CIT Again Says CBP Enforcement of ITC Exclusion Orders Can Be Protested

The Court of International Trade on May 18 again held that CBP plays a central role in the Section 337 exclusion order enforcement process, reiterating its earlier decision that exclusions may be protestable and challenged at the trade court (see 2003040057).

The case involves an International Trade Commission exclusion order on Wirtgen road milling machines. That exclusion order only covers Wirtgen road milling machines that infringe a particular patent, and Wirtgen had imported machines that had been redesigned to avoid infringing it. By excluding those redesigned road milling machines, CBP was effectively making a determination that the redesigned machines were still covered by the exclusion order, and that determination is protestable, CIT said.

“Customs’ written Exclusion Notices had the effect of determining that the entries in question met the parameters of the subject patent,” CIT said. CBP’s decision that Wirtgen’s redesigned road milling machines infringed the patent named in the ITC’s exclusion order and fall within the scope of the exclusion order “was more than the performance of a merely ministerial function to simply enforce” the exclusion order, it said.

Ruling against a renewed motion to dismiss the case for lack of jurisdiction, CIT also noted that CBP’s own regulations and directives lay out a decisional role for CBP in the exclusion order process. The government had argued that CBP’s role is only ministerial and that any challenges should be directed to the ITC. But Customs Directive No. 2310-006A, which sets CBP’s policies and procedures on Section 337 exclusion orders, says “Customs officers should seek the advice of Customs laboratories, which provide technical assistance in determining whether goods meet the parameters of the subject patent,” and provides that, “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 … .”

“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,’” CIT said. “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.’”

Noting that the government no longer contested that the redesigned road milling machines no longer infringe the patents named in the exclusion order, the trade court found CBP’s denial of Wirtgen’s protests “were improper because the non-infringing” redesigned road milling machines “should not have been excluded pursuant to the” exclusion order. CIT said it would issue an injunction mandating the immediate release of the six redesigned road milling machines that had been excluded by CBP.

(Wirtgen Am. Inc. v. U.S., Slip Op. 20-70, CIT # 20-00027, dated 05/18/20, Judge Choe-Groves)