[00:00:25] Speaker 01:
Okay, our next case this morning is number 162380, Kempel Inc.

[00:00:48] Speaker 01:
versus United States.

[00:01:34] Speaker 01:
Okay, Mr. Nicely.

[00:01:38] Speaker 02:
Thank you.

[00:01:38] Speaker 02:
Good morning.

[00:01:39] Speaker 02:
May it please the Court, I'm Matt Nicely with Hughes, Obert & Reed appearing on behalf of Chemtol, Inc.

[00:01:46] Speaker 02:
This appeal concerns the proper HTS U.S.

[00:01:48] Speaker 02:
classification of a chemical compound referred to in short as ATBS.

[00:01:53] Speaker 02:
We have two arguments we want to put before you today.

[00:01:56] Speaker 02:
First, the lower court committed legal error when it misinterpreted the term amide in the HTS U.S.

[00:02:04] Speaker 02:
and adopted an overly restrictive and internally consistent reading of the relevant explanatory note, so as to prohibit the presence of heteroatoms in the R2 and R3 positions of the compound.

[00:02:20] Speaker 02:
Second, having concluded that ATBS is a derivative of enhammed, instead of enhammed in its own right, the court also erred by failing to apply Chapter 29's Submitting Note 1 at the 10-digit level.

[00:02:34] Speaker 02:
With regard to our first argument, first, both the CBP and the lower court have adopted a definition of AMID that is inconsistent with the common scientific and commercial meaning of the term, as well as the interpretive text.

[00:02:51] Speaker 01:
Put aside these other patents that you rely on.

[00:02:55] Speaker 01:
Is there any dictionary

[00:02:57] Speaker 01:
which uses the definition that you're urging.

[00:03:00] Speaker 01:
There are dictionaries you'd have to concede that support the government's position, right?

[00:03:05] Speaker 02:
There are dictionaries that use language that would appear to suggest a limitation, but those tend to be the more simplistic text that are used, for instance, to teach introductory chemistry.

[00:03:23] Speaker 05:
Well, what's the more complex and sophisticated text that supports you?

[00:03:27] Speaker 05:
Certainly not Hart's short course.

[00:03:30] Speaker 02:
I'm sorry?

[00:03:31] Speaker 05:
Not Hart's short course.

[00:03:32] Speaker 05:
That's not the more sophisticated text.

[00:03:36] Speaker 02:
The text that we refer to and that shows, that demonstrates the position that we take is Wade better than anything else.

[00:03:45] Speaker 05:
It struck me that Wade is actually not helpful to you.

[00:03:50] Speaker 05:
The only thing that you cite Wade for, I think, is the penicillin

[00:03:55] Speaker 05:
connection.

[00:03:56] Speaker 05:
But there, if I understand what Wade is saying, he's saying that penicillin has a B-lactam ring, and that B-lactam is itself an amide.

[00:04:06] Speaker 05:
But that doesn't mean that penicillin is an amide.

[00:04:09] Speaker 05:
It merely means it contains a ring that is an amide.

[00:04:12] Speaker 05:
That doesn't make the penicillin itself an amide, so far as I can see.

[00:04:18] Speaker 05:
So if you move on from... Well, go ahead.

[00:04:20] Speaker 05:
Well, you can respond to that.

[00:04:21] Speaker 02:
Right, I think that's critically important because in Wade, and this is at appendix pages 1633 through 1633 and 34 to 1659, sorry, to 1661, it talks about how, in fact, penicillin is an amine because lactams are amines.

[00:04:45] Speaker 05:
Where does it say penicillin is an amine?

[00:04:52] Speaker 05:
You didn't cite anything in your brief to that effect.

[00:04:56] Speaker 05:
And the government challenged your assertion about the beta-lactam-slash-penicillin argument.

[00:05:03] Speaker 05:
And you didn't say anything about that in your reply brief, as I recall.

[00:05:07] Speaker 02:
It's my understanding that penicillin is not that it merely has a lactam ring, that it is a lactam, and that lactams are, in turn, amides.

[00:05:22] Speaker 05:
And therefore... You said that's your understanding.

[00:05:25] Speaker 05:
Where in the record do we find anything to support that proposition?

[00:05:30] Speaker 02:
So on page 1661 of Wade, it refers to B-lactam antibiotics, right?

[00:05:40] Speaker 02:
And this is in the section.

[00:05:43] Speaker 02:
I don't have the entirety of it here, but B-lactams are unusually reactive amides, right?

