co., Ltd., Taiyuan Iron & Steel (Group) Co., Ltd., Tianjin Huangtai New Energy-Saving Electromechanical Materials Co., Ltd., WISDRI (Xinyu) Cold Processing Engineering Co., Ltd., Wuhan Iron and Steel Group, Inc. (WISCO), Wuhan Iron & Steel Co., Ltd., Xinwanxin (Fujian) Fine Thin Board Co., Ltd., Xinyu Iron & Steel Co., Ltd.,  and Zhejiang Xiehe Group.

TETRAFLUOROETHANE

On October 22, 2013, Mexichem Fluor, Inc. filed an antidumping and countervailing duty petition was filed against 1, 1, 1, 2-tetrafluoroethane from China.  The Chinese respondent companies are: Bluestar, Kangtai, Dongyue, Sinochem Taicang, Juhua, Bailian, Goldsnow, and Sanmei.  Attached is a copy of the ITC initiation notice.  ITC NOTICE TETRA

IMPORT ALLIANCE FOR AMERICA/IMPORTERS’ LOBBYING COALITION

As mentioned in prior newsletters, we are working with APCO, a well-known lobbying/government relations firm in Washington DC, on establishing a US importers/end users lobbying coalition to lobby against the expansion of the antidumping and countervailing duty laws against China.

On September 18, 2013, ten US Importers agreed to form the Import Alliance for America. The objective of the Coalition will be to educate the US Congress and Administration on the damaging effects of the US China trade war, especially US antidumping and countervailing duty laws, on US importers and US downstream industries.

We will be targeting two major issues—Working for market economy treatment for China in 2016 and working against retroactive liability for US importers. The key point of our arguments is that these changes in the US antidumping and countervailing duty laws are to help US companies, especially US importers and downstream industries. We will also be advocating for a public interest test in antidumping and countervailing duty cases and standing for US end user companies.

If anyone is interested in the Alliance, please feel free to contact me.

APCO CHINA BRAND ARTICLE

Attached is an article published by in the Harvard Business Review by APCO China on the issues faced by Chinese companies in branding their products worldwide.  APCO BRANDS ARTICLE

DORSEY LAWYER ON SHANGHAI FREE TRADE ZONE

For an interview video on You Tube with Peter Corne, the head of Dorsey’s Shanghai office, on the new Shanghai Free Trade Zone, see http://www.youtube.com/watch?v=-K-BoK8y2Po.

CHINESE ANTIDUMPING AND COUNTERVAILING DUTY LAW

MOFCOM SPEECH ON ANTIDUMPING AND COUNTERVAILING DUTY LAW

To understand the Chinese government’s position on the application of the US antidumping and countervailing duty law from their point of view, on October 7, 2013, following the APEC meeting in Bali, Mr. Jianhua Yu, Deputy China International Trade Representative, explained that China is by far the major target of more antidumping and countervailing duty cases than any other country worldwide, stating:

“China is in a serious trade friction situation. According to the statistics, China has got the most anti-dumping investigations among all the WTO members in 18 consecutive years and got the most anti-dumping surveies (sic) among all the countries in the world in 7 consecutive years. Chinese government will, as always, unswervingly fight against trade and investment protectionism. We advocate that all the members work together to resist trade protectionism, stay cautious and restrained, regulate the use of trade remedy measures; help and concern about each other and try to settle the trade dispute by dialogues. President Xi Jinping stressed, in recent G20 Summit, that only when you open the window to realize air convection, can fresh air come in. Trade protectionism and abuse use of trade remedy measures can only do harm to others “without serving their own interest”. Therefore, we hope to deepen the communication with governments of other economies under APEC, strenghten trade and industrial policy coordination, solve trade friction through negotiations, step up dialogues and cooperation, mutually fight against protectionism of any form and resolutely preserve and develop an opening world economy.”

CUSTOMS FRAUD

FALSE CLAIMS ACT

A major False Claims Act case for triple damages has been filed against Aluminum Extrusions companies in Hong Kong, China and the US.  See the attached complaint. ALUMINUM FCA COMPLAINT TAISHAN GOLDEN GATE AND INNOVATIVE  Some of the respondent companies are Tai Shan Golden Gain Aluminum Products, Ltd. and Innovative Aluminum in Hong Kong.  Additional respondent companies are listed below.   John Doe companies are companies that are involved in the conspiracy, but not known to the Government or the relator that filed the action.

In the Complaint, relator alleged that the respondent companies were transshipping aluminum extrusions through Malaysia and labeling the aluminum extrusions as produced in Malaysia to avoid antidumping and countervailing duties on aluminum extrusions from China.  This is Customs fraud and can result in civil and criminal penalties under the US Customs law and triple damages under the False Claims Act.

False Claims Act cases are filed by a private relator on behalf of the US government.  The relator can be a US or foreign company or a US or foreign individual, such as a person in the US, Hong Kong or China.  In this case, a US individual filed the action.  Once the complaint is filed, the US government has to decide whether to intervene or not.  In this case, the US government has chosen to intervene.

The remedy is triple damages plus attorney’s fees.  The relator is entitled to 15 to 25% of any recovery by the Federal Government.

The complaint was filed in April 2011.  The case did not become public until now because when an FCA complaint is filed, it is filed under seal, in secret, until the US government has a chance to investigate and decide whether to intervene in the case or not.  In this case, after an investigation, the US government has decided to intervene and take over the litigation.

To understand the extent of the damages, take the 374% countervailing duty rate rate in the Aluminum Extrusions case, which is the entered import value of the aluminum extrusions multiplied by 374%.  Then multiply that result by 3 so the potential damages are over 900% of the entered value.  The damages alleged in the complaint, therefore, are many 10s of millions of dollars in liability and potentially millions of dollars in payout to the relator.

False Claims Act cases can also change and become Criminal Customs cases.

The Target Companies in the False Claims Act case are: Tai Shan Golden Gain Aluminum  Products, Ltd, Sam Lei, John Lei, , Innovative Aluminum (Hong Kong), Ltd, Robert Wingfield, Steven Atkinson, Northeastern Aluminum Corporation, William Ma, Master Attraction Sbn Bhd, LMM Marketing Sbn Bhd, King River, TMI, Southeastern Aluminum Products, Inc., Basco Manufacturing Company, Waterfall Group, LLC, C.R. Laurence Company, Inc., Vitro Architectural Products, Southern Aluminum Manufacturing Company, Cardinal Shower Enclosures, Coral Industries, and John Doe Companies

US DOWNSTREAM COMPANIES THAT ARE NOT IMPORTERS OF RECORD ARE NO LONGER SAFE

Many US companies believe that if they are not the US importer of record, they cannot be held liable for Customs problems. That is simply no longer the case.

Attached is an Article about the Honey Antidumping Customs Fraud investigation, by Mike Coursey.   MIKE COURSEY HONEY GATE II ARTICLE  Mike Coursey represents the US Honey, Mushrooms and Garlic industries.

The Article starts this way:

“Still buying imports of dubious foreign origin from unrelated U.S. importers? Consider the case of Groeb Farms, Inc., which recently accepted criminal responsibility for fraudulently entered Chinese honey that had avoided $79 million in duties – despite not being directly involved in the honey’s importation.

The takeaway: Not being the importer of record for fraudulently entered goods does not insulate a “knowing” downstream buyer from criminal liability for that fraud.”

By the way, Groeb Farms has filed for bankruptcy and the two brothers that ran the company are facing possible prison terms.

The point is that downstream companies, such as consignees, that to try to avoid liability by not being importer of record so as circumvent US antidumping and countervailing duty laws with false documents submitted to Customs should be very, very careful. This is not a game; it is a crime. Such actions are not a good business strategy and expose the owners and employees of the downstream companies to criminal fraud cases and millions of dollars in liability.  Import games have consequences.

NEW PATENT CASES AGAINST CHINESE COMPANIES, INCLUDING HUAWEI, ZTE, AND OTHER COMPANIES

On October 7, 2013, Polygroup Macau Limited filed a patent case for infringing Christmas Tree Lights against Willis Electric Co., Ltd., a Taiwan company.  CHRISTMAS LIGHTS PATENT CASE

On October 8, 2013, Blue Spike filed a patent case against Oppo Digital, Inc. and Guangdong Oppo Electronics Industry Co., Ltd. OPPO DIGITIAL GUANGDONG

On October 10, 2013, Pragmatus Mobile filed a patent case against ZTE. PRAGMATUS ZTE

On October 11, 2013, RCRV, Inc. d/b/a Rock Revival filed a trademark case against Guangzhou Nandadi Textile Garment Co. Ltd. GUANGDONG TRADEMARK

On October 14, 2013, Blue Spike filed a patent case against Beijing Xiaomi Technology Co., Ltd. BLUE SPIKE BEIJING COMPLAINT

On October 18, 2013, Alex is the Best filed a patent case aganst ZTE.  ZTE PATENT COMPLAINT

ANTITRUST

SOLAR ANTITRUST CASE

On October 4, 2013, a new class action $950 million antitrust case was filed by Energy Conversion Devices (“ECD”), a former US solar panel producer, which is now bankrupt, against three Chinese companies, Trina, Yingli and Suntech.  ECD argues that the three companies conspired to dominate the American solar market by coordinating a “complex”  price-fixing scheme to sell “inferior” solar panels in the U.S. at artificially low prices and achieve market domination.  According to the attached complaint, SOLAR ANTITRUST CASE the scheme forced ECD into bankruptcy.

