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January 3 2013 Issue

Thursday, January 03, 2013
Sandler, Travis & Rosenberg Trade Report

USTR Preparing Annual Report on Intellectual Property Protection and Enforcement

The Office of the U.S. Trade Representative has initiated its annual review of foreign countries’ acts, policies and practices concerning the protection of intellectual property rights. USTR will hold a hearing and gather comments and plans to issue a report no later than April 30.

Section 182 of the 1974 Trade Act, also known as Special 301, requires USTR to identify countries that deny adequate and effective IPR protection or deny fair and equitable market access to U.S. persons who rely on IPR protection. Those countries that have the most onerous or egregious acts, policies or practices that have the greatest adverse impact (actual or potential) on relevant U.S. products are to be identified as priority foreign countries. Acts, policies or practices that are the basis of a country’s designation as a PFC are normally the subject of an investigation under the Section 301 provisions of the Trade Act. USTR may not identify a country as a PFC if it is entering into good faith negotiations, or making significant progress in bilateral or multilateral negotiations, to provide adequate and effective IPR protection.

USTR has also created a priority watch list and a watch list to assist policymakers in pursuing the goals of the Special 301 provisions. The placement of a trading partner on the PWL or WL indicates that particular problems exist in that country with respect to IPR protection, enforcement or market access for persons relying on intellectual property. Trading partners placed on the PWL are the focus of increased bilateral attention concerning the problem areas.

USTR is now requesting written public comments on those foreign acts, policies and practices relevant to determining whether to designate a particular country as a PFC or place it on the PWL or WL. Comments are due by Feb. 8 for interested parties other than foreign governments and Feb. 15 for foreign governments. In addition, a public hearing will be held Feb. 20 in Washington, D.C. Where relevant, submissions should mention particular regions, provinces, states or other subdivisions of a country whose acts, policies or practices are believed to deserve special attention. 

New Assessment Proposed on Imports of Paper and Paper-Based Packaging

The Department of Agriculture’s Agricultural Marketing Service is inviting comments through March 4 on a proposed Paper and Paper-Based Packaging Promotion, Research and Information Order. This order would aim to maintain and expand markets for four kinds of products: printing, writing and related paper (used to make products for printing, writing and other communication purposes), kraft packaging paper (used for products like grocery bags and sacks), containerboard (used to make corrugated boxes, shipping containers and related products), and paperboard (used for food and beverage packaging, tubes and other miscellaneous products). It would be financed by an assessment on importers and manufacturers that would initially be set at $0.35 per short ton. Entities that import or manufacture less than 100,000 short tons per marketing year, as well as organic paper and paper-based packaging, would be exempt from this assessment.

According to U.S. Customs and Border Protection data, in 2011 imports that would be covered under the proposed order totaled 7.5 million short tons. Of that total, 58.6% percent was from Canada, 22.2% was from Western Europe, 9.8% was from China, Japan and the Far East, 2.7% was from South America and the remainder was from other countries. In terms of type, 72.0% of the imports was printing, writing and related paper, 13.1% was paperboard, 10.1% was containerboard and 4.8% was kraft packaging paper. 

AD/CV Notices: New Admin Reviews, Orange Juice, Honey

Agency: International Trade Administration.
Nature of Notice: Initiation of administrative reviews of antidumping and countervailing duty orders on the following products for the periods Nov. 1, 2011, through Oct. 31, 2012, and Jan. 1 through Dec. 31, 2011, respectively.
- polyethylene terephthalate film from Brazil, China and the United Arab Emirates (AD)
- lightweight thermal paper from China (AD/CV) and Germany (AD)
- circular welded non-alloy steel pipe from Mexico and Korea (AD)
- seamless refined copper pipe and tube from China and Mexico (AD)
- cut-to-length carbon steel plate from China and Ukraine (AD)
- hot-rolled carbon steel flat products from China (AD)
- diamond sawblades and parts thereof from China (AD)
- fresh garlic from China (AD)
- seamless carbon and alloy steel standard, line and pressure pipe from China (AD/CV)

Agency: International Trade Administration.
Commodity: Orange juice.
Country: Brazil.
Nature of Notice: Amended final results of administrative review of antidumping duty order for the period March 1, 2008, through Feb. 28, 2009, in accordance with court decision.
Details: Weighted average dumping margin of 1.18% for Fischer S.A. Comercio, Industria and Agricultura. AD duties will be assessed on entries of subject merchandise based on this revised rate.