[00:05:50] Speaker 02:
And so if it's a B-lactam,

[00:05:52] Speaker 02:
Then it is an amy.

[00:05:57] Speaker 05:
Belactam, everybody seems to agree, is itself an amy.

[00:06:04] Speaker 05:
But on the immediately preceding page, what Wade says is the belactam ring is found in three important classes of antibiotics, the implication being it is part of the overall molecule.

[00:06:20] Speaker 05:
that doesn't make the molecule an amine.

[00:06:23] Speaker 05:
I don't see any support for the proposition that penicillin is an amine.

[00:06:30] Speaker 02:
That is our understanding and our expert's understanding that, in fact, penicillin does not merely only have the lactin ring, but that it is, in fact, the lactin itself.

[00:06:43] Speaker 01:
But even on your own theory, this is not a clear definition of amine.

[00:06:50] Speaker 01:
that supports you, unlike the dictionary definitions that the government relies on.

[00:06:55] Speaker 01:
And it's all, frankly, a little bit convoluted in the way of an argument.

[00:06:59] Speaker 02:
Well, in all due respect, Your Honor, we point your attention to the fact that the lower court relied upon the EN for 2924.

[00:07:11] Speaker 02:
And the EN for 2924, if read in its entirety, demonstrates that, in fact,

[00:07:19] Speaker 02:
But in fact, the court went too far.

[00:07:23] Speaker 02:
The court restricted the definition of an amine too far.

[00:07:27] Speaker 05:
Let me ask you a question about the, and just right at the outset, because both parties passed by the structural definition, if you will, of the amides that's found in the

[00:07:42] Speaker 05:
explanatory notes, slash CONH2 being a primary amide, slash CO2 twice NH being the secondary, and CO3N being the tertiary.

[00:07:58] Speaker 05:
You don't agree, do you, that those are appropriate structural definitions of those three amides, or at least the latter two?

[00:08:09] Speaker 02:
Well, no.

[00:08:09] Speaker 05:
That's a mistake, isn't it?

[00:08:12] Speaker 05:
to cut to the chase?

[00:08:15] Speaker 02:
What I think is... Well, is it right or wrong?

[00:08:19] Speaker 02:
With regard to secondary and tertiary, frankly, whether it's wrong or whether it's right, it's not relevant to our particular case.

[00:08:26] Speaker 05:
I knew that was going to be your answer, but I would like you first, before telling me it's not relevant, to tell me whether you think it's right or wrong.

[00:08:37] Speaker 05:
It's an easy answer.

[00:08:38] Speaker 05:
It's wrong.

[00:08:39] Speaker 02:
It's wrong, isn't it?

[00:08:41] Speaker 02:
It doesn't look, this particularly doesn't look correct, that's right.

[00:08:44] Speaker 02:
Okay.

[00:08:45] Speaker 02:
But I think the primary AMID looks correct.

[00:08:47] Speaker 02:
Yeah, primary AMID looks correct.

[00:08:49] Speaker 02:
And it's consistent with the box that we talk about as having the AMI functional group, right?

[00:08:54] Speaker 02:
All right.

[00:08:54] Speaker 02:
So in any event, the critical point though here is what follows those diagrams in the EN.

[00:09:02] Speaker 02:
And what the court focused on was the next sentence.

[00:09:05] Speaker 02:
What page of the record is the ENF?

[00:09:08] Speaker 02:
We included it as an annex to our brief, so it's the first annex.

[00:09:12] Speaker 02:
So the other point that we want to make and the critical point focusing on the relevance of the EN here is... Does the EN help your argument or hurt your argument?

[00:09:33] Speaker 02:
It helps us significantly, Your Honor.

[00:09:35] Speaker 05:
And your point here, I guess, is focused on the cyclic amides, right?

[00:09:40] Speaker 02:
Well, in effect, yes.

[00:09:44] Speaker 02:
But if I could walk us through exactly how we get there.

[00:09:46] Speaker 02:
No, that's fine.

[00:09:47] Speaker 05:
But that's where you end up, right?

[00:09:48] Speaker 02:
Yes.

[00:09:48] Speaker 05:
Is that collection of compounds that are listed under cyclic amides, as you think, inconsistent with what the CIT defined amides to be?

[00:09:57] Speaker 02:
Exactly.

[00:09:57] Speaker 02:
OK.

[00:09:58] Speaker 02:
Exactly.

[00:09:59] Speaker 02:
And we get there by first starting with the discussions that the next sentence, which talks about some amides of this heading, also contain a diazotizable amine group.