The complaint alleges that the companies were able to do this by collaborating with raw material suppliers, lenders, Chinese trade associations and Chinese government entities to dump their solar panels in the U.S. at prices that were less  than the actual cost of materials, assembly and shipping.

The problem with this allegation is that no one knows whether the three Chinese companies were dumping or not. The Commerce Department’s antidumping determination did not determine that the Chinese companies were selling their solar panels below their raw material costs because the Commerce Department refuses to look at actual prices and costs in China to determine dumping. In fact, the real issue in Solar Panels US antidumping case was whether to use Thailand or India as the surrogate country to get the surrogate values to value Chinese consumption factors for raw materials.

What do prices and costs in Thailand or India have to do with the price of solar cells in China? Nothing!! That is the fiction embodied in the Commerce Department’s antidumping determination and now reflected in the antitrust complaint filed by ECD.

VITAMIN C CASE

The Vitamin C case is wrapping up at the District Court level.  Attached is the October 16, 2013 proposed settlement agreement with China Pharmaceutical Group Ltd. and Weisheng Pharmaceutical Group Co., Ltd.  VITAMIN C DIRECT LEGAL FEES  Note that the legal fees for the US lawyers are 7.8 million plus 1.5 million in expenses.

In other words, the Chinese respondent companies pay the legal fees of the US lawyers bringing the case.  Another incentive to bring more antitrust cases in the US against Chinese companies–big payouts to the US lawyers.

LCDS CASE—AU OPTRONICS EXECUTIVE BAI NOT GUILTY

In the second week in October, a Jury in San Francisco found AU Optronics Executive Richard Bai not guilty. In March 2012, a California jury found two executives for AU Optronics guilty, but in the Bai case, the Jury believed that the Justice Department had not provided sufficient evidence of guilt.

AU Optronics has appealed its criminal conviction to the San Francisco-based 9th U.S. Circuit Court of Appeals.  The Taiwan company is arguing that the U.S. Sherman Act can not be stretched to criminalize the actions of foreign companies on foreign soil. In the alternative, the defendants argue that if U.S. antitrust law does have extraterritorial reach, it should be applied in a limited way. AU Optronics argues that the fact that foreign executives met to discuss prices shouldn’t be an automatic U.S. antitrust violation.

Most comentators, however, believe that the chances of winning on this argument are very low.

In response, the Justice Department argues that U.S. antitrust law reaches foreign conduct that has a substantial and intended effect on the U.S..  Justice also also argues that part of the price-fixing conspiracy actually occurred in the U.S, stating LCD makers “reaped billions of dollars in ill-gotten gains at the expense of their U.S. customers,” . . . “That conspiracy meetings were held abroad does not change the felonious nature of defendants’ conspiracy or undo the enormous harm it caused in the United States.”

JAPANESE AUTO PARTS ANTITRUST CASES

On October 3rd and 9th more class action antitrust cases were filed against Japanese auto parts suppliers.  CLASS ACTION ANTITRUST JAPAN 2-13cv14289 CLASS ACTION ANTITRUST JAPAN

CHINA ANTITRUST CASES

As stated before, what goes around, comes around, and we now have Chinese antitrust cases against US companies.

In the attached article NRDC Steps up Anti-trust Enforcement in China Even Further by Peter Corne, head of Dorsey’s Shanghai office, and Blake Yang state:

“On June 27, Biostime, a premium manufacturer of pediatric nutrition and baby care products in China, announced through its Hong Kong holding company that subsidiary Biostime, Inc. (Guangzhou) . . . is subject to investigation by China’s National Development and Reform Commission (“NDRC”).

The main purpose of the investigation is in relation to an alleged violation of Article 14 of the Anti-Monopoly Law of the People’s Republic of China (“AML”) by Biostime, Inc. (Guangzhou) in managing the market sales prices at which the distributors and retailers sell Biostime products. This announcement caused the stock price of Biostime to fall by 7.55% to HKD 43.5 on June 28.

On July 2, it was also reported by National Business Daily, Beijing Times, and other news media that five foreign infant milk firms including Abbott Laboratories, Mead Johnson Nutrition Co., Nestlé SA, Wyeth Nutrition, and Dumex (a brand of Danone) had also been placed under investigation by the NDRC for alleged antitrust violations in relation to Article 14 of the AML.

By way of background, Article 14 of the Anti-Monopoly Law prohibits business operators from entering into vertical agreements with trading partners that fix the product prices or set minimum sales prices for resale to third parties. A violation of Article 14 may attract heavy penalties including a fine ranging from 1% to 10% of the business operator’s overall sales revenue for the preceding year. . . .

This case is significant because it underlines the more aggressive approach that the NDRC has begun to take to anti-trust law enforcement in respect of matters within its own jurisdiction (in the area of pricing). . . .

So what are the potential implications for the future of anti-trust enforcement in China? As the NDRC has become more proactive and gains more experience in this area, we would expect it to expand the scope of its attention beyond resale price maintenance and into other areas of anti-trust related to price, such as price discrimination, price gouging, bid rigging or price signaling. We would also expect the Administration of Industry and Commerce, whose investigatory activity (limited in scope to areas outside of purely pricing) has been relatively low key, to also step up its activity in this area. As suggested by its latest investigations into foreign infant milk formula companies, the NDRC appears to feel confident enough to press ahead with plans to investigate foreign companies. MNCs should prepare by conducting their own internal audits with the help of outside counsel to ascertain the extent of their exposure to risk of enforcement for AML violations.”

See also another attached article SAIC Launches First Abuse of Dominance Investigation under AML by Mr. Corne about China’s State Administration for Industry and Commerce (SAIC) investigation against Sweden’s Tetra Pak for alleged abuse of market dominance through tying and discrimination. This is the SAIC’s first publicly announced investigation into abuse of dominance since the PRC Anti-Monopoly Law (AML) came into force in 2008. The investigation also represents an extraordinary joinder of more than twenty provincial and municipal branches of the SAIC countrywide that have been mobilized jointly to conduct the investigation against the foreign company. Such actions mirror the private antitrust actions brought by US states and their attorney generals in antitrust cases.

RUMORS OF POSSIBLE CHINESE ANTITRUST ACTIONS AGAINST FOREIGN AUTOMOBILE COMPANIES

Recently, there have been rumors that the National Development and Reform Commission (NDRC), the Chinese governmental authority that regulates price monopoly activities in China, has been working with the China Automobile Dealers Association (CADA) to collect data regarding the pricing behavior of foreign auto manufacturers.  The thought is that this data will be used to determine whether the foreign manufacturers are requiring their distributors and retailers to resell products at a minimum price. This practice, known as a resale price maintenance (RPM), may violate China’s Anti-Monopoly Law (AML).

Many commentators believe that although not acknowledged publicly, the NDRC is investigating the situation and more investigations against various industries are underway.

What is sauce for the goose is sauce for the gander.

SECURITIES

SEC GRANTS DELAY IN PROCEEDING AGAINST US ACCOUNTING FIRMS FOR  REFUSING TO RELEASE AUDIT DOCUMENTS OF CHINESE COMPANIES

On October 2, 2013, in the attached order, SEC ORDER ACCOUNTING FIRMS the U.S. Securities and Exchange Commission (“SEC”) granted a request from an administrative law judge to give an additional 100 days to determine whether top accounting firms, such as Ernst & Young, Deloitte and Price, Waterhouse, have to produce audit documents of Chinese company clients that are suspected of defrauding their US investors through reverse mergers.  In December 2012 the SEC started this case because it believes the accounting firms, including the Big 4, have refused to to cooperate with document requests in an investigation into China-based companies whose securities are publicly traded in the U.S. in violation of US security laws.

The accounting firms argue that they fear violating Chinese secrecy laws. As evidenced by the complaints on this site, the SEC has cracked down in the last few years on fraudulent reverse mergers, in which Chinese companies have used existing public shell company to merge with a private operating company, leaving the shell company as the surviving legal entity. The crackdown, however, has been delayed by the Chinese privacy laws, which bar China-based auditors, including the subsidiaries of US accounting firms, from turning over Chinese client information.

