Certain Bone Cements, Components Thereof and Products Containing the Same, Inv. 337-TA-1153

In the Matter of
CERTAIN BONE CEMENTS, COMPONENTS
THEREOF AND PRODUCTS CONTAINING
THE SAME
Investigation No. 337-TA-1153
Publication 5304 March 2022
U.S. International Trade Commission
Washington, DC 20436

U.S. International Trade Commission
COMMISSIONERS
Jason E. Kearns, Chair
Randolph J. Stayin, Vice Chair
*David S. Johanson, Commissioner
Rhonda K. Schmidtlein, Commissioner
Amy A. Karpel, Commissioner
Address all communications to
Secretary to the Commission
United States International Trade Commission
Washington, DC 20436
*Has been recused from investigation.

U.S. International Trade Commission
Washington, DC 20436
www.usitc.gov
In the Matter of
CERTAIN BONE CEMENTS, COMPONENTS
THEREOF AND PRODUCTS CONTAINING
THE SAME
Investigation No. 337-TA-1153
Publication 5304 March2022

UNITED STATES INTERNATIONAL TRADE COMMISSION
Washington, D.C.
In the Matter of
CERTAIN BONE CEMENTS,
COMPONENTS THEREOF AND
PRODUCTS CONTAINING THE SAME
Investigation No. 337-TA-1153
NOTICE OF COMMISSION DETERMINATION FINDING NO VIOLATION OF
SECTION 337; TERMINATION OF THE INVESTIGATION
AGENCY: 	U.S. International Trade Commission.
ACTION: 	Notice.
SUMMARY: Notice is hereby given that the U.S. International Trade Commission
(“Commission”) has determined to affirm in part, reverse in part, and vacate in part the final
initial determination’s (“ID”) finding that no violation of section 337 has occurred. The
investigation is terminated.
FOR FURTHER INFORMATION CONTACT: Ronald A. Traud, Office of the General
Counsel, U.S. International Trade Commission, 500 E Street S.W., Washington, DC 20436,
telephone (202) 205-3427. Copies of non-confidential documents filed in connection with this
investigation may be viewed on the Commission’s electronic docket (EDIS) at
https://edis.usitc.gov. For help accessing EDIS, please email EDIS3Help@usitc.gov. General
information concerning the Commission may also be obtained by accessing its internet server at
https://www.usitc.gov. 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: The Commission instituted this investigation on
April 10, 2019, based on a complaint filed by Heraeus Medical LLC of Yardley, Pennsylvania,
and Heraeus Medical GmbH of Wehrheim, Germany (collectively, “Complainants”). 84 FR
14394–95 (Apr. 10, 2019). The complaint alleges a violation of section 337 of the Tariff Act of
1930, as amended, by reason of misappropriation of trade secrets, the threat or effect of which is
to destroy or substantially injure an industry in the United States or to prevent the establishment
of such an industry. The complaint named the following respondents: Zimmer Biomet
Holdings, Inc. of Warsaw, Indiana; Biomet, Inc. of Warsaw, Indiana; Zimmer Orthopaedic
Surgical Products, Inc. of Dover, Ohio; Zimmer Surgical, Inc. of Dover, Ohio; Biomet France
S.A.R.L. of Valence, France; Biomet Deutschland GmbH of Berlin, Germany; Zimmer Biomet
Deutschland GmbH of Freiburg im Breisgau, Germany; Biomet Europe B.V. of Dordrecht,
Netherlands; Biomet Global Supply Chain Center B.V. of Dordrecht, Netherlands; Zimmer
Biomet Nederland B.V. of Dordrecht, Netherlands; Biomet Orthopedics, LLC of Warsaw,

2
Indiana; and Biomet Orthopaedics Switzerland GmbH of Dietikon, Switzerland. The
Commission’s Office of Unfair Import Investigations (“OUII”) also was named as a party.
The investigation has terminated as to respondents Zimmer Orthopaedic Surgical
Products, Inc. and Biomet Europe B.V., Order No. 10 (May 23, 2019), unreviewed, Notice (June
14, 2019), and as to certain accused products, Order No. 30 (Nov. 24, 2019), unreviewed, Notice
(Dec. 10, 2019). Also, the first amended complaint and notice of investigation were amended to
add three entities as respondents: Zimmer US, Inc.; Zimmer, GmbH; and Biomet
Manufacturing, LLC. Order No. 18 (June 26, 2019), unreviewed, 84 FR 35884–85 (July 25,
2019). The remaining respondents are referred to collectively herein as “Zimmer Biomet.”
On May 6, 2020, the presiding administrative law judge (“ALJ”) issued the final ID,
which found that Zimmer Biomet did not violate section 337. On May 18, 2020, the parties filed
petitions for review of the final ID.
On July 13, 2020, the Commission determined to review in part the final ID and
requested briefing from the parties on the issues under review. In particular, the Commission
determined to review the following: (1) the ALJ’s findings and conclusions as to TS 1–35 and
121–23; and (2) the ALJ’s domestic industry findings, including whether there has been a
substantial injury to the alleged domestic industry. The Commission also sought briefing from
the parties, interested government agencies, and any other interested parties on remedy, bonding,
and the public interest.
Having examined the record of this investigation, including the final ID, the petitions for
review, the responses thereto, and the written submissions in response to the Commission’s
request for briefing, the Commission finds that no violation of section 337 has occurred.
Specifically, the Commission finds that the Complainants did not establish that an industry in the
United States exists as required by section 337(a)(1)(A)(i) and therefore did not establish injury
to a domestic industry. The investigation is hereby terminated.
The Commission vote for this determination took place on January 12, 2021.
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.
Lisa R. Barton
Secretary to the Commission
Issued: 	January 12, 2021

CERTAIN BONE CEMENT, COMPONENTS THEREOF
AND PRODUCTS CONTAINING THE SAME
Inv. No. 337-TA-1153
PUBLIC CERTIFICATE OF SERVICE
I, Lisa R. Barton, hereby certify that the attached NOTICE has been served via EDIS
upon the Commission Investigative Attorney, Monica Bhattacharyya, Esq., and the following
parties as indicated, on January 12, 2021.
Lisa R. Barton, Secretary
U.S. International Trade Commission
500 E Street, SW, Room 112
Washington, DC 20436
On Behalf of Complainants Heraeus Medical LLC and
Heraeus Medical GmbH:
David A. Caine, Esq.
ARNOLD & PORTER KAYE SCHOLER LLP
3000 El Camino Real, Suite 500
Palo Alto, CA 94306-3807
Email: david.caine@arnoldporter.com
☐ Via Hand Delivery
☐ Via Express Delivery
☐ Via First Class Mail
☒ Other: Email Notification
of Availability to Download
On Behalf of Respondents Zimmer Biomet Holdings, Inc.,
Biomet, Inc., Zimmer Surgical, Inc., Biomet France S.A.R.L.,
Biomet Deutschland GmbH, Zimmer Biomet Deutschland
GmbH, Biomet Global Supply Chain Center B.V., Zimmer
Biomet Nederland B.V., Biomet Orthopedics, LLC, and
Biomet Orthopaedics Switzerland GmbH:
Eric S. Namrow, Esq.
MORGAN, LEWIS & BOCKIUS LLP
1111 Pennsylvania Avenue, NW
Washington, DC 20004
Email: eric.namrow@morganlewis.com
☐ Via Hand Delivery
☐ Via Express Delivery
☐ Via First Class Mail
☒ Other: Email Notification
of Availability to Download

PUBLIC VERSION
1
UNITED STATES INTERNATIONAL TRADE COMMISSION
Washington, D.C.
In the Matter of
CERTAIN BONE CEMENTS,
COMPONENTS THEREOF AND
PRODUCTS CONTAINING THE SAME
Investigation No. 337-TA-1153
COMMISSION OPINION
I. 	INTRODUCTION .............................................................................................................. 2
II. 	BACKGROUND ................................................................................................................ 2
III. 	THE APPLICABLE LAW .................................................................................................. 5
A. 	The Commission’s Standard of Review ................................................................. 5
B. 	Protectable Trade Secrets ........................................................................................ 6
C. 	The Domestic Industry Requirement ...................................................................... 8
IV. 	ANALYSIS ........................................................................................................................ 12
A. 	Existence of Protectable Trade Secrets ................................................................. 12
B. 	Failure to Establish an “Industry in the United States” ........................................ 15
1. 	The “Nature and Significance” of Domestic Activities and Investments . 16
2. 	Assessment of Heraeus’s Domestic Activities and Investments .............. 27
C. 	Failure to Demonstrate Substantial Injury to the Claimed Domestic Industry ..... 36
V. 	CONCLUSION .................................................................................................................. 37

PUBLIC VERSION
2
I. 	INTRODUCTION
The Commission has determined to affirm, with modifications, the presiding
administrative law judge’s (“ALJ”) final initial determination (“ID”) that there has been no
violation of section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1337, by reason of
misappropriation of trade secrets, the threat or effect of which is to destroy or substantially injure
an industry in the United States. As explained below, the Commission has determined that
Complainants did not establish that they have an “industry in the United States” as required by
section 337(a)(1)(A)(i). Therefore, there can be no injury within the meaning of the statute.
This opinion sets forth the Commission’s reasoning in support of that determination.
II. 	BACKGROUND
The Commission instituted this investigation on April 10, 2019, based on a complaint
filed by Heraeus Medical LLC of Yardley, Pennsylvania (“HMUS”) and Heraeus Medical
GmbH of Wehrheim, Germany (collectively, “Complainants” or “Heraeus”). 84 Fed. Reg.
14394-95 (Apr. 10, 2019). The complaint alleged a violation of section 337 by reason of
misappropriation of Heraeus’s trade secrets, the threat or effect of which is to destroy or
substantially injure an industry in the United States or to prevent the establishment of such an
industry.1 Heraeus asserted multiple trade secrets, which it designated with “TS” numbers. ID
at 9-10. The trade secrets remaining at issue on review are directed to (1) the specifications for
the Plex 6612 and Plex 6613 copolymers (“TS 1-35”); and (2) the specifications for the powder
and liquid components of two Heraeus products, Refobacin Palacos R and Palacos R bone
cements (“TS 121-23”). The alleged domestic industry relates to Heraeus’s Palacos bone
1 Complainants did not pursue their allegations that the threat or effect of the unfair acts is to
prevent the establishment of an industry in the United States before the Commission, so they are
waived.

PUBLIC VERSION
3
cements. See Comp. Post-Hrg. Br.2 at 1; OUIIPet.3 at 3. The powder component of Heraeus’s
bone cements includes beads made from two different copolymers (called Plex 6612 and Plex
6613), a zirconium dioxide radio-opaque agent, and a benzoyl peroxide initiator. See, e.g., Tr.
(Mays) at 379:17-27, 417:13-17. The liquid component of Heraeus’s bone cements uses a
chlorophyll-based recipe, which imparts a green color to the hardened bone cement. See Tr.
(Kluge) at 30:21-31:7.
The respondents include: Zimmer Biomet Holdings, Inc. of Warsaw, Indiana; Biomet,
Inc. of Warsaw, Indiana; Zimmer Surgical, Inc. of Dover, Ohio; Biomet France S.A.R.L. of
Valence, France; Biomet Deutschland GmbH of Berlin, Germany; Zimmer Biomet Deutschland
GmbH of Freiburg im Breisgau, Germany; Biomet Global Supply Chain Center B.V. of
Dordrecht, Netherlands; Zimmer Biomet Nederland B.V. of Dordrecht, Netherlands; Biomet
Orthopedics, LLC of Warsaw, Indiana; Biomet Orthopaedics Switzerland GmbH of Dietikon,
Switzerland; Zimmer US, Inc. of Warsaw, Indiana; Zimmer, GmbH of Winterthur, Switzerland;
and Biomet Manufacturing, LLC of Warsaw, Indiana (collectively, “Respondents” or “Zimmer
Biomet”).4 Order No. 18 (June 26, 2019), unreviewed, 84 Fed. Reg. 35884 (July 25, 2019). The
Commission’s Office of Unfair Import Investigations (“OUII”) also was named as a party.
2 Complainants’ Post-Hearing Brief, EDIS Doc ID 701250 (Feb. 3, 2020) (“Comp. Post-Hrg.
Br.”).
3 Petition of the Office of Unfair Import Investigations For Review-in-part of the Initial
Determination on Violation of Section 337, EDIS Doc ID 710576 (May 18, 2020) (“OUIIPet.”).
4 The investigation was terminated as to respondents Zimmer Orthopaedic Surgical Products,
Inc. of Dover, Ohio, and Biomet Europe B.V. of Dordrecht, Netherlands, Order No. 10 (May 23,
2019), unreviewed, Notice (June 14, 2019), and as to certain accused products, Order No. 30
(Nov. 24, 2019), unreviewed, Notice (Dec. 10, 2019).

PUBLIC VERSION
4
The Accused Products are bone cements designed and manufactured by or for Zimmer
Biomet. Heraeus asserts that Zimmer Biomet misappropriated its trade secrets during the
development of the original “-1” formulation of Biomet Bone Cement R and Refobacin Bone
Cement R in the early 2000s; Heraeus further asserts that the misappropriation bled over into
development of Zimmer Biomet’s “-3” products. See Comp. Post-Hrg. Br. at 1-2.
On May 6, 2020, the ALJ issued the ID, which found that Zimmer Biomet did not violate
section 337. ID at 79. Of the asserted trade secrets, the ID found that TS 1-35 are protectable
trade secrets, but that TS 121-23, TS 130-34, and TS 145 are not protectable trade secrets. Id.
The ID further found that Zimmer Biomet misappropriated TS 1-35. Id. The ID also found that
Heraeus established a domestic industry with respect to Heraeus’s education, training, and
research and development activities and investments in the United States, but that Heraeus did
not show a substantial injury or threat of injury to its domestic industry by Zimmer Biomet’s
misappropriation of TS 1-35. Id.
On July 13, 2020, after considering the parties’ petitions and responses thereto, the
Commission determined to review the ID in part. Review Notice, 85 Fed. Reg. 43600 (July 17,
2020). Specifically, the Commission determined to review the following issues:
(1) The ID’s findings and conclusions as to TS 1-35 and 121-23; and
(2) 	The ID’s domestic industry findings, including whether there has been a
substantial injury to the alleged domestic industry.
Id. at 43601. The Commission determined not to review the remainder of the ID. The
Commission did not request briefing as to TS 1-35 and TS 121-23; however, the Commission
posed several questions relating to domestic industry. Id.

PUBLIC VERSION
5
On July 27, 2020, the parties filed written submissions on the issues under review and on
remedy, public interest, and bonding,5 and on August 3, 2020, the parties filed replies.6
III. 	THE APPLICABLE LAW
A. 	The Commission’s Standard of Review
When the Commission decides to review an initial determination, it reviews the
determination de novo. Certain Polyethylene Terephthalate Yarn & Prods. Containing Same,
Inv. No. 337-TA-457, Comm’n Op. at 9 (June 18, 2002). Upon review, the “Commission has
‘all the powers which it would have in making the initial determination,’ except where the issues
are limited on notice or by rule.” Certain Flash Memory Circuits & Prods. Containing Same,
Inv. No. 337-TA-382, USITC Pub. No. 3046, Comm’n Op. at 9-10 (July 1997) (quoting Certain
Acid-Washed Denim Garments & Accessories, Inv. No. 337-TA-324, Comm’n Op. at 5 (Nov.
1992)). Commission practice in this regard is consistent with the Administrative Procedure Act.
Certain EPROM, EEPROM, Flash Memory, & Flash Microcontroller Semiconductor Devices &
Prods. Containing Same, Inv. No. 337-TA-395 (Reconsideration), Comm’n Op. at 6 (Dec. 11,
2000); see also 5 U.S.C. § 557(b).
5 Complainant Heraeus’s Opening Brief on Commission Review of the Initial Determination,
EDIS Doc ID 715745 (July 27, 2020) (“CBr.”); Respondents’ Brief to the Commission on Issues
under Review, Remedy, and Bonding, EDIS Doc ID 715734 (July 27, 2020) (“RBr.”); Opening
Submission of the Office of Unfair Import Investigations in Response to the Commission’s July
13, 2020 Notice, EDIS Doc ID 715727 (July 27, 2020) (“OUIIBr.”).
6 Complainant Heraeus’s Reply Brief to Respondents’ and OUII’s Opening Briefs on
Commission Review of the Initial Determination, EDIS Doc ID 716285 (Aug. 3, 2020);
Respondents’ Responsive Brief to the Commission on Issues under Review, Remedy, and
Bonding, EDIS Doc ID 716283 (Aug. 3, 2020); Reply Submission of the Office of Unfair Import
Investigations Pursuant to the Commission’s July 13, 2020 Notice, EDIS Doc ID 716280 (Aug.
3, 2020).

PUBLIC VERSION
6
Upon review, “the Commission may affirm, reverse, modify, set aside or remand for
further proceedings, in whole or in part, the initial determination of the administrative law
judge.” 19 C.F.R. § 210.45. “The Commission may also make any findings or conclusions that
in its judgment are proper based on the record in the proceeding.” Id. This rule reflects the fact
that the Commission is not an appellate court but is the body responsible for making the final
agency decision. On appeal, only the Commission’s final decision is at issue. See Spansion, Inc.
v. Int’l Trade Comm’n, 629 F.3d 1331, 1349 (Fed. Cir. 2010).
B. 	Protectable Trade Secrets
“Misappropriation of trade secrets is a method of unfair competition defined by the
common law.” Certain Rubber Resins & Processes for Manufacturing Same, Inv. No. 337-TA-
849, Comm’n Op. at 9 (Feb. 26, 2014) (“Rubber Resins”). A “single federal standard,” rather
than the law of a particular state, applies to investigations into trade secret misappropriation
under section 337. TianRui Group Co. v. Int’l Trade Comm’n, 661 F.3d 1322, 1327 (Fed. Cir.
2011). Sources for this federal standard include the Restatement of Unfair Competition, the
Uniform Trade Secrets Act (“UTSA”), the Restatement of Torts, the Defend Trade Secrets Act
of 2016 (18 U.S.C. §§ 1831-39), and federal common law. Rubber Resins lays out the elements
of a trade secret misappropriation claim:
The elements of misappropriation of trade secrets are as follows: (1) the
existence of a process that is protectable as a trade secret (e.g., that is (a)
of economic value, (b) not generally known or readily ascertainable, and
(c) that the complainant has taken reasonable precautions to maintain its
secrecy); (2) that the complainant is the owner of the trade secret; (3) that
the complainant disclosed the trade secret to respondent while in a
confidential relationship or that the respondent wrongfully took the trade
secret by unfair means; and (4) that the respondent has used or disclosed
the trade secret causing injury to the complainant.

