[00:00:01] Speaker 01:
Our next case is Sinal Legend versus the ITC, International Trade Commission.

[00:00:53] Speaker 01:
I want to make sure I have the order of arguments correct.

[00:00:57] Speaker 01:
Mr. Pinkus, you're going to reserve four minutes for rebuttal.

[00:01:01] Speaker 01:
Is that correct?

[00:01:02] Speaker 04:
Yes, Your Honor.

[00:01:03] Speaker 01:
Mr. Rosenweg, you're going to argue for eight minutes, followed by Mr. Cass for seven.

[00:01:11] Speaker 01:
Is that correct?

[00:01:14] Speaker 01:
Yes, Your Honor.

[00:01:16] Speaker 01:
OK.

[00:01:16] Speaker 01:
OK, Mr. Pinkus.

[00:01:16] Speaker 01:
May I proceed?

[00:01:18] Speaker 04:
Thank you, Your Honor, and may it please the court.

[00:01:20] Speaker 04:
This case involves an ITC proceeding

[00:01:23] Speaker 04:
involving tackifiers used in producing products made of layers of rubber such as tires.

[00:01:29] Speaker 04:
It's based on a misappropriation in China of intervenors' trade secrets and the use of those trade secrets to manufacture the product in China.

[00:01:38] Speaker 04:
I'd like to begin, if I may, with the extraterritoriality issue.

[00:01:41] Speaker 01:
Are you asking us to overrule Tian Rui or is your argument that this case is

[00:01:49] Speaker 01:
distinguishable from the TNRU.

[00:01:51] Speaker 04:
Our argument is that TNRU has been undermined significantly so that it could be reconsidered by a panel based on the Supreme Court's intervening decision in Kievel.

[00:02:02] Speaker 04:
And that Kievel basically in three ways

[00:02:07] Speaker 04:
undermines the reasoning of the majority in TNRU, such that it would be open to the panel to reconsider it.

[00:02:15] Speaker 04:
Obviously, it's also a question.

[00:02:16] Speaker 01:
Let's start there.

[00:02:16] Speaker 01:
What is it about the case that undermined TNRU?

[00:02:20] Speaker 04:
Sure.

[00:02:21] Speaker 04:
Three things, Your Honor.

[00:02:22] Speaker 04:
First of all, in TNRU, the court relied on statutory language touching on international matters the use of the word importation.

[00:02:34] Speaker 04:
Kia Bell, the Supreme Court, had a similar statute.

[00:02:36] Speaker 04:
It referred to the law of nations and claims brought by aliens and said that that was not sufficient to render the presumption against extraterritoriality inapplicable.

[00:02:49] Speaker 04:
So we think that that basis of Tian Rui, which is the saying, because the word importation is here, that's enough, is significantly undermined by Kia Bell in a similar context reaching the opposite conclusion.

[00:03:02] Speaker 02:
I'm sorry, what was the statutory term in Q Bell?

[00:03:06] Speaker 02:
In your view, is a close cousin of the term importation?

[00:03:10] Speaker 04:
Two things.

[00:03:11] Speaker 04:
Claims based on the law of nations and claims brought by aliens.

[00:03:16] Speaker 04:
And the argument in that case by the plaintiffs who ultimately lost was that language referred sufficiently to international matters that that was enough to bring the case

[00:03:29] Speaker 04:
out of the presumption against extraterritoriality.

[00:03:32] Speaker 02:
Right, importation is international in nature inherently, but at the same time, it's a domestic act as well.

[00:03:41] Speaker 02:
And that's what seemed to be missing in the Kiobel case, anything that's remotely domestic going on there.

[00:03:50] Speaker 04:
No, I think it was the opposite, Your Honor, because Kiobel held that the language wasn't international.

[00:03:56] Speaker 04:
Even though it referred to law of nations and aliens, the court said that was not an indication.

[00:04:01] Speaker 02:
Oh, I'm sorry.

[00:04:01] Speaker 02:
That was being regulated or policed.

[00:04:05] Speaker 02:
It all occurred in Nigeria, right?

[00:04:08] Speaker 04:
It did.

[00:04:09] Speaker 04:
But this question, of course, is about whether the language of the statute gave the clear indication that the presumption against extraterritoriality didn't apply.

[00:04:18] Speaker 04:
And so the language of the statute, I think, is critical.

[00:04:21] Speaker 04:
And that sort of leads to the second.

[00:04:24] Speaker 04:
difference between Tian Rui and Kievel.

[00:04:27] Speaker 04:
Tian Rui said in footnote two, there's no clear statement rule citing the Supreme Court's decision in Morrison.

[00:04:35] Speaker 04:
But in Kievel, the court specifically said that there has to be a clear indication.

[00:04:41] Speaker 04:
It doesn't have to be a clear statement in the statute, but it has to be a clear indication.