The accounting firms have been fighting requests for audit paperwork related to Chinese companies accused of fraud on US investors.  In July, following bilateral investment talks, the U.S. announced that China had agreed to turn over certain audit documents to the SEC and the Public Company Accounting Oversight Board (“PCAOB”). That deal came shortly after the PCAOB announced a memorandum of understanding with the China Securities Regulatory Commission and China’s Ministry of Finance to ease restrictions on release of audit information in fraud investigations.

COMPLAINTS

A number of new securities complaints cases have been filed against Chinese companies.

On October 8, 2013, Warner Technology & Investment Company filed a complaint for securities fraud against Sichuan Apollo Solar Energy Technology Co. Ltd. and Renyi Hou. SECURITIES APOLLO

On October 9, 2013, the Securities and Exchange Commission brought a major fraud case against a Hong Kong Company CKB 168, Cyber Kids Best Education Ltd., and various individuals and other companies, such Rosanna LS Inc., USA Trade Group, Inc., Ouni International Trading Inc., E. Stock Club Corp., EZ Stock Club Corp., HTC Consulting LLC and Arcadia Business Consulting Inc.  SEC CK CASE

The complaint states that the SEC “brings this emergency action to halt an ongoing pyramid scheme and offering fraud, which primarily targets members of the Asian-American community.” The Complaint goes on to state:

“To date, the Defendants have harvested $20 million, and likely much more, from at least 400 investors in New York, California, and elsewhere in the United States, as well as millions of dollars from investors in Canada, Taiwan, Hong Kong, and other countries in Asia. . . .

Through publicly available websites, promotional materials, seminars, and videos posted to the internet, as well as through other efforts intended to create the appearance of a legitimate enterprise, Defendants have falsely portrayed CKB as a profitable multi-level marketing company that sells web-based children’s educational courses.

What CKB really sells, however, is the false promise of easy wealth. . . . Defendants have falsely portrayed CKB as a profitable multi-level marketing company that sells web-based children’s educational courses.

In fact, CKB has little or no retail consumer sales to generate the promised returns and no apparent source of revenues other than money received from new investors. Instead, CKB is a classic pyramid scheme that depends on the recruitment of new investors to pay promised returns to existing ones. CKB’s inevitable collapse will cause substantial investor losses.”

On October 15, 2013, another class action securities complaint was filed against Chinese company, Light in the Box.  LIGHT COMPLAINT

On October 18, 2013, the US Securities and Exchange Commission filed a securities fraud complaint against Yuhe International Inc. and Gao Zhentao in Weifang, Shandong Province. YUE COMPLAINT

On October 28, 2013, Phuong Ho filed an attached class action securities complaint against NQ Mobile Inc. of Beijing China, several Chinese individuals, Piper Jeffray, Oppenheimer and Canaccord.  HO NQ MOBILE

SECURITIES CLASS ACTION CERTIFICATION–CHINA INTELLIGENT LIGHTING

On October 28, 2013, a Federal Judge in California certified a class of shareholders suing China Intelligent lighting and Electronics Inc. for securities fraud, alleging that the company and the underwriters exaggerated the company’s revenues ahead of its public offering in June 2010.  According to the Plaintiff shareholders, China Intelligent overstated its revenue for the 2008 and 2009 fiscal years by roughly $74 million in its offering documents, which were prepared with help from underwriters WestPark Capital Inc. and auditors MaloneBailey LLP and Kempisty & Co. PC, after which its auditor resigned and the U.S. Securities and Exchange Commission banned public sales of company stock. See attached order.  CTORDER CLASS CERTIFICATION

If you have any questions about these cases or about the US trade, customs, false claims act, 337, patent, antitrust or securities law in general, please feel free to contact me.

Best regards,

Bill Perry

US CHINA TRADE WAR–DEVELOPMENTS IN TRADE, CUSTOMS, PATENTS, ANTITRUST AND SECURITIES

Houhai Lake at Night With Drum and Bell Tower Beijing, China TraDear Friends,

There have been some major developments in the trade, solar cells, Customs, 337/patents, antitrust and securities areas.

TRADE

SOLAR CELLS—BEAT GOES ON

On September 26th there were reports that the United States and China have been negotiating for the past several weeks toward a settlement of existing trade remedy cases affecting Chinese solar cells that would set a minimum floor price and limit Chinese imports.   Apparently, the arrangement would be similar to the one China reached with the European Union, which also included a floor price and provisions aimed at limiting Chinese imports.  Another US objective is to remove Chinese duties affecting U.S. exports of solar-grade polysilicon to China.

Apparently, negotiations have taken place, but it is still unclear how intense the talks are at this time or whether they are anywhere close to a breakthrough.   Sources report that the U.S. Trade Representative (“USTR”), which is leading the negotiations for the U.S. side, has been talking to the domestic manufacturing industury.  As mentioned before since antidumping and countervailing duty orders have already been issued, there cannot be a suspension agreement.

One speculation is that the US and Chinese government could enter into a memorandum of understanding like the U.S-Canada lumber agreement.   Regarding who has more leverage in the negotiations, as described below, with the third country loophole in place, since the Chinese companies can source the cells from Taiwan, Chinese companies may not be that affected by the Trade Remedy orders.  But certain Chinese producers make most of their money by producing solar cells in China, not the modules and panels.

Furhter increasing the pressure, there was quite a flurry in the newspapers as the Chinese Ministry of Commerce (“MOFCOM”) announced on September 20th its preliminary countervailing duty of 6.5% against Polysilicon from the United States against Hemlock and AE Polysilicon.  Other US producers, such as REC Silicon, received a 0% CVD rate. The CVD duty is in addition to the antidumping rates on polysilicon from 53 to over 60% on certain exporters.  See attached announcement.  MOFCOM ANNOUNCEMENT POLYSILICON

One trade publication quoted me stating that “I really think the United States, for the first time, has encountered a trade war,” Perry said. “All of a sudden, when it throws a rock at China, China throws two or three back.”

In addition, certain newspaper assumed that the countervailing duty replaced the antidumping duty against US polysilicon and the newspapers declared victory for the US side.  See http://www.renewableenergyworld.com/rea/blog/post/print/2013/09/china-escalates-trade-war-with-us-over-polysilicon-upping-tariffs-to-63-5

But the reality is quite different.  Just like the United States, the Chinese countervailing duty is added to the antidumping duty against US polysilicon so US producers/exporters are still under enormous pressure because of the Chinese trade case.  The U.S. imports of polysilicon into China were roughly $2 billion, while the imports of Chinese solar cells to the U.S. were roughly $4 billion.  The looming uncertainty has already cost the U.S. manufacturing jobs.  As mentioned in my last post, an August 18th article in the Seattle Times stated that Hemlock Semiconductor, the third-largest polysilicon producer, announced plans in January to lay off 400 employees at its Michigan and Tennessee plants, citing an oversupply of solar panels because of the potential for Chinese tariffs.  The article also stated that REC Silicon said the trade issues caused it enough uncertainty as far back as January of 2013 to delay a $1 billion capacity expansion at its Moses Lake plant in Washington.

The MOFCOM Polysilicon Decision increased pressure on the United States to negotiate a settlement agreement.  On September 23rd, a US solar industry association, the Solar Energy Industrial Association, released a proposed settlement of the solar cells and polysilicon trade cases.  SEIA SETTLEMENT PROPOSAL  In the attached announcement issued on September 23rd, the SEIA states:

“With no end in sight to the ongoing solar trade dispute between the United States and China, the Solar Energy Industries Association (SEIA) is offering an industry compromise between the U.S. and Chinese solar industries, which could serve as the centerpiece for a fair, negotiated settlement of outstanding issues, benefit end users, and encourage the proliferation of solar energy in the United States and globally. . . .

For months, SEIA has been working behind the scenes in Washington and Beijing to resolve the current conflict and head off an escalation of trade sanctions. SEIA has warned U.S. negotiators that any settlement similar to the recently announced EU-China agreement would represent a blow to the U.S. solar industry because of an expected increase in solar prices. SEIA also believes that any resolution of the U.S.-China solar dispute must recognize the interests of all stakeholders, including American consumers, and not just one segment of the industry.

Highlights of SEIA’s proposed solution include:

• Chinese companies would agree to create a fund that would benefit U.S. solar manufacturers directly and help to grow the U.S. market. Money for the fund would come from a percentage of the price premium Chinese companies are currently paying to third-country cell producers to get around U.S. trade sanctions, reducing costs and supply chain distortion for Chinese companies.

• The Chinese government would also agree to end its antidumping and countervailing duty investigations on U.S. polysilicon exports to China, and remove the threat of artificial cost increases in a key raw material in the solar value chain, benefiting not just Chinese solar companies but all users of solar energy.

