Wirtgen Am., Inc. v. United States , 2020 CIT 70 ( 2020 )

Slip Op. 20-70
UNITED STATES COURT OF INTERNATIONAL TRADE
WIRTGEN AMERICA, INC.,
Plaintiff, Before: Jennifer Choe-Groves, Judge
v. Court No. 20-00027
UNITED STATES, ET AL.,
Defendants.
OPINION
[Granting Plaintiff’s motion for [partial] summary judgment regarding Customs’ exclusion of
Plaintiff’s redesigned road-milling machines from entry into the United States; Denying
Defendants’ motion to dismiss and cross-motion for summary judgment; Denying as moot
Plaintiff’s motion for preliminary injunction and bond; and Dismissing as moot the second count
of Plaintiff’s complaint.]
Dated: May 18, 2020
Daniel E. Yonan, Dallin G. Glenn, Michael E. Joffre, Donald R. Banowit, and Kristina C. Kelly,
Sterne, Kessler, Goldstein & Fox, PLLC, of Washington, D.C., and Ryan D. Levy, Patterson
Intellectual Property Law, P.C., of Nashville, TN argued for Plaintiff Wirtgen America, Inc.
Seth R. Ogden also appeared.
Guy R. Eddon, Trial Attorney, Edward F. Kenny and Marcella Powell, Senior Trial Counsel,
Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of New York, N.Y.,
argued for Defendants United States; U.S. Department of Homeland Security and Acting
Secretary Chad F. Wolf; and U.S. Customs and Border Protection, Acting Commissioner Mark
A. Morgan, Director of Machinery Center of Excellence and Expertise Juan J. Porras, and Chief
of the Intellectual Property Rights and Restricted Merchandise Branch of the Office of Trade
Charles R. Steuart. With them on the brief were Joseph H. Hunt, Assistant Attorney General,
Jeanne E. Davidson, Director, Patricia M. McCarthy and Justin R. Miller, Assistant Directors,
and Jason Kenner, Senior Trial Counsel. Aimee Lee also appeared.
Choe-Groves, Judge: This action concerns road-milling machines that were redesigned
to avoid infringing upon a registered patent. Plaintiff Wirtgen America, Inc. (“Plaintiff” or
“Wirtgen”) commenced this action to obtain judicial review of a decision by U.S. Customs and
Court No. 20-00027 Page 2
Border Protection (“Customs”) excluding the entry of six redesigned 1810 Series road-milling
machines (“Redesigned RMM(s)”) pursuant to a Limited Exclusion Order issued by the
International Trade Commission (“Commission” or “ITC”). Plaintiff challenges Customs’ denial
of Wirtgen’s protest regarding the exclusion of the Redesigned RMMs sought to be entered into
the United States. Compl. ¶¶ 1-2, ECF No. 7. Plaintiff seeks a declaratory judgment and a court
order directing Customs to grant entry of the Redesigned RMMs. Id. ¶¶ 3–4.
Before the court are Plaintiff’s Motion for [Partial] Summary Judgment, ECF No. 40
(“Pl.’s Mot. Summ. J.”) 1, Plaintiff’s Renewed Motion for Preliminary Relief and Bond, ECF No.
59 (“Pl.’s PI Mot.”), and Defendants’ Renewed Motion to Dismiss or, in the Alternative, Cross-
Motion for Summary Judgment, ECF No. 80 (“Defs.’ Mot. Dism.”). The court takes notice that
Defendants no longer contest Wirtgen’s allegation of non-infringement. Defs.’ Mot. Dism. 17,
25. For the following reasons, the court grants Plaintiff’s Motion for [Partial] Summary
Judgment, denies Plaintiff’s Renewed Motion for Preliminary Relief and Bond as moot, denies
Defendants’ Renewed Motion to Dismiss, or, in the Alternative, Cross-Motion for Summary
Judgment, and dismisses Count II of the Complaint as moot.
I. BACKGROUND
Wirtgen is the exclusive U.S. importer of Wirtgen Group’s heavy machinery under the
Wirtgen, Vögele, Hamm, and Kleemann brands used primarily in road construction and
maintenance. Compl. ¶¶ 9–10; Prelim. Inj. Hr’g Tr. 18:9–13, Apr. 2, 2020, ECF No. 76 (“PI
Tr.”). Wirtgen delivers the subject merchandise to a network of domestic dealers who sell to
end-use customers. PI Tr. 17:21–18:6. This case involves Wirtgen-brand road-milling machines
1
Because Plaintiff moves for summary judgment as to Count I but not Count II of the
Complaint, the court will treat Plaintiff’s motion as a motion for partial summary judgment.
Court No. 20-00027 Page 3
(used interchangeably with roto millers, and cold-milling and cold-planer machines), which
remove surface layers in the first stage of pavement resurfacing or maintenance. Compl. ¶ 12;
Mem. P. & A. Supp. Wirtgen’s Mot. Prelim. Relief & Bond 1, 5, ECF No. 60 (“Pl.’s PI Br.”); PI
Tr. 65:13–17.