[00:10:08] Speaker 02:
We showed in Figure 7 in our brief an example of an amide that has that diazotizable amine group.

[00:10:16] Speaker 02:
A diazotizable amine group by definition has a nitrogen in it.

[00:10:20] Speaker 02:
And in the one compound that we showed you at Figure 7, it has nitrogen in the R2 position.

[00:10:28] Speaker 02:
with a diacetylisable amine group.

[00:10:31] Speaker 02:
That's also cyclic.

[00:10:33] Speaker 02:
Then the EN goes on to list exemplars of amines that meet the definition as set forth in the EN.

[00:10:45] Speaker 02:
And amongst those, as we set forth in figures 10 and 11 of our brief, among those are cyclic amines that clearly do have something other than hydrogen or carbon

[00:10:57] Speaker 02:
in R2 or R3.

[00:11:00] Speaker 02:
And if that is possible, as we have shown in our brief, that it is possible to have something other than to have a heteroatom, a nitrogen, an oxygen, or a sulfur in one of those positions, then by definition, the restrictive definition of an amine that the court adopted is too restrictive.

[00:11:22] Speaker 02:
And I'll point out also that the EN does use the language

[00:11:26] Speaker 02:
only May as opposed to must.

[00:11:29] Speaker 05:
You know, I was troubled by your argument on the May sentence.

[00:11:34] Speaker 05:
It says the hydrogen of the NH2 or NH groups may be substituted by alkyl or aryl radicals, in which case the products are in substituted MAs.

[00:11:45] Speaker 05:
You know, May in that context seems to me to say that is what you

[00:11:55] Speaker 05:
can do and you can't do anything else.

[00:11:59] Speaker 05:
For example, suppose I walk into a Chinese restaurant and the menu says you may substitute for egg rolls, spring rolls or dumplings.

[00:12:10] Speaker 05:
It doesn't mean you may substitute spring rolls or dumplings, but you may also substitute a bottle of French wine.

[00:12:18] Speaker 05:
In this context, isn't this the same as that?

[00:12:21] Speaker 02:
It isn't.

[00:12:22] Speaker 02:
And the reason it's not is because you hit on the key point.

[00:12:26] Speaker 02:
It has to be read in context.

[00:12:28] Speaker 05:
You're going to go back to the acyclic amides, but that sentence by itself seems to me to cut against you.

[00:12:37] Speaker 05:
Does it not?

[00:12:38] Speaker 02:
I disagree.

[00:12:39] Speaker 02:
Because I think if you talk about... Take it out of context.

[00:12:42] Speaker 05:
Out of context, would you agree that it cuts against you?

[00:12:45] Speaker 02:
I don't know that you ever can read a single sentence of any document and reach a legal conclusion without reading it truly in context, which by definition means reading it with the other sentences that surround it.

[00:12:59] Speaker 05:
But if they had simply stopped at that point, I know they didn't.

[00:13:03] Speaker 05:
But if they had, wouldn't you lose on that sentence alone?

[00:13:08] Speaker 02:
I'm not so sure of that.

[00:13:10] Speaker 02:
That's not what we're dealing with, but I'm not so sure of that because they use the word may.

[00:13:14] Speaker 05:
But doesn't the word may put you in the Chinese restaurant problem?

[00:13:18] Speaker 02:
Again, I'm not convinced, given.

[00:13:22] Speaker 05:
You think you could get wine substituted for your egg rolls?

[00:13:25] Speaker 02:
If that menu said what this says, which in the next line, you could also get French wine, you could also get French fries, then the answer would be, then may certainly doesn't mean may.

[00:13:38] Speaker 05:
You're going back to the context.

[00:13:39] Speaker 02:
What's that?

[00:13:40] Speaker 05:
You're running back to the context.

[00:13:41] Speaker 02:
I am.

[00:13:42] Speaker 02:
I am, because I think it's critical.

[00:13:44] Speaker 02:
because we've shown several examples of amides that don't fit with the government's and the court's definition.

[00:13:54] Speaker 02:
And if they don't fit with their definition, then the definition is too restrictive.

[00:14:01] Speaker 02:
And the definition that we've adopted, that we've indicated is true for this product, which is that you have the possibility of something other than a hydrogen or carbon in the R2 or R3 position means that

[00:14:14] Speaker 02:
ATBS, in this particular instance, ATBS is in fact an amy.

[00:14:18] Speaker 02:
So that's the critical point of our argument about why this is in fact an amy.

[00:14:26] Speaker 02:
We have not addressed in significant detail in this brief whether it should be treated as a derivative, because our view is that it is an amy in its own right.

