Notice2023-22754
Certain Lidar (Light Detection and Ranging) Systems and Components Thereof; Notice of Commission Determination To Review and, on Review, To Affirm With Modification an Initial Determination Terminating the Investigation in Its Entirety Based on an Arbitration Agreement; Termination of Investigation
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
October 16, 2023
Issuing agencies
International Trade Commission
Abstract
Notice is hereby given that the U.S. International Trade Commission has determined to review and, on review, to affirm with modification an initial determination ("ID") (Order No. 10) of the presiding administrative law judge ("ALJ") granting a motion to terminate the investigation in its entirety based upon an arbitration agreement. The investigation is terminated.
Full Text
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<title>Federal Register, Volume 88 Issue 198 (Monday, October 16, 2023)</title>
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[Federal Register Volume 88, Number 198 (Monday, October 16, 2023)]
[Notices]
[Pages 71377-71378]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-22754]
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INTERNATIONAL TRADE COMMISSION
[Investigation No. 337-TA-1363]
Certain Lidar (Light Detection and Ranging) Systems and
Components Thereof; Notice of Commission Determination To Review and,
on Review, To Affirm With Modification an Initial Determination
Terminating the Investigation in Its Entirety Based on an Arbitration
Agreement; Termination of Investigation
AGENCY: U.S. International Trade Commission.
ACTION: Notice.
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SUMMARY: Notice is hereby given that the U.S. International Trade
Commission has determined to review and, on review, to affirm with
modification an initial determination (``ID'') (Order No. 10) of the
presiding administrative law judge (``ALJ'') granting a motion to
terminate the investigation in its entirety based upon an arbitration
agreement. The investigation is terminated.
FOR FURTHER INFORMATION CONTACT: Namo Kim, Esq., Office of the General
Counsel, U.S. International Trade Commission, 500 E Street SW,
Washington, DC 20436, telephone (202) 205-3459. Copies of non-
confidential documents filed in connection with this investigation may
be viewed on the Commission's electronic docket (EDIS) at <a href="https://edis.usitc.gov">https://edis.usitc.gov</a>. For help accessing EDIS, please email
<a href="/cdn-cgi/l/email-protection#2b6e6f627818634e475b6b5e58425f48054c445d"><span class="__cf_email__" data-cfemail="dc9998958fef94b9b0ac9ca9afb5a8bff2bbb3aa">[email protected]</span></a>. General information concerning the Commission may
also be obtained by accessing its internet server at <a href="https://www.usitc.gov">https://www.usitc.gov</a>. Hearing-impaired persons are advised that information on
this matter can be obtained by contacting the Commission's TDD terminal
on (202) 205-1810.
SUPPLEMENTARY INFORMATION: On May 17, 2023, the Commission instituted
this investigation under section 337 of the Tariff Act of 1930, as
amended, 19 U.S.C. 1337 (``section 337''), based on a complaint filed
by Ouster, Inc. of San Francisco, CA (``Ouster''). See 88 FR 31519-20
(May 17, 2023). The complaint alleges violations of section 337 based
upon the importation into the United States, the sale for importation,
and the sale within the United States after importation of certain
LiDAR (Light Detection and Ranging) systems and components thereof by
reason of the infringement of certain claims of U.S. Patent Nos.
11,175,405; 11,178,381; 11,190,750; 11,287,515; and 11,422,236. Id. The
notice of investigation names as respondents Hesai Group of Shanghai,
China; Hesai Technology Co., Ltd. of Shanghai, China; and Hesai Inc. of
Palo Alto, CA (collectively, ``Hesai''). Id. The Office of Unfair
Import Investigations (``OUII'') is also participating in this
investigation. Id.
On June 22, 2023, Hesai filed a motion to terminate or
alternatively stay the investigation in its entirety based upon an
arbitration provision in a 2020 Litigation Settlement and Patent Cross-
License Agreement (``Settlement Agreement'') between Hesai Photonics
Technology Co. Ltd. (``Hesai Photonics,'' a subsidiary of respondent
Hesai Group) and Velodyne Lidar, Inc. (``Velodyne,'' now merged with
Ouster). On July 7, 2023, Ouster filed an opposition to the motion and
OUII filed a response in support of the motion. On July 12, 2023, a
case management conference was held to give each of the parties an
opportunity to discuss the motion to terminate or stay.