PUBLIC VERSION
7
Rubber Resins, Comm’n Op. at 10 (citing Certain Processes for the Manufacture of Skinless
Sausage Casings & Resulting Prod., Inv. Nos. 337-TA-148 & 169, ID at 244 (July 31, 1984)
(unreviewed in pertinent part) (“Sausage Casings”); UTSA, § 1(4)).
The existence of a trade secret is a prerequisite for a trade secret misappropriation claim.
Rubber Resins, Comm’n Op. at 10 (citing Sausage Casings, ID at 244). It is the complainant’s
burden to show “the existence of a process that is protectable as a trade secret.” Rubber Resins,
Comm’n Op. at 56-59. “The common law does not provide ‘precise criteria for determining the
existence of a trade secret,’ but instead requires ‘a comparative evaluation of all the relevant
factors, including the value, secrecy, and definiteness of the information as well as the nature of
the defendant’s misconduct.’” Certain Activity Tracking Devices, Sys., & Components Thereof,
Inv. Nos. 337-TA-963, ID at 18, (Sept. 22, 2016), unreviewed, Notice (Oct. 20, 2016) (quoting
Restatement (Third) of Unfair Competition § 39 cmt. d.).
The Commission looks to the following six factors—each of which relates to issues of
value and/or secrecy—to help determine whether a trade secret exists:
(1) the extent to which the information is known outside of complainant’s business;
(2) the extent to which it is known by employees and others involved in complainant’s
business;
(3) the extent of measures taken by complainant to guard the secrecy of the information;
(4) the value of the information to complainant and to his competitors;
(5) the amount of effort or money expended by complainant in developing the
information; and
(6) the ease or difficulty with which the information could be properly acquired or
duplicated by others.
Sausage Casings, ID at 245-46 (citing Restatement of Torts § 757, cmt. b). These factors are
“instructive guidelines,” not a six-pronged test. See, e.g., Certain Crawler Cranes &
Components Thereof, Inv. No. 337-TA-887, ID at 24 (July 11, 2014).

PUBLIC VERSION
8
Information otherwise eligible for protection as a trade secret may lose that protection,
however, if adequate steps are not taken to maintain its secrecy. Sausage Casings, ID at 246.
The burden is on complainant to establish that reasonable precautions were taken to preserve
secrecy to ensure that it would be difficult for others to discover the secret without the use of
improper means. Id. (citing Henry Hope X-Ray Prods. Inc. v. Marron Carrell, Inc., 674 F.2d
1336, 1340 (9th Cir. 1982)).
C. 	The Domestic Industry Requirement
Trade secret misappropriation investigations at the Commission are governed by 19
U.S.C. § 1337(a)(1)(A), which declares unlawful—
Unfair methods of competition and unfair acts in the importation of
articles . . . into the United States, or in the sale of such articles by
the owner, importer, or consignee, the threat or effect of which
is—
(i) 	to destroy or substantially injure an industry in the United States;
(ii) 	to prevent the establishment of such an industry; or
(iii) to restrain or monopolize trade and commerce in the United States.
19 U.S.C. § 1337(a)(1)(A). Thus, complainants must show not only that they have an “industry
in the United States,” but also that the industry has suffered “actual substantial injury or threat of
substantial injury.” See, e.g., Rubber Resins, Comm’n Op. at 10.
In addressing whether an “industry . . . in the United States” exists under section
337(a)(1)(A)(i), the Commission has historically considered the “nature and significance” of the

PUBLIC VERSION
9
complainant’s activities that allegedly form the domestic industry.7, 8, 9, 10 For example, in
Certain Miniature, Battery-Operated, All Terrain, Wheeled Vehicles, Inv. No. 337-TA-122,
7 See, e.g., Certain Modular Structural Sys., Inv. No. 337-TA-164, USITC Pub. No. 1668,
Comm’n Op. at 13 (June 1984) (“Modular Systems”) (stating that it is necessary to determine
“the nature and significance” of complainant’s activities in the United States with respect to the
relevant product to determine “whether there is an industry ‘in the United States’ within the
meaning of section 337”); Certain Cube Puzzles, Inv. No. 337-TA-112, USITC Pub. 1334,
Comm’n Op. at 30 (Jan. 1983) (“Cube Puzzles”) (“We find that Ideal’s domestic activities are of
the appropriate nature and are significant enough to conclude that their domestic business
activities constitute an ‘industry . . . in the United States.’”) (emphasis added) (footnotes
omitted). As discussed below, Commission decisions under section 337(a)(1)(A) after the
amendments to Section 337 in the Omnibus Trade and Competitiveness Act of 1988, Pub. L. No.
100-418, have continued to rely upon pre-1988 section 337 precedent. See Certain Ink Markers
& Packaging Thereof, Inv. No. 337-TA-522, Order No. 30 at 57-58, (July 25, 2005) (“Ink
Markers”) (“The administrative law judge finds that investigations prior to the Omnibus Trade &
Competitiveness Act of 1988 (1988 Act) and when injury to a domestic industry had to be
established for all unfair acts, including statutory intellectual property based cases, are helpful in
determining how to define the industry for the acts relating to the trade dress in issue.”)
(unreviewed, see USITC Pub. No. 3971); see also Certain Cast Steel Railway Wheels, Certain
Processes for Manufacturing or Relating to Same & Certain Prods. Containing Same, Inv. No.
337-TA-655, ID at 78-79 n.38 (Oct. 20, 2009), unreviewed by Notice (Dec. 17, 2009) (“Cast
Steel Railway Wheels”) (same).
8 Whether a complainant’s investments in domestic activities must be “substantial” or
“significant” is an issue raised by the parties and addressed more fully below. See, e.g., OUIIPet.
at 11-16; RPet. at 72-76; OUIIBr. at 21-27; CBr. at 22-26; RBr. at 17-20.
9 Commissioner Schmidtlein notes that the parties disagreed on the applicable legal standard. In
Commissioner Schmidtlein’s view, after a complainant presents evidence of its domestic
expenditures, the Commission analyzes the nature and extent of those expenditures to determine
whether the expenditures are sufficient to show that a domestic industry exists. Based on the
parties’ submissions and her reading of the applicable caselaw, Commissioner Schmidtlein finds
that there is no material difference between the Commission’s “nature and significance” inquiry
and the Federal Circuit’s “nature and extent” inquiry. Commissioner Schmidtlein agrees that the
legislative history can be read as indicating it was Congress’s intent to allow the Commission’s
pre-1988 “nature and significance” analysis for investigations brought under section
337(a)(1)(A) to persist. This, however, does not mean that Congress intended that a complainant
must show its domestic industry expenditures satisfy a “significant” threshold under section
337(a)(1)(A) as the word “significant” does not appear in subparagraph (A). See TianRui, 661
F.3d at 1336 (“Because the Senate’s proposal did not become law, we cannot rely on the
legislative history discussing that proposal to read a strict definition of ‘industry’ into section
337(a)(1)(A), when the statute itself contains no such definition.”). Indeed, requiring a
complainant to show that its investments satisfy a “significant” threshold is tantamount to

PUBLIC VERSION
10
USITC Pub. No. 1300 (Oct. 1982) (“Toy Vehicles”), complainants’ toy vehicles were
manufactured in Hong Kong, and their claimed domestic industry was based on various business
activities that they conducted in the United States. The Commission noted that “[t]he threshold
question of the existence of an ‘industry . . . in the United States’ . . . requires an inquiry into the
nature and significance of complainants’ business activities in the United States which relate to
the STOMPER toy vehicles.” Toy Vehicles, Comm’n Op. at 6. The Commission considered
complainants’ business activities involving quality control inspections amounting to “sampling
that would be expected of any commercial purchaser,” warehousing, and shipping, and noted that
the majority of expenditures involved advertising, financing, and licensing fee payments. Id. at
amending the statute rather than simply construing it. See Burlington N.R.R. Co. v. Okla. Tax
Comm’n, 481 U.S. 454, 463 (1987) (“Respondents’ position depends upon the addition of words
to a statutory provision which is complete as it stands. Adoption of their view would require
amendment rather than construction of the statute, and it must be rejected here.”). Thus, in
Commissioner Schmidtlein’s view, analyzing the nature and extent of a complainant’s
expenditures fundamentally differs from requiring a complainant to show its investments are
significant or substantial. Compare 19 U.S.C. § 1337(a)(1)(A) (Congress did not use the word
“significant” in subparagraph (A)) with id. at § 1337(a)(3)(A)-(B) (Congress used “significant”
in subparagraphs (A) and (B)); see also Certain Hand Dryers and Housing for Hand Dryers, Inv.
No. 337-TA-1015, Comm’n Op. at 4 (Oct. 30, 2017) (the Commission held that “an industry in
the United States” under section 337(a)(1)(A)(i) is not limited to the domestic industry definition
for statutory IP rights under section 337(a)(3)); Certain Botulinum Toxin Prods., Processes for
Manufacturing or Relating to Same, and Certain Prods. Containing Same, Inv. No. 337-TA-
1145, Comm’n Op. at 50-51 n.37 (Dec. 16, 2020) (Commissioner Schmidtlein’s related views)
(“Botulinum Toxin Prods.”). Accordingly, for investigations brought under subparagraph
(a)(1)(A), Commissioner Schmidtlein considers whether a complainant’s expenditures are
sufficient to constitute an industry in the United States. See, e.g., Cube Puzzles, Comm’n Op. at
30 (Jan. 1983) (concluding that the complainant’s “domestic activities are of the appropriate
nature and are significant enough to . . . constitute an ‘industry . . . in the United States.’”
(emphasis added)). She agrees, however, that minimal domestic investment, is insufficient to
satisfy section 337(a)(1)(A). Accord n.17, infra (discussing “minimal domestic investment”). In
this investigation, Commissioner Schmidtlein finds that it is not necessary to parse out the
differences between a “sufficient” and “significant” or “substantial” threshold because Heraeus’s
expenditures do not satisfy the “sufficient” threshold.
10 Vice Chair Stayin is of the view that the application of the “nature and significance” test
demonstrates that the Complainant failed to show their U.S. activities were significant enough to
constitute a domestic industry in the United States, see n.17 below.

PUBLIC VERSION
11
10-11. Applying the “nature and significance” test, the Commission determined that these
activities were not “sufficient to constitute an ‘industry . . . in the United States.’” Id.
On appeal, the Federal Circuit affirmed the Commission’s approach, stating that “the
nature and extent of Schaper’s domestic activities (in relation to the total production process of
the Stomper toy vehicles) are insufficient to constitute an ‘industry . . . in the United States.’”
Schaper Mfg. Co. v. Int’l Trade Comm’n, 717 F.2d 1368, 1372 (Fed. Cir. 1983). Ultimately, the
Court concluded that “[t]here is simply not enough significant value added domestically to the
toy vehicles by Schaper’s activities in this country (including design, inspection and
packaging).” Id. at 1373. The Court distinguished qualifying U.S. activities from those that
would ordinarily be performed by a mere importer stating that “Schaper has not shown its United
States inspection activities to be substantially different from the random sampling and testing
that a normal importer would perform upon receipt (and Schaper does no repairs).” Id. at 1372.
Likewise, the Court found “Schaper’s very large expenditures for advertising and promotion
cannot be considered part of the production process. Were we to hold otherwise, few importers
would fail the test of constituting a domestic industry.” Id.
Upon establishing an industry in the United States and unfair acts related to the
importation and sale of respondents’ products, a complainant must show that those unfair acts
have substantially injured or threatened to injure the domestic industry. The Commission in
Rubber Resins explained:
In determining whether unfair acts have substantially injured the domestic
industry, the Commission considers a broad range of indicia, including:
the volume of imports and their degree of penetration, complainant’s lost
sales, underselling by respondents, reductions in complainants’ declining
production, profitability and sales, and harm to complainant’s good will or
reputation.

PUBLIC VERSION
12
Rubber Resins, Comm’n Op. at 60-61 (citing Cast Steel Railway Wheels). In addition, the
Commission has recognized the necessity of evidence establishing a causal nexus between the
unfair imports and alleged substantial injury. See, e.g., Certain Drill Point Screws for Drywall
Construction, Inv. No. 337-TA-116, Comm’n Op. at 20-22 (Mar. 3, 1983); Rubber Resins,
Comm’n Op. at 61.
IV. 	ANALYSIS
The Commission’s findings, conclusions, and supporting analysis follow. The
Commission affirms and adopts the ID’s findings, conclusions, and supporting analysis that are
not inconsistent with the Commission’s opinion.
A. 	Existence of Protectable Trade Secrets11
As an initial matter, the Commission adopts the ID’s findings, conclusions, and analysis
as to TS 1-35 in their entirety. Specifically, the Commission affirms the ID’s findings that
Heraeus has proven that TS 1-35 are protectable trade secrets; Zimmer Biomet misappropriated
TS 1-35; and Zimmer Biomet used these trade secrets in the production of its bone cement
products. ID at 19-31, 51-55. Thus, as to TS 1-35, the Commission affirms the ID’s finding that
Heraeus has established an unfair act in the importation and sale of Zimmer Biomet’s bone
cement products.
The parties dispute whether the confidentiality obligations of an agreement between 	.
[………. ]. Heraeus have expired. Heraeus argues that the obligations have not expired, while
11 Commissioner Schmidtlein takes no position on the ID’s contractual analysis, as it is discussed
in Part III.A of this opinion, for reasons of administrative efficiency. See Beloit Corp. v. Valmet
Oy, 742 F.2d 1421, 1423 (Fed. Cir. 1984) (“The Commission’s judicious use of a single
dispositive issue approach in issuing final negative § 337 determinations can not only save the
parties, the Commission, and this court unnecessary cost and effort, it can greatly ease the burden
on a Commission commonly faced with a § 337 proceeding involving numerous complex issues
and required by statute to reach its conclusion within rigid time limits.”).

PUBLIC VERSION
13
Zimmer Biomet argues that they have. See, e.g., CPet.12 at 54 n.19; RReply13 at 33-38. This
issue relates to whether Heraeus has shown it kept the proprietary information in TS 121-23
confidential, but it does not affect the remainder of the asserted trade secrets.
The Commission agrees with the ID’s conclusion that Heraeus failed to take steps to
safeguard TS 121-23 in the [ 	] its fulfillment of orders, the Biomet Merck Joint
Venture, and the Biomet Distribution Arrangement (U.S.). The Commission disagrees, however,
that the confidentiality obligations set forth in the [ 	] Supply Agreement between [ 	] and
Heraeus (the “[ 	] Supply Agreement” or the “Supply Agreement”) (JX-134C) [
]) (JX-25C). ID at 35-38. As discussed further below, this modification does not
alter the ID’s conclusion that T121-23 are not protectable trade secrets. See Restatement (Third)
of Unfair Competition § 39 (1995) (“If the information has become readily ascertainable from
public sources so that no significant benefit accrues to a person who relies instead on other
means of acquisition, the information is in the public domain and no longer protectable under the
law of trade secrets.”).
Specifically, the Commission finds that the [
.
.
. 	].” JX-134C at 50. Zimmer Biomet contends that [ 	]
12 Complainant’s Petition for Review of Initial Determination on Violation of Section 337, EDIS
Doc ID 710576 (May 18, 2020) (“CPet.”).
13 Respondents’ Response to Heraeus’ and the Commission Staff’s Petitions for Review of the
Initial Determination, EDIS Doc ID 711067 (May 26, 2020) (“RReply”).

PUBLIC VERSION
14
and Heraeus terminated the Supply Agreement through the [ 	].14 See JX-
25C. The [ 	] states that “[
.
. 	].” JX-
25C at 2. The Commission finds that this letter was not an affirmative action taken by the parties
to terminate the Supply Agreement with a three-year notice period. Rather, it explained that a
portion of the Supply Agreement conflicted with a new regulation in the EU cartel law. JX-25C
at 2.
In fact, in accordance with the Supply Agreement’s severability clause,15 the parties
continued to comply with the agreement by endeavoring to replace the provisions that had
become contrary to law. JX-134C at 53; JX-25C at 2 (“[. …… 	al
asdlkj fasdlf lj asdlkfj
asdf
…]”). In addition, a 2009
submission by [ 	] (and multiple Biomet entities) in certain European court proceedings
indicated the understanding that the [
. 	]. See CX-739C at 65 (HERAEUSITC0328428) (cover page), 68
14 To the extent Zimmer Biomet attempts to rely on evidence presented by its expert, Dr. Cheryl
Blanchard, to show that the [ 	] Supply Agreement has terminated, the Commission
notes that Dr. Blanchard’s testimony is contrary to the text of the agreements themselves (the [
. 	] Supply Agreement and the [ 	]), and as such, this evidence is
not persuasive.
15 [
]. JX-134C at 53.

PUBLIC VERSION
15
(HERAEUSITC0328431) (The court filing states: “The Plaintiff has disregarded this still valid
jurisdiction agreement between the parties by calling on the District Court of Darmstadt.”).
Finally, Mr. Schneider, Heraeus’s Head of the Legal and Insurance Department, testified that he
understood the change in EU law to nullify only the exclusivity provisions of the Supply
Agreement in Europe. JX-259C (Schneider) at 304:16-306:24. In such circumstances, the
Supply Agreement’s severability clause provides that all other provisions remain in place. JX-
134C at 53. Accordingly, the Commission finds that the Supply Agreement’s confidentiality
obligations are still in force. JX-134C at 48, 53-54.16
This modification to the ID’s analysis, however, does not change the ID’s conclusion that
Heraeus failed to take steps to safeguard TS 121-23 in the [ 	] Project, its fulfillment of
orders, the Biomet Merck Joint Venture, and the Biomet Distribution Arrangement (U.S.). ID at
33-38. Accordingly, except for the discussion on page 35 of the ID in the section labeled
“Heraeus and [ 	],” the Commission affirms and adopts the portions of the ID that address TS
121-23 and the conclusion that they are not protectable trade secrets.
B. 	Failure to Establish an “Industry in the United States”
The Commission next turns to the question of whether Heraeus has proven that it has an
“industry in the United States” under section 337(a)(1)(A)(i). The parties dispute whether
16 [
].

PUBLIC VERSION
16
Heraeus’s activities are of a nature that qualify under the statute for consideration as “an industry
in the United States.” 	The parties further disagree as to whether the statute requires proof of
“significant” or “substantial” investments, pertaining to the qualifying activities, to establish that
Heraeus has “an industry in the United States.” For the reasons provided below, the Commission
reverses the ID’s conclusion that Heraeus proved the existence of an industry in the United
States under section 337(a)(1)(A)(i).
1. 	The “Nature and Significance” of Domestic Activities and Investments
As noted in Part III.C above, to determine whether an “industry in the United States”
exists under section 337(a)(1)(A)(i), the Commission has traditionally considered the “nature and
significance” of the complainant’s domestic activities. Heraeus argues that there is no statutory
requirement that its investments and expenditures in its domestic activities be significant or
substantial, but rather only that an industry exists. CBr. at 22. Specifically, Heraeus contends
that “[s]ection 337(a)(3), which applies to statutory [intellectual property] investigations,
requires proof of domestic investments in specific categories that are ‘significant’ or ‘substantial’
to establish a domestic industry[.]” Id. Heraeus argues that there is no such requirement in
section 337(a)(1)(A)(i). Id. Heraeus also argues that “[n]either the legislative history nor
precedent support rewriting section 337(a)(1)(A)(i) to require a complainant to prove that the
expenditures or investments demonstrating the existence of a domestic industry are ‘significant’
or ‘substantial.’” CBr. at 23.
Respondents and OUII object to this interpretation of the statute and argue that the
Commission has consistently held that “a complainant bringing a claim under section
337(a)(1)(A)(i) should demonstrate that its industry in the United States is ‘significant’” and
does so by analyzing the nature and significance of such activities. OUIIBr. at 21; see also RBr.