[00:04:46] Speaker 04:
And Tian Rui pretty clearly doesn't apply that clear indication standard.

[00:04:50] Speaker 02:
So you're saying there's

[00:04:51] Speaker 02:
Is there some kind of daylight on the statutory canon of presumption against extraterritoriality between Keobel and Morrison?

[00:05:00] Speaker 04:
I think to the extent that there is language in Morrison at the end of Morrison that says there doesn't have to be a clear statement that in terms this is extraterritorial and I think

[00:05:14] Speaker 04:
my friend in their brief and the court in TNRUI took that to mean that there didn't have to be a clear indication that Congress meant the statute to apply extra-territorially.

[00:05:27] Speaker 04:
And I think to the extent that was true, I think Kiabell makes clear that that's not right and that, in fact, there has to be a clear indication.

[00:05:35] Speaker 04:
And nowhere in TNRUI is the clear indication standard applied.

[00:05:38] Speaker 01:
Why wouldn't the Supreme Court just refer to TNRUI and rejected it?

[00:05:43] Speaker 01:
Excuse me?

[00:05:43] Speaker 01:
Why didn't the Supreme Court just refer to the Tian Rui decision and just reject it?

[00:05:48] Speaker 04:
Well, unfortunately, it would be clearer for us all.

[00:05:51] Speaker 04:
But of course, the question of Section 337 wasn't before the court.

[00:05:55] Speaker 04:
So we have to sort of go based on the tea leaves that we have.

[00:05:59] Speaker 04:
And the third difference is.

[00:06:02] Speaker 01:
Then why should we presume, then, that Keough Bell reaches Tian Rui?

[00:06:08] Speaker 04:
I don't think you should presume it, Your Honor.

[00:06:10] Speaker 04:
I think that what you should do is look at the rationale that Tian Rui applied and compare it to what the court did.

[00:06:16] Speaker 01:
So what that means to you is an argument as to whether Tian Rui was correct or not.

[00:06:22] Speaker 04:
Well, I think there are two questions, Your Honor.

[00:06:25] Speaker 04:
I think the further threshold question is, does Kiabell cast doubt on Tian Rui's rationale such that it would be open to a panel as opposed to the en banc court to reconsider it?

[00:06:36] Speaker 01:
I think the second question, then, is applying... But as you said, we shouldn't presume that it did.

[00:06:41] Speaker 01:
I mean, so what is there... Without that presumption, you're left with an argument.

[00:06:48] Speaker 01:
It seems to me that most of the briefing and most of the argument is based on T.N.

[00:06:52] Speaker 01:
Rui, that it was wrong.

[00:06:54] Speaker 04:
It was wrongly decided.

[00:06:58] Speaker 04:
I think what we tried to show in our brief are two things.

[00:07:00] Speaker 04:
First of all, that Kiabell makes clear that the basis on which Tian Rui was decided, the three bases, are inconsistent with Kiabell.

[00:07:10] Speaker 04:
And Kiabell precludes relying on them.

[00:07:13] Speaker 04:
If we're right about that, then the question is, OK, what's the right answer for extraterritoriality under 337?

[00:07:21] Speaker 04:
And that requires looking at Kiabell, but also looking at other cases that the court has decided.

[00:07:26] Speaker 04:
Because it could be, we obviously don't agree with this, but it could be that even though the three reasons that were given in Tien Rui are inconsistent with Kiobel, maybe there are other arguments that would be consistent with Kiobel.

[00:07:37] Speaker 04:
So I think the panel would have to look at it, or the court, bon bon court, at those two steps.

[00:07:42] Speaker 01:
So if we determine that Kiobel doesn't have the effect that you argue, then it's case is over for you.

[00:07:50] Speaker 04:
That issue, we have a second issue on comedy.

[00:07:54] Speaker 04:
But yes, I think for the panel, at least, that would be over.

[00:07:57] Speaker 04:
And obviously, it would be open for the panel to say that this should be taken en banc.

[00:08:02] Speaker 04:
But I think, yes, that's exactly right.

[00:08:04] Speaker 04:
So just to cover the third difference, in Kiabell, the court applied the focus test.

[00:08:11] Speaker 04:
That test was mentioned in Morrison.

[00:08:12] Speaker 04:
It was not mentioned at all in Tien Ngu Rui.

[00:08:17] Speaker 04:
If the court finds that a statute is not extraterritorial, then it has to identify what the focus of the statute is, because that conduct that's the focus of the statute has to occur in the United States.

[00:08:29] Speaker 04:
Tian Rui didn't apply that test, perhaps because the majority there thought that Morrison was limited to securities law.

[00:08:37] Speaker 04:
Keabel makes clear that that Morrison test applies generally.

[00:08:41] Speaker 04:
And so that's another basis of Tian Rui that is inconsistent with Keabel.