[00:14:38] Speaker 02:
The only thing we've done in the second part of our brief, just to take what little time I have left to talk about it,

[00:14:44] Speaker 02:
is that if the court deems that this is in fact an amine, and the question is, where does it go still?

[00:14:52] Speaker 02:
If it's deemed a derivative of acrylamide, for instance, which we completely disagree with, because you can't create this product from acrylamide.

[00:15:01] Speaker 02:
Acrylamide and ATBS are both created from acrylamide in a trial.

[00:15:06] Speaker 02:
But the fact is, if as an alternative argument, all that we're left with

[00:15:13] Speaker 02:
is where do you put it if indeed you take at their word that it is a derivative of acrylamide, then the question is, do you put it in the other category or do you put it in the other category of within at the 10-digit level?

[00:15:31] Speaker 02:
And so our argument about the 10-digit level is what I want to turn to now.

[00:15:38] Speaker 02:
We've explained that the way that subheading the one works

[00:15:43] Speaker 02:
is such that the series that is discussed, the series that is relevant is the series within which the product, the parent product appears.

[00:15:54] Speaker 02:
And that product is in the 10th digit series at 29, 24, 19, 11, 10 is where acrylamide is.

[00:16:05] Speaker 02:
Reading subheading note one, where you would end up in terms of choosing what the correct

[00:16:11] Speaker 02:
subheading is for the derivative of acrylamide is in 50 where we had proposed to put it in the first place.

[00:16:20] Speaker 02:
So the critical point here is subheading note one, which is in fact statutory, calls upon the CVP to place this product in the same subheading that we had proposed in the first place, which is where it belongs as an

[00:16:43] Speaker 01:
Okay, thank you, Mr. Niceau.

[00:16:44] Speaker 01:
We'll give you two minutes for rebuttal.

[00:16:47] Speaker 01:
Mr. Love-Grabham?

[00:17:00] Speaker 03:
Morning.

[00:17:00] Speaker 03:
May it please the Court?

[00:17:03] Speaker 01:
Would you address their argument about the explanatory note?

[00:17:06] Speaker 01:
Not the May issue, but their contention that the rest of the explanatory note

[00:17:12] Speaker 01:
is inconsistent with the way the CIT construed this?

[00:17:17] Speaker 03:
There is no inconsistency between the explanatory note and the way the CIT quoted the explanatory note.

[00:17:25] Speaker 03:
The provision that says the hydrogen attached to the nitrogen may be substituted by alkyl or alkyl radicals, in which case the products are unsubstituted amides.

[00:17:37] Speaker 03:
They can be substituted by other compounds.

[00:17:39] Speaker 03:
In ATBS, they are substituted by a different compound,

[00:17:41] Speaker 03:
It's just not an end-substituted amide.

[00:17:43] Speaker 03:
It's a derivative of an amide.

[00:17:47] Speaker 05:
What do you say to the argument that the explanatory notes referenced to cyclic amides includes compounds that do not seem to fit within the definition of an amide given by the Court of International Trade and supported by you?

[00:18:06] Speaker 05:
Well, to be clear.

[00:18:08] Speaker 05:
Am I right that some of those compounds are not amides as defined as you define them?

[00:18:16] Speaker 03:
First, as an initial matter, we're talking about an eight-digit statutory subheading.

[00:18:20] Speaker 05:
So it's an important distinction.

[00:18:21] Speaker 05:
If you would please answer the question.

[00:18:23] Speaker 05:
Are some of them not within the definition of amide?

[00:18:30] Speaker 05:
Some of them are.

[00:18:33] Speaker 03:
Some of them are.

[00:18:36] Speaker 03:
do attach compounds that are other than alkyl or aryl radicals.

[00:18:40] Speaker 03:
That's absolutely true.

[00:18:41] Speaker 05:
Which sounds like it's inconsistent with your definition.

[00:18:43] Speaker 03:
Is it not?

[00:18:44] Speaker 03:
It is not inconsistent with our definition because we are not defining the entire heading 2924.

[00:18:49] Speaker 03:
This term amides is an eight-digit sub-subheading under acyclic amides.

[00:18:56] Speaker 03:
So the cyclic amides that are referenced in the explanatory notes do not illuminate the distinction between an amide

[00:19:03] Speaker 03:
and other, which are the two competing eight-digit subheadings that the trial court construed.

[00:19:09] Speaker 03:
So in certain contexts, can amides be referred to, I guess, to encompass a universe where products attach compounds other than aryl or alkyl radicals to the amide functional group?