On July 17, 2023, Ouster filed a supplemental brief. On July 18,
2023, OUII filed a sur-reply to Ouster's opposition. On July 20, 2023,
Hesai filed a sur-reply to Ouster's opposition.
On August 24, 2023, the ALJ issued the subject ID (Order No. 10)
pursuant to Commission Rule 210.21(d), 19 CFR 210.21(d), granting the
motion to terminate the investigation in its entirety under 19 U.S.C.
1337(c) because of an arbitration agreement. In particular, the ID
finds that (1) ``a valid arbitration agreement at ] 9.5 exists as part
of the Settlement Agreement that binds Ouster and Hesai,'' (2) ``the
arbitrability of the dispute between Ouster and Hesai . . . rests with
[Judicial Arbitration and Mediation Services, Inc.], London,'' and (3)
``Hesai did not waive its right to arbitrate as Ouster argues.'' See ID
at 4.
On August 31, 2023, Ouster filed a petition for review of the ID
with the Commission. On September 8, 2023, Hesai and OUII filed their
responses to Ouster's petition.
On September 12, 2023, Ouster filed a notice of recent developments
explaining that, on September 5, 2023,
[[Page 71378]]
Hesai filed petitions for inter partes review before the Patent Trial
and Appeal Board with respect to two of the patents at issue in this
investigation. On September 14, 2023, Hesai and OUII filed their
responses to Ouster's notice of recent developments.
The Commission has determined to review and, on review, to affirm
the subject ID with modification. In particular, the Commission strikes
the ``wholly groundless'' legal standard discussion and analysis at
pages 11-12 and 16 of the subject ID, including the following
statements: (1) ``[T]he ALJ then must make a secondary inquiry to
determine whether the assertion of arbitrability is `wholly
groundless.' If it is determined that the assertion of arbitrability is
not `wholly groundless.' '' ID at 11. (2) ``Therefore, Hesai's claim
for arbitration is not `wholly groundless.' '' ID at 11-12. (3) ``In
other words, the demand for arbitration is `not wholly groundless.' ''
ID at 16. The Supreme Court previously overruled the ``wholly
groundless'' exception, holding that ``[w]hen the parties' contract
delegates the arbitrability question to an arbitrator, a court may not
override the contract . . . even if the court thinks that the argument
that the arbitration agreement applies to a particular dispute is
wholly groundless . . . In sum, we reject the `wholly groundless'
exception.'' Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S.
Ct. 524, 529-31 (2019).
The Commission also addresses a typographical error at page 10 of
the subject ID by modifying ``See id. at ] 9.5'' to state ``See id. at
] 9.4.'' This is a citation for the sentence in the subject ID that
states ``[t]he Choice of Law for purposes of construing the Settlement
Agreement is designated as California law,'' and Section 9.4 of the
Settlement Agreement on ``Governing Law'' is the section that
determines the choice of law for the Settlement Agreement.
With regard to Ouster's notice of recent developments, the
Commission finds that, under the facts of this investigation, Hesai's
separately filed inter partes review petitions do not prevent the
Commission from determining that the investigation must be terminated
in favor of arbitration. The Commission also notes that the Settlement
Agreement provides that ``either Party shall have the right to
challenge the validity and enforceability of any Patent in defense to a
suit or assertion of a claim relating to any such Patent that is
brought against a Party or alleging infringement by a Licensee Product
or a Velodyne Product.'' Settlement Agreement section 3.4 (``Contesting
Validity'').
The investigation is terminated.
The Commission vote for this determination took place on October
10, 2023.
The authority for the Commission's determination is contained in
section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and
in part 210 of the Commission's Rules of Practice and Procedure (19 CFR
part 210).
By order of the Commission.
Issued: October 11, 2023.
Lisa Barton,
Secretary to the Commission.
[FR Doc. 2023-22754 Filed 10-13-23; 8:45 am]
BILLING CODE 7020-02-P
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