• In return, the U.S. antidumping and countervailing duties orders would be phased out.”

In other words, the SEIA is proposing that the US Solar Industry and the Chinese solar industry simply come together and sing Kumbhaya, a let’s get together song, and everything will be fine again.  The reality is much different.

Although the United States and Chinese governments apparently are negotiating, the first problem with any settlement agreement is that the Chinese government has to agree.  With the Third Country loophole in place, that is if foreign solar cells are put in Chinese panels and modules, the panels and modules are not in the antidumping and countervailing duty case, Chinese modules and panels are not shut out of the US.  In fact, estimates are that the price difference between Chinese and Taiwan solar cells is an estimated 5 to 10 cents so the prices for modules and panels in the United States have only gone up by about $10.  Such a small prices increase has no impact on the US market.  So unless Commerce closes the loophole on its own or because of Court appeals, the Chinese government has no incentive to enter into such a settlement agreement.

Moreover, the US Solar Cell industry has no interest in such a settlement agreement.  In response to SEIA proposal, US counsel representing the US solar cell producers, including Solar World, indicated that they did not have any any intention of giving up unless and until China’s unfair trade practices have stopped.

Counsel for the US industry indicated that his clients are highly skeptical of any arrangement or settlement with China given its history of predatory trade pract1ces.  Since no agreement was negotiated in the initial investigation, getting the US industry’s agreement will be critical to any Solar Cells agreement because the Petitioners, including Solar World, must agree to withdraw their complaint.

This fight will definitely go on.

HARDWOOD PLYWOOD CASE

Another major trade fight is the antidumping and countervailing duty case against Hardwood Plywood from China.  On September 17, 2013, the Commerce Department issued its final antidumping and countervailing duty determinations in the Hardwood Plywood from China case.  As indicated in the attached notice, COMMERCE DEPARTMENT FACT SHEET HARDWOOD PLYWOOD the Antidumping rates range from 55.76% to 62.55% for the mandatory respondents and 59.46% for the rest of the Chinese companies that cooperated in the investigation and 121% for the Chinese companies that did not cooperate.

In the Countervailing Duty case, the three companies that were chosen as mandatory respondents received 0%.  But as mentioned before, even though the Chinese companies that were individually examined received 0%, the Commerce Department’s methodology does not let the Department go negative on the rest of China.  Despite the 0% dumping rates for the mandatory Chinese respondent companies, all other Chinese companies, more than 100 companies, received a 13.58% Countervailing Duty rate.  Fairness Commerce style.

In addition, how did the Commerce Department calculate an antidumping rates of approximately 55 to 62% for Chinese companies?  By using Bulgaria as the surrogate country.  Do you really think that Bulgaria is a more market driven economy than China?  Of course not, but that is not the point.

On September 19, 2013 at the ITC injury hearing Senator Wyden from Oregon testified for the US Industry stating:

“The growing tide of Chinese imports is sinking the boat of the American hardwood plywood industry . . .Left unchecked, these illegal trade practices undermine economic growth, struggling Oregon communities, and encourage more of these unacceptable trade practices by China and others who seek to play by their own rules. . .  American communities that are reliant on manufacturing had been brought “to the brink of economic collapse because of unfair trade.”

But who is the real loser in the Hardwood Plywood case, not the Chinese nor the US hardwood plywood industry.  The real losers in the Hardwood Plywood case are the downstream US producers of cabinets, furniture, boats, paneling and in home construction, crating and packaging, store fixtures, flooring underlayment and many other products, some of which are located in Oregon.

As Mr. Simon, the co-chairman of American Alliance and for Hardwood Plywood, and Mr. Titus, the executive vice president of the US Kitchen Cabinet Manufacturers Association, state in the attached article from the Wall Street Journal, “Protectionists Pick Your Pocket Again, You’ll Pay More for Cabinets, and Anything Made with Chinese Plywood and US jobs will be lost too” WSJ ARTICLE:

“Many thousands of U.S. factories depend on a steady, affordable supply of this plywood for the products they will sell at home and abroad.  Whether those downstream manufacturers sink or swim may be determined in Washington this week in two separate events—a ruling and a hearing.

The damage to U.S. manufacturers that rely on hardwood plywood has already begun. The combined tariffs have jolted supply chains, spiking the cost of imported hardwood plywood and creating painful shortages due to a lack of domestic supply. The first to suffer will be American jobs in manufacturing and woodworking. .. . Today, many U.S. manufacturers that depend on imported Chinese hardwood plywood fear that the tariffs will force the production of cabinets, furniture and other products now made in the U.S. to sites overseas. The domestic kitchen and bath-cabinet industries alone have $8.2 billion in annual sales. But how will the U.S. industry, hit by tariffs, compete with kitchen cabinets and other products made abroad—that can be shipped to the U.S. free of import duties? Competition will come from Canada and Mexico as well as China. . . .

This point was reinforced by Mr. Carl Spencer of Spencer Cabinetry, who testified at the ITC on behalf of the Kitchen Cabinetry industry in the attached article from Woodworking Network, ” Plywood Antidumping Ruling: Upside-Down System of Justice”  See  http://www.woodworkingnetwork.com/wood-blogs/industrial-woodworker/production-industry-guest-blogs/Upside-Down-System-of-Justice-226075531.html?page=2#sthash.wgd6pcex.dpbs

In the Article, Mr. Spencer states:

“My in-depth exposure has convinced me that a lot more American cabinetmakers need to get involved right away. This isn’t just someone else’s issue — our own very existence may be at stake, and it’s ten seconds to midnight. . . .”

“It’s a serious mistake for your readers to think this will not greatly affect them. Whether we buy any imported plywood or not, restricting the longstanding pipeline of hardwood plywood imported for use as secondary wood will trigger spot shortages and drive up prices of all domestic material for everyone.  That is the whole reason the Cartel of Six filed their complaint in the first place. . . .

“even though our hardwood plywood prices will go up a lot, they will not go up for our direct cabinetmaking competitors in China, Canada, Mexico, or elsewhere. As an example, we are already competing every day with Canadian companies, whose primary market is the United States.”

“From our point of view, our own government’s actions amount to a de facto stimulus, not for Americans, but instead for the Chinese, Canadian, and Mexican cabinet industries — all of whom can still buy plywood from China at the true world price. In the end, it is the American cabinet companies that will be punished, especially the small ones, and American jobs that will be lost.” . . .

“As it stands now, over 9,300 of us cabinet companies must now pay them for it for as long as we survive . .  .”

“The handwriting is on the wall. It might be well for the woodworking press to move their headquarters to Canada and have staff who speak Mandarin in order to better keep up with the new American cabinet industry.”

 

When the US government imposes antidumping and countervailing duties on US imports using an unfair process that is tilted in favor of US producers, the Government creates little monopolies.  When the products at issue are raw materials, the real losers are US producers of downstream products, which are either driven out of business because they cannot compete in the downstream market with imports that have access to the cheaper raw materials or forced to close their US production facilities and move to China.

NEW ANTIDUMPING AND COUNTERVAILING DUTY INVESTIGATIONS

MSG

On September 16, 2013, the Commerce Department initiated antidumping and countervailing duty review investigations on Monosodium Glutamate (“MSG”) from China. ITC Notice and Chinese companies in the review are listed below:

ITC NOTICE

Docket No: 2979

Document Type: 701 & 731 Petition

Filed By: Iain R. McPhie

Firm/Org: Squire Sanders (US) LLP

Behalf Of: Ajinomoto North America Inc.

Date Received: September 16, 2013

Commodity: Monosodium Glutamate (MSG)

Country: China and Indonesia

Description: Letter to Lisa R. Barton, Secretary, USITC; requesting the Commission to conduct an investigation under sections 701 and 731 of the Tariff Act of 1930 regarding the imposition of antidumping and countervailing duties on imports of Monosodium Glutamate (MSG) from People’s Republic of China and Republic of Indonesia.

