On June 12, the United States International Trade Commission (USITC) announced the initiation of a Section 337 investigation under the Tariff Act of 1930. This investigation targets 42 companies accused by RAI Strategic Holdings, Inc., R.J. Reynolds Tobacco Company, RAI Services Company, and R.J. Reynolds Vapor Company of importing, selling, and distributing illegal disposable e-cigarette devices and components in the United States. The complainants seek general exclusion orders, limited exclusion orders, and cease and desist orders to address these alleged violations.
Details of the Section 337 Investigation
Complainants and Allegations
Complainants
The investigation was prompted by complaints from the following companies:
- RAI Strategic Holdings, Inc.
- RAI Services Company
- R.J. Reynolds Tobacco Company
- R.J. Reynolds Vapor Company
The complainants accuse 42 companies of violating Section 337 of the Tariff Act of 1930 (19 U.S.C. 1337) by:
- Importing disposable e-cigarette devices and components into the United States.
- Selling these products for importation.
- Distributing them within the United States.
Potential Measures for Defendants
General Exclusion Order
A general exclusion order would prevent all accused infringing products from entering the U.S. market, regardless of the manufacturer or seller.
Cease and Desist Orders
Defendants would be required to stop importing and selling the accused infringing products immediately.
Bond Requirement
A bond could be imposed on the accused infringing products during the President’s 60-day review period, ensuring compensation for the rights holders before a final decision is made.
Complete List of Defendants
- Breeze Smoke, LLC (MI, USA)
- Capital Sales Company (MI, USA)
- KMT Services, LLC (MI, USA)
- Dongguan (Shenzhen) Shikai Technology Co., Ltd. (China)
- Vapeonly Technology Co. Ltd. (Hong Kong)
- iMiracle (Shenzhen) Technology Co., Ltd. (China)
- Guangdong Qisitech Co., Ltd. (China)
- Fewo Intelligent Manufacturing Ltd. (China)
- Nevera (HK) Ltd. (Hong Kong)
- Guangdong Cellular Workshop Electronics Technology Co., Ltd. (China)
- Wonder Ladies Ltd. (British Virgin Islands)
- Sailing South Ltd. (British Virgin Islands)
- Marea Morada Ltd. (British Virgin Islands)
- Social Brands, LLC (TX, USA)
- Zhuhai Qisitech Co., Ltd. (China)
- Shenzhen Han Technology Co., Ltd. (China)
- Palma Terra Ltd. (British Virgin Islands)
- Shenzhen IVPS Technology Co., Ltd. (China)
- Heaven Gifts International Ltd. (Hong Kong)
- Maduro Distributors d/b/a The Loon (MN, USA)
- Bidi Vapor, LLC (FL, USA)
- Kaival Brands Innovations Group Inc. (DE, USA)
- Kimsun Technology (HuiZhou) Co., Ltd. (China)
- Shenzhen Yanyang Technology Co., Ltd. (China)
- Pastel Cartel, LLC (TX, USA)
- American Vape Company, LLC (TX, USA)
- Affiliated Imports, LLC (TX, USA)
- Shenzhen Innokin Technology Co., Ltd. (China)
- Shenzhen Funyin Electronic Technology Co., Ltd. (China)
- Shenzhen LC Technology Co., Ltd. (China)
- LCF Labs, Inc. (Canada)
- Shenzhen Kangvape Technology Co., Ltd. (China)
- Flumgio Technology Ltd. (Hong Kong)
- Shenzhen Pingray Technology (China)
- SV3, LLC d/b/a Mi-One Brands (AZ, USA)
- Price Point Distributors Inc. d/b/a Price Point NY (NY, USA)
- Flawless Vape Shop Inc. (CA, USA)
- Flawless Vape Wholesale & Distribution Inc. (CA, USA)
- Thesy, LLC d/b/a Element Vape (CA, USA)
- VICA Trading Inc. d/b/a Vapesourcing (CA, USA)
- Ecto World, LLC d/b/a Demand Vape (NY, USA)
- Midwest Goods Inc. d/b/a Midwest Distribution (IL, USA)
FAQ
What is Section 337 of the Tariff Act of 1930?
Section 337 of the Tariff Act of 1930 addresses unfair practices in import trade, including patent infringement and other intellectual property violations. It allows the USITC to investigate and take action against such practices.
What actions can the USITC take under a Section 337 investigation?
The USITC can issue general exclusion orders, limited exclusion orders, and cease and desist orders to prevent the importation and sale of infringing products. They can also impose bonds during the President’s review period.
What are the potential consequences for the companies involved?
Companies found in violation of Section 337 may face significant fines, legal costs, and the requirement to stop importing and selling the infringing products, leading to potential business losses and operational disruptions.