[00:19:30] Speaker 03:
Yes, sometimes that distinction is irrelevant.

[00:19:32] Speaker 03:
But it's not irrelevant here.

[00:19:33] Speaker 03:
And it's not irrelevant because Congress identified that distinction.

[00:19:37] Speaker 00:
So how does it explain to us a distinction and how that relates to the fact that cyclic amines and amides are in different subheadings?

[00:19:44] Speaker 00:
Sure.

[00:19:44] Speaker 03:
May I direct your attention to page two of our brief, which is the excerpt of the tariff schedule.

[00:19:51] Speaker 03:
And the tariff schedule, because this is really what this case is about.

[00:19:54] Speaker 03:
It's a classification case.

[00:19:57] Speaker 00:
And in terms of authority, which has greater authority, the EM,

[00:20:02] Speaker 00:
or the actual plain language or the HTS?

[00:20:07] Speaker 03:
The HTS US is statutory.

[00:20:09] Speaker 03:
It's binding.

[00:20:10] Speaker 03:
The explanatory notes provide interpretive guidance.

[00:20:15] Speaker 03:
So what the statute provides is under heading 2924, carboxyamide function compounds, amide function compounds of carbonic acid.

[00:20:25] Speaker 03:
The signature functional group that appears in every single compound, heading 2924,

[00:20:30] Speaker 03:
is the amide functional group which is reflected on page five.

[00:20:34] Speaker 03:
Then under that main heading, there are two categories.

[00:20:39] Speaker 03:
There's a category for acyclic amides, including acyclic carbamides, and their derivatives salts thereof.

[00:20:47] Speaker 03:
And that's where everyone agrees that ATBS falls.

[00:20:54] Speaker 03:
Then there are three other choices.

[00:20:56] Speaker 03:
Two of the statutory six-digit subheadings

[00:21:00] Speaker 03:
refer to specific compounds.

[00:21:02] Speaker 03:
And then there's other.

[00:21:03] Speaker 03:
So that other refers to all other acyclic amides, including acyclic carbamates and their derivative salts thereof.

[00:21:13] Speaker 01:
So if I understand correctly, these subheadings 10, 20, and 30, these are all carbon and hydrogen in the R position.

[00:21:24] Speaker 01:
Is that correct?

[00:21:25] Speaker 01:
In which ones?

[00:21:27] Speaker 01:
10, 20, and 30.

[00:21:29] Speaker 03:
So in the statistical suffixes?

[00:21:31] Speaker 03:
Yes.

[00:21:31] Speaker 03:
OK, in the statistical suffixes, which are not law, which are not part of the statute, those do all attach alkyl or aryl radicals to the nitrogen.

[00:21:44] Speaker 03:
Yes.

[00:21:45] Speaker 03:
Right.

[00:21:46] Speaker 03:
So we have a distinction between amides and their derivatives.

[00:21:51] Speaker 03:
So Congress recognized a distinction.

[00:21:53] Speaker 03:
And then subheading note one, councils

[00:21:57] Speaker 03:
counsels us that when there is an residual subheading, then derivatives of that particular compound must be classified in the other subheading.

[00:22:07] Speaker 03:
That's the analysis that the trial court engaged in, and that's the correct analysis.

[00:22:12] Speaker 05:
Let me go back to your original response to my question about the explanatory notes on cyclic amides.

[00:22:23] Speaker 05:
Are you saying in effect that

[00:22:25] Speaker 05:
The term amides, as it is used in 29, 24, 19, 11, has a different definition from the term amides as used, for example, in 29, 24, 21, when there's a reference to cyclic amides.

[00:22:48] Speaker 05:
The term amides that we're concerned with

[00:22:52] Speaker 05:
in this case is the one at 29-24-1911.

[00:22:55] Speaker 05:
Yes.

[00:22:55] Speaker 05:
All right.

[00:22:55] Speaker 05:
Now, if I understood your response to me, you were saying, well, with respect to that term, the definition that the CIT employed is correct.

[00:23:08] Speaker 05:
But I thought I heard you say that with respect to the term amide as it is used in 29-24-21, which deals with cyclic amides, a different definition of the term amide would be applicable.

[00:23:21] Speaker 05:
Is that right?

[00:23:22] Speaker 03:
No, that's not necessarily what we're saying.

[00:23:25] Speaker 03:
The difference between 29, 24, 19, which refers to the acyclic amides, has an eight-digit subheadings, amides, and other.