PUBLIC VERSION
17
at 17-20. Moreover, OUII argues that the Commission’s pre-1988 precedent continues to
provide guidance for investigations instituted under current section 337(a)(1)(A). OUIIBr. at 23-
24. As discussed below, the Commission will continue to follow Commission precedent,
affirmed by the Federal Circuit, by analyzing the nature and significance of the complainant’s
domestic activities to determine if they are sufficient to constitute a domestic industry.17
To address Heraeus’s argument that domestic activities do not need to be “significant,”
the Commission looks to the language of its governing statute, legislative history, Federal Circuit
precedent, and its own historical practice to conclude that the Commission’s application of the
“nature and significance” test is appropriate. The plain language of section 337(a)(1)(A)(i),
quoted above, requires a showing of “an industry in the United States,” but does not define that
phrase as it is used within the subclause, nor does the language specify the types of activities that
would qualify toward establishing a domestic industry.
17 Vice Chair Stayin is of the view that the statute, relevant legislative history, and Commission
precedent discussed herein all show that when evaluating whether a domestic industry exists for
purposes of section 337(a)(1)(A), the Commission applies the “nature and significance” of the
alleged investments (if manufacture and production occur abroad) to determine if a
complainant’s industry in the United States is significant. See also Botulinum Toxin Prods.,
Comm’n Op. at 15, 51, 55 (The Commission, in applying the nature and significance test, found
complainants’ expenditures in the U.S. to be significant.). A determination without this
threshold would otherwise permit a finding of a domestic industry based on any minimal
domestic investment. Such a result would be inconsistent with the purposes of section 337. See,
e.g., Certain Computers & Computer Peripheral Devices, & Components Thereof, & Prods.
Containing Same, Inv. No. 337-TA-841, Comm’n Op., Dissenting Views of Commissioner
Shara L. Aranoff, at 2 (Jan. 9, 2014) (“Congress intended section 337 to protect American
industries and American workers”); John Mezzalingua Assocs., Inc. v. Int’l Trade Comm’n, 660
F.3d 1322, 1328 (Fed. Cir. 2011) (“The purpose of the Commission is to adjudicate trade
disputes between U.S. industries and those who seek to import goods from abroad.” (quoting
H.R. Rep. No. 100-40, at 157)). In application of this standard, Vice Chair Stayin is of the view
that the Complainant has failed to establish that its activities and investments in the United States
are significant enough to constitute a domestic industry, and therefore, he concurs with the
majority’s finding of no domestic industry.

PUBLIC VERSION
18
The term “industry” was originally introduced into law in the predecessor to section 337,
section 316 of the Tariff Act of 1922. The statute was re-enacted, with minor changes, in section
337 of the Tariff Act of 1930. The statute provided then, in pertinent part, as follows:
(a) Unfair Methods of Competition Declared Unlawful.— Unfair methods of competition
and unfair acts in the importation of articles into the United States, or in their sale by the
owner, importer, consignee, or agent of either, the effect or tendency of which is to
destroy or substantially injure an industry, efficiently and economically operated, in the
United States, or to prevent the establishment of such an industry, or to restrain or
monopolize trade and commerce in the United States, are hereby declared unlawful, and
when found by the President to exist shall be dealt with, in addition to any other
provisions of law, as hereinafter provided.
19 U.S.C. § 1337(a) (1930) (emphasis added).
Prior to 1988, when section 337(a) was last amended to its current form as section
337(a)(1)(A), the Commission’s assessment of whether the “industry” requirement was met
consisted of considering investments in land, plant, and equipment and to employment of labor
and capital, but also more generally to the nature of complainant’s claimed business activities in
the United States within “the realities of the marketplace.” See TianRui, 661 F.3d at 1336. This
reflects the fact that each industry is unique to its particular facts and circumstances. In many
pre-1988 investigations, where the relevant domestic industry product was manufactured abroad
and imported, “the Commission traditionally examine[d] the nature and significance of the
activities in the United States in order to determine whether a domestic industry exists.” Certain
Dynamic Random Access Memories, Components Thereof & Prods. Containing Same, Inv. No.
337-TA-242, USITC Pub. No. 2034, Comm’n Op. at 67-68 (Sept. 1987), rev’d in part on other
grounds, Texas Instruments Inc. v. U.S. Int’l Trade Comm’n, 871 F.2d 1054 (Fed. Cir. 1989); see
also Toy Vehicles, Comm’n Op. at 6, aff’d by Schaper, 717 F.2d at 1368 (“The threshold
question of the existence of an ‘industry . . . in the United States’ . . . requires an inquiry into the
nature and significance of complainants’ business activities in the United States which relate to

PUBLIC VERSION
19
the STOMPER toy vehicles.”).18 In fact, the Federal Circuit, in affirming the Commission’s
finding of no industry in the United States in Toy Vehicles, where the product was manufactured
abroad, looked to the “nature and the extent of [the complainant’s] domestic activities (in
relation to the total production process of the [domestic industry products]) . . . .” Schaper, 717
F.2d at 1372. The Court found that such activities were “insufficient to constitute an industry . . .
in the United States,” explaining that “[t]here is simply not enough significant value added
domestically to the toy vehicles by [the complainant’s] activities in this country.” Id. at 1372-73
(emphasis added). The Court in Schaper also pointed out that the complainant’s inspection
activities were not substantially different from those that a “normal importer” would perform,
and that crediting its advertising and promotion expenditures would mean “few importers would
fail the test of constituting a domestic industry.” Id.
The term “industry” was retained through the 1988 Amendments, and the legislative
history does not indicate that Congress intended to reject the Commission’s pre-1988 precedent
as it applies to non-statutory intellectual property. Indeed, it supports the contrary. Prior to
1988, section 337(a) covered all unfair methods and acts, including both patent and trade secret
claims. See generally John Mezzalingua, 660 F.3d at 1327. The 1988 Amendments enacted
18 See also Certain Airtight Cast-Iron Stoves, Inv. No. 337-TA-69, USITC Pub. No. 1126,
Comm’n Op. at 11 (Jan. 1981) (“Cast-Iron Stoves”) (finding that a domestic industry had been
shown based on domestic repair, testing, and installation activities because “the value added
domestically is significant”); Cube Puzzles, Comm’n Op. at 27, 30 (finding domestic activities
“significant enough” under a “nature and significance” assessment to establish an industry in the
United States where approximately 50 percent of the product’s value is added by production
activities in the United States); Modular Systems, Comm’n Op. at 13-15 (evaluating “the nature
and significance” of Complainant’s activities in the United States with respect to the relevant
product in order to determine “whether there is an industry in the United States within the
meaning of section 337” and ultimately finding no industry in the United States, where
“inspection and quality control are minimal, and installation and assembly are only sometimes
done” (footnote and internal quotation omitted)).

PUBLIC VERSION
20
separate domestic industry requirements for statutory-based intellectual property rights, like
patents. See 19 U.S.C. § 1337(a)(3); see also Omnibus Trade and Competitiveness Act of 1988,
Pub. L. No. 100-418 (amending section 337). These provisions, including their “significant”
language, were intended to codify, for statutory-based intellectual property rights, pre-1988
Commission decisions regarding the domestic industry requirement. See S. R EP . NO. 100-71,
100th Cong., 1st Sess. at 129 (1987) (noting that the “significant investment in plant and
equipment” and “significant employment of labor and capital” factors “have been relied on in
prior Commission decisions finding that an industry exists in the United States”). For non-
statutory intellectual property claims (i.e., common law trademark or trade secret claims),
Congress retained the language of former section 337(a) in section 337(a)(1)(A). The 1988
Amendments removed the “efficiently and economically operated” requirement but retained the
term “industry” from former section 337(a) in section 337(a)(1)(A)(i) & (ii). See 19 U.S.C.
§ 1337(a)(1)(A). In light of Congress’s decision to retain the term “industry” and the fact that
Congress was aware of the Commission’s pre-1988 precedent, the pre-1988 precedent continues
to provide guidance for investigations instituted under the current version of section
337(a)(1)(A). See S. R EP . NO. 100-71 at 129; see also 2B S UTHERLAND S TATUTORY
C ONSTRUCTION § 49:9 (7th ed.) (“[L]egislative action by amendment or appropriation of some
parts of a law which has received a contemporaneous and practical construction may indicate
approval of interpretations relating to the unchanged and unaffected parts.”); Lindahl v. Office of
Pers. Mgmt., 470 U.S. 768, 782-83 (1985) (“Moreover, the fact that Congress amended [the
relevant statutory section] in 1980 without explicitly repealing the established [legal] doctrine
itself gives rise to a presumption that Congress intended to embody [that doctrine] in the
amended version of [that statutory section]. We need not rely on the bare force of this

PUBLIC VERSION
21
presumption here, however, because the legislative history . . . demonstrates that Congress was
indeed well aware of [the established legal doctrine], amended [the statutory section] on its
understanding that [the established legal doctrine] applied to judicial review of disability
retirement decisions generally, and intended that [the established legal doctrine] review continue
except to the extent augmented by the more exacting standards [added by Congress].” (footnote
omitted)).
Heraeus argues that Congress considered whether trade secret misappropriation claims
should receive the same treatment as statutory intellectual property claims in the 1988
Amendments, and ultimately did not take that approach. See, e.g., CBr. at 24-26. However,
Congress was aware of Commission practice under prior section 337(a) law—including the
application of a significance assessment—and yet made no changes to this aspect of subsection
337(a)’s language as it applied to non-statutory intellectual property. Thus, the re-enactment
doctrine supports continued application of the Commission’s standard. See Lorillard v. Pons,
434 U.S. 575, 580-81 (1978) (“Congress is presumed to be aware of an administrative or judicial
interpretation of a statute and to adopt that interpretation when it re-enacts a statute without
change . . . where, as here, Congress adopts a new law incorporating sections of a prior law,
Congress normally can be presumed to have had knowledge of the interpretation given to the
incorporated law, at least insofar as it affects the new statute.” (citations omitted)).
Accordingly, to determine whether an “industry” exists in the United States, the
Commission has historically considered the nature of the activities in the United States that relate

PUBLIC VERSION
22
to the complainant’s product and the significance of those activities.19, 20 The 1988 Amendments
did not change that. Thus, the statute, legislative history, Federal Circuit precedent, and
Commission precedent support the Commission’s continued assessment of the nature and
significance of complainants’ business activities in the United States that relate to complainants’
domestic industry products to determine whether there are sufficient qualifying activities to
constitute an industry in the United States or whether complainants’ activities are those of a mere
importer. Schaper, 717 F.2d at 1372-73.
While there is no bright-line rule to determine whether a complainant’s domestic
activities are distinguishable from those of a mere importer the Commission has often considered
some types of activities, such as administrative overhead, inspections, and warehousing costs
associated with importation of the domestic industry products as well as sales and marketing of
the product, to be indistinguishable from those of a mere importer and has not typically credited
them when determining whether a domestic industry exists.21 See, e.g., Schaper, 717 F.2d at
19 As explained above, in Commissioner Schmidtlein’s view, considering the “nature and
significance” of the domestic industry investments to determine whether they are “sufficient” or
“significant enough” per pre-1988 precedent is not the same as requiring the investments to be
significant.
20 See views of Vice Chair Stayin, n.17, supra, applying nature and significance test to determine
if a complainant’s domestic activities are significant enough to establish an industry in the
United States.
21 Historically, Commissioner Schmidtlein notes that discrediting “mere importer” activities
occurs where the asserted domestic industry lacks domestic manufacturing activity. See, e.g.,
Toy Vehicles, Comm’n Op. at 6, 10-11 (noting that the complainant’s manufacturing occurred in
Hong Kong, finding that complainant’s marketing, financing, and royalty expenses were its
largest expenses, and concluding that complainant’s activities were not sufficient to constitute an
industry in the United States); Certain Non-Volatile Memory Devices & Prods. Containing
Same, Inv. No. 337-TA-1046, USITC Pub. No. 4965, ID at 159 n.37 (Apr. 27, 2018) (“Non-
Volatile Memory Devices”) (reviewing cases and noting that the Commission has included
“ancillary activities,” such as sales and marketing expenses, “as part of domestic industry [when
the ancillary activity] accompanied actual domestic manufacturing”), rev’d on other grounds,

PUBLIC VERSION
23
1372-73; Certain Male Prophylactic Devices, Inv. No. 337-TA-546, Comm’n Op. at 39 (Aug. 1,
2007) (“Male Prophylactic Devices”) (examining complainant’s U.S. activities to determine
whether they are the types of activities that constitute a domestic industry or whether they are the
types of activities that a “mere importer” would perform); Non-Volatile Memory Devices, ID at
158-60 (noting Commission and Federal Circuit precedents discounting sales and marketing
activities as indistinguishable from those of a mere importer).22, 23
Comm’n Op. at 44 (Sept. 2019); Certain Solid State Storage Drives, Stacked Elec. Components,
& Prods. Containing Same, Inv. No. 337-TA-1097, Comm’n Op. at 22 (June 20, 2018) (noting
that the Commission “has stated that ‘[w]hile marketing and sales activity, alone, may not be
sufficient to meet the domestic industry test, those activities may be considered as part of the
overall evaluation of whether or not a Complainant meets the economic prong.’” (quoting
Certain Printing & Imaging Devices & Components Thereof, Inv. No. 337-TA-690, Order No.
24 at 34 (Apr. 21, 2010), rev’d on other grounds, Comm’n Op. at 30-31 (Feb. 17, 2011) and
citing to S. Rep. No. 100-71, at 129 (1987)); see also Male Prophylactic Devices, Comm’n Op.
at 45 (“[U]nder the statutory domestic industry test, as set forth in the 1988 amendments, actual
production is not necessarily required to give a company standing to claim relief under section
337.”).
22 In Non-Volatile Memory Devices, the ALJ found that complainant failed to establish a
domestic industry in the process of being established, notwithstanding its significant investments
in R&D activities, because complainant did not have a commercial product and thus did not meet
the “article” requirement under section 337(a)(3). While crediting the R&D investments, the
ALJ declined to rely on investments in asserted “customer facing technical work” that were
deemed sales and marketing; the ALJ stated that the Commission has not “distinguished between
technical sales and marketing and other types of sales and marketing,” and added that it would
not “make sense to do so. If a company is importing products from abroad, it needs a sales force
in the United States to sell the products. If the company’s products are highly technical, the
company needs a technically sophisticated cadre of marketers to sell them.” See ID at 160. On
review, the Commission rejected the ID’s finding that a commercial product is required and
found a domestic industry in the process of being established based on significant R&D
investments, but affirmed the ID’s determination that “Macronix failed to establish a domestic
industry based on investments in ‘customer facing’ engineering for the reasons provided in the
ID.” Comm’n Op. at 44 (Oct. 26, 2018) (citing ID at 154-186).
23 Commissioner Schmidtlein notes that in various decisions over the last four decades—and as
recently as six months ago—the Commission has credited sales and marketing expenses where
the complainant has shown it is more than a mere importer. See, e.g., Certain Toner Cartridges,
Components Thereof, & Sys. Containing Same, Inv. No. 337-TA-1174, Order No. 40 at 114 n.31

PUBLIC VERSION
24
Other types of activities, such as manufacturing in the United States, have traditionally
been considered ones that Congress intended to form the basis for a domestic industry and the
Commission generally credits them towards a domestic industry. John Mezzalingua, 660 F.3d at
1337. Congress, however, in choosing to employ the word “industry” rather than
“manufacturing,” illustrated that it intended the term “industry” to cover more than just domestic
manufacturing. See Schaper, 717 F.2d at 1373 (observing that “in proper cases ‘industry’ may
encompass more than the manufacturing of the patented item”). As illustrated in Toy Vehicles,
when assessing non-manufacturing activities in the United States, the Commission carefully
considers the nature of the complainant’s activities to determine whether they are the types of
activities that qualify toward a domestic industry or whether they are the types of activities that a
mere importer would perform. Activities relating to the domestic industry products at issue that
go beyond what a mere importer would perform may contribute to a domestic industry, as the
Schaper Court explained.
(July 23, 2020) (finding that complainant’s “marketing and sales expenditures are appropriately
considered as part of its domestic industry in light of their relationship to [complainant’s]
significant investment in manufacturing and servicing products”), unreviewed by Comm’n
Notice (Sep. 8, 2020); Certain Integrated Circuits, Processes for Making Same, & Prods.
Containing Same, Inv. No. 337-TA-450, ID at 152-56 (May 6, 2002) (noting that complainants’
employees work with customers to customers to ensure complainants’ products complied with
applicable design rules, rejecting respondents’ argument that these activities were “merely sales
and marketing activity that cannot form the basis of a domestic industry,” and concluding that
the complainants satisfied the economic prong “by virtue of their activities and investments
which assist customers to design integrated circuits that will be made according to the ’345
patented method”), unreviewed in pertinent part by Comm’n Notice (June 21, 2002); Certain
Personal Computers & Components Thereof, Inv. No. 337-TA-140, USITC Pub. No. 1504,
Comm’n Op. at 43 (Mar. 1984) (crediting quality control and packaging activities where the
complainant also engaged in some domestic production); see also H.R. Rep. No. 100-40, Pt. 1, at
157 (1988) (“Marketing and sales in the United States alone would not, however, be sufficient to
meet this test.” (emphasis added)).

PUBLIC VERSION
25
For instance, the Commission has held, depending on the facts and circumstances of the
particular investigation, that installation of the domestic industry’s product, education and
training regarding that product, and corresponding warranty, service, repair, quality control, and
packaging activities may be considered. See, e.g., Cast-Iron Stoves, Comm’n Op. at 10-11
(finding the existence of a domestic industry of importer-distributors-dealers with respect to
wood-burning stoves manufactured abroad based on U.S. repair, testing, and installation
activities for those stoves); Certain Apparatus for the Continuous Prod. of Copper Rod, Inv. No.
337-TA-52, USITC Pub. 1017, Comm’n Op. at 53-55 (Nov. 1979) (finding a domestic industry
related to “SCR systems” based on their development, licensing of related patents and trade
secret know-how, related engineering, related start-up operations, and related technical
assistance, as well as subcontracted manufacture of related components); Sleep-Disordered
Breathing Treatment Sys. & Components Thereof, Inv. No. 337-TA-890, ID at 168 (Sept. 16,
2014), unreviewed in relevant part, Notice (Oct. 16, 2014) (crediting, in a patent-based
investigation brought under 337(a)(3), investments providing for a clinical education group to
train medical providers how to “configure ResMed devices and select appropriate masks for
patients”); Certain Road Milling Machines & Components Thereof, Inv. No. 337-TA-1067, ID at
429-34 (Oct. 1, 2018) (in a patent-based investigation, finding a domestic industry based in part
on investments oriented to instructing customers on how to use the domestic industry products),
unreviewed in relevant part by Comm’n Notice (Apr. 23, 2019); Cube Puzzles, Comm’n Op. at
28-30 & n.109-13 (finding a domestic industry based in part on extensive packaging, testing
operations, and repair in conjunction with the quality control process, as well as the production
of molds and efforts to improve design and materials) (citing Cast-Iron Stoves, USITC Pub. No.
1126).