Status: 701-TA-503-504 and 731-TA-1229-1230 (Preliminary)

The Chinese respondent producers and exporters in the MSG case are: Fufeng Group, Meihua Holdings Group, Henan Lotus Flower Gourmet Powder Co., Ltd, COFCO Biochemical (Anhui) Co. Ltd.), Shandong Linghua Monosodium Glutamate Incorporated Co. , Jining Jusheng Gourmet Powder Food Co., Ltd., Shandong Xinle Monosodium Glutamate Foods Co. Ltd.,  COFCO Limited, Ningxia Eppen Bio-Tech Co., Ltd., Huanyu Gelin Food Development Co Ltd., Haerbing Juhua Biotech Co. Ltd, Fujian Province Jianyang Wuyi MSG Co., Ltd., and Shandong Qilu MSG Group Co.,

GOES

On September 18, 2013, an antidumping and countervailing duty petition was filed against Grain Oriented Electrical Steel from China.   Notice and Chinese companies are listed below:

ITC NOTICE

Docket No: 2980

Document Type: 701 & 731 Petition

Filed By: John M. Herrmann

Firm/Org: Kelley Drye & Warren LLP

Behalf Of: AK Steel Corporation, Allegheny Ludlum LLC, and the United

Steelworkers

Date Received: September 18, 2013

Commodity: Grain-Oriented Electrical Steel

Countries: People’s Republic of China, The Czech Republic, The Federal Republic of Germany, Japan, The Republic of Korea, Poland, and the Russian Federation.

Description: Letter to Lisa R. Barton, Secretary, USITC; requesting the Commission to conduct an investigation under sections 701 and 731 of the Tariff Act of 1930 regarding the imposition of antidumping and countervailing duties on imports of Grain-Oriented Electrical Steel from the People’s Republic of China, The Czech Republic, The Federal Republic of Germany, Japan, The Republic of Korea, Poland, and The Russian Federation.

Status:  701-TA-505 & 731-TA-1231-1238

The Chinese respondents in the GOES case are: Anshan Iron & Steel Group Corporation, Hebei Shougang Qian’an Iron & Steel Co., Ltd. (subsidiary of Beijing Shougang Co. Ltd.), Baoshan Iron & Steel Co., Ltd. (subsidiary of Baosteel Group headed by parent company Shanghai Baosteel Group Corporation) (“Baosteel”), and Wuhan Iron & Steel Co. Ltd. (”Wuhan” or “WISCO”).

As indicated below, the ironic point is that the Chinese Government has levied antidumping and countervailing duties on US exports of GOES to China.  Although the US has taken the GOES case to the WTO and won a victory, the orders stay in place in China.  The 3 plus years that the orders have been in place, however, have allowed the Chinese GOES industry to catch up and now export GOES to the US, which is causing problems for the US GOES industry.

In the Steel Antidumping and Countervailing Duty Wars between the US and China, what goes around, comes around.

IMPORT ALLIANCE FOR AMERICA/IMPORTERS’ LOBBYING COALITION

As mentioned in prior newsletters, we are working with APCO, a well-known lobbying/government relations firm in Washington DC, on establishing a US importers/end users lobbying coalition to lobby against the expansion of the antidumping and countervailing duty laws against China.

On September 18, 2013, ten US Importers agreed to form the Import Alliance for America.  The objective of the Coalition will be to educate the US Congress and Administration on the damaging effects of the US China trade war, especially US antidumping and countervailing duty laws, on US importers and US downstream industries.

We will be targeting two major issues—Working for market economy treatment for China in 2016 and working against retroactive liability for US importers. The key point of our arguments is that these changes in the US antidumping and countervailing duty laws are to help US companies, especially US importers and downstream industries.  We will also be advocating for a public interest test in antidumping and countervailing duty cases and standing for US end user companies.

If anyone is interested in the Alliance, please feel free to contact me.

CHINESE ANTIDUMPING AND COUNTERVAILING DUTY LAW

POLYSILICON

Attached is the Chinese Government’s Ministry of Commerce (“MOFCOM”) September 20th announcement of preliminary countervailing duties to be levied on polysilicon imports from the US.  MOFCOM ANNOUNCEMENT POLYSILICON

SILICON STEEL—GOES

The US battle with the Chinese government on its antidumping and countervailing duty orders against GOES from the US is still being fought out.  In response to the August 12th announcement by MOFCOM that it had met its WTO obligations in the GOES case, on September 11, 2013, the USTR stated that it is “currently evaluating China’s re-determination of antidumping and countervailing duties on GOES from the United States” and that if the Chinese government’s actions are not sufficient to comply with the WTO’s recommendations and rulings, the US could initiate further proceedings at the WTO.

As the recent US antidumping and countervailing petitions against GOES from  China indicate, however, the US GOES industry has already lost its technical/tactical advantage.

Although the US Steel industry complains about Chinese antidumping and countervailing duty cases against US GOES exports, in light of US refusal to use actual prices and cost in China calculate dumping rates and the Commerce Department’s methodology that finds dumping and subsidization in 100% of the cases against China, such criticism has a very hollow ring.

CUSTOMS

HONEY CASE

On September 30, 2013, a US agent for a dozen Chinese honey importers was sentenced to three years in prison for her role in smuggling operations that allegedly avoided nearly $40 million in US antidumping duties. At a federal court hearing in Chicago, Hung Yi lin -who pled guilty last year to three counts of entry of goods into the U.S. by means of false statements- was also ordered to pay $512,852 in restitution, but avoided the six-year prison sentence sought by prosecutors.

Lin, 43, also known as Katy Lin, allegedly played a pivotal role in helping her clients falsify documents on shipping containers loaded with Chinese-origin honey from 2009 to 2012, making it appear that they were filled with sugars or syrups. Through her California-based company KBB Express, Lin brought in $11.5 million of honey into the US avoiding almost $40 million in antidumping duties.

Ms. Lin’s attorney argued that his client was simply a hardworking immigrant, who was merely a freight forwarder and did not profit from the scheme.  Ms. Lin in tears told the US Judge Milton I. Shadur that she was not attempting to flee prosecution, when she was arrested on her way out of the country.  “I’m really sorry if anything I did hurt this country. I came here for my dream . . . .”

In response, however, the Assistant US Attorney argued that the Mr. Lin’s role was absolutely critical in the sophisticated scheme.  The Assistant U.S. Attorney also stressed the damage to the U.S. honey industry when the price of honey collapsed due to the smuggling operation and other similar schemes.

PATENTS

337 CASES

CAFC DETERMINATION –MICROSOFT NO DOMESTIC INDUSTRY UNDER 337

On October 3, 2013, the third day of the Government shutdown, we can say that at least the Courts are open. Today the Court of Appeals for the Federal Circuit (“CAFC”) issued its attached decision in Microsoft v. US International Trade Commission (“ITC”) and Motorola in which Microsoft appealed an ITC determination of no violation in a 337 case.  MICROSOFT DOMESTIC INDUSTRY  The CAFC affirmed the ITC on almost every part of the decision, remanding on one small aspect of one patent back to the ITC.  The most important issue is the its decision on domestic industry, which will effect future 337 cases against China.

In that decision, which is attached, the CAFC dismissed one part of Microsoft’s patent case becasue Microsofit did not establish that the patented invention, the specific patent in question, was actually practiced in the United States and, therefore, there was no domestic US industry with regards to this patented product.  The CAFC stated:

“Microsoft’s failing was simple. Although Dr. Olivier purported to identify “client applications” in an example application that Microsoft provides to third party phone manufacturers, Microsoft failed to show that any such “client applications” are actually implemented on any third-party mobile device.  .  .  According to the ALJ, because Microsoft did not point to evidence that its expert examined client applications in fact running on third-party mobile phones or confirmed how they operated, Microsoft failed to show that there is a domestic industry product that actually practices the ’376 patent.  . . .In this appeal, we do not reach Microsoft’s challenge to the non-infringement determination because we find substantial evidence to support the Commission’s finding of no domestic industry, which suffices to support its finding of no violation based on this patent. There is no question about the substantiality of Microsoft’s investment in its operating system or about the importance of that operating system to mobile phones on which it runs.”

“But that is not enough under the statute. Section 337, though not requiring that an article protected by the patent be produced in the United States, unmistakably requires that the domestic company’s substantial investments relate to actual “articles protected by the patent.”  19 U.S.C. §§ 1337(a)(2), (3). A company seeking section 337 protection must therefore provide evidence that its substantial domestic investment—e.g., in research and development—relates to an actual article that practices the patent, regardless of whether or not that article is manufactured domestically or abroad. . . .”

“We conclude that there is substantial evidence to support the Commission’s determination that Microsoft failed to meet that requirement. . . . The Commission did not lack substantial evidence to support its finding that Microsoft simply failed to identify any actual phones with the required components performing as required.  . . .”

“On that basis, the Commission could find that Microsoft failed to show that any Microsoft-supported products practiced the ’376 patent. We therefore affirm the Commission’s finding of no proven domestic industry, and hence no section 337 violation, involving this patent.”

SUPREME COURT ARGUMENTS ON DOMESTIC INDUSTRY

On September 9, 2013, in Nokia v. US International Trade Commission, Nokia attempted to persuade the Supreme Court to take jurisdiction and overturn the CAFC’s January 2013 decision in Interdigitial Communications LLC et al v.  International Trade Commission and Nokia Inc. that licensing of specific patents by InterDigital in the United States was enough to be a domestic industry under section 337.  Nokia argued that nonpracticing entities should not be considered a domestic industry under section 337.