Agency: International Trade Administration.
Commodity: Honey.
Country: Argentina.
Nature of Notice: Revocation of antidumping and countervailing duty orders, effective Dec. 31, 2012.
Details: Changed circumstances reviews determined that substantially all domestic producers lack interest in the relief provided by these orders.

Agency: International Trade Administration.
Commodity: Honey.
Country: Argentina.
Nature of Notice: Rescission of administrative review of antidumping duty order for the period Dec. 1, 2010, through Nov. 30, 2011, due to revocation of order. 

IPR Enforcement Actions on Dissection Devices, Backlight Devices, Computer Forensic Devices

Balloon Dissection Devices. The International Trade Commission is requesting comments no later than Jan. 8 on any public interest issues raised by a Section 337 intellectual property rights infringement complaint filed on behalf of Covidien LP against certain balloon dissection devices and products containing same. Comments should address whether the issuance of exclusion orders and/or cease and desist orders pursuant to this complaint would affect the public health and welfare in the U.S., competitive conditions in the U.S. economy, the production of like or directly competitive articles in the U.S., or U.S. consumers. In particular, the ITC is interested in comments that:

- explain how the articles potentially subject to the orders are used in the U.S.;

- identify any public health, safety or welfare concerns in the U.S. relating to the potential orders;

- identify like or directly competitive articles that the complainant, its licensees or third parties make in the U.S. that could replace the subject articles if they were to be excluded;

- indicate whether the complainant, the complainant’s licensees and/or third-party suppliers have the capacity to replace the volume of articles potentially subject to the requested orders within a commercially reasonable time; and

- explain how the requested orders would impact U.S. consumers.

Backlight Devices. In investigation 337-TA-805 of certain devices for improving uniformity used in a backlight module and components thereof and products containing same the presiding administrative law judge has issued a final initial determination that the importation, sale for importation and sale within the U.S. after importation of these products are not violating a patent owned by Technology Research Institute and ITRI International Inc. The International Trade Commission has determined to review the final ID in its entirety and is also remanding the investigation to the ALJ to consider certain issues. The current target date for completing this investigation is Feb. 28.

Computer Forensic Devices. The International Trade Commission has terminated patent infringement investigation 337-TA-799 of certain computer forensic devices and products containing same after the presiding administrative law judge determined that complainant MyKey Technology Inc. failed to satisfy the economic prong of the domestic industry requirement. 

FTZ Authority for Production of Cosmetic Sets, Chocolate

Cosmetic and Personal Hygiene Gift Sets. The Foreign-Trade Zones Board has authorized production activity under zone procedures at the Sonoco Corrflex facilities in Rural Hall and Winston-Salem, N.C., which are used for the kitting of cosmetic and personal hygiene gift sets. This authorization is subject to a restriction requiring that all foreign bags and cases of textile materials (classified within HTSUS 4202.22.4020, 4202.22.4030, 4202.22.4040, 4202.22.4500, 4202.22.6000, 4202.22.8030, 4202.22.8050, 4202.22.8080, 4202.32.4000, 4202.32.8000, 4202.32.9530, 4202.32.9550, 4202.32.9560, 4202.92.0805, 4202.92.0807, 4202.92.0809, 4202.92.1500, 4202.92.2000, 4202.92.3016, 4202.92.3020, 4202.92.3031, 4202.92.3091, 4202.92.6091, 4202.92.9026, and 4202.92.9036) used in the production activity must be admitted to the zone in domestic (duty-paid) status.

Chocolate Bars. The FTZB has received from the Tsudis Chocolate Company, an operator of FTZ 33, a notification of proposed export production activity for its facility in Pittsburgh, Pa. Activity at this facility would involve the production of chocolate confectionery bars for export, and no shipments for U.S. consumption would occur.