PUBLIC VERSION
26
Once the Commission has determined which qualifying activities contribute to the
domestic industry, it assesses what investments or expenditures have been made in those
activities. The Commission has historically considered relevant investments in plant, equipment,
land, labor, and capital, but other investments and expenditures can also be considered. Finally,
the Commission considers the extent of all qualifying domestic industry investments and
expenditures to determine whether they are sufficient to constitute a domestic industry. Schaper,
717 F.2d at 1372 (finding no industry in the United States where “the nature and the extent of
Schaper’s domestic activities (in relation to the total production process of the Stomper toy
vehicles)” were “insufficient”).
The Commission has looked to several different contextual indicators to determine if
these investments and expenditures are sufficient to constitute a domestic industry. For instance,
one methodological approach the Commission has used in both pre- and post-1988 investigations
is “comparing complainant’s domestic expenditures to its foreign expenditures.” Certain
Carburetors & Prods. Containing Such Carburetors, Inv. No. 337-TA-1123, Comm’n Op. at 9
(Oct. 28, 2019) (finding that “comparing complainant’s domestic expenditures to its foreign
expenditures is one of the possible factors that the Commission could but . . . is not required to
consider”) (quoting Certain Optoelectronic Devices for Fiber Optic Communications, Inv. No
337-TA-860, Comm’n Op. at 18-19 (May 9, 2014)). Another approach, among others, is to
consider “the value added to the article in the United States by the domestic activities.” Id. at 19.
Indeed, Commission decisions have accepted a “value-added” analysis to assess whether an
industry in the United States exists. See Cube Puzzles, Comm’n Op. at 30 (significance of the
domestic operations was shown by the fact that “approximately 50 percent of the value of the
cube puzzle” is added in the United States by “Ideal’s quality control, packaging and repair

PUBLIC VERSION
27
operations”); Cast-Iron Stoves, Comm’n Op. at 11 (finding a domestic industry based on repair,
testing, and installation activities because “the value added domestically is significant”); Certain
Airless Paint Spray Pumps & Components Thereof, Inv. No. 337-TA-90, USITC Pub. No. 1199,
Comm’n Op. at 10-11 (Nov. 1981) (finding that domestic investments in warranty repairs should
be included in the domestic industry “[i]nasmuch as the value added to a product in the United
States is a significant factor in determining whether the U.S. operation of a foreign corporation is
part of domestic industry”). Moreover, the Federal Circuit in Schaper compared the investments
in the United States with “the total production process of [the domestic industry products],” and
found that there was not “significant value added” to the products in the United States. Schaper,
717 F.2d at 1372-73 (emphasis added). In sum, as discussed above, the Commission’s
determination as to the existence of a domestic industry must be assessed according to a highly
fact-specific assessment of the “nature and significance” of the complainant’s domestic
activities.
2. 	Assessment of Heraeus’s Domestic Activities and Investments
To determine whether Heraeus’s domestic business activities constitute an “industry in
the United States” that merits protection under section 337, “the initial inquiry is what parts of
these activities are to be considered[.]” Schaper, 717 F.2d at 1370. Consistent with its past
practice, the Commission first considers the nature of Heraeus’s activities in the United States
related to its Palacos bone cements to determine whether these activities should be considered for
inclusion in an “industry” in the United States. The Commission finds that, in this investigation,
several of Heraeus’s activities in the United States do not contribute to an “industry” within the
meaning of the statute or Commission precedent. TianRui, 661 F.3d at 1337.

PUBLIC VERSION
28
Heraeus argues that its claimed activities in the United States relate to its Palacos line of
bone cements, which are the products in direct competition with the accused articles.24 To
support its position that it has an industry in the United States, Heraeus relies on expenditures for
activities by HMUS and its consultants that can be broadly described as education and training,
domestic labor, regulatory, and manufacture of adapters and medical hoses that are used with
Heraeus’s Palacos bone cements. The Palacos bone cements are manufactured entirely in
Germany and imported into the United States. HMUS does not modify or repackage the Palacos
units before selling them to customers in the United States. ID at 59; Tr. (Childers) at 187:12-22.
Thus, the Commission considers the nature and significance of Heraeus’s activities in the United
States related to its Palacos bone cements that Heraeus seeks to protect from unfair imports,
including whether those activities are those that would be undertaken by a mere importer,25 to
determine whether there is an “industry” in the United States.
The ID credited some of Heraeus’s claimed education and training, domestic labor, and
regulatory expenditures, in particular those related to the Reduce Revisions Initiative (ID at 60-
63), to certain Domestic Labor (ID at 66-68), and to Medical Professionals (ID at 70-71). The
ID did not credit other education and training, domestic labor, regulatory, new-contract
acquisition, warehousing, or component manufacture expenditures because, in the ID’s view, any
importer would conduct those activities, they are sales and marketing activities, or they do not
sufficiently relate to the Palacos bone cements.
24 Heraeus frames its argument as follows: “Once a complainant satisfies the threshold question
of whether its domestic industry expenditures are sufficient to establish a domestic industry, the
question becomes whether its domestic industry as a whole has been injured. Heraeus is in the
bone cement industry. Its education, training and research and development expenditures
advance that industry. They are not a separate industry.” CPet. at 2.
25 See, e.g., Male Prophylactic Devices, Comm’n Op. at 39.

PUBLIC VERSION
29
The Commission agrees with the ID that Heraeus’s expenditures for Palacademy and the
“Other Medical Events and Medical Conferences,” trade shows, and conferences are not of the
nature of activities that qualify toward establishing an industry under the facts of this
investigation because, as the ID found, (a) these activities are largely marketing events, (b) they
are the types of activities a mere importer would conduct, and (c) they had an overly attenuated
relationship to the Heraeus bone cement products. ID at 60-65. The Commission also affirms
and adopts the ID’s findings and analysis declining to consider the asserted “Domestic Facility
Expenditures,” “Domestic Labor Expenditures” (except those credited by the ID), and
“Contracting Costs” (except Medical Professionals) as qualifying toward “an industry in the
United States.”26 ID at 65-72. The Commission also affirms the ID’s findings that four of
Heraeus’s employees engage in education and training related to the bone cements (totaling
$[…….]).27 ID at 66-68. Accordingly, the Commission affirms and adopts the ID’s findings as
26 For the “Domestic Component Expenditures,” the Commission notes that the alleged
components—hoses—are actually accessories that connect Heraeus’s medical foot pump to
compressed air systems in hospital rooms. Comp. Post-Hrg. Br. at 113. They are not a
component of the bone cements at issue here. ID at 72. Moreover, even if they were
components, the Commission finds that Heraeus relied on the full purchase price of the hoses
and did not present evidence of what investments the domestic manufacturer, [
. 	], made in these hoses. Cf. Lelo Inc. v. Int’l Trade Comm’n, 786 F.3d 879, 884 (Fed.
Cir. 2015) (in a patent-based investigation, criticizing the complainant for presenting “only
generic purchase prices it paid for the off-the-shelf items” as investments). For these reasons,
the Commission declines to credit these expenditures. The Commission disagrees, however, that
the expenditures for the hoses would necessarily need to be connected to the other domestic
activities that Heraeus attempts to rely upon, i.e., education, training, research, and quality
control, in order to contribute to a domestic industry. ID at 72.
27 It is unclear whether all the work of Ms. Ducharme, HMUS’s Scientific Quality Affairs
Analyst, should be credited toward the domestic industry. ID at 67-68 (“Ms. Ducharme’s activity
should be considered a non-sales and marketing expense, because, giving Heraeus the benefit of
the doubt, at least some of her work focuses specifically on clinical research studies.”) (emphasis
added). However, as discussed below, even fully crediting her activities does not result in the
Commission finding a domestic industry.

PUBLIC VERSION
30
to the nature of those activities and that only the expenses for the four employees qualify toward
establishing a domestic industry. The remainder of Heraeus’s activities, i.e., (a) the Reduce
Revisions Initiative and (b) Heraeus’s FDA Activities, are discussed below.
a) 	The Reduce Revisions Initiative
The Commission finds that the Reduce Revisions Initiative activities do not qualify for
consideration as part of the domestic industry. While some education and training expenditures
may so qualify under appropriate circumstances, at the very least, the Reduce Revisions
activities focus on reducing repeat joint replacements and are not sufficiently related to the
Palacos bone cements.28 As discussed above, in order for the Reduce Revisions Initiative to
qualify towards the domestic industry concerning the Palacos bone cements, it must be
sufficiently related to the domestic industry that Heraeus seeks to protect from unfair imports.
E.g.¸ Comp. Post-Hrg. Br. at 4-5, 85. In particular, the ID observed that the Reduce Revisions
Initiative “has no obvious link to Palacos bone cement at all.” ID at 63. Rather, the Reduce
Revisions Initiative is directed to reducing the number of repeat total joint arthroplasty surgical
procedures. Tr. (Prowse) at 545:3-9; CDX-3C at 14-15 (“[
.
. 	].”). The Commission finds that these activities are not
sufficiently related to bone cements such that they may be considered qualifying activities
contributing to the claimed “industry” in the United States. Id.
28 In considering whether to credit education and training expenditures toward a domestic
industry, Chair Kearns also considers whether they are of the sort that a mere importer would
engage in, and whether they are activities that must by their nature be performed in the United
States. Chair Kearns need not resolve these issues for the Reduce Revisions expenditures here,
as the Commission finds that they are insufficiently related to the domestic industry product.

PUBLIC VERSION
31
Moreover, evidence offered to support the Reduce Revisions Initiative cuts against
Heraeus’s claim that the program is anything but marketing. Instead, the evidence shows that
Heraeus itself treats Reduce Revisions as a sales and marketing effort. Heraeus’s financial
records classify expenditures related to Reduce Revisions, including [ 	], the
adverting agency that develops content for the Reduce Revisions website, as “advertising
expenses.” JX-142C at Rows 823, 825, 13764-13767, 13786-13793, 13890-13893, 15446-
15464, 15576-15578, 16905; Tr. (Childers) at 190:18-21. Heraeus hired [ 	] for
strategy, consulting, and for marketing and selling Heraeus’s Palacos brand. See Tr. (Childers)
at 191:7-14 (Heraeus hired [ 	] “for strategy, consulting, marketing, branding.”); JX-
249C (Childers Dep. Designations) at 182:13-15 ([ 	]involved in developing content
for Reduce Revisions website); JX-255C (Kolbe Dep. Designations) at 66:11-18 (“Q. And so
what does [ 	] do? A. They’re an ad agency, so marketing stuff.”); Tr. (Mulhern) at
906:2-15 (“[ 	] provides marketing services to Heraeus of a variety of different
types”); RDX-2 at 5; RDX-2 at 6 (summarizing Heraeus testimony regarding [ 	]). In
short, there is a failure of proof to support Heraeus’s claim that the Reduce Revisions
expenditures are related to anything but marketing. Accordingly, the Commission finds that
Heraeus has not proven that the nature of the Reduce Revisions Initiative qualifies it as an
activity that contributes to an “industry” in the United States within the meaning of the statute.29
29 Commissioner Schmidtlein does not join this paragraph. Commissioner Schmidtlein would
not dismiss the Reduce Revisions Initiative as a marketing expense because the initiative, in her
view, is more like an educational symposium. For example, the initiative collects and hosts
articles that are published in scholarly journals. See CDX-3C at 18. Exemplary articles include [
.
.
.
.
. 	]. 	Id.

PUBLIC VERSION
32
With regard to the medical professionals paid to work on Palacademy and the Reduce
Revisions Initiative, the Commission finds that the consulting fees for medical professionals paid
to work on those programs do not qualify toward an “industry” in the United States for the same
reasons other expenditures for those programs do not. See, e.g., Tr. (Prowse) at 563-64; Tr.
(Childers) at 200-01.
b) 	Heraeus’s FDA Activities
The ID held that Heraeus’s Food and Drug Administration (“FDA”) regulatory activities
were no different from the types of activities that a mere importer would engage in. ID at 68-69.
Heraeus argues that these expenses should have been included in the total investment of
activities in the United States because the Commission has previously included expenditures
related to FDA approval and because Heraeus did not have to take on the responsibility for FDA-
compliance, but chose to do so. CBr. at 20-22. Zimmer Biomet argues that these activities
should not be included because the evidence indicates that some of the expenses are for Heraeus
Germany and are not allocated for Heraeus U.S. RBr. at 16-17. The Commission declines to
include these expenditures for the reasons discussed below, but holds that, even if these
expenditures were included, Heraeus would not have shown the existence of a domestic industry,
as discussed infra in Part IV.B.2.c.
Commissioner Schmidtlein also notes that Respondents apparently have not rebutted Heraeus’s
argument by pointing to examples showing that the Reduce Revisions Initiative is a typical
marketing activity within the healthcare sector. Further, Commissioner Schmidtlein would not
dismiss the initiative as a marketing expense given the Commission’s conclusion that the
initiative “is not sufficiently related to bone cements.” If the initiative is a marketing expense,
the Commission’s conclusion that it is “not sufficiently related” to Heraeus’s products begs the
question of what Heraeus was marketing. Additionally, even if the expenses are a marketing
expense, the Commission could choose to credit them. See n.23, supra; see also Botulinum
Toxin Prods., Comm’n Op. at 47 n.35 (Commissioner Schmidtlein noting that sales and
marketing investments, when combined with other qualifying domestic investments or activities,
can be credited in determining whether a domestic industry exists).

PUBLIC VERSION
33
The Commission has previously assessed whether expenditures related to FDA
compliance may qualify toward an industry based on the facts and evidence of record. See, e.g.,
Certain Diltiazem Hydrochloride & Diltiazem Preparations Containing Same, Inv. No. 337-TA-
349, USITC Pub. No. 2902, ID at 142-145 (June 1995) (unreviewed in relevant part by Comm’n
Notice (Mar. 20, 1995)); Certain Salinomycin Biomass & Preparations Containing Same, Inv.
No. 337-TA-370, USITC Pub. 2978 (July 1996), ID at 128 (unreviewed); Certain Strontium-
Rubidium Radioisotope Infusion Sys., & Components Thereof Including Generators, Inv. 337-
TA-1110, ID at 140-143 (Aug. 13, 2019) affirmed by Comm’n Op. at 40-42 (Dec. 11, 2019)
(“Radioisotope Infusion Systems”)).
Heraeus describes its FDA activities as follows: “internal labor for personnel involved in
regulatory activities, as well as payments to a third party, [ 	], which assists HMUS
with its quality systems to ensure that ‘products are within a pretty tight band of compliance to
manufacturing specifications,’ as well as provides general consulting on issues relating to FDA
market approval and other government regulations.” CBr. at 20 (quoting Tr. (Childers) at 176:2-
22). As evidence supporting its expenditures, Heraeus provides several invoices. E.g., CX-
144C; CX-145C. In one representative example, the invoice describes the paid-for activities as:
[
]
CX-144C. In a further example, the invoice recites:

PUBLIC VERSION
34
[
]
CX-144C. In a third example, the invoice recites: “[
. 	].” CX-145C.
Complainant Heraeus has the burden to show that its U.S. activities are more than those
performed by a mere importer. Here, the record is unclear as to the exact nature of Heraeus’s
FDA activities in the United States, and whether they are distinguishable from activities that a
mere importer would perform. Heraeus has not shown, for example, that they are the types of
activities, such as research and development, clinical trials, or maintenance of processes and
equipment in the United States in accordance with FDA requirements, that the Commission has
credited in the past. Thus, Heraeus has failed to prove that its claimed FDA activities qualify for
inclusion in the domestic industry.30 Regardless, even if Heraeus’s FDA-related activities were
to be credited, Heraeus has not shown the existence of a domestic industry, as discussed infra.
30 Chair Kearns views expenditures on regulatory activities that by their nature can only be
performed in the United States as akin to expenditures that a mere importer would have to incur
domestically, and thus they may not qualify for inclusion in the domestic industry. See
Radioisotope Infusion Systems, Comm’n Op. at 42 n.27. While Heraeus argues that it was not
“legally required” to undertake the claimed regulatory activities in the United States, CBr. at 21-
22, it remains unclear on this record whether some of these expenses, by their nature, could only
be performed in the United States, regardless of legal requirements.

PUBLIC VERSION
35
c) 	Sufficiency of Heraeus’s Qualifying Activities
As noted above, the Commission finds that only the domestic labor expenditures for four
Heraeus employees – whose activities involved education and training related to the alleged
domestic industry in Palacos bone cements – are of the nature of activities that contribute to an
“industry in the United States” under section 337(a)(1)(A)(i). The parties agree that the domestic
labor expenditures for the Heraeus employees’ education and training activities related to the
Palacos bone cements amount to $[ 	]. CBr. at 3-4; RBr. at 3; OUIIBr. at 3-4.
The Commission must determine whether these expenditures are sufficient to establish
“an industry in the United States.”31 While Heraeus need not (and indeed does not) manufacture
its domestic industry products in the United States in order to have a domestic industry, it does
need to provide evidence to demonstrate that its cognizable expenditures in its qualifying U.S.
activities are sufficient to constitute “an industry in the United States.” Heraeus has provided
scant contextual evidence to demonstrate that its cognizable expenditures in qualifying U.S.
activities contribute sufficient value to its imported Palacos bone cements to constitute “an
industry in the United States.”32 Based on the evidence presented by Heraeus, the Commission
concludes that Heraeus’s cognizable expenditures in qualifying domestic activities are not
significant compared to HMUS’s gross sales of the Palacos bone cements in the United States
($[ 	. 	]), the only metric that Heraeus relies upon to establish the significance of its
31 See n.17, supra.
32 As the ID noted, in investigations involving a complainant that engages in foreign
manufacturing, the Commission often uses a value-added analysis to assess whether an industry
in the United states exists. ID at 16-17. In this investigation, complainants did not present
evidence of the cost of the imported Palacos products or arguments that would allow a
quantitative value-added analysis (for example, there is no evidence of the production cost of the
bone cements at issue) or any other similar method by which to assess significance of its alleged
domestic activities. Id.

PUBLIC VERSION
36
domestic industry expenditures.33 See Comp. Post-Hrg. Br. at 114-15 (reporting gross revenues
through February 2019, four days before the complaint was filed); Resp. Pre-Hrg. Br.34 at 151
(noting HMUS was formed in June 2017). In other words, Heraeus’s evidence shows that these
expenditures are not significant compared to gross sales, which is the comparison Heraeus
presented to show its activities are “significant.”35, 36 See Comp. Post-Hrg. Br. at 114-15.
Heraeus did not otherwise attempt to show the significance of its investments in cognizable
activities in the United States. In sum, the Commission concludes that Heraeus has failed to
demonstrate that its qualifying, relevant domestic activities are sufficient to establish the
existence of an “industry in the United States.”37
C. 	Failure to Demonstrate Substantial Injury to the Claimed Domestic Industry
The parties also dispute whether Heraeus has proven that Zimmer Biomet’s importation
and sale of its bone cement products that have misappropriated TS 1-35 have the threat or effect
of destroying or substantially injuring Heraeus’s claimed domestic industry. See, e.g., CPet. at
10-11. To establish a violation under section 337(a)(1)(A)(i), the Complainant must show
33 Commissioner Schmidtlein finds that Heraeus’s cognizable expenditures are not sufficient to
constitute a domestic industry when considered in the context of its gross U.S. sales.
34 Respondents’ Pre-Hearing Brief, EDIS Doc ID 697036 (Dec. 11, 2019) (“Resp. Pre-Hrg.
Br.”).
35 Qualifying lifetime domestic expenditures ($[ 	] divided by lifetime total revenue
($[……. 	]) is equal to [ 	]%. The Commission notes that the expenditures for the [. 	. 	.
……...] amount to $[ 	]. CBr. at 3-4; RBr. at 3; OUIIBr. at 3-4. Even if the Commission were
to credit those expenses, the total qualifying lifetime domestic expenditures would be $[ 	],
which divided by lifetime total revenue is equal to [ 	]%. The Commission finds that even if
the [ 	] expenditures were included, Heraeus has failed to demonstrate that its qualifying
relevant domestic activities are sufficient to establish the existence of an “industry in the United
States.”
36 See n.33, supra.
37 See n.17, supra.