The ITC initiated Investigation 337-TA-1088 (“1088 Investigation”) under Section 337
of the Tariff Act of 1930 (“Section 337”), 19 U.S.C. § 1337, upon a patent infringement
complaint filed by Caterpillar, Inc. and Caterpillar Paving Products, Inc. (collectively,
“Caterpillar”). 2 Certain Road Construction Machines and Components Thereof, 82 Fed. Reg.
56,625, 56,625 (Int’l Trade Comm’n Nov. 29, 2017) (institution of investigation by Commission
into Section 337 violations). Caterpillar 3 alleged that Wirtgen infringed U.S. Patent No.
7,140,693 B2 (“’693 Patent”). See id. The ’693 Patent claims, in relevant part, the invention of
an extendable and retractable swing leg: “one wheel or track [ ] connected to a [ ] lifting column
connected to [the frame of a work machine] . . . ” where rotating the “wheel or track . . . includes
rotating [the] lifting column.” Compl. Ex. A, at 13, ECF No. 7-1 (“’693 Patent”). 4 The ’693
Patent includes the following illustration:
2
Wirtgen filed a patent infringement complaint against Caterpillar. The Commission initiated
Investigation No. 337-TA-1067 and found that Caterpillar infringed Wirtgen’s patent. Certain
Road Milling Machines and Components Thereof, 82 Fed. Reg. 40,595 (Int’l Trade Comm’n
Aug. 25, 2017). Caterpillar appealed the Commission’s decision to the U.S. Court of Appeals
for the Federal Circuit. Caterpillar’s appeal and Wirtgen’s appeal have been consolidated in
Federal Circuit Appeal No. 19-2306. Defs.’ Mot. Dism. 13.
3
Gregory Henry Dubay, Michele Orefice, and Dario Sansone are the inventors and Bitelli S.p.A.
is the assignee listed on the ’693 Patent. Bitelli S.p.A. assigned its rights to Caterpillar Paving
Products, Inc., the current owner of the ’693 Patent. Pl.’s PI Br. Ex. 2, at 7.
4
The pages of the ’693 Patent are not consecutively numbered, so, when necessary, the court
will cite the ’693 Patent through ECF pagination.
Court No. 20-00027 Page 5
(collectively, “Original RMMs”) infringed Claim 19 of the ’693 Patent. Certain Road
Construction Machines and Components Thereof, 84 Fed. Reg. 31,910, 31,911 (Int’l Trade
Comm’n July 3, 2019) (notice of Commission final determination); Pl.’s PI Br. 6; FID 84–85.
Contemporaneous with the ITC proceeding, Wirtgen redesigned the swing leg of the
Original RMMs based on the Bitelli Prior Art to avoid infringing Claim 19 of the ’693 Patent
and presented the swing leg redesign as evidence during the trial before the Administrative Law
Judge. Statement of Undisputed Material Facts Supp. of Wirtgen’s Mot. For Summ. J. ¶ 13,
ECF No. 44 (“SUMF”); Compl. ¶¶ 36–41; FID 24–25. The Administrative Law Judge declined
to consider the redesigned swing leg because the “design[ ] [had] not been implemented in any
imported articles, however, and [was] thus outside the scope of [the] investigation. Th[is]
alternate swing-leg design[ ] [was] not ripe for a determination of infringement or non-
infringement in this investigation.” Compl. ¶¶ 42–43; FID 25. The ITC issued a Limited
Exclusion Order (“LEO”) barring importation by Wirtgen of products infringing Claim 19 of the
’693 Patent and issued a cease-and-desist order against Wirtgen. Limited Exclusion Order,
USITC Inv. No. 337-TA-1088 (June 27, 2019), ECF No. 7-5, Ex. 4 (“LEO”); 84 Fed. Reg. at
31,911. Paragraph 1 of the LEO states: “Road construction machines and components thereof
that infringe claim 19 of the ’693 patent . . . are excluded from entry for consumption into the
United States [or] entry for consumption from a foreign-trade zone . . . .” LEO ¶ 1. Wirtgen’s
appeal of the ITC’s determination remains under review at the U.S. Court of Appeals for the
Federal Circuit. Compl. ¶ 34; SUMF ¶ 12.
Wirtgen incorporated the redesigned swing leg into 1810 Series machines that bear the
new branding of W 100 XFi, W 100 XTi, W 120 XFi, W 120 XTi, W 130 XFi, and W 130 XTi.
Court No. 20-00027 Page 6
Id. ¶¶ 46–54. The “X” indicates that the machines have a new swing-leg redesign. 6 Compl. ¶¶
55–56; SUMF ¶¶ 21–26.
