Fischer & Porter Co. v. United States Internatinal Trade Commission

831 F.2d 1574
CourtCourt of Appeals for the Federal Circuit
DecidedOctober 28, 1987
DocketNo. 87-1166
StatusPublished
Cited by2 cases

This text of 831 F.2d 1574 (Fischer & Porter Co. v. United States Internatinal Trade Commission) 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
Fischer & Porter Co. v. United States Internatinal Trade Commission, 831 F.2d 1574 (Fed. Cir. 1987).

Opinion

NIES, Circuit Judge.

Fischer & Porter Co., Inc. (F & P) appeals from the International Trade Commission’s final determination in In the Matter of Certain Unitary Electromagnetic Flowmeters, Investigation No. 337-TA-230, U.S.I.T.C.Pub. 1924 (Nov. 17, 1986) (Comm’n op.), holding that the importation and sale of certain unitary, flangeless, electromagnetic flowmeters made in West Germany by Krohne Messtechnik GmbH & Co. KG and sold in the United States by Krohne America, Inc. (collectively, Krohne) did not violate section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1337 (1982).1 Although the Commission found that the subject imports infringed F & P’s U.S. Patent No. 4,420,982 (’982) covering certain flowmeters, it found no effect or tendency to substantially injure a domestic industry as required for relief under section 337. 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 the Commission’s finding of no injury and, thus, its ultimate determination of no violation of section 337. The Commission’s decision with respect to validity and infringement of the ’982 patent is vacated.

I

Following proceedings on a section 337 complaint filed by F & P, an Administrative Law Judge (AU) in an initial decision ruled that there was an unfair trade practice in the importation and sale of certain unitary, electromagnetic flowmeters by Krohne by reason of infringement of claims 1 through 5 of F & P’s 1982 patent.2 The AU also found that such unfair trade practice had the effect or tendency to destroy or substantially injure an industry, efficiently and economically operated, in the United States. Accordingly, the AU determined that section 337 had been violated by the Krohne imports and that an exclusion order should be entered.

Krohne petitioned the Commission to review the AU’s decision. The Commission chose to review only the issue of whether Krohne’s infringing flowmeters had the effect, or tendency, to destroy or substantially injure a domestic industry and the majority of the Commission (two members dissenting) determined that F & P had not established such injury, rejecting the AU’s contrary finding. 51 Fed.Reg. 40,270 (Oct. 30, 1986). Consequently, F & P obtained no relief under section 337 and appeals to this court for reinstatement of the AU’s decision.

II

F & P set forth the issue on appeal as whether the majority decision of the Commission was arbitrary, capricious, or otherwise not in accordance with law “when it reversed the AU.” It argues that the AU’s findings are unassailable under Fed.R.Civ.P. 52, that a jury could have found as did the AU, and that such a verdict would have survived a JNOV motion.

Throughout its briefs, F & P misdirects the focus of the appellate inquiry in disregard of the precedent of this court. In Corning Glass Works v. United States International Trade Commission, 799 [1577]*1577F.2d 1559, 230 USPQ 822 (Fed.Cir.1986), this court undertook to set out in detail the appellate function in connection with appeals from the International Trade Commission and, particularly, in reviewing an injury determination. Id. at 1564-68, 230 USPQ at 825-28. Contrary to F & P’s understanding, we do not “review” the correctness of the AU’s initial decision or the correctness of the Commission’s “reversal” under Rule 52 or otherwise. The statute, 19 U.S.C. § 1337(c), directs that on appeal to this court, this court must review the “final determination of the Commission ... in accordance with chapter 7 of title 5 [i.e., the Administrative Procedure Act (APA) ].” The AU’s decision is, of course, part of the record and will be accorded “such probative force as it intrinsically commands.” Universal Camera Corp. v. NLRB, 340 U.S. 474, 495, 71 S.Ct. 456, 468, 95 L.Ed. 456 (1951); see also SSIH Equip. S.A. v. United States Int’l Trade Comm’n, 718 F.2d 365, 382, 218 USPQ 678, 692 (Fed.Cir.1983) (Nies, J., additional views). However, the issue before us is whether the “no injury” finding of the majority is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law or unsupported by substantial evidence. 5 U.S.C. § 706 (1982). That the contrary determination of the ALT and the dissenting members of the Commission would be sustained if it were the decision under review does not mean that the majority’s determination must be overturned. Both decisions may be reasonable based on the entirety of the record, a concept some litigants find difficult to accept. In sum, this court may not substitute its judgment for the Commission’s final determination on the ground that the court believes the AU’s and the minority’s view is “more reasonable” than the majority’s view. Such an appellate evaluation is patently not a basis for reversal under 5 U.S.C. § 706.

Ill

COMMISSION’S INJURY ANALYSIS

The Commission’s analysis of the issue of injury begins with the correct statements of law that the section 337 requirement for injury to a domestic industry does not automatically follow from proof of infringement of an intellectual property right, citing Corning Glass, 799 F.2d at 1566, 230 USPQ at 826-27; Textron, Inc. v. United States International Trade Commission, 753 F.2d 1019, 1028, 224 USPQ 625, 631 (Fed.Cir.1985); [accord Akzo N.V. v. United States International Trade Commission, 808 F.2d 1471, 1486, 1 USPQ2d 1241, 1250 (Fed.Cir.1986), cert. denied, — U.S. -, 107 S.Ct. 2490, 96 L.Ed.2d 382 (1987) ]; the holder of an intellectual property right has a smaller quantum of proof of injury than would be required in a nonintellectual property-based case, Textron, 753 F.2d at 1029, 224 USPQ at 632; Bally/Midway Mfg. v. United States Int’l Trade Comm’n, 714 F.2d 1117, 1124, 219 USPQ 97, 102 (Fed.Cir.1983); the determination of injury to an industry is the type of question particularly within the expertise of the Commission, Corning Glass, 799 F.2d at 1568, 230 USPQ at 828; a determination of injury is dependent on the facts of the particular case, and, thus, not controlled by precedent, id.; and, finally, because the relevant market in the instant investigation contains noninfringing substitutes, it could not be assumed that sales by Krohne would have been made by F & P; rather F & P had to prove a causal connection between infringing imports and lost sales.

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