PUBLIC VERSION
37
“substantial injury,” or threat thereof, to that industry. However as noted above, the Commission
finds that Heraeus did not establish an “industry in the United States.” The Commission holds
that, without this predicate requirement being met, Heraeus cannot show substantial injury or
threat of such injury to the industry. See 19 U.S.C. § 1337(a)(1)(A)(i). The Commission
therefore vacates the ALJ’s injury analysis in its entirety.
V. 	CONCLUSION
For the reasons set forth above, the Commission determines that Heraeus has not shown
that it has an “industry” in the United States in its Palacos bone cement products. Accordingly,
the Commission terminates the investigation with a finding of no violation of section 337.
By order of the Commission.
Lisa R. Barton
Secretary to the Commission
Issued: 	January 25, 2021

CERTAIN BONE CEMENT, COMPONENTS THEREOF
AND PRODUCTS CONTAINING THE SAME
Inv. No. 337-TA-1153
PUBLIC CERTIFICATE OF SERVICE
I, Lisa R. Barton, hereby certify that the attached COMMISSION OPINION has been
served via EDIS upon the Commission Investigative Attorney, Monica Bhattacharyya, Esq.,
and the following parties as indicated, on January 25, 2021.
Lisa R. Barton, Secretary
U.S. International Trade Commission
500 E Street, SW, Room 112
Washington, DC 20436
On Behalf of Complainants Heraeus Medical LLC and
Heraeus Medical GmbH:
David A. Caine, Esq.
ARNOLD & PORTER KAYE SCHOLER LLP
3000 El Camino Real, Suite 500
Palo Alto, CA 94306-3807
Email: david.caine@arnoldporter.com
☐ Via Hand Delivery
☐ Via Express Delivery
☐ Via First Class Mail
☒ Other: Email Notification
of Availability to Download
On Behalf of Respondents Zimmer Biomet Holdings, Inc.,
Biomet, Inc., Zimmer Surgical, Inc., Biomet France S.A.R.L.,
Biomet Deutschland GmbH, Zimmer Biomet Deutschland
GmbH, Biomet Global Supply Chain Center B.V., Zimmer
Biomet Nederland B.V., Biomet Orthopedics, LLC, and
Biomet Orthopaedics Switzerland GmbH:
Eric S. Namrow, Esq.
MORGAN, LEWIS & BOCKIUS LLP
1111 Pennsylvania Avenue, NW
Washington, DC 20004
Email: eric.namrow@morganlewis.com
☐ Via Hand Delivery
☐ Via Express Delivery
☐ Via First Class Mail
☒ Other: Email Notification
of Availability to Download

UNITED STATES INTERNATIONAL TRADE COMMISSION
Washington, D.C.
In the Matter of
CERTAIN BONE CEMENTS,
COMPONENTS THEREOF AND
PRODUCTS CONTAINING THE SAME
Investigation No. 337-TA-1153
NOTICE OF COMMISSION DETERMINATION TO REVIEW IN PART A FINAL
INITIAL DETERMINATION FINDING A VIOLATION OF SECTION 337; SCHEDULE
FOR FILING WRITTEN SUBMISSIONS ON THE ISSUES UNDER REVIEW AND ON
REMEDY, THE PUBLIC INTEREST, AND BONDING
AGENCY: 	U.S. International Trade Commission.
ACTION: 	Notice.
SUMMARY: Notice is hereby given that the U.S. International Trade Commission has
determined to review in part the final initial determination (“final ID”) issued by the presiding
administrative law judge (“ALJ”) on May 6, 2020, finding no violation of section 337 of the
Tariff Act of 1930, as amended in connection with the alleged misappropriation of trade secrets.
The Commission requests briefing from the parties on certain issues under review, as indicated
in this notice. The Commission also requests briefing from the parties, interested government
agencies, and interested persons on the issues of remedy, the public interest, and bonding.
FOR FURTHER INFORMATION CONTACT: Ron Traud, Office of the General Counsel,
U.S. International Trade Commission, 500 E Street S.W., Washington, DC 20436, telephone
(202) 205-3427. Copies of non-confidential documents filed in connection with this
investigation may be viewed on the Commission’s electronic docket (EDIS) at
https://edis.usitc.gov. For help accessing EDIS, please email EDIS3Help@usitc.gov. General
information concerning the Commission may also be obtained by accessing its internet server at
https://www.usitc.gov. 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: The Commission instituted this investigation on
April 10, 2019, based on a complaint filed by Heraeus Medical LLC of Yardley, Pennsylvania,
and Heraeus Medical GmbH of Wehrheim, Germany (collectively, “Heraeus”). 84 FR 14394–95
(Apr. 10, 2019). The complaint alleges a violation of section 337 by reason of misappropriation
of trade secrets, the threat or effect of which is to destroy or substantially injure a domestic
industry in the United States or to prevent the establishment of such an industry. The complaint
named the following respondents: Zimmer Biomet Holdings, Inc. of Warsaw, Indiana; Biomet,
Inc. of Warsaw, Indiana; Zimmer Orthopaedic Surgical Products, Inc. of Dover, Ohio; Zimmer
Surgical, Inc. of Dover, Ohio; Biomet France S.A.R.L. of Valence, France; Biomet Deutschland

2
GmbH of Berlin, Germany; Zimmer Biomet Deutschland GmbH of Freiburg im Breisgau,
Germany; Biomet Europe B.V. of Dordrecht, Netherlands; Biomet Global Supply Chain Center
B.V. of Dordrecht, Netherlands; Zimmer Biomet Nederland B.V. of Dordrecht, Netherlands;
Biomet Orthopedics, LLC of Warsaw, Indiana; and Biomet Orthopaedics Switzerland GmbH of
Dietikon, Switzerland. The Commission’s Office of Unfair Import Investigations (“OUII”) also
was named as a party.
The investigation has terminated as to respondents Zimmer Orthopaedic Surgical
Products, Inc. and Biomet Europe B.V., Order No. 10 (May 23, 2019), not reviewed, Notice
(June 14, 2019), and as to certain accused products, Order No. 30 (Nov. 24, 2019), not reviewed,
Notice (Dec. 10, 2019). Also, the first amended complaint and notice of investigation were
amended to add three entities as respondents: Zimmer US, Inc.; Zimmer, GmbH; and Biomet
Manufacturing, LLC. Order No. 18 (June 26, 2019), not reviewed, 84 FR 35884-85 (July 25,
2019). The remaining respondents are referred to collectively herein as “Zimmer Biomet.”
On May 6, 2020, the ALJ issued the final ID, which finds that Zimmer Biomet did not
violate section 337. More particularly, the final ID finds, inter alia, that: (1) the Commission
has subject matter and personal jurisdiction; (2) Zimmer Biomet sold for importation into the
United States, imported, or sold after importation the Accused Products; (3) a domestic industry
exists with respect to Heraeus’s education, training, and research and development and Heraeus
owns the asserted trade secrets; (4) trade secrets (“TS”) 1–35 are protectable trade secrets, but TS
121–23, 130–34, and 145 are not protectable trade secrets; (5) Zimmer Biomet misappropriated
TS 1–35; and (6) Heraeus did not show a substantial injury or threat of injury to its domestic
industry by Zimmer Biomet’s misappropriation.
The final ID includes the ALJ’s Recommended Determination on Remedy and Bond (the
“RD”). The RD recommends that, if the Commission finds a violation of section 337, the
Commission should issue a limited exclusion order directed to copolymer trade secrets TS 1–35
for five years; a limited exclusion order directed to the other categories of asserted trade secrets
for two years or less; and cease and desist orders directed to Zimmer Biomet. The RD further
recommends imposing a bond of five percent during the period of Presidential review.
On May 18, 2020, the parties filed petitions for review of the final ID, and on May 26,
2020, the parties filed responses. Issues not raised in the petitions for review are deemed to have
been abandoned. 19 CFR 210.43.
Having examined the record in this investigation, including the final ID, the petitions for
review, and the responses thereto, the Commission has determined to review the final ID in part.
In particular, the Commission has determined to review the following:
(1) 	The ALJ’s findings and conclusions as to TS 1–35 and 121–23;
and
(2) 	The ALJ’s domestic industry findings, including whether there has
been a substantial injury to the alleged domestic industry.
The Commission has determined to not review the remainder of the final ID.

3
The parties are requested to brief their positions with reference to the applicable law and
the evidentiary record regarding the questions provided below:
(1) 	For purposes of determining whether Heraeus has established the existence of
a domestic industry, if the final ID’s findings are modified to exclude
expenditures for the Reduce Revisions initiative and contracting costs for
medical professionals, but to include the contracting costs for FDA Group:
(A) what would be the dollar amount of total qualifying investments, and
(B) what evidence and argument was presented to the administrative law
judge regarding the nature and significance of those investments?
(2) 	For purposes of determining whether Heraeus has established the existence of
a domestic industry, if the final ID’s findings are modified to exclude
expenditures for the Reduce Revisions initiative and contracting costs for
medical professionals, and the contracting costs for FDA Group were
excluded (as the ID did): (A) what would be the dollar amount of total
qualifying investments, and (B) what evidence and argument was presented to
the administrative law judge regarding the nature and significance of those
investments?
(3) 	For the costs related to education-and-training-related investments (e.g., the
Reduce Revisions initiative), discuss: (A) how the Commission and the
Federal Circuit have considered education-and-training-related investments in
prior investigations, e.g., Certain Sleep-Disordered Breathing Treatment
Systems and Components Thereof, Inv. No. 337-TA-890, Init. Det. at 168–70
(Aug. 21, 2014), not reviewed in relevant part, Notice (Oct. 16, 2014), and
(B) how the facts of this investigation should be assessed in light of applicable
precedent.
(4) 	For the Reduce Revisions initiative costs: (A) are these costs incorporated
into Heraeus’s general marketing expenses? See Certain Gas Spring Nailer
Products and Components Thereof, Inv. No. 337-TA-1082, Comm’n Op. at
83 n.20 (Apr. 28, 2020); (B) if the costs are viewed as marketing expenses, is
there a basis for concluding the costs are technical marketing costs; and
(C) how should technical marketing costs be treated?
(5) 	For the alleged costs related to FDA and other regulatory approvals and
compliance: (A) which of those regulatory efforts had to take place in the
United States (for either legal or practical reasons), and which could have
been carried out in another country; and (B) does the record permit allocation
of costs between those two categories?
(6) 	Please analyze whether a complainant bringing a claim under section
337(a)(1)(A)(i) must demonstrate that its industry in the United States is
“significant” or “substantial.” Please include a discussion of the relevant
statutory language, any relevant legislative history, any relevant Federal
Circuit decisions and any relevant prior Commission determinations.

4
In connection with the final disposition of this investigation, the statute authorizes
issuance of: (1) an exclusion order that could result in the exclusion of the subject articles from
entry into the United States, and/or (2) one or more cease and desist orders that could result in
the respondents being required to cease and desist from engaging in unfair acts in the importation
and sale of such articles. Accordingly, the Commission is interested in receiving written
submissions that address the form of remedy, if any, that should be ordered. If a party seeks
exclusion of an article from entry into the United States for purposes other than entry for
consumption, the party should so indicate and provide information establishing that activities
involving other types of entry either are adversely affecting it or are likely to do so. For
background, see Certain Devices for Connecting Computers via Telephone Lines, Inv. No. 337-
TA-360, USITC Pub. No. 2843, Comm’n Op. at 7–10 (Dec. 1994). In addition, if a party seeks
issuance of any cease and desist orders, the written submissions should address that request in
the context of recent Commission opinions, including those in Certain Arrowheads with
Deploying Blades and Components Thereof and Packaging Therefor, Inv. No. 337-TA-977,
Comm’n Op. (Apr. 28, 2017) and Certain Electric Skin Care Devices, Brushes and Chargers
Therefor, and Kits Containing the Same, Inv. No. 337-TA-959, Comm’n Op. (Feb. 13, 2017).
The statute requires the Commission to consider the effects of that remedy upon the
public interest. The public interest factors the Commission will consider include the effect that
an exclusion order and/or cease and desist orders would have on: (1) The public health and
welfare, (2) competitive conditions in the U.S. economy, (3) U.S. production of articles that are
like or directly competitive with those that are subject to investigation, and (4) U.S. consumers.
The Commission is therefore interested in receiving written submissions that address the
aforementioned public interest factors in the context of this investigation.
If the Commission orders some form of remedy, the U.S. Trade Representative, as
delegated by the President, has 60 days to approve, disapprove, or take no action on the
Commission’s action. See Presidential Memorandum of July 21, 2005, 70 FR 43251 (July 26,
2005). During this period, the subject articles would be entitled to enter the United States under
bond, in an amount determined by the Commission and prescribed by the Secretary of the
Treasury. The Commission is therefore interested in receiving submissions concerning the
amount of the bond that should be imposed if a remedy is ordered.
WRITTEN SUBMISSIONS: The parties to the investigation are requested to file written
submissions on the questions identified in this notice. Parties to the investigation, interested
government agencies, and any other interested parties are encouraged to file written submissions
on the issues of remedy, the public interest, and bonding. Such initial written submissions
should include views on the RD that issued on May 6, 2020.
In their initial written submission, Complainants are also requested to identify the form of
the remedy sought, and Complainants and OUII are requested to submit proposed remedial
orders for the Commission’s consideration. Complainants are also requested to state the HTSUS
subheadings under which the accused articles are imported, and to supply identification
information for all known importers of the accused products. Initial written submissions,
including proposed remedial orders must be filed no later than the close of business on July 27,
2020. Reply submissions must be filed no later than the close of business on August 3, 2020.
No further submissions on these issues will be permitted unless otherwise ordered by the

5
Commission.
Persons filing written submissions must file the original document electronically on or
before the deadlines stated above. The Commission’s paper filing requirements in 19 CFR
210.4(f) are currently waived. 85 FR 15798 (March 19, 2020). Submissions should refer to the
investigation number (“Inv. No. 337-TA-1153”) in a prominent place on the cover page and/or
the first page. (See Handbook for Electronic Filing Procedures, https://www.usitc.gov/
documents/handbook_on_filing_procedures.pdf). Persons with questions regarding filing should
contact the Secretary at (202) 205-2000.
Any person desiring to submit a document to the Commission in confidence must request
confidential treatment. All such requests should be directed to the Secretary to the Commission
and must include a full statement of the reasons why the Commission should grant such
treatment. See 19 CFR 201.6. Documents for which confidential treatment by the Commission
is properly sought will be treated accordingly. All information, including confidential business
information and documents for which confidential treatment is properly sought, submitted to the
Commission for purposes of this Investigation may be disclosed to and used: (i) by the
Commission, its employees and Offices, and contract personnel (a) for developing or
maintaining the records of this or a related proceeding, or (b) in internal investigations, audits,
reviews, and evaluations relating to the programs, personnel, and operations of the Commission
including under 5 U.S.C. Appendix 3; or (ii) by U.S. government employees and contract
personnel, solely for cybersecurity purposes. All contract personnel will sign appropriate
nondisclosure agreements. All non-confidential written submissions will be available for public
inspection at the Office of the Secretary and on EDIS.
The Commission vote for this determination took place on July 13, 2020.
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.
Lisa R. Barton
Secretary to the Commission
Issued: July 13, 2020

CERTAIN BONE CEMENT, COMPONENTS THEREOF
AND PRODUCTS CONTAINING THE SAME
Inv. No. 337-TA-1153
PUBLIC CERTIFICATE OF SERVICE
I, Lisa R. Barton, hereby certify that the attached NOTICE has been served via EDIS
upon the Commission Investigative Attorney, Monica Bhattacharyya, Esq., and the
following parties as indicated, on 7/13/2020.
Lisa R. Barton, Secretary
U.S. International Trade Commission
500 E Street, SW, Room 112
Washington, DC 20436
On Behalf of Complainants Heraeus Medical LLC and
Heraeus Medical GmbH:
David A. Caine, Esq.
ARNOLD & PORTER KAYE SCHOLER LLP
3000 El Camino Real, Suite 500
Palo Alto, CA 94306-3807
Email: david.caine@arnoldporter.com
☐ Via Hand Delivery
☐ Via Express Delivery
☐ Via First Class Mail
☒ Other: Email Notification
of Availability to Download
On Behalf of Respondents Zimmer Biomet Holdings, Inc.,
Biomet, Inc., Zimmer Surgical, Inc., Biomet France S.A.R.L.,
Biomet Deutschland GmbH, Zimmer Biomet Deutschland
GmbH, Biomet Global Supply Chain Center B.V., Zimmer
Biomet Nederland B.V., Biomet Orthopedics, LLC, and
Biomet Orthopaedics Switzerland GmbH:
Eric S. Namrow, Esq.
MORGAN, LEWIS & BOCKIUS LLP
1111 Pennsylvania Avenue, NW
Washington, DC 20004
Email: eric.namrow@morganlewis.com
☐ Via Hand Delivery
☐ Via Express Delivery
☐ Via First Class Mail
☒ Other: Email Notification
of Availability to Download

1
UNITED STATES INTERNATIONAL TRADE COMMISSION
Washington, D.C.
In the Matter of
CERTAIN BONE CEMENTS,
COMPONENTS THEREOF, AND
PRODUCTS CONTAINING THE SAME
Inv. No. 337-TA-1153
INITIAL DETERMINATION ON VIOLATION OF SECTION 337 AND
RECOMMENDED DETERMINATION ON REMEDY AND BOND
Administrative Law Judge Cameron Elliot
(May 6, 2020)
Pursuant to the Notice of Investigation and Rule 210.42(a) of the Rules of Practice and
Procedure of the United States International Trade Commission, this is my Initial Determination
in the matter of Certain Bone Cements, Components Thereof, And Products Containing The Same,
Investigation No. 337-TA-1153.