Wirtgen’s counsel met with Customs officials to explain the structure, operation, and new
branding of the Redesigned RMMs on August 13, 2019. Compl. ¶¶ 65–66; Pl.’s PI Br. 7; SUMF
¶ 29. In a September 5, 2019 memorandum (“Wirtgen Memorandum”) to Customs, Wirtgen’s
counsel submitted six photographs and nine videos of a W 120 XFi Redesigned RMM, serial
number 18101069, which depict the distinction between the Redesigned RMMs and the Original
RMMs, demonstrating to Customs officials that the Redesigned RMMs do not infringe Claim 19
of the ’693 Patent. See SUMF ¶¶ 31–34; Compl. ¶¶ 68–82. The Wirtgen Memorandum depicts
the “rotational coupling” of the Original RMM swing leg that the Administrative Law Judge
found infringed Claim 19, compared to the “rotational decoupling” of the Redesigned RMM
swing leg designed to avoid Claim 19 by incorporating the swing leg design of the Bitelli Prior
Art. Compl. Ex. 6, at 7–10 (“Wirtgen’s Mem.”). The Wirtgen Memorandum also includes
photographs identifying a “keyway” or visible vertical groove down the length of the lifting
column. Id. at 10–13. The series of photographs of the wheel track and yoke in straight, steering
left, and steering right positions shows that the lifting column keyway remains stationary
regardless of the rotation of the wheel track and yoke. See id.; SUMF ¶¶ 83–85. The Wirtgen
Memorandum also explains how to identify the first Redesigned RMM scheduled to arrive at the
Port of Baltimore, Maryland, by the manifest and visual inspection. Compl. ¶¶ 83–85; SUMF
¶¶36–37. Wirtgen offered to make a technician available at the port to demonstrate the
Redesigned RMM’s operation and answer questions. Compl. ¶ 86; SUMF ¶ 38–39; Pl.’s PI Br.
6
“F” and “T” indicate cost-related differences irrelevant to this case. Compl. ¶¶ 57–58; SUMF ¶
27–28.
Court No. 20-00027 Page 7
7. The following Redesigned RMMs were released by Customs and allowed entry:
Pl’s PI Br. Ex. 1, ¶ 24, Compl. ¶¶ 88–89, 91. Customs detained the following six Redesigned
RMMs that are at issue in this case:
Pl’s PI Br. Ex. 1, ¶ 26; see Compl. ¶¶ 93–100; SUMF ¶¶ 42–45, 49–50. 7 On December 9, 2019,
7
Customs claims that the ten admitted Redesigned RMMs “came in very soon after the LEO was
transmitted to CBP and so CBP at that moment was still in the process of creating the tools
necessary to identify those machines so that it could . . . enforce the LEO.” PI Tr. 178:10–15.
The court notes that the record does not support this assertion. For example, Customs detained
five Redesigned RMMs at the Port of Brunswick in November 2019, then subsequently allowed
entry of two Redesigned RMMs at the same Port in December 2019. During oral argument, the
Government could not provide a reason why some Redesigned RMMs were detained and some
Redesigned RMMs were allowed entry. Customs’ arbitrary application of the LEO to some
Redesigned RMMs and not others undermines the Government’s argument in this case.
Court No. 20-00027 Page 8
Wirtgen submitted certifications, dated September 9, 2019, stating that the six detained
Redesigned RMMs were outside the scope of the LEO. Compl. ¶ 104. Customs issued three
notices excluding the six detained Redesigned RMMs. Compl. Exs. B–D, ECF Nos. 7-2, 7-3, 7-
4 (collectively, “Exclusion Notices”). The Exclusion Notices explain that Customs applies the
LEO to all products that infringe the ’693 Patent. Id. at 2. Customs asserted in the Exclusion
Notices that Wirtgen failed to meet its burden of showing that the excluded Redesigned RMMs
are non-infringing. Id. at 3. Customs recounted the ITC Administrative Law Judge’s
determination that the redesign was not ripe for a determination of infringement or non-
infringement. Id. at 3–4 (citing FID 24–25). Customs refused to accept Wirtgen’s certification
without an ITC or Customs determination. Id. at 5. The Exclusion Notices advise that importers
may seek prospective guidance on whether a product is subject to an exclusion order through an
ITC advisory opinion or a Customs Part 177 ruling. Id. (citing 19 C.F.R. § 210.79; 19 C.F.R. pt.
177).
The U.S. Patent Trial and Appeal Board (“PTAB”) issued a Final Written Decision as to
Wirtgen’s petition for inter partes review of the ’693 Patent. Wirtgen America, Inc. and Joseph
Vögele AG v. Caterpillar Paving Prods., Inc., IPR2018-01201, Paper 32 (PTAB Dec. 13, 2019).
The PTAB concluded that all claims, including Claim 19, were unpatentable as obvious
according to certain prior art.8 Id. at 34–35. Wirtgen is not challenging the validity of the ’693
Patent before this court.