In response, according to InterDigital, when it ruled that it had satisfied the domestic industry requirement, the CAFC simply followed “the intent of Congress to enlarge the domestic industry requirement to cover licensing activities – when those activities are substantial and connected to exploitation of the patents at issue. . . .”  InterDig Brief

In the attached Supreme Court brief, the ITC sided with InterDigital.  ITC BRIEF  19 USC 1337(a)(3) (C) specifically provides that a domestic industry “shall be considered to exist if there is in the United States with respect to the articles protected by the patent, “substantial investment in the patent’s exploitation, including engineering, research and development or licensing”.  The ITC pointed to record evidence that InterDigitial had “invested a total of approximately $7.6 million in salaries and benefits for employees engaged in its licensing activities, and it received almost $1 billion in revenues from portfolio licenses (including the patents in suit) related to its cellular technology. . . .”

In addition, the ITC pointed to the CAFC’s explanation that in 19 1337(a)(3)(C) Congress intended to protect “innovators who did not actually produce goods in this country, but who were injured by the importation of goods that incorporated the technology that they had invented or sought to license”.

NEW 337 CASE

HANDHELD MAGNIFIERS

On September 26, 2013, a new 337 case was filed against Aumed Group Corp. in China on handheld magnifiers. See notice below:

Docket No: 2984

Document Type: 337 Complaint

Filed By: Matthew B. Lowrie

Firm/Org: Foley & Lardner

Behalf Of: Freedom Scientific, Inc

Date Received: September 26, 2013

Commodity: Handheld Magnifiers

Description: Letter to Lisa R. Barton, Acting Secretary, USITC; requesting that the Commission conduct an investigation under section 337 of the Tariff Act of 1930, as amended regarding Certain Handheld Magnifiers and Products Containing Same. The proposed respondents are Aumed Group Corp., China; and Aumed Inc., San Carlos, CA.

MARINE SONAR DEVICES AGAINST HONG KONG

On September 20, 2013, a new 337 case was filed on Marine Sonar Imaging Devices against a Hong Kong company.  See notice below.

Docket No: 2981

Document Type: 337 Complaint

Filed By: M. Scott Stevens

Firm/Org: Alston and Bird LLP

Behalf Of: Navico Inc. and Navico Holding AS

Date Received: September 20, 2013

Commodity: Marine Sonar Imaging Devices

Description:  Letter to Lisa R. Barton, Acting Secretary, USITC; requesting that the Commission conduct an investigation under section 337 of the Tariff Act of 1930, as amended regarding Certain Marine Sonar Imaging Devices, Products  Containing the Same, and Components Thereof. The proposed respondents are: Raymarine Inc., Nashua, New Hampshire; Raymarine UK Ltd., United Kingdom;  and In-Tech Electronics Ltd, Hong Kong.

NEW PATENT BILL PROPOSES TO MAKE IT MORE DIFFICULT FOR NPES/PATENT TROLLS

The House of Representatives released the attached draft patent bill on September 23, 2013 aimed at making it more difficult for patent trolls, non-practicing entities (“NPEs”), to bring patent cases.  HOUSE PATENT BILL  The bill will raise the pleading requirements, making it more difficult for NPEs to file frivolous suits.  The pleading requirements would also increase the cost and complexity of patent cases.

The bill would also require the losing party in patent cases to pay the costs of the prevailing party unless the judge finds that the suit was “substantially justified,” creating an exception in patent cases to the “American rule” that parties are generally responsible for paying their own attorney’s fees.

NEW PATENT CASES AGAINST HUAWEI, ZTE, HANGZHOU COMPANY AND OTHER CHINESE COMPANIES

On September 9, 2013, ACQIS filed a patent complaint against Huawei.  ACQIS HUAWEI

On September 17, 2013, C. B. Worldwide Inc. filed a patent complaint against Chinese companies, Hangzhou Yizhan Pet Products, Allara China Ltd., Shanghai ITCPC Import and Export Co. and Petlike.  The complaint alleges misappropriation of technology, patent infringement and breach of contract.  CHINA TOYS HANGZHOU

On September 25, 2013, Nidec Motor Corporation filed a patent complaint in the Federal District Court in Missouri against Broad Ocean Motor, Broad Ocean Technologies and Zhongshan Broad Ocean Motor Co., Ltd.

On September 26, 2013, James Grove and LF Products filed a patent case against COSTCO and Global Furniture (Zhejiang) Co. Ltd.  ZHEJIANG COSTCO

On September 26, 2013, SPH America filed patent complaints against Huawei and ZTE.  SPH ZTE   SPH HUAWEI

On September 30, 2013 and October 1, 2013, Super Interconnect Technologies filed patent complaints against Huawei and ZTE.  SUPER INTERCONNECT ZTE   SUPER INTERCONNECT HUAWEI

ANTITRUST

JUSTICE DEPARTMENT’S SYSTEMATIC INVESTIGATION OF ASIAN CARTELS

To illustrate that antitrust cases against Chinese companies for price fixing are not just China bashing, the following are additional examples of the major movement by the Justice Department and private plaintiffs in the United States to go after cartels, price fixing by foreign companies, aimed at the US market.  Well known antitrust experts have told me that Justice is targeting foreign cartels, especially Asian cartels, and is systematically going through industry after industry looking for evidence of price fixing.

In light of the ongoing cases against Vitamin C, Magnesium and Bauxite from China, it is just a matter of time before the Justice Department and Private Plaintiffs start to target Chinese companies for price fixing on various products.  One of the first targets of such price fixing investigations may be auto parts.

NINE JAPANESE AUTO PARTS COMPANIES PLEAD GUILTY TO PRICE FIXING CARTEL

On September 26th, the Justice Department issued the attached announcement that Nine automobile parts manufacturers and two executives agreed to plead guilty to fixing prices on automobile parts sold to U.S. car manufacturers and installed in U.S. cars.  FULL DOJ NOTICE AUTO PARTS SEPT 26  NINE JAPANESE AUTO PARTS COMPANIES PLEAD GUILTY

 The nine Japanese Companies agreed to pay a total of more than $740 million in Criminal fines.  The September 26th announcement states as follows:

“Nine Japan-based companies and two executives have agreed to plead guilty and to pay a total of more than $740 million in criminal fines for their roles in separate conspiracies to fix the prices of more than 30 different products sold to U.S. car manufacturers and installed in cars sold in the United States and elsewhere . . .  The department said that price-fixed automobile parts were sold to Chrysler, Ford and General Motors, as well as to the U.S. subsidiaries of Honda, Mazda, Mitsubishi, Nissan, Toyota and Fuji Heavy Industries–more commonly known by its brand name, Subaru.”

“These international price-fixing conspiracies affected more than $5 billion in automobile parts sold to U.S. car manufacturers, and more than 25 million cars purchased by American consumers were affected by the illegal conduct,” said Attorney General Eric Holder. “The Department of Justice will continue to crack down on cartel behavior that causes American consumers and businesses to pay higher prices for the products and services they rely upon in their everyday lives.”

“Some of the price-fixing conspiracies lasted for a decade or longer, and many car models were fitted with multiple parts that were fixed by the auto parts suppliers,” said Scott D. Hammond, Deputy Assistant Attorney General of the Antitrust Division’s criminal enforcement program. “The Antitrust Division has worked hand in hand with its international competition colleagues who have provided invaluable assistance to the Justice Department in breaking up these worldwide price-fixing cartels.”

“Today’s charges should send a message to companies who believe they don’t need to follow the rules,” said Ronald Hosko, Assistant Director of the FBI’s Criminal Division. “If you violate the laws of this country, the FBI will investigate and put a stop to the threat you pose to our commercial system. The integrity of our markets is a part of the foundation of a free society.”

“Including those announced today, 20 companies and 21 executives have been charged in the Antitrust Division’s ongoing investigation into price fixing and bid rigging in the auto parts industry. All 20 companies have either pleaded guilty or have agreed to plead guilty and have agreed to pay more than $1.6 billion in criminal fines. Seventeen of the 21 executives have been sentenced to serve time in U.S. prisons or have entered into plea agreements calling for significant prison sentences.”