i
TABLE OF CONTENTS
I. 	INTRODUCTION............................................................................................................................... 4
A. 	Procedural Background ................................................................................................................. 4
B. 	The Parties ....................................................................................................................................... 7
C. 	The Asserted Trade Secrets ........................................................................................................... 9
D. 	Products at Issue ........................................................................................................................... 10
II. 	STANDARDS OF LAW ............................................................................................................... 11
A. 	Protectable Trade Secrets ............................................................................................................ 11
B. 	Domestic Industry ......................................................................................................................... 14
III. 	IMPORTATION AND SALE ...................................................................................................... 17
IV. 	JURISDICTION ........................................................................................................................... 17
V. 	THE ASSERTED TRADE SECRETS ............................................................................................ 18
A. 	The Asserted Copolymer Trade Secrets – TS 1-35 .................................................................... 19
1. 	Extent Trade Secrets 1-35 Were Known Outside Heraeus ................................................... 19
2. 	Extent All Asserted Trade Secrets Were Known Inside Heraeus ........................................ 20
3. 	Extent of Steps Taken By Heraeus to Guard Trade Secrets 1-35......................................... 22
4. 	Value of Trade Secrets 1-35 to Heraeus and Competitors .................................................... 24
5. 	The Amount of Effort or Money Expended in Development ................................................ 26
6. 	The Ease or Difficulty of Acquisition or Duplication by Others........................................... 27
B. 	The Asserted Powder and Liquid Components – TS 121-123 .................................................. 31
1. 	Extent Trade Secrets 121-123 Were Known Outside Heraeus ............................................. 31
2. 	Extent Trade Secrets 121-123 Were Known Inside Heraeus ................................................ 33
3. 	Extent of Steps Taken by Heraeus to Guard Trade Secrets 121-123 ................................... 33
4. 	Value of Trade Secrets to Heraeus and Competitors ............................................................ 38
5. 	The Amount of Effort or Money Expended in Development ................................................ 38
6. 	The Ease or Difficulty of Acquisition or Duplication by Others........................................... 38
C. 	The Asserted Chlorophyll Recipe and Procedure – TS 130-134............................................... 39
1. 	Extent Trade Secrets 130-134 Were Known Outside Heraeus ............................................. 40
2. 	Extent Trade Secrets 130-134 Were Known Inside Heraeus ................................................ 42
3. 	Extent of Steps Taken By Heraeus to Guard Trade Secrets 130-134 ................................... 42
4. 	Value of Trade Secrets to Heraeus and Competitors ............................................................ 43
5. 	The Amount of Effort or Money Expended by Heraeus in Developing ............................... 44
6. 	The Ease or Difficulty of Acquisition or Duplication by Others........................................... 44

ii
D. 	The Asserted Zirconium Dioxide Trade Secret - TS 145........................................................... 44
1. 	Extent Trade Secret 145 Was Known Outside Heraeus ........................................................ 45
2. 	Extent Trade Secret 145 Was Known Inside Heraeus ........................................................... 47
3. 	Extent of Steps Taken By Heraeus To Guard Trade Secret 145 .......................................... 47
4. 	Value of TS 145 to Heraeus and Competitors ........................................................................ 47
5. 	The Amount of Effort or Money Expended in Developing TS 145 ...................................... 47
6. 	The Ease or Difficulty of Acquisition or Duplication by Others........................................... 47
VI. 	MISAPPROPRIATION OF THE TRADE SECRETS ............................................................. 48
A. 	Ownership...................................................................................................................................... 48
B. 	Disclosure or Wrongful Acquisition ............................................................................................ 49
C. 	Use of the Asserted Trade Secrets ............................................................................................... 50
1. 	The Asserted Copolymer Trade Secrets TS 1-35 ................................................................... 51
2. 	The Asserted Powder and Liquid Specification Trade Secrets ............................................ 56
3. 	The Asserted Chlorophyll Trade Secrets ................................................................................ 57
4. 	The Asserted Zirconium Dioxide Trade Secret ...................................................................... 58
D. 	Summary........................................................................................................................................ 58
E. 	Harm to Heraeus by Respondents’ Misappropriation .............................................................. 59
VII. 	DOMESTIC INDUSTRY ............................................................................................................. 59
A. 	Training and Education ............................................................................................................... 60
B. 	Domestic Facility Expenditures ................................................................................................... 65
C. 	Domestic Labor Expenditures ..................................................................................................... 66
D. 	Contracting Costs.......................................................................................................................... 68
E. 	Analysis .......................................................................................................................................... 72
F. 	Substantial Injury To Domestic Industry ................................................................................... 72
G. 	Customer Confusion ................................................................................................................. 74
VIII. 	CONCLUSIONS OF LAW ...................................................................................................... 78
IX. 	RECOMMENDED DETERMINATION ON REMEDY AND BOND .................................... 79
A. 	Limited Exclusion Order .............................................................................................................. 81
B. 	Cease and Desist Order ................................................................................................................ 82
C. 	Bond ............................................................................................................................................... 82
D. 	Public Interest ............................................................................................................................... 83
X. 	INITIAL DETERMINATION AND ORDER ................................................................................ 84

iii
TABLE OF ABBREVIATIONS
Am. Comp. 	Amended Complaint
CDX 	Complainant’s Demonstrative Exhibit
CIB 	Complainant’s Initial Post-Hearing Brief
CPB 	Complainant’s Pre-Hearing Brief
CPX 	Complainant’s Physical Exhibit
CRB 	Complainant’s Reply Post-Hearing Brief
CX 	Complainant’s Exhibit
Dep. Tr. 	Deposition Transcript
Hr’g Tr. 	Hearing Transcript
JX 	Joint Exhibit
RDX 	Respondents’ Demonstrative Exhibit
RIB 	Respondents’ Initial Post-Hearing Brief
RPB 	Respondents’ Pre-Hearing Brief
RPX 	Respondents’ Physical Exhibit
RRB 	Respondents’ Reply Post-Hearing Brief
RX 	Respondents’ Exhibit
SDX 	Staff’s Demonstrative Exhibit
SIB 	Staff’s Initial Post-Hearing Brief
SPB 	Staff’s Pre-Hearing Brief
SPX 	Staff’s Physical Exhibit
SRB 	Staff’s Reply Post-Hearing Brief
SX 	Staff’s Exhibit

4
I. 	INTRODUCTION
A. 	Procedural Background
Complainants, Heraeus 	Medical 	LLC and 	Heraeus 	Medical GmbH 	(“Heraeus” or
“Complainants”), filed a Complaint with the Commission on March 5, 2019. 84 Fed. Reg. 13394
(March 5, 2019).1 	On March 20, 2019, proposed Respondents Zimmer Biomet Holdings, Inc.,
Biomet, Inc., Zimmer Orthopaedic Surgical Products, Inc., Zimmer Surgical, Inc., Biomet France
S.A.R.L., Biomet Deutschland GmbH, Zimmer Biomet Deutschland GmbH, Biomet Europe B.V.,
Biomet Global Supply Chain Center B.V., Zimmer Biomet Nederland B.V., Biomet Orthopedics,
LLC, and Biomet Orthopaedics Switzerland GmbH (collectively “Respondents”) submitted a
letter requesting that the Commission utilize the Early Disposition Program to determine whether
Heraeus Medical LLC and Heraeus Medical GmbH satisfy the domestic industry requirement
under 19 U.S.C. § l337(a)(3). See EDIS Doc. ID 670677. The Request was denied on April 5,
2019. See EDIS Doc. ID 672314. The Commission instituted the investigation on April 10, 2019.
84 Fed. Reg. 14394 (April 10, 2019).
By publication of a notice in the Federal Register on April 10, 2019, the Commission
ordered that:
1) Pursuant to subsection (b) of section 337 of the Tariff Act of 1930, as
amended, an investigation be instituted to determine whether there is a violation
of subsection (a)(1)(A) of section 337 in the importation into the United States, or
in the sale of certain bone cements, components thereof and products containing
the same by reason of the misappropriation of trade secrets, the threat or effect of
which is to destroy or substantially injure an industry in the United States or to
prevent the establishment of such an industry; (2) Pursuant to section 210.1(b)(1)
of the Commission’s Rules of Practice and Procedure, 19 CFR 210.10(b)(1), the
plain language description of the accused products or category of accused
1 The Commission issued a Notice of Solicitation of Comments Relating to the Public Interest on
March 6, 2019, and this Notice was published on March 14, 2019. 	84 Fed. Reg. 8743. The
Commission received public interest comments from the proposed Respondents. See Request Not
to Institute on Behalf of Proposed Respondents, EDIS Doc. ID 67077 (March 20, 2019).

5
products, which defines the scope of the investigation, is “(1) Biomet Bone
Cement R, Refobacin® Bone Cement R and other bone cements designed and
manufactured by the proposed Respondents; (2) the components of the accused
bone cements products, which are the bone cement powder, liquid and the raw
materials that comprise the powder and liquid; and (3) the ClearMixTMVacuum
Mixing Systems and accessories, the Compact Cement Vacuum Mixing Systems
and MillerTM Cement Delivery Systems and accessories, the Optipac® mixing
system, mixing bowls, plugs, bone preparation kits, molds, diagnostic kits and
other mixing and delivery systems made or sold by the proposed Respondents that
contain or are used with the proposed Respondents’ bone cements:
84 Fed. Reg. 14394 (April 10, 2019).
On May 23, 2018, pursuant to an unopposed motion, I issued an initial determination
terminating two of the Respondents—Zimmer Orthopaedic Surgical Products, Inc. and Biomet
Europe B.V.—from the investigation. Initial Determination (EDIS Doc. ID 676829); Comm’n
Determination Not to Review (EDIS Doc. ID 678704).
On May 28, 2019, Complainants moved for leave to amend the Complaint to add three new
respondents identified by the named Respondents in interrogatory responses: Zimmer US, Inc.;
Zimmer, GmbH; and Biomet Manufacturing, LLC. EDIS Doc. ID 677185. I denied the motion
based on Complainants’ failure to serve the proposed new respondents as required by Commission
rules. Order No. 15. On June 17, 2019, Complainants renewed their motion. See EDIS Doc. ID
678786. I granted Complainants’ motion by initial determination on June 26, 2019. Order No. 18
(Initial Determination); Commission Inv. No. 337-TA-1153: Determination Not to Review (EDIS
Doc. ID 682349). On November 14, 2019, Complainants withdrew their allegations against the
accessory products identified in Paragraph 37 of the Amended Complaint (and set forth in the
Notice of Institution of Investigation), including certain mixing and delivery systems. 	On that
same day I entered Order No. 30, which was an Initial Determination Granting Complainants’
Unopposed Motion for Partial Termination of the Investigation With Respect to the Accessory

6
Products and to Amend the Notice of Investigation. The Commission determined not to review
the ID (EDIS Doc. ID 696846) (Dec. 10, 2019).
On November 13, 2019, Respondents filed a Motion for Summary Determination of No
Violation, which was timely opposed by Complainants and Staff. The motion was denied on
December 14. Order No. 34, EDIS Doc. ID 696276.
An evidentiary hearing was held January 13-17, 2020. 	Following the evidentiary
hearing, and pursuant to the procedural schedule, the parties submitted initial and reply post-
hearing briefs on February 3, 2020 (EDIS Doc. 701250 (Complainant), EDIS Doc. 701208
(Respondents), EDIS Doc. 701227 (Commission Staff)) and February 18, 2020 	(EDIS Doc.
702860 (Complainant), EDIS Doc. 702856 (Respondents), EDIS Doc. 702853 (Commission
Staff)), respectively.
On February 24, 2020, Respondents filed a Motion to Strike Untimely Arguments in
Complainants’ Post-Hearing Briefs (“Respondents’ Motion to Strike”) (Motion 1153-050).
Complainants and Staff responded to the motion. 	Respondents allege that Heraeus included
numerous new arguments in its Post- Hearing Briefs that were not raised in its Pre-Hearing Brief.
Respondents list the following as the new arguments:
• 	New labor allocations on pages 105, 106, and 107 of the Initial Post-
Hearing brief (“Initial PostHB”);
• 	New significance/substantiality contentions on pages 103, 104, 107, 114-
115 of the Initial PostHB and pages 53-54 of the reply post-hearing brief
(“Reply PostHB”);
• 	New contentions regarding future lost sales and continuing price erosion
on pages 116-117, 132-133, 138-139, and 144-145 of the Initial PostHB
and page 67 of the Reply PostHB;
• 	New 	arguments 	supporting 	inclusion 	of 	accessory 	product-related
expenditures in domestic industry on page 51-52 of the Reply PostHB; and

7
• 	New arguments regarding the degree of injury required on page 59 of the
Reply PostHB.
Respondents’ Motion to Strike at 2.
The motion (Motion 1153-050) is denied as moot. 	All of the alleged new evidence
presented relates to Complainants’ domestic industry. This evidence has been considered but,
as will become apparent, it is irrelevant to the domestic industry findings.
B. 	The Parties
Complainants Heraeus Medical GmbH and Heraeus Medical LLC are related companies.
Heraeus Medical GmbH is a German company with a principal place of business in Wehrheim,
Germany. 	Complaint ¶ 26. 	Heraeus Medical LLC (HMUS), a subsidiary of Heraeus Medical
GmbH, is a Delaware limited liability company formed in June 2017 with a principal place of
business in Yardley, Pennsylvania. Complaint ¶ 27; Comp. PHB at 3.
Respondents (collectively, “Zimmer Biomet”) are a related group of companies. Zimmer
Biomet Holdings, Inc. (“ZBH”), the ultimate parent company, was formed in a 2015 merger
between Zimmer Holdings, Inc. and Biomet, Inc. Response to Second Am. Complaint ¶ 28. ZBH
maintains its principal place of business at 345 East Main Street, Warsaw, Indiana, 46580. ZBH
is the ultimate parent entity to Respondents Biomet, Inc.; Zimmer Surgical, Inc.; Biomet France
S.A.R.L.; Biomet Deutschland GmbH; Zimmer Biomet Deutschland GmbH; Biomet Global
Supply Chain Center B.V.; Zimmer Biomet Nederland B.V.; Biomet Orthopedics, LLC; and
Biomet Orthopaedics Switzerland GmbH. Id. at ¶ 28.
Biomet, Inc. is a subsidiary of Zimmer Biomet Holdings, Inc. with a principal place of
business at 56 East Bell Drive, Warsaw, Indiana 46582. Id. at ¶ 29.
Zimmer Orthopaedic Surgical Products, Inc. changed its name to Zimmer Surgical, Inc. on
October 1, 2010, and has a principal place of business at 200 West Ohio Avenue, Dover, Ohio

8
44622. Zimmer Surgical, Inc. acted as Heraeus’ exclusive U.S. distributor for Heraeus’ Palacos
bone cement products and related products. Id. at ¶ 30.
Biomet France S.A.R.L. has its principal place of business at B.P. 75, Plateau de Lautagne,
Valance, France. 	Biomet France S.A.R.L. manufactures the -3 formulation of Biomet Bone
Cement R, Refobacin Bone Cement R, and certain components thereof, and sells for importation
into the United States the -3 formulation of Biomet Bone Cement R and Refobacin Bone Cement
R through, among others, Biomet Global Supply Chain Center B.V. Id. at ¶ 32.
Biomet Deutschland GmbH maintains its principal place of business at Gustav-Krone-
Straße 2, Berlin, Germany, 14167. 	Zimmer Biomet Deutschland GmbH maintains its principal
place of business at Merzhauser Str. 112, 79100 Freiburg im Breisgau, Germany. 	Biomet
Deutschland GmbH transferred its bone cement business to Zimmer Biomet Deutschland GmbH,
and Zimmer Biomet Deutschland GmbH assists Biomet France S.A.R.L. in the manufacture of
Biomet Bone Cement R and Refobacin Bone Cement R. Id. at ¶ 33.
Biomet Europe B.V. was formerly known as Biomet Merck B.V. and changed its name to
Biomet Europe B.V. in 2004. Biomet Europe B.V. operated as a subsidiary of Biomet, Inc. and
the remainder of Biomet Europe B.V. was merged into Zimmer Biomet Nederland B.V. Zimmer
Biomet Nederland B.V. maintains its principal place of business at Toermalijnring 600, Dordrecht,
3316 LC, Netherlands. Id. at ¶ 34.
Biomet Orthopedics, LLC operates as a subsidiary of Zimmer Biomet Holdings, Inc., and
maintains its principal place of business at 56 East Bell Drive, Warsaw, Indiana 46582. Id. at ¶
35.
Zimmer US, Inc. is a subsidiary of ZBH and maintains its principal place of business at
345 East Main Street, Warsaw, IN 46580, United States. 	Zimmer US purchases the -3

9
formulations of Biomet Bone Cement R and Refobacin Bone Cement R from Zimmer, Inc., and
distributes them to its customers directly or through its distributors. Id. at ¶ 37.
Zimmer Switzerland is a subsidiary of ZBH and maintains its principal place of business
at Sulzerallee 8, CH-8404 Winterthur, Switzerland. 	Zimmer Switzerland purchases the -3
formulations of Biomet Bone Cement R and Refobacin Bone Cement R from Biomet France, and
then sells them to Biomet Manufacturing. Id. at ¶ 38.
Biomet Manufacturing is a subsidiary of ZBH and has a principal place of business at 56
East Bell Drive, Warsaw, IN 46582, United States. 	Biomet Manufacturing purchases the -3
formulations of Biomet Bone Cement R and Refobacin Bone Cement R from Zimmer Switzerland,
and then sells them to Zimmer, Inc. Id. at ¶ 39.
C. 	The Asserted Trade Secrets
The trade secrets in this investigation fall into four general categories; however, the parties
assert slightly different trade secret identifications. Complainants identify trade secrets 1-87 as
relating to the copolymer specifications, trade secrets 121 and 122-128 as relating to the final
powder and liquid specification trade secrets, trade secrets 130-134 as relating to the process for
coloring the liquid monomer component, and trade secret 145 as relating to the zirconium dioxide
component. 	CIB. at 6-7. 	However, as the Staff notes, this list includes certain asserted trade
secrets that Complainants withdrew in November. See Complainants’ Nov. 13, 2019 Letter to
ALJ Elliot (EDIS Doc. ID 694252) (providing narrowed list of asserted trade secrets without TS
36-87 and 124-128). 	Respondents argue that Complainants presented no evidence regarding
asserted trade secrets 88, 94-96, 103-105, 112-113, 118-120, 131, 136, 141, 149, and 152 and
thus waived any arguments as to those trade secrets. RIB. at 6. Accordingly, Respondents assert
that the trade secrets at issue are TS 1-35, TS 121-123, TS 130 and 132-134, and TS 145 and 153.

10
Id. In the Staff’s view, Dr. Kluge’s testimony limited Heraeus’s asserted trade secrets to those
he identified. Accordingly, the Staff submits that the asserted trade secrets are TS 1-35, TS 121-
123, TS 130-134, and TS 145. See SRB. at 3.
In view of the hearing testimony, the parties’ briefs, and the withdrawn trade secrets, the
Staff’s list is the most accurate. Therefore, the Asserted Trade Secrets are:
(1) specifications for the Plex 6612 and Plex 6613 copolymers (TS 1-35) (“the Asserted
Copolymer Trade Secrets”);
(2) specifications for the powder and liquid components of Heraeus’s products, Refobacin
Palacos R and Palacos R 	bone cements (TS 121-123) (the “Asserted Powder and Liquid
Specifications Trade Secrets”);
(3) the recipe and procedure for coloring the liquid component of Heraeus’s products,
Refobacin Palacos R and Palacos R bone cements (TS 130-134) (the “Asserted Chlorophyll Trade
Secrets”); and
(4) the specific part number and distributor of the zirconium dioxide used in Heraeus’s
products, Refobacin Palacos R and Palacos R bone cement powder component (TS 145) (the
“Asserted Zirconium Dioxide Trade Secret”).
D. 	Products at Issue
The accused products are bone cements designed and manufactured by or for Respondents.
Complainants assert that their trade secrets were misappropriated during the development of the
original “-1” formulation of Biomet Bone Cement R (BBCR) and Refobacin Bone Cement R
(RBCR) in the early 2000’s, as well as the redesigned “-3” formulation of these products developed
after an adverse German court decision in 2014 forced Respondents to halt the sale of the -1
product. See Compl. PHB at 1-2; Resp. PHB at 2, 14-15.