8
The PTAB issued a second Final Written Decision concluding that all claims were valid and
patentable on separate grounds based on different prior art. Wirtgen America, Inc. and Joseph
Vögele AG v. Caterpillar Paving Prods., Inc., IPR2018-01202, Paper 29 (PTAB Dec. 23, 2019).
The two Final Written Decisions are independent; the second Final Written Decision has no
effect on the PTAB’s conclusion in the first Final Written Decision. PI Tr. 159:17–160:11.
Court No. 20-00027 Page 9
On December 24, 2019, Wirtgen filed a protest as to the first five Redesigned RMMs
excluded by Customs on December 17, 2019. Compl. Ex. E, ECF No. 7-5. Wirtgen lodged a
protest on December 31, 2019 as to the sixth Redesigned RMM excluded on December 27, 2019.
Compl. Ex. F, ECF No. 7-6. The protests included the non-infringement argument and
substantiation from the Wirtgen Memorandum, with the complete Wirtgen Memorandum
attached. Compl. Ex. E, at 13–22. Customs denied both protests and announced that Customs
believes its exclusion decisions are not subject to protest or review by the U.S. Court of
International Trade because the ITC is the only agency with authority to make infringement
determinations in the context of Section 337. Compl. Exs. G, H, at 2, 18, ECF Nos. 7-7 (“HQ
H308232”), 7-8 (“HQ H308399”) (collectively, “Protest Denials”) 9; Defs.’ Mot. Dism. 24.
Wirtgen brought an action against Defendants in the U.S. District Court for the District of
Columbia, 20-cv-0195, claiming that Customs’ application of the LEO to the Redesigned RMMs
was arbitrary and capricious, violated the Appointments Clause of the U.S. Constitution, and
denied procedural due process. Compl. ¶ 7. Wirtgen sought a temporary restraining order,
preliminary injunction, and declaratory relief to prevent Defendants from excluding or seizing
Redesigned RMMs imported in the future. Id. The case was dismissed by the U.S. District
Court for the District of Columbia for lack of subject matter jurisdiction. Notice Suppl. Auth.,
ECF No. 53. Wirtgen has appealed the dismissal to the U.S. Court of Appeals for the District of
Columbia Circuit, which denied Wirtgen’s request for expedited review on April 6, 2020. Defs.’
Opp’n to Pl.’s Renewed Mot. Prelim. Relief & Bond, at 6 & n.2, ECF No. 74 (“Defs.’ Opp’n”)
(citing USCA Case No. 20-5064, Doc. No. 1836940).
9
The second denial HQ H308399 incorporated the first denial HQ H308232 by reference, so,
when necessary, the court will cite the Protest Denials through the first denial HQ H308232
pagination.
Court No. 20-00027 Page 10
The ITC initiated a modification proceeding of the LEO on January 16, 2020. Id. at 5.
The parties to the modification proceeding have exchanged contentions and an inspection of a
Redesigned RMM was conducted at a port in Georgia. PI Tr. 207:18–25. The modification
proceeding in the ITC is ongoing, with a determination and recommendation expected in
approximately June 2020. Pl.’s PI Br. 2 n.2; PI Tr. 207:25–208:9.
Before this Court, Wirtgen sought a temporary restraining order and preliminary
injunction. Pl.’s Mot. TRO & Prelim. Inj., ECF No. 8. Wirtgen withdrew that motion, ECF No.
36, in favor of the pending [partial] summary judgment motion. Pl.’s Mot. Summ. J. The court
issued an expedited scheduling order. Sch. Order, ECF No. 54, as amended, Order, ECF No. 63,
as amended, Order, ECF No. 65, as amended, Order, ECF No. 78. Wirtgen filed a renewed
motion for preliminary relief and bond. Pl.’s PI Mot. The court held a preliminary injunction
and bond hearing. Conf. Prelim. Inj. Hr’g, ECF No. 72. The parties agreed to postpone
discovery and proceed with summary judgment briefing. Joint Mot. Modify Sch. 3, ECF No. 77
(“Joint Mot.”). On summary judgment, Defendants challenge Wirtgen’s assertions that the
Redesigned RMMs do not fall within the scope of the LEO and that Customs was wrong to reject
Wirtgen’s certification, but no longer contest Wirtgen’s assertion of non-infringement. Defs.’
Mot. Dism. 17–23. In Defendants’ words, the “Government takes no position on Wirtgen’s
factual allegations on the issue of infringement. Rather, we will defer to the final determination
of the ITC, which is considering the question as part of the modification proceeding of the LEO
and respectfully request that the Court do the same.” Id. at 6, 25.
II. DEFENDANTS’ RENEWED MOTION TO DISMISS
The court has jurisdiction pursuant to 28 U.S.C. § 1581(a) (protest-denied jurisdiction).