[00:08:46] Speaker 02:
Didn't Tian Rui say there's a domestic injury and the remedy would be domestic and the triggering act is an importation, which also is bringing these articles onto the US shores?

[00:09:04] Speaker 02:
I think there's a way to read.

[00:09:06] Speaker 02:
Tian Rui is fairly clearly saying the focus of everything is domestic.

[00:09:12] Speaker 04:
Well, it is, although, as Judge

[00:09:16] Speaker 04:
As the dissent pointed out, the statute doesn't just refer to importation.

[00:09:21] Speaker 04:
It refers to an unfair method or act in the importation.

[00:09:24] Speaker 04:
And so I think that actually is quite different.

[00:09:27] Speaker 04:
And I think as the dissent argued, and as we discuss in our briefs, saying that any unfair act anywhere in the world, as long as it relates in some way to the imported goods as covered, is quite a broad extraterritorial application in the absence of what Congress says.

[00:09:45] Speaker 04:
But maybe I should move on to the comedy argument, because the second issue that we raise is that the ITC should have deferred to the Chinese court decision in a case instituted by the intervener.

[00:09:59] Speaker 04:
And there, the ITC held comedy principles inapplicable.

[00:10:04] Speaker 04:
It has an investigation, and comedy were no role to play.

[00:10:08] Speaker 04:
And so here, that ruling could only be upheld if the court were to conclude that comedy principles are wholly inapplicable.

[00:10:15] Speaker 04:
in an ITC ruling and we think there's no basis for that and indeed my friends don't really defend that argument.

[00:10:22] Speaker 04:
They say comedy was inappropriate here for various reasons relating to the nature of the issues before the court in China and the Chinese litigation system generally, but the ITC did not base its decision on that ground.

[00:10:37] Speaker 04:
So if that's

[00:10:38] Speaker 04:
the only way that the judge thought the decision below could be defended under Chenery and other cases, there'd have to be a remand to allow the ITC to exercise its authority to apply the appropriate comedy test and decide whether comedy is appropriate.

[00:10:53] Speaker 01:
So there's no obligation to observe comedy, right?

[00:10:58] Speaker 01:
It's a discretionary act on behalf of the agency in this case.

[00:11:02] Speaker 04:
Well, I think there's an obligation that comedy principles apply in any particular case

[00:11:08] Speaker 04:
there's no mandate that the foreign decision be deferred to.

[00:11:13] Speaker 04:
The court has to, or the agency has to apply the test, the generally applicable test for comity, which requires first of all for someone to come forward with the decision, and then for the party opposing comity to say, well, this was an unfair tribunal, or there are various other reasons that are set forth in the restatement of foreign judgments, Section 481, and in some of the cases that we cite,

[00:11:37] Speaker 04:
that would then be assessed and the decision would be made.

[00:11:41] Speaker 02:
Do you know of a case where a federal court is granted comity in this way, essentially giving preclusive effect to a decision by a Chinese court?

[00:11:49] Speaker 04:
We cite a number of cases involving recognition of judgments in which, obviously, the first step in recognizing a judgment is to recognize it and then enforce it.

[00:11:59] Speaker 04:
And so we cite a number of cases in which that's been done.

[00:12:03] Speaker 02:
A federal court has enforced a Chinese court's judgment?

[00:12:06] Speaker 02:
Yes, Your Honor.

[00:12:09] Speaker 04:
And in fact, in one of the cases that SI cites, a district court case, although the decision ultimately went against transferring the case to China on forum non-convenience grounds, the district court found, as we discussed in our reply brief, that the Chinese court was in appropriate forum.

[00:12:27] Speaker 04:
And it would be, I think, very surprising to have a blanket rule that any country's courts are totally off base without some examination of the fairness and of the proceedings there.

[00:12:39] Speaker 04:
a law review article in our reply brief that talks about the fairness of the Chinese tribunals.

[00:12:44] Speaker 04:
So we think the appropriate result here is to say, no, comedy principles apply in ITC proceedings, and to remand to allow the ITC to apply those principles in this case.

[00:13:00] Speaker 01:
Even the enforcement of a foreign judgment requires some sort of a due process analysis.

[00:13:06] Speaker 01:
Absolutely, Your Honor.

[00:13:07] Speaker 01:
And so too with comedy.

[00:13:08] Speaker 01:
And there was a dispute here.

[00:13:10] Speaker 01:
The issue is whether the Chinese proceedings have been unfair in its consideration of the misappropriation conduct.

[00:13:18] Speaker 01:
True, Your Honor.

[00:13:19] Speaker 01:
That's a factual finding, correct?

[00:13:22] Speaker 04:
Well, I think the fairness is what courts have said is the question whether to recognize a judgment.

[00:13:29] Speaker 04:
We recently set a Second Circuit case on this.

[00:13:31] Speaker 04:
It's reviewed de novo.

[00:13:33] Speaker 04:
There may be underlying factual findings that may get deference, but here the ITC didn't address that issue at all.