11
II. 	STANDARDS OF LAW
A. 	Protectable Trade Secrets
Misappropriation of trade secrets “is a method of unfair competition defined by the
common law.” Certain Rubber Resins and Processes for Manufacturing Same, Inv. No. 337-TA-
849, Comm’n Op., 2014 WL 7497801, at *4 (Feb. 26, 2014) (“Certain Rubber Resins”). A “single
federal standard,” rather than the law of a particular state, applies to investigations into trade secret
misappropriation under Section 337. TianRui Group Co. Ltd. v. ITC, 661 F.3d 1322, 1327 (Fed.
Cir. 2011) (“TianRui”). 	Sources for this federal standard include the Restatement of Unfair
Competition, the Uniform Trade Secrets Act, and federal common law as set forth in Commission
decisions. See TianRui at 1327-28. Although it postdates TianRui, the Defend Trade Secrets Act
of 2016 is also pertinent. 	See 18 U.S.C. §§ 1831-39. 	From these references, the Commission
developed four elements for establishing misappropriation of a trade secret: 	(1) a trade secret
exists which is not in the public domain; (2) the complainant is the owner of, or possesses a
proprietary interest in, the trade secret; (3) the complainant disclosed the trade secret to respondent
while in a confidential relationship, or the respondent wrongfully took the trade secret by unfair
means; and (4) the respondent has used or disclosed the trade secret, causing injury to the
complainant. Id.
The existence of trade secrets is a prerequisite of a trade secret misappropriation claim.
Certain Rubber Resins, 2014 WL 749801, at * 5 (citing Certain Sausage Casings, Inv. No. 337-
TA-148/169, Initial Determination (July 31, 1984)). It is the complainant’s burden to show “the
existence of a process that is protectable as a trade secret.” 	Certain Rubber Resins, 2014 WL
7497801, at *5. The common law “does not provide ‘precise criteria for determining the existence
of a trade secret,’ but instead requires ‘a comparative evaluation of all the relevant factors,

12
including the value, secrecy, and definiteness of the information as well as the nature of the
defendant’s misconduct.’” Certain Activity Tracking Devices, Systems, and Components Thereof,
Inv. No. 337-TA-963, Initial Determination, 2016 WL 11596099, at *12 (Aug. 23, 2016) (“Certain
Activity Tracking Devices”) (non-reviewed, EDIS Doc. ID 593177 (Oct. 20, 2016)) (quoting
Restatement (Third) of Unfair Competition § 39 cmt. d.).
The Commission looks to the following six factors—each of which relates to issues of
value and/or secrecy—to help determine whether a trade secret exists:
(1) the extent to which the information is known outside of
complainant’s business;
(2) the extent to which it is known by employees and others involved
in complainant’s business;
(3) the extent of measures taken by complainant to guard the secrecy
of the information;
(4) 	the 	value 	of 	the 	information 	to 	complainant 	and 	to 	his
competitors;
(5) the amount of effort or money expended by complainant in
developing the information; and
(6) the ease or difficulty with which the information could be
properly acquired or duplicated by others.
Certain Processes for the Manufacture of Skinless Sausage Casings and Resulting Product, Inv.
No. 337-TA-148/169, Initial Determination, 1984 WL 273789, at *94 (July 31, 1984) (“Sausage
Casings”) (citing Restatement of Torts § 757, comment b) (unreviewed, Certain Processes for the
Manufacture of Skinless Sausage Casings and Resulting Product, Inv. No. 337-TA-148/169,
Comm’n Op., 1984 WL 273970, at *2 (Jan. 1, 1984)). These factors are “instructive guidelines,”
not a six-pronged test. See Certain Crawler Cranes and Components Thereof, Inv. No. 337-TA-
887, Initial Determination, at 24 (July 11, 2014) (EDIS Doc. ID 539295); Certain Activity Tracking
Devices, 2016 WL 11596099, at *12 (same).

13
The Uniform Trade Secrets Act similarly requires an evaluation of value and secrecy,
defining a trade secret as information that “(i) derives independent economic value, actual or
potential, from not being generally known to, and not being readily ascertainable by proper means
by, other persons who can obtain economic value from its disclosure or use, and (ii) is the subject
of efforts that are reasonable under the circumstances to maintain its secrecy.” 	Uniform Trade
Secrets Act (“UTSA”) §1(4); see also Certain Activity Tracking Devices, 2016 WL 11596099, at
*12 (stating that the UTSA’s definition of a trade secret is “consistent with prior Commission
decisions”); 18 U.S.C. § 1839(3). Commission decisions have relied on the UTSA’s “independent
economic value” requirement in determining whether a protectable trade secret exists. See Certain
Rubber Resins, 2014 WL 749801, at *11, *13; Certain Activity Tracking Devices, 2016 WL
11596099, at *12.
A specific embodiment of general concepts or a combination of elements, some or all of
which may be known in the industry, may be protectable as a trade secret. 	Certain Cast Steel
Railway Wheels, Certain Processes for Manufacturing or Relating to Same and Certain Products
Containing Same, Inv. 337-TA-655, Initial Determination at 20 (Oct. 16, 2009) (unreviewed)
(“While matters of general knowledge in an industry are not eligible for trade secret protection, a
specific embodiment of general concepts or a combination of elements, some or all of which may
be known in the industry, may be protectable as a trade secret.”).
Information otherwise eligible for protection as a trade secret may lose that protection if
adequate steps are not taken to maintain secrecy. Sausage Casings, Initial Determination at *95.
The burden is on complainant to establish that reasonable precautions were taken to preserve
secrecy to ensure that it would be difficult for others to discover the secret without the use of
improper means. Id. (citing Henry Hope X-Ray Products. Inc. v .Marron Correll, Inc. 674 F.2d

14
1336, 1340 (9th Cir. 1982)). 	Also, a confidential relationship can exist in the absence of a
confidentiality agreement. 	“[A]n implied undertaking to abide by the trade’s norms of
confidentiality” is sufficient to maintain a confidential relationship. Hicklin Eng’g. L.C. v. Bartell,
439 F.3d 346, 350 (7th Cir. 2006) (reviewing “trade norm” confidentiality under the UTSA).
B. 	Domestic Industry
Trade secret misappropriation investigations at the Commission are governed by 19 U.S.C.
§ 1337(a)(1)(A), which declares unlawful --
Unfair methods of competition and unfair acts in the importation of
articles (other than articles provided for in subparagraphs (B), (C),
(D), and (E), into the United States, or in the sale of such articles by
the owner, importer, or consignee, the threat or effect of which is--
(i) to destroy or substantially injure an industry in the United States;
(ii) to prevent the establishment of such an industry; or
(iii) to restrain or monopolize trade and commerce in the United
States.
19 U.S.C. § 1337(a)(1)(A). Thus, Complainants must show that they have an “industry in the
United States,” and that the industry has suffered “actual substantial injury, or threat of substantial
injury.” See, e.g., Rubber Resins, Comm’n Op., 2014 WL 7497801, at *5 (“Therefore, there is a
requirement not only that the complainant demonstrate the existence of a domestic industry, but
also that there be actual substantial injury or the threat of substantial injury to a domestic
industry.”).
The assessment of whether an “industry . . . in the United States” exists under Section
337(a)(1)(A) requires an inquiry into the “nature and significance” of the complainant’s domestic
activities. See Certain Miniature, Battery-Operated, All Terrain, Wheeled Vehicles, Inv. No. 337-
TA-122, USTIC Pub. No. 1300, Comm’n Op. at 6 (Oct. 1982) (“The threshold question of the
existence of an ‘industry . . . in the United States’ . . . requires an inquiry into the nature and

15
significance of complainants’ business activities in the United States which relate to the
STOMPER toy vehicles.”), aff’d 717 F.2d 1368 (Fed. Cir. 1983); Certain Modular Structural
Systems, Inv. No. 337-TA-164, USITC Pub. No. 1668, Comm’n Op. at 13 (June 1984) (necessary
to determine “the nature and significance” of Complainant’s activities in the United States with
respect to the relevant product to determine “whether there is an industry ‘in the United States’
within the meaning of section 337”); Certain Cube Puzzles, Inv. No. 337-TA-112, USITC Pub.
1334, Comm’n Op. at 30 (Jan. 1983) (“We find that Ideal’s domestic activities are of the
appropriate nature and are significant enough to conclude their domestic business activities
constitute an ‘industry . . . in the United States.’”).
Commission decisions assessing the existence of a domestic industry under Section
337(a)(1)(A) 	(and 	its 	pre-1988 	predecessor, 	which 	concentrated 	on 	patent 	infringement
investigations) have focused largely on manufacturing and production related activities. See, e.g.,
Schaper Mfg. Co. v. U.S. Intern’l Trade Comm’n, 717 F.2d 1368, 1372 (Fed. Cir. 1983) (“Both
the legislative history of section 337 and past Commission decisions on those section 337
investigations that have been based on claims of patent infringement indicate that, in order to
constitute an ‘industry . . . in the United States,’ the patent must be exploited by production in the
United States.”). 	However, the Commission also recognizes that a domestic industry may be
established through other types of activities with a close relationship to the products at issue, such
as repair and installation activities. See e.g., Certain Airtight Cast-Iron Stoves, Inv. No. 337-TA-
69, USITC Pub. No. 1126, Comm’n Op. at 11 (Jan. 1981) (finding domestic industry with respect
to stoves manufactured abroad based on U.S. repair and installation activities).
It is not necessary for the domestic activities to involve use of the asserted trade secret in
Section 337(a)(1)(A) investigations involving trade secret misappropriation. Rather, the domestic

16
industry is the industry that is targeted by, or which directly competes with, the unfair imports.
See TianRui, 661 F.3d 1322, 1337 (Fed. Cir. 2011) (no statutory requirement that the domestic
industry use the asserted trade secrets; the fact that the imported wheels directly competed with
the complainant’s domestically manufactured wheels was sufficient); see also Cast-Iron Stoves,
Inv. No. 337-TA-69, USITC Pub. 1126, Comm’n Op. at 8 (Jan. 1981) (agreeing with the ALJ that
“the domestic industry consists of that segment of the entire coal and wood-burning stove industry
which was the target of the unfair acts and practices”); Certain Apparatus for the Continuous of
Copper Rod, Inv. No. 337-TA-52, USITC Pub. No. 1017, Comm’n Op. at 55 (Nov. 1979) (scope
of domestic industry determined by “realities of the marketplace” and including components that
were part of the competing system).
While there is no bright-line rule to determine whether a domestic industry exists, it is
necessary to distinguish the complainant’s domestic activities from those of a mere importer. Sales
and marketing expenses do not typically distinguish a domestic industry from a mere importer.
See, e.g., Schaper, 717 F.2d at 1373 (Fed. Cir. 1983) (“Schaper’s very large expenditures for
advertising and promotion cannot be considered part of the production process. Were we to hold
otherwise, few importers would fail the test of constituting a domestic industry.”).
In 	section 	337(a)(1)(A) 	investigations 	involving 	a 	complainant 	with 	foreign
manufacturing, Commission decisions have often applied a “value-added” analysis to assess
whether an industry in the United States exists. See Schaper, 717 F.2d at 1372 (finding no industry
in the United States where “the nature and the extent of Schaper’s domestic activities (in relation
to the total production process of the Stomper toy vehicles)” were insufficient); Certain Cube
Puzzles, Inv. No. 337-TA-112, USITC Pub. 1334, Comm’n Op. at 30 (Jan. 1983) (significance of
domestic operations shown by fact that “approximately 50 percent of the value of the cube puzzle”

17
is added in the United States by “Ideal’s quality control, packaging and repair operations”); Certain
Airtight Case-Iron Stoves, Inv. No. 337-TA-69, USITC Pub. No. 1126, Comm’n Op. at 11 (Jan.
1981) (finding domestic industry based on repair, testing, and installation activities because “the
value added domestically is significant”); Certain Airless Paint Spray Pumps and Components
Thereof, Inv. No. 337-TA-90, USITC Pub. No. 1199, Comm’n Op. at 10-11 (Nov. 1981) (domestic
investments in warranty repairs should be included in the domestic industry “[i]nasmuch as the
value added to a product in the United States is a significant factor in determining whether the U.S.
operation of a foreign corporation is part of the domestic industry”).
III. 	IMPORTATION AND SALE
Respondents admit that the -1 and -3 formulations of the Accused Products have been
imported in the United States within the meaning of 19 U.S.C. § 1337(a)(1). CX-0643C at 3-3,
12-14.
IV. 	JURISDICTION
The scope of the Commission’s in rem jurisdiction is directed to articles that are imported
into the United States. See 19 U.S.C. § 1337(a)(1)(C). In view of the Respondents’ admission of
importation of accused products, and the facts identified in the previous section, I find that the
Commission has in rem jurisdiction. 	Section 337 confers subject matter jurisdiction on the
Commission to investigate, and if appropriate, to provide a remedy for, unfair acts and unfair
methods of competition in the importation, the sale for importation, or the sale after importation
of articles into the United States. See 19 U.S.C. § 1337(a)(l)(A), (a)(1)(C), (a)(2). Heraeus filed
a complaint alleging a violation of Section 337, and the Commission therefore has subject matter
jurisdiction. See Amgen, Inc. v. U.S. Int’l Trade Comm’n, 902 F.2d 1532, 1535-37 (Fed. Cir. 1990)
(“Amgen’s complaint alleged that Chugai was importing rEPO and that the rEPO was made by a
process covered by the [IP]; thus, on its face the complaint came within the jurisdiction of the

18
Commission.”). 	The Respondents appeared through counsel and are participating in this
Investigation. Accordingly, the Commission has personal jurisdiction over the Respondents. See,
e.g., Certain Optical Disk Controller Chips, Inv. No. 337-TA-506, Initial Determination, at 4-5,
2005 WL 1901371, at *5 (May 16, 2005) (unreviewed in relevant part).
V. 	THE ASSERTED TRADE SECRETS
The first step in an analysis regarding misappropriation of trade secrets is to determine if
the trade secrets actually exist, and if Complainants own the trade secrets. 	Again, in order to
establish the existence of the trade secrets, which is the Complainants’ burden, Complainants must
present evidence concerning:
(1) the extent to which the information is known outside of
complainant’s business;
(2) the extent to which it is known by employees and others involved
in complainant’s business;
(3) the extent of measures taken by complainant to guard the secrecy
of the information;
(4) 	the 	value 	of 	the 	information 	to 	complainant 	and 	to 	his
competitors;
(5) the amount of effort or money expended by complainant in
developing the information; and
(6) the ease or difficulty with which the information could be
properly acquired or duplicated by others.
Skinless Sausage Casings, Inv. No. 337-TA-148/169, Initial Determination, 1984 WL 273789, at
*94. To the extent that the factors are relevant, each is discussed below with respect to each group
of asserted trade secrets, although the analysis is sometimes the same for all groups.

19
A. 	The Asserted Copolymer Trade Secrets – TS 1-35
1. 	Extent Trade Secrets 1-35 Were Known Outside Heraeus
TS 1-35 relate to the specifications for Heraeus’ Plex 6612 and Plex 6613 copolymers. Tr.
(Kluge) at 46:10-14. 	Each of these alleged trade secrets is a range of values relating to, for
example, viscosity, content of benzoyl peroxide, particle size distribution, and water content. CIB
at 22, CDX-0004C.003. 	The range of values is important because while it may be possible to
reverse engineer the copolymer and ascertain one value for benzoyl peroxide, according to
Complainants’ expert Dr. Mays, it is extremely difficult, if not impossible, to ascertain the ranges.
Tr. (Mays), 391: 10-17, 475:4-524:23. 	The evidence shows that these ranges are not publicly
known. For example, CX-0292C is an email from Dr. Specht to Dan Smith that was written when
the Respondents were attempting to develop bone cement, wherein Dr. Specht states that he was
“not so happy” because he “could not find public information concerning particle size, content of
BPO (in the beads) and water content” of Heraeus’ copolymers. Moreover, Complainants’ expert,
Dr. Radke, verified at the hearing that Respondents’ expert, Dr. Spiegelberg, did not identify any
information in the public domain that showed the trade secret ranges in the specifications of Plex
copolymers. Tr. (Radke), 1456:17-22. This testimony was not disputed by Respondents.
Respondents argue, however, that samples of Plex 6612 and Plex 6613 could be obtained
by third parties directly from the manufacturer Röhm, “at least prior to 2007,” and from these
samples, the trade secrets could have been discovered. RIB at 53. Respondents cite to a purchase
order (JX-0119C) that purportedly shows “the Plex copolymers were sold to and used by other
companies.” RIB at 54. This exhibit, however, is an exchange between Heraeus and Merck, which
was an official distributor of Palacos in 2002 (the date of the document), and the certificate of
analysis on the document does not match the trade secret ranges of Plex 6612. 	CRB at 12.

20
Moreover, this document does not include any information about Plex 6613 whatsoever.
Therefore, the preponderance of the evidence shows that the copolymer trade secrets 1-35 are not
generally known outside Heraeus.
2. 	Extent All Asserted Trade Secrets Were Known Inside Heraeus
Heraeus took reasonable measures to keep its trade secrets secure within the company.
Respondents argue that Heraeus did not have adequate internal procedures to protect the trade
secrets. Respondents’ principal evidence comes from their expert witness, Cheryl Blanchard, who
testified that Heraeus failed to meet industry “best practices”: She alleged that Heraeus failed to
mark the trade secrets as such (Tr. (Blanchard) at 799:21-800:5); failed to maintain documentation
of trade secret policies (id.); failed to maintain logs of people who accessed the trade secrets (id.
at 800:3-5); failed to have personnel who were responsible for maintaining the trade secrets (id. at
800:13-15); failed to store trade secrets in a secure cabinet (id. at 800:6-7); and failed to train
employees until the late 1990’s on trade secret protection (id. at 800:15-19). 	Dr. Blanchard’s
conclusions primarily were based upon her review of Mr. Schneider’s deposition testimony. Id.
at 800:3-4.
A fair reading of Mr. Schneider’s deposition testimony does not support Dr. Blanchard’s
conclusions. 	For example, Mr. Schneider testified that, “[i]f there is already an existing
nondisclosure agreement” Heraeus would not mark documents as trade secrets. 	JX-0258C
(Schneider Dep. Tr.) at 36:16-17. Many of the documents cited by Dr. Blanchard were circulated
between Heraeus and Merck (or its agent) and these two parties had a nondisclosure agreement;
this issue is discussed in further detail below. Mr. Schneider also testified that while there was no
one person at Heraeus responsible for making sure the trade secrets remain secret, “all employees
had an NDA with their working contract or within their employment agreement.” Id. at 55:11-22.