See Wirtgen Am., Inc. v. United States, No. 20-00027, 2020 Ct. Intl. Trade LEXIS 30, at *31
Court No. 20-00027 Page 11
(Ct. Int’l Trade Mar. 4, 2020) (“Wirtgen I”). It is well-settled that a federal court's jurisdiction is
conferred solely by statute; an administrative agency cannot enlarge or limit a court's
jurisdiction. See Myers v. United States, 272 U.S. 52, 64 (1926); Bell v. New Jersey &
Pennsylvania, 461 U.S. 773, 777 (1983).
Defendants revive their argument in Defendants’ Renewed Motion to Dismiss that this
Court lacks subject matter jurisdiction based on Wirtgen’s purported challenge to the scope of
the limited exclusion order, which Defendants argue is within the purview of the ITC rather than
this Court. Defs.’ Mot. Dism. 9. Defendants do not provide any new facts or persuasive law in
support of their renewed motion to dismiss for lack of jurisdiction. The court relies on its prior
opinion in Wirtgen I regarding the Court’s jurisdiction, and addresses here some additional
jurisdictional issues raised by Defendants.
Defendants support their renewed motion to dismiss for lack of jurisdiction by citing a
non-precedential opinion by a District Court Judge for the District of Columbia, who opined in
dicta that this Court lacks jurisdiction. It is apparent that the D.C. District Court Judge’s opinion
is based on a fundamental misunderstanding of Plaintiff’s claims. Defendants state, “[a]t its
heart, Wirtgen’s complaint challenges the scope of a limited exclusion order.” Id. at 7. This
pronouncement miscasts Plaintiff’s claims pending before this Court, which actually challenge
Customs’ denials of Plaintiff’s protests, and do not seek to litigate the Section 337 patent
infringement case or modify the scope of the LEO.
Customs has the authority to enforce exclusion orders. 19 U.S.C. § 1337(d) (“The
Commission shall notify the Secretary of the Treasury [Customs] of its action under this
subsection directing such exclusion from entry, and upon receipt of notice, the Secretary shall,
through the proper officers, refuse such entry.”). Customs’ authority to act against imported
Court No. 20-00027 Page 12
merchandise is limited to the language of the ITC’s Section 337 exclusion order. The LEO
excludes from entry Wirtgen’s “[r]oad construction machines . . . that infringe claim 19 of the
’693 Patent. . . .” LEO ¶ 1; Statement of Undisputed Material Facts Supp. of Wirtgen’s Mot. For
Summ. J. Ex. 6 (Feb. 24, 2020), ECF No. 44 (“SUMF”). As noted in this Court’s prior decision
regarding jurisdiction, while ordering the exclusion from entry of Wirtgen’s “[r]oad construction
machines . . . that infringe claim 19 of the ’693 Patent. . . ”, LEO ¶ 1, the Limited Exclusion
Order does not address the Redesigned RMMs. Wirtgen I at 7. “Thus, according to the facts
Wirtgen alleges, the ITC did not direct Customs to exclude the six Redesigned 1810 Series
machines from entry, and, accordingly, the decision to exclude the six Redesigned 1810 Series
machines was made by Customs.” Id. at 8. The court is not persuaded by Defendants’
jurisdictional arguments and finds that Customs made a reviewable decision to exclude the
Redesigned RMMs, which is subject to this Court’s jurisdiction. Customs’ denials of Wirtgen’s
timely protests of the exclusion of its entries vests this Court with jurisdiction pursuant to 28
U.S.C. § 1581(a).
In addition, Defendants’ jurisdictional contention ignores Customs’ own regulations and
directives setting forth the rules governing how Customs makes decisions when administering
the ITC Section 337 exclusion order enforcement process. In deciding whether Wirtgen’s
Redesigned RMMs infringe Claim 19 of the ’693 Patent under the LEO, Customs was required
to follow its own regulations and directives to enforce the exclusion order. See United States v.
UPS Customhouse Brokerage, Inc., 575 F.3d 1376, 1382–83 (Fed. Cir. 2009) (citing Ft. Stewart
Schools v. Fed. Labor Relations Auth., 495 U.S. 641, 654 (1990) (“It is a familiar rule of
administrative law that an agency must abide by its own regulations.”)); Kemira Fibres Oy v.
United States, 61 F.3d 866, 875–76 (Fed. Cir 1995) (“[W]e strongly deplore Commerce’s or any
Court No. 20-00027 Page 13
other agency’s failure to follow its own regulations. Such failure harms those who assume
agency compliance and are prejudiced by the non-compliance.”).
Customs’ regulation governing the enforcement of exclusion orders is found at 19 C.F.R.
§ 12.39, which states in relevant part:
(b)(1) If the Commission finds a violation of Section 337, or reason
to believe that a violation exists, it may direct the Secretary of the
Treasury [Customs] to exclude from entry into the United States the
articles concerned which are imported by the person violating or
suspected of violating Section 337. . . . [A]rticles covered by the
determination will be refused entry.