[00:23:34] Speaker 03:
There's no comparable analogous eight-digit sub-subheading that has amides and other under the cyclic category from which we can draw some sort of analogy.

[00:23:44] Speaker 03:
So what we do is we go back to the explanatory notes.

[00:23:51] Speaker 03:
Also, to follow up with your question about the expiratory notes, there's one important point that we haven't mentioned so far.

[00:23:57] Speaker 03:
On Appendix 1254, there's a specific reference to halogenated, sulfonated, nitrated, and nitrosated derivatives and combinations thereof.

[00:24:10] Speaker 03:
And it specifically recognizes a scenario where one or more hydrogen atoms in a parent compound are replaced with a sulfur group, which is S03H.

[00:24:21] Speaker 03:
context that compound is a sulfonated derivative.

[00:24:25] Speaker 03:
And that's what we have here.

[00:24:27] Speaker 03:
We have a hydrogen that's been replaced by a sulfo group.

[00:24:30] Speaker 03:
And the explanatory notes counsel that that type of compound is a sulfonated derivative.

[00:24:37] Speaker 03:
So what we have is a sulfonated derivative of an acyclic acid.

[00:24:40] Speaker 05:
But where I think you were going in response to my question earlier was to say

[00:24:47] Speaker 05:
if I understand where you are going, is to say that cyclic amides, which doesn't have an other attached to it, includes the derivatives.

[00:24:55] Speaker 05:
Is that right?

[00:24:57] Speaker 03:
It's cyclic amides and their derivatives.

[00:24:59] Speaker 03:
That's what the statute says.

[00:25:02] Speaker 05:
So it includes both.

[00:25:04] Speaker 05:
But the amides themselves, the problem with saying that the amides include their derivatives is it says and their derivatives.

[00:25:13] Speaker 05:
So the amides must not include amide derivatives, right?

[00:25:18] Speaker 05:
The term amides can't include the derivatives if you then follow it by saying, and their derivatives.

[00:25:24] Speaker 03:
In this statute, there's a distinction.

[00:25:28] Speaker 03:
Under certain circumstances, there might not be a relevant distinction between an amide and an amide derivative, because they both contain the amide functional group.

[00:25:37] Speaker 03:
The issue is everything in heading 24.

[00:25:39] Speaker 05:
Can you understand why I'm having trouble with your answer?

[00:25:43] Speaker 05:
What I'm trying to get to is, are you saying that the term amides

[00:25:47] Speaker 05:
in the reference to the cyclic amides is broader than the term amide that's used in 29, 24, 1911.

[00:25:58] Speaker 05:
Because that was what I understood you to be saying as the explanation for why the explanatory note has cyclic amides that include what, under your definition, would be derivatives.

[00:26:14] Speaker 03:
If I understand your question correctly,

[00:26:17] Speaker 03:
It would be fair to say that 29, 24, 21 does include compounds that attach other than alkyl or aryl radicals at R2 and R3.

[00:26:33] Speaker 05:
And in fact, more than that, I think you're saying that the term anid in that section includes those compounds that include things other than

[00:26:46] Speaker 05:
alkyl and aryl to the R2 and R3, correct?

[00:26:50] Speaker 03:
That's not necessarily correct, because that distinction between cyclic amides and their derivatives are still there.

[00:26:56] Speaker 03:
And all of the exemplar compounds that Kemptel cited are specifically provided for by name.

[00:27:02] Speaker 03:
So Congress made that determination about those particular compounds and how they should be classified.

[00:27:08] Speaker 03:
We don't have the benefit of that with respect to 29, 24, 1911, and 1980, which are the only two

[00:27:14] Speaker 03:
statutory subheadings that are at issue in this case.

[00:27:17] Speaker 03:
The court didn't make a declaration about what the term amids means.

[00:27:22] Speaker 03:
If you describe everything in heading 2924, you only describe this very specific statutory subheading.

[00:27:30] Speaker 03:
And the court shouldn't construe that, so it would subsume the entire heading.

[00:27:38] Speaker 03:
If you say that anything and make no distinction between amids and their derivatives, then

[00:27:44] Speaker 03:
potentially anything would fall within 29, 24, 1911.

[00:27:49] Speaker 03:
But there's another category.

[00:27:50] Speaker 03:
So there's a distinction with the difference.

[00:27:55] Speaker 05:
Would you agree that the structural descriptions in the explanatory notes of secondary amides and tertiary amides are just flat wrong?

[00:28:07] Speaker 03:
No, that's absolutely correct.

[00:28:09] Speaker 05:
There's nothing wrong about that.