[00:13:40] Speaker 04:
It just, in the footnote at the beginning of the case and in the passage at the end, basically just said comedy doesn't apply.

[00:13:46] Speaker 04:
It didn't base its decision on some determination that Chinese proceedings are unfair or per se unwarranting of comedy, and we think that's why a remand is necessary.

[00:13:56] Speaker 04:
I could reserve a balance in that time.

[00:13:59] Speaker 04:
Okay, thank you.

[00:14:04] Speaker 01:
Mr. Rosenweg.

[00:14:06] Speaker 00:
Yes, may it please the court.

[00:14:08] Speaker 00:
If I can, I'd like to just start for a couple of minutes with extraterritoriality.

[00:14:13] Speaker 00:
This court in Tianri applied the Morrison test, and twice on page 1329 of Tianri, the court found the focus of section 337 is on an inherent international transaction importation.

[00:14:27] Speaker 00:
Later on that same page, in light of the statute's focus on the act of importation, the resulting domestic industry,

[00:14:33] Speaker 00:
The commission's order does not purport to regulate purely foreign conduct.

[00:14:37] Speaker 00:
And then immediately after that is a citation to Morrison.

[00:14:41] Speaker 00:
So it's kind of extraordinary to hear an explanation that the court shouldn't apply Tianri because the court in Tianri didn't apply Morrison.

[00:14:48] Speaker 00:
That's just not true.

[00:14:51] Speaker 00:
With respect to focus, because of these holdings in Tianri, we hear from my colleague on the other side here

[00:14:59] Speaker 00:
That the focus of the statute isn't importation.

[00:15:01] Speaker 00:
It's something else that comes up throughout its briefs, including pages 11 to 12 of its reply.

[00:15:06] Speaker 00:
That issue has been decided by Tianri.

[00:15:09] Speaker 00:
Now, of course, the other thing that we hear from the appellants is that Kiobel changes everything.

[00:15:14] Speaker 00:
Now, if it really was so obvious that it changes anything, you would have expected Sino-Legend to bring it to the attention of the commission.

[00:15:22] Speaker 00:
It never did so, even in its submissions to the commission after Kiobel issued.

[00:15:27] Speaker 00:
Putting that to the side, the facts of Kiobel and the statute there are very different from what's going on here.

[00:15:33] Speaker 00:
In Kiobel, the Supreme Court could not ascertain the focus of the alien tort statute from its face or from its legislative history, because that statute is purely jurisdictional.

[00:15:43] Speaker 00:
As the court said at page 1664, it does not regulate conduct or afford relief.

[00:15:49] Speaker 00:
These difficulties in interpreting the alien tort statute are set out in Mustafa, a Second Circuit case at footnote 9.

[00:15:56] Speaker 00:
It's set out in Doe versus Nestle, a Ninth Circuit case, 766 F3 at 1028.

[00:16:01] Speaker 00:
That's all very different from the present case.

[00:16:05] Speaker 00:
As of yesterday or the day before, if you search on Westlaw for Kiobel and in the same paragraph as Touch and Concern, there are only 14 cases of the courts of appeals.

[00:16:17] Speaker 00:
None of those cases interpret Kiobel

[00:16:19] Speaker 00:
in the way that Sino legend does here, in a way that would essentially abrogate Morrison.

[00:16:25] Speaker 00:
Now, tellingly, this accord in Tianri even precedes what Kyobo said.

[00:16:32] Speaker 00:
And what Kyobo said was, well, we can't apply the focus test, so what we're going to do is look to the principles underlying the canon.

[00:16:40] Speaker 00:
And for purposes of the alien tort statute, we'll maybe look at a broader array of

[00:16:46] Speaker 00:
of history.

[00:16:48] Speaker 00:
But footnote two of Tianri explains that even when the presumption against extraterritoriality applies, the Supreme Court has not treated the presumption as a clear statement rule, but has noted that conduct can be consulted as well.

[00:17:00] Speaker 00:
And that's exactly what happened in

[00:17:03] Speaker 00:
The court found that the presumption applied but then left open at the end that for cases that touch and concern the United States with substantial force that

[00:17:17] Speaker 00:
that you would be able to override that presumption.

[00:17:21] Speaker 00:
None of that applies here because the court in Tianri found that the presumption against extraterritoriality does not apply.

[00:17:27] Speaker 00:
It does not apply because the statute requires importation.

[00:17:30] Speaker 00:
It does not apply because in every case the statute requires economic injury here.

[00:17:34] Speaker 00:
It's just completely inapposite.

[00:17:38] Speaker 00:
With respect to comedy, Sinal Legend invokes and tries to blend together a number of different legal theories to create a brand new amalgam for comedy here.

[00:17:47] Speaker 00:
We've got rest judicata.

[00:17:49] Speaker 00:
We've got forum non-convenience.