19 C.F.R. § 12.39(b)(1).
Customs Directive No. 2310-006A sets forth Customs’ policies and procedures
concerning Section 337 exclusion orders as follows:
Exclusion Orders. . . .
3. Background. . . . Subsequent to an investigation of an alleged
violation under Section 337, where the U.S. International Trade
Commission (ITC) determines that Section 337 has been violated,
the Commission may issue orders directing the Secretary of the
Treasury [Customs] to exclude the subject goods from entry into the
United States. . . .
4. Enforcement. In general, Exclusion Orders issued by the ITC
are administered by the [Customs] Office of Regulations & Rulings,
IPR Branch. . . .
4.1.1. Given the highly technical nature of articles which are the
subject of most Exclusion Orders, Customs officers should seek
the advice of Customs laboratories, which provide technical
assistance in determining whether goods meet the parameters of
the subject patent. Field officers may contact the designated field
laboratory servicing their geographic area or the Laboratories and
Scientific Services at Customs Headquarters for advice.
4.1.2. Where goods determined to be subject to an Exclusion
Order are presented to Customs, field officers must exclude the
goods from entry into the United States and permit export. . . .
Court No. 20-00027 Page 14
4.1.3. Written notification of such exclusion must be provided to
the importer. A sample letter to be issued to the importer in such a
case is attached to this Directive. . . .
5. Responsibilities. Customs field officers are responsible for
following this Directive. Area/Port Directors, Assistant Port
Directors (Trade Operations), supervisory import specialists, and
supervisory inspectors are responsible for ensuring that their staffs
are aware of the content of this Directive and adhere to the
guidelines provided.
Exclusion Orders, Customs Directive No. 2310-006A (Dec. 16,
1999), https://www.cbp.gov/sites/default/files/documents/2310-006a_3.pdf (last visited May 2,
2020) (“Customs Directive”) (emphasis added). This Customs Directive demonstrates clearly to
the court that Customs plays an active role “in determining whether goods meet the parameters
of the subject patent.” Id. The Customs Directive also makes apparent that Customs must render
substantive decisions as to whether “goods [are] determined to be subject to an Exclusion
Order.” See id.Moreover, the Customs Directive specifies Customs’ procedures in conducting a
substantive assessment of whether goods meet the parameters of the subject patent, which
directly contradicts Defendants’ position in this litigation that Customs plays no role in assessing
infringement and that the ITC has sole jurisdiction over patent analyses subject to ITC Section
337 exclusion orders. The court is unpersuaded by Defendants’ assertion that it is not proper or
possible for Customs to conduct a substantive patent analysis to determine whether proposed
entries fit within the parameters of a Section 337 exclusion order. Defendants’ argument
suggests that, absent a pre-importation ruling request to Customs under Part 177, only the ITC
can make an infringement determination before allowing an entry into the United States.
Defendants’ argument seeks to render the protest process null and void when goods that could be
subject to an exclusion order are presented to Customs, and directly contradicts Customs’ own
Court No. 20-00027 Page 15
directives. It simply does not make sense to condone Customs’ failure to follow its own
regulations and directives. The court concludes that Customs must determine whether goods
meet the parameters of the subject patent when enforcing a Section 337 exclusion order.
In this case, the LEO did not specify which road construction machines were infringing,
so Customs was required to conduct an examination according to its policies and procedures to
determine whether Wirtgen’s unadjudicated entries were excludable under the LEO for meeting
the parameters of Claim 19 of the ’693 Patent. Even though Customs did not issue a written
patent infringement analysis as it has in similar cases, see, e.g., One World Techs. v. United
States, 42 CIT __, 357 F. Supp. 3d 1278 (2018), and Corning Gilbert, Inc., v. United States, 37
CIT __, 896 F. Supp. 2d 1281 (2013), the court notes that the policies and procedures in Customs
Directive No. 2310-006A applied to Customs’ actions here. The court concludes that Customs’
written Exclusion Notices had the effect of determining that the entries in question met the
parameters of the subject patent. Customs’ decision that Wirtgen’s Redesigned RMMs infringe
Claim 19 of the ’693 Patent and fall within the LEO was more than the performance of a merely
ministerial function to simply enforce the LEO. See, e.g., Exclusion Notices at 7 (Customs
stated that Wirtgen’s Redesigned RMMs are “excluded from entry for consumption into the
United States”). Because the entries were not released by Customs within the prescribed time,
and because Customs issued its decisions excluding Wirtgen’s entries, the unreleased subject
merchandise are considered excluded for the purposes of 19 U.S.C. § 1514. Wirtgen filed timely
protests of the exclusion from entry pursuant to 19 C.F.R. § 174. Although Customs claims that
the exclusion made pursuant to the LEO “is not a subject matter subject to protest,” the court
concludes that Customs’ Protest Denials serve as de facto denials of Wirtgen’s protests pursuant
to 28 U.S.C. § 1581. See HQ H308232, at 3.