[00:28:13] Speaker 05:
twice NH and CO thrice N are accurate descriptions of secondary amides and tertiary amides.

[00:28:24] Speaker 05:
I'm reading from the middle of, this is appendix 1264.

[00:28:29] Speaker 05:
It's a place where the explanatory note says amides are compounds which contain the following characteristic groups.

[00:28:37] Speaker 05:
Primary, secondary, and tertiary.

[00:28:41] Speaker 03:
I'm sorry, what part of that

[00:28:43] Speaker 03:
What part of that have you identified as incorrect?

[00:28:46] Speaker 05:
Secondary amide as being CO twice NH and tertiary amide as being CO three times N. Perhaps I'm not as familiar with the

[00:28:58] Speaker 05:
how that would appear in a structural diagram, or I could say... Well, I don't know where you get three COs in the tertiary amide.

[00:29:06] Speaker 05:
Tertiary amide is something in which the H has been substituted for by an alkyl group, right?

[00:29:10] Speaker 05:
That's correct.

[00:29:11] Speaker 03:
I see what you mean.

[00:29:14] Speaker 03:
Before I concede anything, I'd want to confer with my agency council about the science.

[00:29:20] Speaker 03:
But I think the point is that when you have an amide functional group,

[00:29:26] Speaker 03:
You have the R1, which is attached to the carbon.

[00:29:29] Speaker 03:
And then you have R2 and R3, which are attached to the nitrogen.

[00:29:33] Speaker 05:
That doesn't look very much like this.

[00:29:35] Speaker 03:
I understand what you're saying.

[00:29:36] Speaker 03:
I do understand that.

[00:29:37] Speaker 03:
But I think the text is the important point.

[00:29:42] Speaker 03:
And even if what you said was true, it doesn't help Kemptel.

[00:29:45] Speaker 03:
And it doesn't allow it to substitute the hydrocarbons.

[00:29:47] Speaker 05:
But it does sort of undermine some confidence in the explanatory note.

[00:29:54] Speaker 03:
I can understand that.

[00:29:55] Speaker 03:
I think that the second portion where it says the hydrogen groups may be substituted by alkyl or aryl radicals, in which case the products are unsubstituted amides, that is true.

[00:30:07] Speaker 03:
And they can be substituted by other groups also.

[00:30:09] Speaker 03:
They're just not unsubstituted amides.

[00:30:12] Speaker 03:
They're derivatives of amides.

[00:30:14] Speaker 03:
And they would fall within the other category.

[00:30:18] Speaker 00:
Well, I also identified that the area I'm talking about

[00:30:23] Speaker 00:
Or I should say my clerk did identify that error.

[00:30:27] Speaker 00:
Maybe you should just report that back to CVP.

[00:30:29] Speaker 00:
They need to change that and correct that error.

[00:30:32] Speaker 00:
But the rest of the text, is that incorrect?

[00:30:35] Speaker 00:
The rest of the text is accurate.

[00:30:42] Speaker 03:
OK, anything further?

[00:30:44] Speaker 03:
Just take a moment.

[00:30:46] Speaker 03:
No, you have a minute left.

[00:30:53] Speaker 03:
Just a final issue.

[00:30:59] Speaker 03:
There's an allegation that we've attacked their textbooks and their sources.

[00:31:03] Speaker 03:
The truth is, we've relied on the textbooks that chemtol cites, and they uniformly reflect the definition of amide.

[00:31:11] Speaker 00:
Is there any textbook or dictionary citations that support their definition of the amide?

[00:31:18] Speaker 03:
That support the United States?

[00:31:20] Speaker 03:
That supports chemtols.

[00:31:21] Speaker 03:
No.

[00:31:22] Speaker 03:
And if there were, it would be front and center of their brief and reply brief.

[00:31:26] Speaker 05:
The discussion that I had with opposing counsel, your opposing counsel about the lactam ring and the penicillin, I understood it was your position that

[00:31:40] Speaker 05:
The lactam ring is, in fact, an amide, but it does not mean that that does not make penicillin an amide.

[00:31:47] Speaker 05:
Is that your position?

[00:31:48] Speaker 03:
Well, a lactam ring contains an amide functional group.

[00:31:50] Speaker 03:
And what's actually noteworthy about lactams is that not only is penicillin provided for under a separate heading, lactams are provided for under 2933 of the tariff schedule.

[00:32:05] Speaker 03:
The textbooks provide guidance, but it's really the tariff schedule that's controlled.

[00:32:10] Speaker 05:
But your basic submission is that penicillin is not an amide.