[00:17:51] Speaker 00:
We've got enforcement of foreign judgments for money damages.

[00:17:54] Speaker 00:
We've got bankruptcy cases with special rules discussed in Royal and Sun in the Second Circuit case with respect to bankruptcy.

[00:18:02] Speaker 00:
None of that applies here.

[00:18:04] Speaker 00:
Taking forum non-convenience, for example, there was no motion to dismiss or to state proceedings upon the institution of the investigation.

[00:18:11] Speaker 00:
And instead, SinoLegend waited nearly a year, waited for the hearing here to try to raise these issues.

[00:18:18] Speaker 00:
That's too late.

[00:18:18] Speaker 00:
On page 60 of SinoLegend's opening brief, there's a whole list of forum non-convenience cases.

[00:18:25] Speaker 00:
And I think counsel on the other side

[00:18:27] Speaker 00:
alluded to one of these district court cases in his opening.

[00:18:31] Speaker 00:
But on page 60, so this is the long string site, if you read these cases, King versus Waves, forum non-convenience motion denied.

[00:18:40] Speaker 00:
Jacobs versus Yang, forum non-convenience motion denied.

[00:18:43] Speaker 00:
Nalco, forum non-convenience motion denied, which is hard to square with the representation to the court that scores of lower courts have actually dismissed matters

[00:18:53] Speaker 00:
Pursuant to form nonconvenience.

[00:18:55] Speaker 01:
Was there any argument made at the IPC that the Chinese proceedings were unfair?

[00:19:01] Speaker 00:
The argument was not made in the commission.

[00:19:05] Speaker 00:
I'd like to step back and just talk about the chronology of what happened here.

[00:19:08] Speaker 00:
Because the evidence that my colleague on the other side now relies upon is a law review article.

[00:19:14] Speaker 00:
as opposed to anything in these proceedings.

[00:19:17] Speaker 00:
Somewhat counterintuitively, when the issue of the Chinese proceedings came to the judge, it was actually SI that wanted to rely upon some of the technical determinations that occurred in that proceeding.

[00:19:29] Speaker 00:
And what was going on in China was pertinent for Sino-Legend with respect to defense of unclean hands, and only unclean hands.

[00:19:38] Speaker 00:
Sino-Legend never sought to put in evidence about comedy with respect to

[00:19:43] Speaker 00:
the Chinese judgment to the extent that it actually did.

[00:19:46] Speaker 00:
And I can't find it in the record.

[00:19:47] Speaker 00:
It certainly never preserved those arguments.

[00:19:51] Speaker 00:
So what we're left with by the time the commission received the case is a situation in which there was no evidence of comity in the record.

[00:19:59] Speaker 00:
If you look at these forum nonconvenience cases, what you'll see consistently is you'll see affidavit practice, which has been endorsed by the Supreme Court for decades now.

[00:20:09] Speaker 00:
You'll have law professors coming in, not law reviews, but law professors with affidavits

[00:20:13] Speaker 00:
They can be cross-examined as to the fairness and unfairness of the system and facts with respect to the underlying proceeding.

[00:20:22] Speaker 00:
None of that was an issue here.

[00:20:24] Speaker 00:
And instead, what SinoLegend is trying to do is to argue that in some cases, namely three out of these eight in which cases were actually dismissed pursuant to the doctrine of foreign nonconvenience, because sometimes a case might be dismissed in favor of proceedings in China, this case should be dismissed too.

[00:20:42] Speaker 00:
But reading those cases demonstrates the difference in the evidence that was put in.

[00:20:46] Speaker 00:
Can you get to the Commission's position on comedy?

[00:20:51] Speaker 00:
The Commission's position on comedy is that comedy is an affirmative defense.

[00:20:56] Speaker 00:
We know that.

[00:20:57] Speaker 00:
Look at the answers here.

[00:20:58] Speaker 00:
There are 14 affirmative defenses.

[00:21:00] Speaker 00:
Comedy isn't one of them.

[00:21:01] Speaker 00:
So in the context in which this was presented to the Commission a year into proceedings, comedy had no place here.

[00:21:09] Speaker 00:
There was no evidence of comedy.

[00:21:10] Speaker 00:
There was nothing.

[00:21:11] Speaker 00:
To the extent that in a future case, a party promptly raises these issues, I think under those facts, maybe there's some room in a future case to

[00:21:22] Speaker 00:
to make similar such arguments.

[00:21:25] Speaker 00:
It might go more toward staying a case rather than dismissal.

[00:21:29] Speaker 00:
But even in Sino-Legend's pre-hearing brief, its arguments at that point, until the decision came out, looked a little bit more like forum non-convenience, because they were arguing that the case should be stayed or dismissed.

[00:21:42] Speaker 02:
So the submission position is not that it flatly rejects any notions of comity with respect to a forum non-convenience context or a case of preclusion context?

