United States: ALJ Precludes Reliance On New Domestic Industry Products

Following up on a previous post, Administrative Law Judge Bullock recently granted Respondents Fujifilm Holdings Corporation, Fujifilm Corporation, Fujifilm Holdings America Corporation, and Fujifilm Recording Media U.S.A., Inc. (collectively, "Fujifilm") motion to strike Complainants Sony Corporation, Sony Storage Media Solutions, Sony Storage Media Manufacturing Corporation, Sony DADC US Inc., and Sony Latin America Inc. (collectively, "Sony") reliance on certain newly identified products and to preclude Sony from adding such product as a domestic industry product.  Certain Magnetic Tape Cartridges and Components Thereof, Inv. 337-TA-1058, Order 16.

Summary

According to the Procedural Schedule, the parties had until August 24, 2017 to serve initial responses to contention interrogatories upon which the party carries the burden of proof and had until October 27, 2017 to supplement such contentions.  Sony had the burden of proof for establishing domestic industry and did not identify LTO-7 tape drives as domestic industry products before the August 24, 2017 deadline.  On the October 27, 2017 deadline, Sony attempted to add the LTO-7 products as domestic industry products by arguing that the timing of the addition was proper because of a September 28, 2017 denial of Sony's preliminary injunction request in a New York case and because Sony had until October 27, 2017 to make such a supplementation in compliance with the Procedural Schedule.

ALJ Bullock concluded that Sony's addition of the LTO-7 products does not qualify as "supplementation" as used in Commission Rule 210.27(f) which states: "[a] party is under a duty seasonably to amend a prior response to an interrogatory, request for production, or request for admission if the party learns that the response is in some material respect incomplete or incorrect. . ."  In particular, ALJ Bullock indicated that Sony did not adequately explain how the October 27, 2017 supplemental response was the result of "incomplete" or "incorrect" information in its previous response.  He further indicated that the supplementation on October 27, 2017 was not seasonable because it came almost one month after the September 28, 2017 decision from the New York court and only one day before the deadline for Fujifilm and Staff to serve requests for fact discovery, particularly since all of the necessary information pertaining to the LTO-7 products and establishing domestic industry resided exclusively with Sony.

As a result, ALJ Bullock granted Fujifilm's motion to (i) strike Sony's reliance on the LTO-7 products as domestic industry products and (ii) preclude Sony from adding the LTO-7 products as a domestic industry product.

Takeaway

The fast pace of Section 337 proceedings often favors complainants who take the time to organize their case before filing, however, ALJ Bullock's order emphasizes the importance for complainants and respondents to quickly obtain the necessary facts during discovery and react to such information in a timely manner.  Parties should consider their respective obligations for serving contentions and seek to avoid any unnecessary supplementation.