[00:32:15] Speaker 03:
Our submission is that it contains an amide functional group.

[00:32:21] Speaker 05:
Are you saying penicillin is an amide or not?

[00:32:23] Speaker 03:
You're saying it's not, right?

[00:32:27] Speaker 03:
Our argument is not necessarily whether something is or isn't an amide.

[00:32:30] Speaker 03:
It's whether or not something falls within the

[00:32:33] Speaker 03:
eight-digit statutory subheading for amides, or whether it falls within its statutory subheadings for other because it's a derivative.

[00:32:41] Speaker 03:
So in certain contexts in the laboratory, yes, maybe somebody could call it an amide.

[00:32:45] Speaker 03:
But for the purpose of classification, you wouldn't classify penicillin in 29, 24, and 1911.

[00:32:51] Speaker 03:
It contains an amide functional group that's undisputed.

[00:32:55] Speaker 05:
Let me ask just one more question, if I may, about the 10-digit issue.

[00:32:59] Speaker 05:
If I understand your argument, it is that

[00:33:03] Speaker 05:
The way you deal with, and correct me if this is a misunderstanding, but my understanding was the way you deal with the 10-digit argument is that you start at 2924 and you're dealing with acyclic amides and their derivatives.

[00:33:20] Speaker 05:
Then you go down to, you find that it's not, ATBS is not, I'm not going to try to pronounce these, metrobomate, florescent,

[00:33:32] Speaker 05:
fluoroacetamide, and therefore it must be other.

[00:33:37] Speaker 05:
Within the category of other, you have amides and other.

[00:33:41] Speaker 05:
It is not an amide as you define it, because it has something other than an aryl group in the R2 and R3, and therefore your choice is other.

[00:33:53] Speaker 05:
And that's why you put it in other.

[00:33:55] Speaker 05:
So you never get to the acrylamide, which is two digits farther down in the chain,

[00:34:02] Speaker 05:
so that you never have occasion to get to the other that's attached to the 10 digits.

[00:34:07] Speaker 05:
Is that essentially your argument?

[00:34:08] Speaker 01:
That is our argument.

[00:34:09] Speaker 01:
Okay.

[00:34:11] Speaker 01:
Okay.

[00:34:11] Speaker 01:
Thank you, Mr. Wolfgang.

[00:34:12] Speaker 01:
Thank you.

[00:34:20] Speaker 01:
Mr. Nicely, you've got two minutes here.

[00:34:22] Speaker 02:
Thank you, Your Honor.

[00:34:24] Speaker 02:
The government has no answer for our argument and our point that

[00:34:30] Speaker 02:
the cyclic ammied examples in the EN 2924 disprove the court and the government's position as to the definition of an ammied.

[00:34:41] Speaker 02:
Effectively, they've admitted that there are examples of ammieds out there that are cyclic that don't meet the definition.

[00:34:48] Speaker 02:
It's critical that we point out in this context that if you look at the EN and look at what the court used to define what is an ammied,

[00:35:00] Speaker 02:
They focus on the sentence that says the hydrogen of the NH2 or NH groups may be substituted by alkyl or aryl radicals.

[00:35:10] Speaker 02:
Aryl radical by definition means there's a ring.

[00:35:14] Speaker 02:
It means it's cyclic.

[00:35:16] Speaker 02:
So the very definition that the court relies upon and that the government relies upon recognizes that the definition applies to both acyclic as well as cyclic amines.

[00:35:25] Speaker 02:
No question about that.

[00:35:28] Speaker 02:
Penicillin, I refer you back again, that penicillin, if you read Wade, the paragraph under where they have the picture of penicillin, it does refer to it as amides.

[00:35:39] Speaker 02:
It says B. lactam, it references it as an amide.

[00:35:44] Speaker 02:
So I would take you back there again.

[00:35:46] Speaker 02:
I would also like to point out that the government is taking the position that anything that doesn't meet that strict definition of an amide but has an amide functional group,

[00:35:59] Speaker 02:
is a derivative of an amine.

[00:36:02] Speaker 02:
That takes this notion of the chalkboard and eraser approach to creating derivatives to a whole new level.

[00:36:11] Speaker 02:
That's not what the case horn stands for.

[00:36:15] Speaker 02:
It's not possible, as we've shown, as our experts showed.

[00:36:20] Speaker 02:
It's not actually possible, as I mentioned earlier, to go from acrylamide to ATBS.

[00:36:26] Speaker 02:
acrylamide actually comes from acrylamid in the trial as does our product.