[00:21:52] Speaker 00:
I would say that there might be a little bit of wiggle room with respect to a party that actually makes substantial arguments and does so in a timely manner.

[00:22:02] Speaker 00:
With the benefit of hindsight, given the little that Sinolegend prepared in this case, I think it was appropriate for the Commission to

[00:22:10] Speaker 00:
explain comedy in the way that it did.

[00:22:12] Speaker 02:
Does the standard review change based on the type of comedy we're talking about, i.e.

[00:22:19] Speaker 02:
forum nonconvenience versus something more like reclusion?

[00:22:23] Speaker 02:
We've been talking about the Second Circuit.

[00:22:25] Speaker 00:
The Second Circuit case is a lot different.

[00:22:27] Speaker 00:
I mean, that was a case that involved the two signatory nations to a treaty regarding abducted children.

[00:22:36] Speaker 00:
It was a case in which the Greek court

[00:22:38] Speaker 00:
The Greek Supreme Court in this high profile case had actually raised the issue.

[00:22:42] Speaker 00:
The Ninth Circuit and the D.C.

[00:22:46] Speaker 00:
Circuit have had the opportunity to adopt the Second Circuit's de novo review and have demurred from doing so, finding that it didn't affect the

[00:22:56] Speaker 00:
didn't affect the result.

[00:22:58] Speaker 00:
I'm not aware of any other circuits that have followed the second circuit.

[00:23:02] Speaker 00:
Can I just add one last sentence?

[00:23:04] Speaker 00:
Thank you, Your Honor.

[00:23:06] Speaker 00:
The Chinese court here at pages 4553 to 4554 had the opportunity to take account of the commission's decision, at least the ALJ's decision here.

[00:23:23] Speaker 00:
It was put aside as being foreign evidence

[00:23:26] Speaker 00:
Respectfully, we request that this court put aside the Chinese determination in the same way that the Chinese put aside the US determination.

[00:23:33] Speaker 00:
Thank you.

[00:23:34] Speaker 01:
OK, thank you.

[00:23:35] Speaker 01:
Mr. Cash?

[00:23:50] Speaker 03:
Good morning.

[00:23:51] Speaker 03:
May I please the court?

[00:23:53] Speaker 03:
I'd like to start with the comedy issue since that was the last issue being addressed.

[00:23:59] Speaker 03:
Council said that the SI group doesn't defend the commission's position that comedy never applies in Section 337 cases and points to footnote 1, page 105.

[00:24:11] Speaker 03:
That's not

[00:24:12] Speaker 03:
our position, and we don't think that that was the Commission's opinion, so we didn't have to defend it.

[00:24:17] Speaker 03:
We didn't interpret the Commission's footnote as precluding comedy in all issues in all 337 cases.

[00:24:24] Speaker 01:
Talking about the footnote on A106, right?

[00:24:27] Speaker 03:
I think it's A105, but if it's A106, then you're correct, sir.

[00:24:31] Speaker 03:
It's footnote one.

[00:24:33] Speaker 03:
So there are multiple elements of a 337 case, as the Court knows.

[00:24:41] Speaker 03:
comedy may or may not apply to any or all of them in a particular case.

[00:24:46] Speaker 03:
And that's my understanding of the footnote where the commission says that it has to satisfy itself of whether there's a 337 violation.

[00:24:55] Speaker 03:
In this case, the commission didn't rule out the possibility even of comedy in a particular case and future case maybe where it's raised properly on discrete issues like misappropriation or even trade secret protectability, for example.

[00:25:10] Speaker 03:
In this case, Sinal Legend didn't raise comedy on those issues in their briefs on commission review.

[00:25:17] Speaker 03:
Sinal Legend actually did raise the issue of comedy in their briefs on commission review on one issue and one issue only.

[00:25:23] Speaker 01:
Now, footnote 101 says that they raised it in their petition.

[00:25:25] Speaker 01:
What petition does that refer to?

[00:25:28] Speaker 03:
So there's a petition, and then there's a briefing on review.

[00:25:31] Speaker 03:
First there's a petition, and that basically says we'd like to have review.

[00:25:37] Speaker 03:
And they raised comedy generally there.

[00:25:40] Speaker 03:
But then the commission said, we'll grant review on all issues, brief them.

[00:25:45] Speaker 03:
And then on review, in the briefing, they basically waived it.

[00:25:49] Speaker 03:
They didn't address it.

[00:25:50] Speaker 03:
All they did was they addressed comedy in one issue and one issue only.

[00:25:54] Speaker 03:
And that was on the issue of public interest.

[00:25:57] Speaker 03:
They didn't address it on the merits of the misappropriation claim.

[00:26:00] Speaker 03:
And they didn't talk about the issues and how they would have been argued in both cases, et cetera.

[00:26:05] Speaker 03:
They didn't address it on protectability or anything else.

