On May 25, 2016, the International Trade Commission (ITC) issued a Final Determination in a Section 337 case that excludes all stainless steel products manufactured by India’s Viraj Profiles from the United States for a period of 16.7 years. The ITC also ordered Viraj to cease and desist from all activities relating to the sale of its stainless steel products in the United States, including marketing, advertising, or soliciting distributors for its products. Under the order, Viraj must stop all efforts to market or sell stainless steel products in the United States.
The case stems from allegations that Viraj induced a Valbruna employee to steel Valbruna’s trade secrets and transfer them to Viraj while the ex-employee was hired by Viraj affiliate, Bebitz of Germany. During the 337 investigation, Viraj denied having or using Valbruna’s trade secrets. However, a forensic inspection of Viraj’s computers ordered by presiding Judge Theodore Essex revealed evidence that Viraj in fact possessed and used the Valbruna trade secrets and destroyed evidence of its misappropriation. Judge Essex therefore concluded that Viraj acted in bad faith and found the company in default. The Commission’s May 25 decision largely approves Judge Essex’s determination, and issued the order excluding Viraj’s products from the United States for 16.7 years.
“We are gratified that the Commission has recognized the harm Viraj inflicted on our business and workers in the United States,” said Massimo Amenduni Gresele, Valbruna’s managing director. “Trade secret theft is a serious problem. Bad actors like Viraj cannot be allowed to profit from this kind of behavior. Valbruna is proud of its investment in the Fort Wayne, Indiana, community and its workers, and they deserve to be protected when their competitors violate the law.”
The ITC’s decision is now transmitted to the President, who has 60 days to review the ITC’s determination. Viraj must post a bond of 13.4% to import any products during the President’s review. The President may disapprove the ITC’s determination, but such disapprovals are rare. The ITC’s determination can be appealed to the United States Court of Appeals for the Federal Circuit.
The ITC’s ruling in this stainless steel case comes shortly after U.S. Steel filed a Section 337 complaint related to carbon and alloy steel imported from China. The use of Section 337 by Valbruna and U.S. Steel highlights the growing problem of trade secret theft across all sectors of economic activity.