Corning Glass Works v. United States International Trade Commission, Sumitomo Electric Industries, Ltd., Sumitomo Electric U.S.A., Inc., Intervenors

799 F.2d 1559, 230 U.S.P.Q. (BNA) 822, 1986 U.S. App. LEXIS 20327, 8 I.T.R.D. (BNA) 1120
CourtCourt of Appeals for the Federal Circuit
DecidedAugust 27, 1986
DocketAppeal 85-2632
StatusPublished
Cited by66 cases

This text of 799 F.2d 1559 (Corning Glass Works v. United States International Trade Commission, Sumitomo Electric Industries, Ltd., Sumitomo Electric U.S.A., Inc., Intervenors) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Corning Glass Works v. United States International Trade Commission, Sumitomo Electric Industries, Ltd., Sumitomo Electric U.S.A., Inc., Intervenors, 799 F.2d 1559, 230 U.S.P.Q. (BNA) 822, 1986 U.S. App. LEXIS 20327, 8 I.T.R.D. (BNA) 1120 (Fed. Cir. 1986).

Opinion

NIES, Circuit Judge.

Corning Glass Works appeals from the International Trade Commission’s determination that the importation and sale of certain optical waveguide fibers manufactured in Japan by Sumitomo Electric Industries, Ltd. (SEI) and sold in the United States by Sumitomo Electric U.S.A., Inc. (SEUSA) (collectively Sumitomo) did not violate section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1337 (1982). 1 Although the subject imports were found to infringe Coming’s U.S. Patent No. 3,659,-915 covering certain optical waveguide fibers and to have been made abroad using a process claimed in Coming’s U.S. Patent No. 3,933,454 covering a flame hydrolysis method for making optical waveguide fibers, the Commission found no effect or tendency to substantially injure a domestic industry within the meaning of section 337 because the quantity of imports had been, and were likely to remain, de minimis. Corning asserts that the Commission has misinterpreted the statutory injury requirement and erred in its findings of facts on this issue. Our jurisdiction over the appeal is found in 19 U.S.C. § 1337(c) (1982) and 28 U.S.C. § 1295(a)(6) (1982). We affirm. In view of our disposition of the appeal on the issues related to the determination of no injury, resolution of the patent issues is not necessary to this decision and we do not address them. That part of the decision below is vacated.

I.

Procedural Background

The Commission instituted the investigation at issue on April 5, 1984, on the basis *1563 of a complaint by Corning. Corning alleged that Sumitomo was engaged in an unfair method of competition in the importation and sale of certain optical waveguide fibers. In particular, Coming chárged Sumitomo with direct infringement of claims 1 and 2 of Coming’s U.S. Patent No. 3,659,915, which claims certain optical waveguide fibers, and with unauthorized importation and sale of fibers manufactured abroad using a process claimed in claims 1, 3 and 8 of Coming’s U.S. Patent No. 3,933,-454, which claims a method for making optical waveguide fibers. 2

The Commission referred the case to an administrative law judge for an evidentiary hearing and initial determination. On January 22, 1985, the AU issued his initial determination. He found that both patents were not proved to be invalid, or unenforceable, and were infringed by Sumitomo. The parties stipulated that the domestic industries operating under each patent were efficiently and economically operated. However, the AU found no effect or tendency to destroy or substantially injure the relevant industries. In this connection, he found that the optical waveguide fiber market in the United States had been expanding, and would continue to expand, faster than the capacity of the domestic industry to meet the demand. He also found that Sumitomo’s imports had had no appreciable effect on the sales or prices of domestic producers and that such imports were likely to diminish in the years ahead.

Both Corning and Sumitomo petitioned the Commission for review of various portions of the initial determination. On March 8, 1985, the Commission ordered review of the initial determination, but only with respect to the issue of whether Sumi-tomo’s importation or sales had the tendency to substantially injure an industry in the United States.

On April 18, 1985, the Commission completed its review, determined that there was no violation of section 337, and terminated the investigation. 50 Fed.Reg. 16,171 (1985). The Commission subsequently issued a written opinion. In re Certain Optical Waveguide Fibers, No. 337-TA-189 (May 20, 1985). In that opinion, the Commission affirmed the portion of the initial determination finding no tendency to substantially injure the relevant industries. The effect of the Commission’s March, 1985 order and May, 1985 opinion was specifically declared to affirm the AU’s initial determination in its entirety. 19 C.F.R. § 210.53(h).

II.

The Commission Decision

The Commission’s decision holds that there are two domestic industries, corresponding to the subject matter of each of Coming’s patents. The industry under the ’915 patent, that is, the patent claiming optical waveguide fibers, was found to consist of Corning and its licensees, AT & T, ITT and SpecTran; the industry under the '454 patent for a process for making the fibers solely of Coming. Although licensed under the ’454 process, AT & T, ITT and SpecTran do not produce their fiber by the patented process. With respect to members of either domestic industry, the Commission refused to include Northern Telecom, Inc. (NTI), which sells fiber in the United States imported from its parent Northern Telecom, Ltd. (NTL) which manufactures the fiber in Canada under a license from Corning. The Commission also excluded American Fiberoptics and Light-wave Technologies Co., alleged by Coming to be infringers of its patents, and Valtec Corporation, an alleged infringer which has become a licensee.

Optical waveguide fiber is sold in both cabled and uncabled form. Uncabled fiber is sold to firms which cable the fiber for use in telecommunications and other applications. Corning makes and sells uncabled *1564 fiber' only. AT & T sells only cabled fiber. ITT makes both uncabled and cabled fiber, but its license contains restrictions on its sale of uncabled fiber. SpecTran sells only uncabled fiber. Sumitomo sells both cabled and uncabled fiber, competing with Corning in sales of uncabled fiber.

In 1980, Sumitomo began importing and selling optical waveguide fiber in the United States. The U.S. market for optical waveguide fiber has grown with increasing rapidity since 1982 and is expected to double in size from 1985 to 1988. Detailed findings were made concerning the domestic producers’ failed attempts to expand their production capacity to supply the burgeoning market. Corning itself has had to import fiber from overseas to meet its needs, as have other domestic manufacturers. Demand has outstripped supply across the industry. Coming’s licensees and some of the cablers who sell Coming fiber testified that they are unaware of any business lost to Sumitomo. Sumitomo’s sales efforts have been hampered by a lack of adequate product support service and marketing, and by an inability to offer quick delivery. The record indicates that its market share from imports has remained well under 1%. 3

Sumitomo’s inability to gain a significant share of the United States market was a principal reason behind Sumitomo’s decision to build a facility in this country for research, development and production of optical waveguide fiber and cable.

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799 F.2d 1559, 230 U.S.P.Q. (BNA) 822, 1986 U.S. App. LEXIS 20327, 8 I.T.R.D. (BNA) 1120, Counsel Stack Legal Research, https://law.counselstack.com/opinion/corning-glass-works-v-united-states-international-trade-commission-cafc-1986.