[00:26:09] Speaker 03:
They said that it bears on the issue of the public interest.

[00:26:12] Speaker 03:
And in the commission's opinion, the commission actually did address that issue.

[00:26:19] Speaker 03:
It addressed it to the extent that Sinal Legend brought it up at page A106.

[00:26:24] Speaker 03:
It talked about what are the public interest factors, you know, environmental, public health, things like that.

[00:26:31] Speaker 03:
And then it said, and they raised the issue of the Chinese foreign judgment.

[00:26:35] Speaker 03:
And it said that it has no bearing on the public interest factors, which the commission is required by statute to consider in connection with the issuance of a remedy.

[00:26:54] Speaker 03:
So it was considering all the environmental, public health, the things that it's required to consider in connection with 337 as it applies to public interest factors.

[00:27:05] Speaker 03:
preclude comedy applying, it just said, in this case, it doesn't govern the issue of public interest.

[00:27:11] Speaker 03:
So this is a fair ruling.

[00:27:12] Speaker 01:
So at that point, was there any discussion or argument as to due process in China?

[00:27:18] Speaker 03:
There wasn't detailed discussion on due process, but there was, in our brief, quite a bit of discussion on effectively what that was in terms of the denial of the opportunities to present evidence.

[00:27:30] Speaker 03:
the denial of the opportunity to address, for example... Is this where the USTR's reports were also submitted as to... In connection with due process, specifically?

[00:27:41] Speaker 03:
The USTR reports were submitted specifically in connection with comedy, but they were not specifically referring to due process.

[00:27:49] Speaker 01:
Is that the Section 301 report?

[00:27:51] Speaker 03:
Yes, the Section 301 report.

[00:27:53] Speaker 03:
And on that point, Your Honor, I'd just like to mention that that was evidence

[00:27:58] Speaker 03:
And it's an authoritative report by the US government.

[00:28:03] Speaker 03:
This article that they mentioned for the first time on appeal, this Benjamin Bai article, it's written by a lawyer who's trying to drum up business for a Chinese litigation.

[00:28:14] Speaker 03:
He's a Chinese lawyer.

[00:28:16] Speaker 03:
The article basically says there's numerous cases in which US companies have been successful in China.

[00:28:24] Speaker 03:
Actually, if you look at the article,

[00:28:26] Speaker 03:
There's only one case, the GE case, that has ever been noted as being successful as a private civil litigation in China for trade secret misappropriation.

[00:28:38] Speaker 03:
It's really just a marketing fluff piece.

[00:28:40] Speaker 03:
And again, it's not evidence in this case.

[00:28:43] Speaker 01:
Is comedy the only issue you're addressing?

[00:28:45] Speaker 03:
No, actually.

[00:28:46] Speaker 03:
I'd also like an opportunity to talk about extraderectoriality.

[00:28:50] Speaker 01:
You'd better move on.

[00:28:51] Speaker 03:
OK, that sounds fine.

[00:28:53] Speaker 03:
The statute in this case, 337, is a statute that's intended to, and very clearly does, capture a combination of foreign and domestic conduct.

[00:29:05] Speaker 03:
Even the elements both include foreign and domestic elements.

[00:29:09] Speaker 03:
The facts of this case also are a combination of foreign and domestic conduct.

[00:29:14] Speaker 03:
There was egregious misconduct here and misappropriation, both here and abroad, satisfying the elements of 337.

[00:29:24] Speaker 03:
The Sinal Legends briefs to the Commission did not address the elements such as where the elements of 337 occurred.

[00:29:38] Speaker 03:
For example, where the misappropriation occurred.

[00:29:40] Speaker 03:
They do that for the first time here on appeal.

[00:29:43] Speaker 03:
And that's not really the appropriate place for that to be raised for the first time.

[00:29:49] Speaker 03:
In their briefs to the Commission, they did not address extraterritoriality at all.

[00:29:55] Speaker 03:
It was first raised in the petition, and then they dropped it from their briefs.

[00:29:58] Speaker 03:
Now, their latest submission, the November 30th submission, in that submission they say, quote, the alleged unfair acts of competition and unfair acts must occur in the United States or in connection with importation.

[00:30:11] Speaker 03:
That's their November 30th.

[00:30:13] Speaker 03:
submission in connection with the acts of importation.

[00:30:16] Speaker 03:
That parallels the Supreme Court's description of the Securities Exchange Act in Morrison, which says, in Morrison they said, Section 10b does not punish deceptive conduct, but only deceptive conduct in connection with the purchase or sale of any security registered on a national securities exchange.

[00:30:34] Speaker 03:
So neither statute either, and it's a very analogous situation, but neither statute

[00:30:41] Speaker 03:
punishes or addresses bad acts, per se.

[00:30:46] Speaker 03:
The focus is on the domestic transaction in each case.

[00:30:49] Speaker 03:
So in Morrison, the sale of the securities was foreign.

