On September 19, 2017, Metglas, Inc. of Conway, South Carolina (“Metglas”) and Hitachi Metals, Ltd. of Japan (“HML”) (collectively, “Complainants”) filed a complaint requesting that the ITC commence an investigation pursuant to Section 337.
The complaint alleges that the following entities (collectively, the “Proposed Respondents”) unlawfully import into the U.S., sell for importation, and/or sell within the U.S. after importation certain amorphous metal and products containing same, including amorphous metal ribbon (“AMR”) and amorphous cores made from such AMR, that were manufactured using Complainants’ misappropriated trade secrets:
- Advanced Technology & Materials of China
- AT&M International Trading Co., Ltd. of China
- CISRI International Trading Co., Ltd. of China
- Beijing ZLJG Amorphous Technology Co., Ltd. of China
- Qingdao Yunlu Energy Technology Co., Ltd. of China
- Dr. Hideki Nakamura of Japan
- Mr. Nobrou Hanai of Japan
According to the complaint, the allegedly-misappropriated trade secrets relate to the production of AMR and amorphous cores made from such AMR. The complaint states that two former HML employees who had unfettered access to the relevant trade secrets—Proposed Respondents Messrs. Nakamura and Hanai—misappropriated such trade secrets and disseminated them to other Proposed Respondents through a network of interrelated China-based companies, which are now importing products into the U.S. that were allegedly manufactured using such trade secrets.
Regarding domestic industry, Complainants state that they have made significant investments in the U.S. relating to the engineering, testing, support, and product design of AMR products that practice the allegedly-misappropriated trade secrets. In particular, Complainants state that Metglas maintains a headquarters and manufacturing plant in South Carolina where it conducts relevant design, engineering, research, development, manufacture, and testing of AMR products associated with the allegedly-misappropriated trade secrets. Complainants further state that the Proposed Respondents’ alleged theft of Complainants’ trade secrets has caused substantial injury to Complainants’ domestic industry, including financial losses, employee reductions, production cutbacks, and market share declines.
With respect to potential remedy, Complainants request that the Commission issue a general exclusion order, a limited exclusion order, and permanent cease-and-desist orders directed at the Proposed Respondents. Complainants state that a general exclusion order is warranted because there are numerous offending products entering the U.S., under brand name or private label, and it is extremely difficult to identify the sources of these offending products. Complainants further state that manufacturers, distributors, and importers of AMR products employ complex business arrangements, do business under more than one name, and/or form intricate arrays of confusingly-similar affiliates, which will make it difficult, if not impossible, for Customs to determine the source of the offending products.