Court No. 20-00027 Page 16
Customs cannot attempt to limit this Court’s jurisdiction by purporting that it did not
make an exclusion determination and did not deny Wirtgen’s protests. See Myers, 272 U.S. at
64 (1926); Bell, 461 U.S. at 777. The court concludes that Customs made a reviewable
determination when it excluded the Redesigned RMMs and denied Wirtgen’s timely-filed
protests of the exclusion from entry of the Redesigned RMMs under the LEO. See Exclusion
Notices, at 2 (“The above-identified exclusion order . . . extends to all products . . . that infringe
the relevant intellectual property.”). Thus, jurisdiction is properly vested in this Court pursuant
to 28 U.S.C. § 1581(a) for protests denied.
This Court previously issued an opinion explaining at length that the U.S. Court of
International Trade has proper jurisdiction over this matter. See Wirtgen I. Defendants have not
argued that the occurrence of subsequent events have impacted this Court’s jurisdiction, nor have
Defendants put forward any persuasive arguments that would warrant disturbing this Court’s
prior analysis finding jurisdiction. Upon consideration of Defendants’ Renewed Motion to
Dismiss, nothing provided by Defendants convinces this Court that it is ousted of jurisdiction
over this matter. Accordingly, for the reasons stated in Wirtgen I and in this opinion, the Court
denies Defendants’ Renewed Motion to Dismiss.
III. WIRTGEN’S MOTION FOR [PARTIAL] SUMMARY JUDGMENT
Summary judgment, including partial summary judgment, is appropriate “if the movant
shows that there is no genuine dispute as to any material fact and the movant is entitled to
judgment as a matter of law.” USCIT R. 56(a). Material facts are those “that might affect the
outcome of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
248 (1986).
Wirtgen’s Complaint focuses on whether Customs’ denial of Wirtgen’s protests of the
Court No. 20-00027 Page 17
exclusion of the six Redesigned RMMs was improper because the Redesigned RMMs do not
infringe Claim 19 of the ’693 Patent. Pl.’s PI Br. 10. The sole issue before this court on
summary judgment is whether Customs properly excluded the six Redesigned RMMs as
infringing merchandise pursuant to the LEO. The court reviews actions involving denied
protests de novo. 28 U.S.C. § 2640(a)(1).
The court concludes that Customs’ exclusion was not proper because the redesigned
RMMs are non-infringing. It is undisputed that the redesigned machines do not infringe Claim
19 of the ’693 Patent, based on the significant development that Defendants are not contesting
Wirtgen’s assertion of non-infringement. Joint Mot. 4; Defs.’ Mot. Dism. 17, 25. The Parties
stated in a joint motion that “Defendants do not contest Wirtgen’s allegation of non-infringement
and will take no position on the issue of non-infringement in opposition to Wirtgen’s pending
motion for summary judgment beyond seeking deference to the [ITC’s modification
proceeding].” Joint Mot. 4. Defendants’ brief in opposition to Plaintiff’s motion for summary
judgment does not argue affirmatively that the Redesigned RMMs infringe Claim 19 of the ’693
Patent, but instead takes the position that “the ITC is the agency with paramount authority and
responsibility for making infringement determinations in the context of section 337.” Defs.’
Mot. Dism. 24.
The court finds that Defendants have waived any argument of infringement because the
Government failed to contest non-infringement in its opposition to Plaintiff’s motion for
summary judgment. See USCIT R. 56(e); Saab Cars USA, Inc. v. United States, 434 F.3d 1359,
1369 (Fed. Cir. 2006) (noting that when a party fails to provide opposing evidence to respond to
a moving party’s motion for summary judgment, a court can enter judgment against the
nonresponsive party if the moving party is otherwise entitled as a matter of law). In this case,
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Wirtgen as the movant alleged that its Redesigned RMMs do not infringe Claim 19 of the ’693
Patent, and Defendants failed to provide any opposing evidence responsive to Wirtgen’s claim of
non-infringement. Accordingly, the court finds that Defendant waived any argument of
infringement to rebut Plaintiff’s allegation of non-infringement in support of its motion for
summary judgment. It is undisputed, therefore, that Wirtgen’s Redesigned RMMs are non-
infringing.
For the foregoing reasons, based on the undisputed facts, the court holds that Wirtgen’s
Redesigned RMMs do not infringe Claim 19 of the ’693 Patent. The court holds also that
Customs’ denials of Wirtgen’s protests were improper because the non-infringing Redesigned
RMMs should not have been excluded pursuant to the LEO. Plaintiff’s motion for [partial]
summary judgment is granted.
IV. REMEDY
The court considers the proper remedy in light of the granting of partial summary
judgment for Plaintiff.