“Each of the companies and executives charged today has agreed to cooperate with the department’s ongoing antitrust investigation. The plea agreements are subject to court approval. The companies’ and executives’ agreed-upon fines and sentences are:

• Hitachi Automotive Systems Ltd. to pay a $195 million criminal fine;

• Jtekt Corporation to pay a $103.27 million criminal fine;

• Mitsuba Corporation to pay a $135 million criminal fine;

• Mitsubishi Electric Corporation (MELCO) to pay a $190 million criminal fine;

• Mitsubishi Heavy Industries Ltd. to pay a $14.5 million criminal fine;

• NSK Ltd. to pay a $68.2 million criminal fine;

• T.RAD Co. Ltd. to pay a $13.75 criminal fine;

• Valeo Japan Co. Ltd. to pay a $13.6 million criminal fine;

• Yamashita Rubber Co. Ltd. to pay a $11 million criminal fine;

• Tetsuya Kunida, a Japanese citizen, to serve 12 months and one day in a U.S. prison, and to pay a $20,000 criminal fine; and

• Gary Walker, a U.S. citizen and former executive of a U.S. subsidiary of a Japan-based automotive products supplier to serve 14 months in a U.S. prison, and to pay a $20,000 criminal fine.”

 

At a news conference about the guilty plea, Scott D. Hammond, Assistant Attorney General of the Antitrust Division’s Criminal Enforcement Program, stated as follows in the attached statement:

“We have seen a pattern during the course of this investigation. The detection of one auto part conspiracy has led to the discovery of other conspiracies involving a new set of products, a new group of conspirators and a new list of victims. And as the Attorney General said, our work isn’t done. . . .”

“The companies and executives charged today will pay a heavy price for their conduct. As of today, more than $1.6 billion in criminal fines have been obtained thus far and 17 auto parts executives are currently serving prison time or are awaiting sentencing. The deterrent impact of their sentences should resonate in boardrooms around the world.”

“As today’s charges demonstrate, global cartels operating largely outside of our borders often constitute the biggest competitive threat to our economy, our businesses and our consumers. The Antitrust Division and the FBI have worked closely with our international competition colleagues to break up these worldwide price-fixing cartels.”

SCOTT HAMOND SPEECH

LIQUID CRYSTAL DISPLAY (LCDS) FROM TAIWAN

In San Francisco, a criminal antitrust trial is proceeding against Borlong Bai of AU Optronics in Taiwan for his involvement in a cartel to price liquid crystal displays.  AUO, its US subsidiary  and two executives were convicted of price fixing last year and two other executives were found not guilty.  Bai’s attorneys are arguing that although he was a manager of AUO’s division that sold LCDs to laptop computer companies, Bai simply used the information he received to outmaneuver his rivals and not to fix prices.

The Justice Department is arguing that Bai was essential to the global conspiracy to fix prices of LCDs.

ANTITRUST AG BILL BAER SPEECH ON CRIMINAL ANTITRUST CASES LCDS FROM TAIWAN

On September 25, 2013, Bill Baer, the Assistant Attorney General for the Antitrust Division at the Justice Department spoke to the Georgetown Law’s 7th Annual Global Antitrust Enforcement Symposium on the importance of the lesson from the LCDs case against Taiwan companies.  BAER DOJ STATEMENT  Mr. Baer stated in the attached speech:

“Criminal enforcement is a large part of what we do at the Division. Effective sanctions matter there too. Guided by the federal Sentencing Guidelines, our prosecutors seek criminal sentences that are consistent with statutory considerations and reflect the seriousness of the offense, promote respect for the law, provide just punishment, afford deterrence, protect the public, and offer defendants an opportunity for effective rehabilitation.”

“Last year, for the first time, the division recommended that a criminal antitrust defendant be required, as a condition of its probation, to retain an independent corporate monitor to develop and implement an effective antitrust compliance program. The defendant, AU Optronics Corporation (AUO), its U.S. subsidiary, and two of its top executives, had been convicted at trial for their role in a conspiracy to fix the price of liquid crystal display (LCD) panels – a conspiracy that had a significant impact on U.S. commerce.”

“Rarely has a company needed an effective antitrust compliance program as much as AUO. AUO was founded the very month the LCD conspiracy began. From its inception, AUO’s standard operating procedure was collusion. “Antitrust compliance program” was not in its lexicon. Even after conviction, AUO continued to employ convicted price-fixers and indicted fugitives. As a result, the division argued that there was no reason to believe that AUO’s conviction and the imposition of a criminal fine – even a large fine – would deter AUO from engaging in future collusive conduct.”

“The court agreed.  In addition to a $500 million fine, the court sentenced AUO and its subsidiary to three years of probation during which the companies are required to develop, adopt, and implement an effective compliance and ethics program, and to retain an independent monitor to oversee that program. Consistent with the division’s willingness to request external monitors in the civil context, the division will consider seeking conditions of criminal probation that include independent monitors when faced with circumstances in which the division is not persuaded that penalties alone will deter future illegal behavior.”

Attached are two class action complaints filed in October against Japanese auto parts.  As a result of the Justice Department plea agreements, Japanese auto parts companies and probably eventually Taiwan auto parts companies are exposed to $100s of millions, if not billions of dollars in liability under private right of action triple damage antitrust cases.  AUTO PARTS SWITCHES PANASONIC  DIAMOND AUTO PARTS AT CASE

US FTC CHAIRWOMAN STATES THAT CHINA NEEDS TO ENSURE PROCEDURAL FAIRNESS IN ITS ANTITRUST PROCEEDINGS

On September 25, 2013, at a conference in Washington DC, FTC Chairwoman Edith Ramirez questioned the Chinese Government’s fairness in antitrust proceedings.  Ms. Ramirez stated:

“While every country must determine its own competition policy, we believe consumers and competition policy are best served when competition enforcement is based solely on economic analysis of effects on competition.  But if other factors nonetheless enter into competition decisions, their nature and effect should be transparent.”

The problem with Ms. Ramirez’s statement is that the Chinese government’s first experience with US government fairness is through the US antidumping laws.  For decades, the Chinese companies and government have been subjected to Commerce Department antidumping and countervailing duty proceedings, which are clearly not fair and transparent.  With its surrogate country and surrogate value analysis, Commerce Department determinations in antidumping cases on their face are arbitrary and capricious.  Using Bulgaria as a surrogate country in the Hardwood Plywood case is just such an example.

The procedural unfairness inherent in US antidumping and countervailing duty laws affects the entire legal relationship between the US and China.  Chinese government officials and many Chinese companies sincerely believe that the United States is simply out to bash Chinese companies and procedural fairness be damned.

What is sauce for the goose is sauce for the gander.  If the Commerce Department uses inherently unfair procedures in its antidumping and countervailing duty investigations, which have no basis in economic reality, from the Chinese government’s point of view why should it base its competition policy on “economic analysis of effects of competition.”

CLASS ACTION ANTITRUST CASE AGAINST KOREAN NOODLE COMPANIES

On September 5, 2013, the attached class action antitrust case complaint was filed in Federal District Court in California by Stephen Fenerjian against Korean noodle companies for price fixing on exports of noodles to the United States.  The target companies are: Nong Shim Company Ltd., Nong Shim America Inc., Ottogi Company Ltd., Ottogi America, Inc., Samyang Foods Company Ltd., Samyang (USA) Inc., Korea Yakult Co., Ltd., and Paldo Company Ltd.  KOREAN NOODLES ANTITRUST CASE

SECURITIES

SEC GRANTS DELAY IN PROCEEDING AGAINST US ACCOUNTING FIRMS FOR REFUSING TO RELEASE AUDIT DOCUMENTS OF CHINESE COMPANIES

On October 2, 2013, in the attached order, SEC ORDER ACCOUNTING FIRMS the U.S. Securities and Exchange Commission (“SEC”) granted a request from an administrative law judge to give an additional 100 days to determine whether top accounting firms, such as Ernst & Young, Deloitte and Price, Waterhouse, have to produce audit document of Chinese company clients that are suspected of defrauding their US investors through reverse mergers.  In December 2012 the SEC started this case because it believes the accounting firms, including the Big 4, have refused to to cooperate with document requests in an investigation into China-based companies whose securities are publicly traded in the U.S. in violation of US security laws.  The accounting firms argue that they fear violating Chinese secrecy laws.  As evidenced by the complaints on this site, the SEC has cracked down in the last few years on fraudulent reverse mergers, in which Chinese companies have used existing public shell company to merge with a private operating company, leaving the shell company as the surviving legal entity.  The crackdown, however, has been delayed by the Chinese privacy laws, which bar China-based auditors, including the subsidiaries of US accounting firms, from turning over Chinese client information.

The accounting firms have been fighting requests for audit paperwork related to Chinese companies accused of fraud on US investors.  In July, following bilateral investment talks, the U.S. announced that China had agreed to turn over certain audit documents to the SEC and the Public Company Accounting Oversight Board.  That deal came shortly after the PCAOB announced a memorandum of understanding with the China Securities Regulatory Commission and the country’s Ministry of Finance to ease restrictions on release of audit information in fraud investigations.

COMPLAINTS

A number of new securities complaints cases have been filed against Chinese companies.