For shipments to Canada or Mexico, production under FTZ procedures could allow reduced duty treatment under NAFTA duty deferral requirements. For shipments to other export markets, FTZ procedures could exempt Tsudis from customs duty payments on the foreign status material used in its production. Customs duties also could possibly be deferred or reduced on foreign status production equipment or foreign liquid chocolate scrapped or destroyed under customs procedures.

Comments on this proposal are due no later than Feb. 11. 

Export Privileges Suspended for Illegal Imports and Exports of Defense Articles

The Bureau of Industry and Security has suspended for ten years the export privileges of two men (see here and here) convicted of violating defense export laws in connection with the unlicensed exportation of firearms and ammunition to Nigeria. BIS has also denied for five years the export privileges of a man with addresses in California and the Philippines who was convicted of knowingly and willfully causing the temporary importation into the U.S. of an unmanned aerial vehicle without the required license.

As a result, neither these individuals nor anyone on their behalf may directly or indirectly participate in any way in any transaction involving any commodity, software or technology exported or to be exported from the U.S. that is subject to the Export Administration Regulations. However, these orders do not prohibit any export, reexport or other transaction subject to the EAR where the only items involved that are subject to the EAR are the foreign-produced direct product of U.S.-origin technology. 

Ex-Im Bank Asked to Finance Exports of Semiconductor Manufacturing Equipment

The Export-Import Bank of the United States has received an application for a $448 million loan guarantee to support the export of approximately $542 million in U.S. semiconductor manufacturing equipment and services to a (non-DRAM) semiconductor manufacturing facility in Singapore. The U.S. exports will enable the foreign buyer to manufacture about 80,000 wafers of 300mm NAND flash memory semiconductors per month, and available information indicates that this new production will be consumed globally. Interested parties may submit comments on this transaction no later than Jan. 14.

State Dept. Eases Rules on Defense Exports to Afghanistan, Proscribed Nations

The State Department has issued a final rule that, effective Dec. 31, 2012, makes two changes to the International Traffic in Arms Regulations.

First, this rule adds Afghanistan to the list of major non-NATO allies. MNNA status qualifies a country for certain privileges supporting defense and security cooperation, including eligibility for training, loans of equipment for cooperative research and development, and ultimately foreign military financing for commercial leasing of certain defense articles.

Second, this rule makes available the use of two additional defense export license exemptions (i.e., shipments by or for U.S. government agencies, and foreign-owned military aircraft and naval vessels and the Foreign Military Sales program) for proscribed destinations, which include Belarus, Burma, China, Cuba, Eritrea, Iran, North Korea, Sudan, Syria and Venezuela. 

Uniform Compliance Date Established for Meat and Poultry Labeling Changes

The Department of Agriculture’s Food Safety and Inspection Service has issued a final rule establishing Jan. 1, 2016, as the uniform compliance date for new meat and poultry product labeling regulations that are published after Jan. 1, 2013, and before Dec. 31, 2014. Comments on this final rule must be received on or before Jan. 30, 2013.

The FSIS notes that two-year increments enhance the industry's ability to make orderly adjustments to new labeling requirements without unduly exposing consumers to outdated labels. With this approach, the meat and poultry industry is able to plan for the use of label inventories and develop new labeling materials that meet the requirements of all labeling regulations made within the two-year period, thereby minimizing the economic impact of labeling changes.

Nevertheless, the FSIS encourages meat and poultry companies to comply with new labeling regulations as soon as it is feasible. If companies initiate voluntary label changes, they should consider incorporating any new requirements that have been published as final regulations. 

Food Import and Export Issues to be Subject of Jan. 24 USDA Meeting

The Department of Agriculture’s Food Safety and Inspection Service will hold a public meeting Jan. 24 in Washington, D.C., to provide information and receive public comments on agenda items and draft U.S. positions that will be discussed at the 20th Session of the Codex Committee on Food Import and Export Inspection and Certification Systems, which will be held in Thailand Feb. 18-22. The following items on the agenda for the CCFICS session will be discussed during the public meeting.

- principles and guidelines for national food control systems
- burden of multiple questionnaires directed at exporting countries
- monitoring regulatory performance of national food control systems
- need for further guidance on food safety emergencies and the analysis of proposed changes to the CCFICS texts on emergencies and rejections to address feed 

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