This Court has the authority to order Customs to release articles for entry into the United
States. 19 U.S.C. § 1499(c)(5)(C). In granting a permanent injunction, a court must be satisfied
that: “(1) [the plaintiff] has suffered an irreparable injury;” (2) legal remedies, including
monetary damages, “are inadequate to compensate the injury;” (3) the balance of the parties’
hardships warrants equitable relief; and (4) “the public interest would not be disserved by a
permanent injunction.” eBay Inc. v. MercExchange, LLC, 547 U.S. 388, 391 (2006).
In this case, Wirtgen has demonstrated irreparable injury. Wirtgen is unable to recognize
revenue and profits for the excluded Redesigned RMMs, PI Tr. 109:14–110:4, Pl.’s PI Br. 30–
31, and has suffered loss of goodwill. PI Tr. 58:12–14; Pl.’s PI Br. 32–33 (citing Pl.’s PI Br. Ex.
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4, Decl. of Robert Forest McDuff, Ph.D ¶ 29, Jan. 13, 2020, ECF No. 60-4 (“McDuff Decl.”);
Pl.’s PI Br. Ex. 1, Decl. of Jan Schmidt ¶ 4, 30–35, 37, 40, Jan. 12, 2020, ECF No. 60-1
(“Schmidt Decl.”)). Wirtgen has also established a likelihood of loss of sales and market share if
its customers who verbally committed to purchase the Redesigned RMMs rescind and look for
alternatives from Wirtgen’s competitors due to Wirtgen’s failure to deliver. Schmidt Decl. ¶¶ 7,
10, 11, 39; PI Tr. 20:13–15, 22:4–8, 24:16–24; 98:10–18; Pl.’s PI Br. 3.
Wirtgen explained that its injury cannot be compensated through legal remedies. Loss of
goodwill and market share destroys Wirtgen’s relationships with its end-use customers that have
been developed over decades based on Wirtgen’s reliability in a competitive and time-sensitive
industry. See PI Tr. 58:12–14; Pl.’s PI Br. 32 (citing McDuff Decl. ¶ 29; Schmidt Decl. ¶¶ 30–
35, 37, 40). Damage to business relationships and the loss of future sales to loyal customers
cannot be repaired by money damages available at law.
The balance of hardships favors equitable relief. Wirtgen has demonstrated hardship in
the form of irreparable injury. Defendants have not asserted any hardship that would befall
Defendants if the court were to issue an injunction and release the Redesigned RMMs.
Defendants contend that the public interest favors protecting intellectual property rights
and domestic industries by excluding Wirtgen’s Redesigned RMMs. Defendants undermined
their own arguments, however, because Customs permitted ten Redesigned RMMs to enter the
United States between September and December 2019, see Schmidt Decl. ¶ 24; PI Tr. 178:8–9,
and Defendants do not contest Wirtgen’s assertion of non-infringement, Defs.’ Mot. Dism. 17,
25. The public interest in protecting domestic intellectual property rights is not served where
undisputedly non-infringing goods are denied entry into the United States.
In sum, equity warrants a permanent injunction for the immediate release of the six
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excluded Redesigned RMMs for entry into the United States.
V. WIRTGEN’S MOTION FOR PRELIMINARY INJUNCTION AND BOND
Pending before the court is Plaintiff’s Renewed Motion for Preliminary Relief and Bond,
ECF No. 59. In light of the granting of the ultimate relief requested by Wirtgen in its motion for
[partial] summary judgment, the preliminary injunction and bond requests are now moot. The
court denies Plaintiff’s Renewed Motion for Preliminary Relief and Bond as moot.
VI. COUNT II OF WIRTGEN’S COMPLAINT
Under Article III of the U.S. Constitution, this court has jurisdiction over cases and
controversies. U.S. Const. art. III, § 2. A case ceases to be an “actual and concrete dispute”
required by Article III when a plaintiff obtains the relief sought. Monk v. Shulkin, 855 F.3d
1312, 1316 (Fed. Cir. 2017) (citing DeFunis v. Odegaard, 416 U.S. 312, 317 (1974)) (internal
citations omitted). In light of the granting of the ultimate relief requested by Wirtgen in its
Complaint, Count II of the Complaint is now moot. The court dismisses as moot Count II of the
Complaint.
VII. CONCLUSION
For the foregoing reasons, the court grants Plaintiff’s Motion for [Partial] Summary
Judgment, denies as moot Plaintiff’s Renewed Motion for Preliminary Relief and Bond, denies
Defendants’ Renewed Motion to Dismiss or, in the Alternative, Cross-Motion for Summary
Judgment, and dismisses as moot Count II of the Complaint. Judgment will enter accordingly.
/s/ Jennifer Choe-Groves
Jennifer Choe-Groves, Judge
Dated: May 18, 2020
New York, New York