On September 26, 2013, the Securities and Exchange Commission (“SEC”) filed the attached  securities fraud complaint against Lee Chi Ling (“Lee”) and Perfect Genius Limited (“Perfect Genius”), alleging securities fraud in a classic “pump and dump”scheme from at least June 2004 through at least February 2006 to manipulate the price of the common stock of China Energy Savings Technology, Inc.   PERFECT GENIUS

On September 26, 2013, the SEC filed a securities fraud complaint against defendants Chan Tze Ngon, a/k/a Chen Zi Ang and Ron Chan, (“Chan”), and Jiang Xiangyuan (“Jiang”).  The case involves two securities fraud schemes engineered by former high level officials of ChinaCast Education Corporation (“ChinaCast”) to steal about $100 million out of the company by diverting monety to their private accounts.  CHINA CAST

On September 27, 2013, the SEC filed a securities fraud complaint against Universal Travel Group (UTG), a China-based travel company, UTG’s former ChiefExecutive Officer Jiangping Jiang (“Jiang”); and UTG’s former Chief Financial Officer, Jing Xie (“Xie”) for diverting $41 million in public and private stock offerings in the United States to numerous unknown parties in Hong Kong and the PRC. In an interesting note, the attached complaint also includes consent judgements by UTG, Jian and Xie in which they agree to the SEC charges and agree to pay fines and penalties.  Even in China, you can run, but not hide.  UNIVARSAL TRAVEL

On September 30, 2013, Another class action securities case was filed against Light in the Box Holding, a Beijing company, and two Chinese individuals for securities fraud.  LIGHT IN THE BOX

 If you have any questions about these cases or about the US trade, customs, patent, antitrust or securities law in general, please feel free to contact me.

Best regards,

Bill Perry

US CHINA TRADE WAR — GUILTY VERDICT VITAMIN C ANTITRUST CASE

New York City Skyline East River Chrysler Building NightDear Friends,

There have been a number of developments in the trade, antitrust, patent, products liability and securities areas.  Most important being a Guilty Verdict in the Vitamin C case in New York City with certain Chinese Producers now facing $162 million in liability.

TRADE

HARDWOOD PLYWOOD

Commerce has issued a revised CVD preliminary determination in the Hardwood Plywood case, but the CVD rates did not change much ranging from 0 to 27%.  See attached documents.  AMENDED PRELIM HARDWOOD PLYWOOD CVD AMENDED PRELIM PLYWOOD DECISON MEMO

ANOTHER GPX TYPE CASE THROWN OUT

On March 12, 2013, the Court of International Trade issued another GPX type of decision in the attached Guangdong Wireking Case dismissing the argument that bringing a countervailing duty case against China is unconstitutional.  GUANGDONG WIREKING CASE

ANTITRUST—VITAMIN C CASE—GUILTY VERDICT

As a follow-up to my last two posts on this blog with day to day descriptions of the Vitamin C antitrust jury trial, yesterday, Thursday, March 14, 2013,  the Jury issued a guilty verdict and certain Chinese companies are now facing $162 million in liability.

As stated in the prior two posts, the Jury trial started on Monday, February 25, with allegations that the price fixing by Chinese Vitamin C companies cost US businesses $54.1 million. The specific allegation is that China’s largest vitamin C makers voluntarily entered into a series of agreements that limited supply and artificially inflated prices U.S. purchasers paid for Vitamin C between 2002 and March 2006.  About 80 percent of vitamin C used in the U.S. is produced in China.  The remedy in an antitrust case is triple damages or $54 million times 3 or $162 million.

The trial is historic because Chinese companies have never before been forced to defend themselves in an antitrust case in US court.

The Chinese Vitamin C companies’ defense is that the Chinese government compelled the companies to set the prices, which is known as the sovereign compulsion defense, through the China Chamber of Commerce for Import & Export of Medicine & Health Products (“Chamber”).  To win on this argument, however, the Chinese companies had to prove that the Chinese government actually compelled the Chinese companies to set the price floor for the Vitamin C exports on pain of penalty.

On Monday, March 11th, and Tuesday, March 12th, the trial continued and the economists made competing presentations regarding damages.  The Plaintiffs’ expert Dr. Bernheim stated that the Wu report from the Chinese side attributing sharp price increases to fears over SARS and avian flu outbreak- as opposed to industry collusion was “nonsensical” and riddled with mathematical errors.

On Wednesday, there were closing arguments.  Just before the case went to the Jury, the Judge stated that China Pharmaceutical Group Ltd. and its vitamin C production unit had bowed out of an antitrust trial probably because of a confidential settlement agreement with the Plaintiffs.

China Pharmaceutical’s exit means that only North China Pharmaceutical Group Corp. and its HeBei Welcome Pharmaceutical Co. Ltd. subsidiary remained in the case to face the Jury.

The Plaintiffs’ lawyer stated that the US companies were still requesting $54.1 million in damages for setting prices for Vitamin C, which harmed American business.

NCPG and HeBei Welcome’s attorney told the Jury that Plaintiffs’ attorney in showing jurors numerous documents regarding the Chinese companies price fixing, presented evidence at trial in a misleading manner.

Both attorneys focused on the testimony of Qiao Haili, formerly the Chamber’s top vitamin C regulator.  Haili, who testified for the Chinese companies, said that he ordered Chinese companies to coordinate pricing activity through an industry chamber group he directed.  Haiti testified that he had the power to punish companies, including voiding their export contracts, if they didn’t comply with pricing arrangements.

But Plaintiffs’ attorney during cross-examination presented Haili with a memo he sent to MOFCOM in July 2003, stating the group the agency had formed to regulate competition vitamin C manufacturers lacked legal authority to penalize companies that didn’t follow industry rules. Haili wrote that industry rules were a mere formality and lacked enforcement mechanisms.

“(Haili) wrote a memo about his lack of authority,” Plaintiffs’ attorney said. “He wrote a memo that everything he testified under oath was wrong.“   Plaintiff’s attorney also challenged Haili’s credibility as a witness, pointing out that he gave differing statements in deposition and then at trial.  Plaintiffs’ attorney also suggested that Haili wasn’t actually a member of the Chinese government or working as a MOFCOM surrogate.

NCPG and HeBei Welcome’s attorney responded that Haili’s memo was referring to a lack of regulation in China’s penicillin industry and didn’t relate to vitamin C.

After closing arguments, the case went to the jury for a decision.

On Thursday, March 14, 2013, less than one day after the case was sent to the jury, the Jury returned a guilty verdict of $54 million, which was tripled to $162.3 million against North China Pharmaceutical Group Corp. and its vitamin C manufacturing unit for price fixing.  The Jury rejected Defendants’ argument that the Chinese government has forced them to fix prices and limit supply to a class of U.S. businesses.  The jury found that NCPG and its HeBei Welcome Pharmaceutical Co. Ltd. met with competitors to coordinate pricing in China’s vitamin C industry.  U.S. District Judge Brian Cogan said he would sign an order trebling the damages later Thursday, which would push the companies’ liability to $162.3 million.

Plaintiffs’ attorney from Boies Schiller stated “The jury found that this was never about the Chinese government,” “This was about the cartel in China violating our laws.”

Jurors deliberated less than a day before reaching the verdict.

PATENTS

And another patent case was filed against Huawei.  Attached is the complaint filed on March 12, 2013 by Packet.  SHORT PACKET HUAWEI COMPLAINT 3122013

PRODUCTS LIABILITY

Attached is a products liability complaint filed on March 11, 2013 against Foshan Mattress.  FOSHAN MATTRESS

SECURITIES

SUNPOWER PAYS $20 MILLION TO SETTLE SECURITIES CLASS ACTION FRAUD CASE

On March 14, a California federal judge preliminarily approved a $19.7 million settlement in a class action securities case between SunPower Corp. and a class of shareholders who claim the solar-power company falsely inflated earnings reports, leading stock values to fall substantially.  U.S. District Court Judge Richard Seeborg allowed a retirement fund and an investment management fund to become the lead plaintiffs for the shareholder class, representing thousands of shareholders who bought SunPower shares between 2008 to 2009.

SunPower was hit with the putative class-action in November 2009, shortly after revealing the alleged fiscal misconduct.  Plaintiffs accused SunPower of falsifying seven consecutive quarters of financial results and overstating the company’s earnings and making misleading statements about the company’s fiscal health.

According to the settlement motion, those alleged misstatements allowed SunPower to raise $450 million in stock and bond offerings “using fictitious financial reports during a period of intense competition from lower-cost competitors in China.”

If you have any questions about these cases or legal areas, please feel free to contact me.  As mentioned before, I will be in China in Beijing and Shanghai from March 17 to 30th.  If anyone wants to meet and talk about these developments, please feel free to contact me.

Best regards,

Bill Perry

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