[00:30:55] Speaker 03:
The exchange was in Australia.

[00:30:58] Speaker 03:
And so the presumption applied.

[00:31:01] Speaker 03:
But here, the importation is domestic.

[00:31:03] Speaker 03:
So the presumption doesn't apply.

[00:31:05] Speaker 03:
So we have a flipped situation.

[00:31:07] Speaker 03:
And Morrison applies, I think, very directly to this case.

[00:31:11] Speaker 03:
that it controls and that the result is that the focus is on importation and the presumption does not apply in this case.

[00:31:20] Speaker 03:
We got it.

[00:31:21] Speaker 03:
Thank you.

[00:31:21] Speaker 03:
Thank you very much, Your Honor.

[00:31:26] Speaker 01:
Mr. Pinker, you have four minutes.

[00:31:29] Speaker 01:
Thanks very much, Your Honor.

[00:31:31] Speaker 01:
A couple of points.

[00:31:32] Speaker 04:
First of all, on this question of waiver and what was raised and what the commission decided, I think it's important to be very clear.

[00:31:40] Speaker 04:
Sign of Legend raised comedy generally as a basis for the rejection of the misappropriation claim by the ITC in its petition, and that's at A7504 and 7505.

[00:31:54] Speaker 04:
Footnote 1, what Your Honor referred to, responds to that.

[00:31:59] Speaker 04:
It says it was raised in the petition.

[00:32:00] Speaker 04:
Here's our response.

[00:32:01] Speaker 04:
Essentially, comedy doesn't apply.

[00:32:03] Speaker 04:
We have to make our own determination.

[00:32:06] Speaker 01:
The briefs that my colleague is referring to are the written submissions after... At that point, why didn't you submit additional arguments as to the Chinese proceedings, the character of the Chinese proceedings, its fairness, its due process, notice to parties, all of the hallmarks that courts look to when seeking, for example, to enforce a foreign judgment?

[00:32:29] Speaker 04:
Well, Your Honor, this is sort of a unique case because

[00:32:32] Speaker 04:
The other side brought this case in the Chinese courts to begin with.

[00:32:35] Speaker 04:
This is not the typical case where people were hauled into a foreign court and are complaining that it was unfair.

[00:32:41] Speaker 04:
SI pursued the case, as we detail in our brief, multiple times in the Chinese courts.

[00:32:46] Speaker 04:
We think submitting the judgments of the decisions, which laid out exactly the process that was followed, met our prima facie burden.

[00:32:54] Speaker 04:
If I can, I want to address my colleague's second waiver argument, which is that the post-grant brief only addressed

[00:33:02] Speaker 04:
the use of the Chinese decision in connection with the public interest factors.

[00:33:07] Speaker 04:
That's because at A 15084 what the Commission said when it issued an order was the parties are requested to file written submissions on the issues identified in this order and on the issues of remedy.

[00:33:21] Speaker 04:
So it would have, the Commission did not request further briefing on the general question of comedy and arguing

[00:33:28] Speaker 04:
that somehow there was waiver because it wasn't raised is directly contrary to the language of the commission's opinion.

[00:33:34] Speaker 04:
I think it's clear, contrary to what my colleague from the ITC said, that there is a comity principle that it's applied in the federal courts.

[00:33:45] Speaker 04:
And here the commission in footnote one rejected it.

[00:33:48] Speaker 04:
And the question is whether that comity principle applies.

[00:33:51] Speaker 04:
If it does,

[00:33:52] Speaker 04:
Then the case should be remanded so the commission can make the determination that your honor is referring to.

[00:33:57] Speaker 04:
And the commission obviously would have to consider the fairness of the Chinese proceedings, the claims about identity of the parties, and things like that.

[00:34:03] Speaker 04:
We think, as we explain in detail in our reply brief, it's clear that they should be rejected.

[00:34:08] Speaker 04:
But that would certainly be open on remand.

[00:34:10] Speaker 04:
But the court can't uphold the commission's decision rejecting comity across the board as a principle inapplicable to the ITC based on the different finding

[00:34:21] Speaker 04:
that the IPC didn't make, that for some reason, comedy might be inappropriate in these circumstances.

[00:34:27] Speaker 04:
If that's the question, then it has to be decided here.

[00:34:31] Speaker 04:
And that's why, contrary to what my colleagues say, we're not arguing that they're precluded from raising that argument, or that this court should say that the IPC judgment has to be reversed and the case dismissed based on the Chinese

[00:34:44] Speaker 04:
Court's decision, all we're saying is that those issues need to be addressed by the ITC.

[00:34:48] Speaker 04:
It can't simply say across the board, comity has no place in our proceedings.

[00:34:52] Speaker 04:
Thank you very much.

[00:34:53] Speaker 04:
Thank you.

[00:34:54] Speaker 01:
We thank the party for the arguments.