This bulletin has been prepared especially for clients of A. N. Deringer, Inc. by:

June 19, 2006

• Definition of Baby Socks: The U.S. Trade Representative (USTR) recently requested the U.S. International Trade Commission (ITC) to investigate the trade effect of possible changes to the definition of baby socks (booties) and their requirement for quota if imported from China. The question of whether a baby sock with attached embellishments should still be considered as a baby "sock" will be investigated. If such a sock is no longer considered a "sock" but "footwear", it will not require quota under the U.S.-China Textile Agreement.
• Energy Standards for Lamps: The U.S. Department of Energy (DOE) is requesting comments by June 29, 2006 on proposals for new energy conservation standards for certain fluorescent and incandescent lamps.
• Classification Developments:

• AD/CVD Developments: The U.S. Commerce Department took the following action:

• Section 337 Patent Infringement Investigations: The U.S. ITC recently received petitions to investigate alleged patent infringement violations of the following imported goods: 1) certain mobile phone headsets, wireless communications devices, and components thereof; 2) certain portable digital media players and components thereof; and 3) certain caskets.
• Import Licensing System for Mexican Cement: The U.S. International Trade Administration (ITA) issued a proposed rule to implement the recent agreement between the U.S. and Mexico covering imports of Mexican cement. The ITA proposed an internet based licensing system to register cement importers and to automatically issue licenses. While only the import license number will have to be listed on the CF-7501 (with the physical import license made available upon request), an actual Mexican export license will have to be submitted along with the entry papers for each import.

• Port Security: Two separate Congressional committees recently reviewed port security issues and recommended: 1) withholding $10 million in funds from the Department of Homeland Security (DHS) until it submits to Congress a comprehensive port, container, and cargo strategic security plan; 2) ensuring that all inbound cargo are screened through the Automated Targeting System (ATS); 3) the doubling of cargo to be inspected; 4) develop minimum cargo container security standards; and 5) increased staffing for the C-TPAT, CSI, and other security programs. The committees also noted progress of the C-TPAT program whereby 45% of goods are now imported under C-TPAT; validation of every C-TPAT member will be completed by the end of 2007; and the Free and Secure Trade (FAST) program will be expanded to thirteen (13) additional ports of entry in 2006, bringing the total ports of entry featuring the FAST program to thirty one (31).

• Recent CPSC Developments: The U.S. Consumer Product Safety Commission (CPSC) recently announced the following recalls: 1) certain rechargeable battery packs, as they can short-circuit and overheat; 2) certain saws, as the handle may break resulting in loss of control; 3) certain children’s sweaters, as its drawstring can pose a choking hazard; 4) certain push-button toy phones, as the buttons can detach; 5) certain treadmills, as they can accelerate or decelerate and cause the user to lose balance; and 6) certain digital cameras, as the batteries may overheat when they recharge or are in the docking position.

• Minimum Wage Increase: The U.S. House of Representative’s House Appropriations Committee voted to increase the minimum wage, currently at $5.15 since 1997. The increase to $7.35 will come in three yearly equal increments of 70¢. It is not certain whether the increase will be approved when brought for a full vote in the House.
• Sweatshop Labor: A bill (S. 3485) recently introduced in the U.S. Senate will prohibit the import and sale of goods made with "sweatshop" labor.

• High Court Orders Patent Injunction Case Review: In eBay v. MercExchange (No. 05-130), the U.S. Supreme Court recently weighed in on the continuing legal battle for a patent injunction that MercExchange is seeking over eBay’s "Buy It Now" technology. While a Federal District Court in Virginia denied MercExchange’s request for an injunction, stating that it did not engage to commercialize its patent, the U.S. Court of Appeals for the Federal Circuit (CAFC), the court which handles patent appeals, invoked the "general rule" that a "permanent injunction will issue once infringement and validity have been adjudged." The Supreme Court stated that the District Court was wrong in categorically denying the injunction request, as in today’s business environment there exists a business model whereby inventors don’t seek to commercialize their discoveries themselves but rely on others to bring their patents to market. In addition, the CAFC was wrong to automatically invoke the "general rule" for an injunction, as the party seeking injunction must first meet the following four-factor test: 1) it must show that it "suffered an irreparable injury"; 2) that other remedies are inadequate; 3) that an injunction is warranted; and 4) that the public interest "will not be disserved by a permanent injunction." The Supreme Court returned the case to the lower courts for reconsideration.