21
Further, Mr. Schneider testified at the hearing that since at least 1980, every employment contract
also had an NDA associated with it along with a “work regulations” document, which contains
information on what Heraeus considers confidential, what particular secrets the employee is
entitled to see, and how to handle the secrets. 	Tr. (Schneider) at 248:1 – 251:1; CX-113C at
HERAEUSITC0008978; CX-118C at HERAEUSITC0008462. Also, German law (UWG Section
710) obligates all employees to keep the company’s information confidential. See Tr. (Schneider)
at 247:15-19; JX-60, Act Against Unfair Competition (“UWG”) Sections 17-18; JX-254C (Kohler
Dep. Tr.) at 84:1-16; JX-264C (Bornkamm Dep. Tr.) at 55:4-15; Merckle GmbH v. Johnson &
Johnson, 961 F. Supp. 721, 732 (D.N.J. 1997) (reasonable jury could conclude that European
guidelines and German drug laws protected confidentiality). Mr. Schneider further testified there
is no need to have a list of people that are approved to see the bone cement trade secrets because
each department head instructs new employees on the work space and area, and thus the
department is able to keep track of who has access. 	JX-0258C (Schneider Dep. Tr.) at 58:7 –
60:14; Tr. (Schneider) at 250:2 – 251:1. Moreover, Mr. Schneider testified that HR has the job
description of all employees, and thus managers know what trade secrets each employee is entitled
to use. JX-0258C (Schneider Dep. Tr.) at 58:7-15.
Presently, with the use of computers, each employee has electronic access to the specific
trade secrets needed for the particular job the employee performs. For instance, Mr. Schneider is
a lawyer, and thus does not have access to all information on the server. 	JX-0258C (Schneider
Dep. Tr.) at 61:4-13. The trade secrets are stored on a secure server, the trade secret server is not
on the internet, so outside access is impossible, and the IT department of Heraeus is able to track
access to trade secrets. Tr. (Schneider) at 252:22 – 253:24. Even prior to computer usage, Mr.
Schneider testified, all trade secret documentation was locked in cabinets at the end of the day.

22
JX-0258C (Schneider Dep. Tr.) at 57:8-58:23, 56:16-24, 60:15-61:3; Tr. (Schneider) at 245:1–
246:6-12. 	Therefore, Heraeus has, at all relevant times, taken the appropriate steps to guard all
asserted trade secrets within the company.
3. 	Extent of Steps Taken By Heraeus to Guard Trade Secrets 1-35
Respondents argue that Heraeus disclosed its copolymer trade secrets to third parties
without adequate confidentiality agreements in place. 	Specifically, Respondents submit that
Heraeus disclosed these trade secrets to three different entities. First, Heraeus allegedly disclosed
its TS 1-35 to Röhm and/or Evonik without reasonable measures in place to secure their secrecy.
RIB at 17-20. Respondents state that Heraeus began selling Palacos in the late 1950’s and it was
purchasing the Plex 6612 and 6613 copolymers from Röhm at that early date. Respondents then
argue that “Röhm “must have had access to the claimed copolymer trade secrets since at least the
1950s because Röhm would require the information and the specifications to manufacture the
copolymers.” Id. at 17 (citing Tr. (Blanchard) at 754:22-755:4). Moreover, Respondents assert,
Id. at 11 (citing JX-118C; JX-0233C, Tr. (Blanchard) at 756:20-757:16).
The evidence shows, however, a long-standing 	supply relationship between
Heraeus and Röhm. See CX-0091C and Specht Dep. Ex. 64, at ZBITC-1748400 (Merck document
indicating that Röhm 	delivers Plex 6613 to Kulzer); Tr. (Smith) at 1148:7-1149:9
(testifying that, in early 2000’s, after considering the possibility of purchasing Plex 6613 and Plex
6612, Biomet determined that Plex 6612 and Plex 6612 are proprietary products that Röhm could
not sell to Biomet); JX-247C (Kühn) at 65:11-13, 66:14-17, 85:22-86:14 (Dr. Kühn understood
from predecessors that copolymers were produced 	JX-258C

23
(Schneider Dep. Tr.) at 78:2-8
JX-118C 	JX-119C
(between Heraeus and Röhm); and JX-37C (between Heraeus and Evonik). 	Heraeus would not
have had such a long-lasting and 	relationship unless its trade secrets were adequately
protected.
Second, Respondents argue that Heraeus disclosed the copolymer trade secrets to Smith &
Nephew without having any confidentiality protection in place. RIB at 28. The evidence shows,
however, that the disclosures made to Smith & Nephew were secure. Merck signed confidentiality
agreements with Heraeus that included non-disclosure requirements. 	CX-96C
JX-134C §§ 9.2,12
Merck appointed Smith & Nephew as its distribution agent in the U.S.,
and Smith & Nephew’s role included obtaining regulatory approval in the U.S. CIB at 51.
Moreover, the
CIB at 50 (citing JX-
0134C; JX-0125C). Moreover,

24
JX-
0134C at HERAEUSITC000314, 318. The disclosures to and the relationship of Smith & Nephew
with Merck fell under this obligation. Smith & Nephew operated as a licensee of Merck, and thus,
Merck was obligated to protect Heraeus’s confidential information as it pertained to Smith &
Nephew. See JX-0032 (product information showing Smith & Nephew as distributor “[u]nder the
license of E. Merck”).
The evidence regarding these
disclosures, therefore, illustrates that the trade secrets were sufficiently protected by Heraeus.
Finally, 	Respondents 	submit 	that 	Heraeus 	disclosed 	its 	trade secrets 	to
Respondents allege
that
RIB at 15 (emphasis in original) (citing JX-
0135C). However, there is no evidence that any copolymer specifications actually were sent to
See JX-135C; Tr. (Blanchard) at 750:13-753:9
(discussing TS 122, 123, and 145, but not TS 1-35). Therefore, the evidence shows that Heraeus
took reasonable precautions to protect trade secrets 1-35, and that these trade secrets were not
generally known publicly.
4. 	Value of Trade Secrets 1-35 to Heraeus and Competitors
A trade secret “derives independent economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by, other persons who

25
can obtain economic value from its disclosure or use.” 	Uniform Trade Secrets Act (“UTSA”)
§1(4). 	Heraeus argues that the copolymer specifications are important to the Palacos cements’
handling characteristics. CIB at 16. 	Respondents, however, argue that the handling properties of
Palacos is not evidence that Heraeus’ trade secrets have any economic value, because there is no
evidence showing that the product has an advantage in the market based on handling properties.
Moreover, Respondents argue, there is no evidence that the copolymer trade secrets contribute to
the handling properties of Palacos. RIB at 48 and 58.
The evidence shows that the handling characteristics of Palacos is important to users. Tr.
(DiGioia) at 1050:19-1051:1. Moreover, Heraeus’ bone cement is highly respected in the industry.
Tr. (DiGioia) at 1046:6-14 (Palacos and Simplex are gold standard cements in the industry). And
as the Staff correctly points out, the evidence shows that the Heraeus copolymer specifications—
including the individual specifications for viscosity, BPO, particle size, and water content--add to
properties of the resulting bone cement, and thus have value. 	See Tr. (Kluge) at 44:16-45:17
(discussing importance of specifications to the finished bone cement properties); id. at 41:6-42:13
(discussing viscosity’s relationship to bone cement handling properties); id. at 42:14-43:7
(discussing copolymers’ benzoyl peroxide specifications and purpose); Tr. (Radke) at 1451:3-10,
1453:3-5 (BPO responsible for speed of reaction, length of polymer chains); Tr. (Kluge) at 43:8-
44:1 (discussing particle size specifications for Heraeus); Tr. (Kluge) at 44:2-44:15 (discussing
water content specifications); Tr. (Radke) at 1454:14-21 (discussing importance of water content);
JX-64
Respondents also argue that the copolymer specifications lack value because
RRB at 58-59.

26
Tr. (Kluge) at 107:6-10, 65:20-69:22. However, the value of a trade secret is not wholly
dependent on whether it is used by the trade secret owner. 	TianRui, 661 F.3d at 1335 (no
requirement under Section 337 that the domestic industry practice the asserted trade secret). See
also Restatement (Third) of Unfair Competition § 39, cmt.e (“[u]se by the person asserting rights
in the information is not a prerequisite to protection”). 	And there is plenty of evidence that
Respondents and Merck used the trade secret specifications in trying to develop a similar product.
See Tr. (Mays) at 391:18-411:22 and CX-81C, JX-23C, CX-2052C, CX-82C, CX-546C, CX-
272C, CX-552C, CX-87C, JX-24C, CX-83C, CX-91C, CX-1959C (attempts to develop substitutes
for Palacos copolymers, using Heraeus copolymer specifications); JX-238C (Specht Dep. Tr.) at
136:7-16 (Dr. Specht acknowledging that he compared samples to specifications when assessing
Plex 6612 and Plex 6613 substitutes from multiple companies); CX-307C (Dr. Specht comparing
specifications of Plex 6612 and Plex 6613 to Esschem potential copolymer substitutes); see also
Tr. (Radke) at 1491:1-11 (specifications useful as a target range for development).
5. 	The Amount of Effort or Money Expended in Development
Respondents argue that there is no evidence showing Heraeus invested money, time, or
effort in developing the trade secrets. Thus, according to Respondents, the absence of evidence
“on this factor weighs in favor of a conclusion that Heraeus cannot carry its burden to demonstrate
protectable trade secrets.” RIB at 11. While direct evidence of development of the bone cement
is lacking (Tr. (Schneider) at 279:21-280:18, 282:4-7), this does not necessarily prove a lack of
protectable trade secrets. First, Heraeus presented general information regarding the development
of its copolymers. 	Tr. (Kluge) 55:18-56:5 (discussion of Heraeus’ scientists studying early
discovery of MMA polymer, PMMA polymers, and early use by dentist, citing CX-2047C); id. at

27
60:2-61:21 (discussing D. Kühn’s work at Heraeus developing Palacos, citing JX-152, Section 3.4,
pages 26-27). 	And as Heraeus points out, first hand witnesses to the development, which most
likely occurred in the 1950’s, are no longer available as any scientist involved “would be well over
100 today.” 	See CRB at 4. 	And again, this is but one factor that the Commission uses as an
“instructive guideline.” Crawler Cranes, Inv. No. 337-TA-887, Initial Determination, at 24 (July
11, 2014)(EDIS Doc. ID 539295. Thus, the lack of development evidence does not automatically
preclude a finding of protectable trade secrets.
6. 	The Ease or Difficulty of Acquisition or Duplication by Others
Respondents submit that the evidence shows that the copolymer trade secrets can be easily
duplicated by others. Respondents allege that the nominal (or measured) values for the viscosity,
particle size, water content, and BPO content of the Plex copolymers, which fall within the ranges
claimed by Heraeus as trade secrets, were listed on the certificates of analysis provided by Röhm
when batches of the Plex copolymers were sold. 	Respondents also submit these manufacturing
specifications could have been used to derive the alleged copolymer trade secrets. 	JX-0241C
(Chisholm Dep. Tr.) at 124:10-124:20. Respondents further argue that these values also can be
measured from purchased samples of Plex 6612 and Plex 6613 using known analytical techniques.
See RIB at 55, citing JX-0119C; JX-0238C (Specht Dep. Tr.) at 85:5-22, 114:9- 117:11; Tr.
(Spiegelberg) at 315:13-1316:17, 1319:5-11, 1320:11-1321:20.
Respondents also contend that nominal values of the copolymers can be determined from
samples of the Osteopal and Palacos powders. 	While the powder components of Osteopal and
Palacos contain other ingredients, Respondents’ expert Dr. Spiegelberg testified that the values for
Plex 6613 could be readily and relatively inexpensively measured from a sample of Osteopal
(which contains only Plex 6613) using standard analytical techniques. Tr. (Spiegelberg) at 1308:1-

28
16, 1315:20-1316:17, 1317:2-8; JX-0223; JX-0247C at 236:19-237:13, 238:2-4. 	He further
testified that the values for Plex 6612 could be calculated by performing measurements on a sample
of Palacos (which contains both Plex 6612 and Plex 6613) and using mathematical analysis to
extract information about Plex 6612 by eliminating known values for Plex 6613 obtained from
Osteopal data. Tr. (Spiegelberg) at 1308:1-16, 1317:9-22. Based on this evidence, Respondents
take the position that each copolymer nominal value that can be measured falls within the Alleged
Trade Secret specifications, and one of skill in the art would be able to estimate or develop a similar
manufacturing or quality control range based on the nominal values and knowledge of the industry.
Tr. (Spiegelberg) at 1318:3-1319:11.
Respondents’ characterization of the evidence is unpersuasive. There is no evidence Plex
6612 or Plex 6613 were publicly sold and/or publicly available; as noted, Röhm/Evonik sold Plex
6612 and Plex 6613 	to Heraeus. Tr. (Schneider) at 259:6-9; Tr. (Kluge) at 31:21-32:4.
Moreover, Heraeus’ technical expert Dr. Jimmy Mays testified, without rebuttal, that the trade
secret ranges (as opposed to the values in a particular batch) in the specifications of Plex 6612 and
Plex 6613 were not generally known or readily ascertainable. Tr. (Mays) at 370:10-16, 371:15-
19, 372:20-374:21, 391:10-17, 475:4-524:23. 	Heraeus’ other technical expert, Dr. Wolfgang
Radke, also confirmed that the trade secret ranges in the specifications of Plex 6612 and Plex 6613
were never publicly available. CDX-0004C.002; Tr. (Radke) at 1456:17-22.
As the Staff points out, however, Dr. Spiegelberg’s testimony regarding determining
copolymer ranges is not especially convincing, in light of the lack of any supportive testing data
from Dr. Spiegelberg, and the contrary testimony of Dr. Radke. 	See Staff Br. at 14-16. 	For
example, Dr. Spiegelberg testified that to ascertain the copolymer specifications, the steps of: (1)
separating Plex 6613 from the rest of the materials in the Osteopal powder (which contains

Order
29
additional BPO, water, and zirconium dioxide); (2) separating Plex 6612 from the rest of the
materials in Palacos R powder (which contains Plex 6613, Plex 6612, 	water, and
zirconium dioxide); and (3) determining the trade secret ranges from the nominal viscosity, particle
size distribution, BPO content, and water content values of the separated Plex 6612 and Plex 6613
obtained in (1) and (2) would be necessary. Tr. (Spiegelberg) at 1315:20-1316:8, 1317:9-22,
1318:22-1319:4. However, Dr. Spiegelberg admitted at the hearing that he did not perform any
such separation, or conduct any other tests, for this investigation. Tr. (Spiegelberg) at 1390:2-15.
Dr. Spiegelberg also testified that isolating Plex 6613 would be comparatively easy because
Osteopal contains a single copolymer, Plex 6613, not a combination of Plex 6613 and Plex 6612.
Tr. (Spiegelberg) at 1317:2-8. 	However, Dr. Radke testified that separating Plex 6613 from
Osteopal powder would be “difficult,” “time-consuming,” and “costly” and would be unlikely to
re-create the original Plex 6613. 	Tr. (Radke) at 1456:23-1464:19. 	Dr. Radke explained that
separation using a sieving method, which Dr. Spiegelberg suggested, would either lose small sizes
of Plex 6613 or include large sizes of zirconium dioxide
See CDX-0004C at 006; Tr. (Radke) at 1457:3-1460:13. He
further testified that separation by a dissolution method would permanently alter the particle size
distribution of the original Plex 6613. CDX-0004C at 007; Tr. (Radke) at 1461:16-1462:25.
Dr. Spiegelberg’s testimony was further undermined by Dr. Radke’s testimony that no
known method exists to separate the residual BPO in Plex 6613 from the chemically identical BPO
added to the powder, thus precluding the determination of the residual BPO amount in the original
Plex 6613. Tr. (Radke) at 1460:14-1461:4, 1463:1-8. Similarly, Dr. Radke testified that no known
method exists to

30
thus precluding the determination of the water content in the original Plex 6613. 	Tr.
(Radke) at 1461:5-15, 1463:9-14.
Dr. Radke also testified that separating Plex 6612 from Palacos is even more difficult
because, in addition to the same difficulties involved in separating Plex 6613 from Osteopal, Plex
6612 and Plex 6613 have 	thus making it impossible to separate Plex
6612 beads from Plex 6613 beads 	CDX 0004C at 010, 011; Tr. (Radke) at 1470-
73. 	Dr. Radke testified that there is no evidence of anyone succeeding in separating Plex 6613
from Osteopal powder or separating Plex 6612 from Palacos. Tr. (Radke) at 1464:1-19; 1473:8-
12.
Most importantly, even if one could separate Plex 6612 or Plex 6613 from a package of
Palacos and then measure the viscosity, particle size distribution, BPO content, and water content
in each copolymer, the results are only a single value, not the trade secret ranges. And according
to Dr. Radke, to derive those trade secret ranges, the separation process must be performed using,
for example, about 200 batches of Plex 6613. 	CDX-0004C at 008, 009, 012; Tr. (Radke) at
1464:20-1470:17, 1473:13-1474:21. Moreover, obtaining two hundred different batches of Plex
6613 is difficult because each Plex batch (obtained from Röhm) is divided into numerous
individual packages of Osteopal. 	CDX-0004C at 009; Tr. (Radke) at 1467:6-25. 	Thus, two
hundred different packages of Osteopal powder available commercially (from Heraeus) do not
represent the same number of Plex 6613 batches. Tr. (Radke) at 1469:6-25.
Overall, Dr. Spiegelberg’s testimony would have been more persuasive had he performed
the testing he claims is straightforward and inexpensive. 	And Dr. Radke’s testimony regarding
the stumbling blocks to successful separation of the powder components is reasonable. 	So on

31
balance, reverse engineering trade secrets 1-35 would be a very difficult, if not impossible,
undertaking.
Accordingly, balancing the evidence relating to all six parameters, I find that Heraeus’
Trade Secrets 1-35 are protectable trade secrets under the Commission guidelines.
B. 	The Asserted Powder and Liquid Components – TS 121-123
The asserted trade secrets relating to liquid and powder specifications are:
TS 121:
TS 122: Specifications for Palacos R:
TS 123: Specifications for Refobacin-Palacos R:
JX-205C.
1. 	Extent Trade Secrets 121-123 Were Known Outside Heraeus
The parties presented similar arguments as that above regarding the copolymer trade
secrets; namely, Respondents argue that at least nominal values of these trade secrets were publicly
disclosed, and one could ascertain the trade secrets by reverse engineering from the values. RIB
at 65-66. Complainants again argue that it is nearly impossible to determine the trade secret ranges
from nominal values. CIB at 28-30.
The evidence shows public disclosure of all these trade secrets. 	The Staff prepared a
comprehensive list of them, based on the testimony of Dr. Spiegelberg and a small collection of
exhibits:

32
• With respect to TS 121 (relating to the monomer liquid), public
information relating to Palacos provides several points within the alleged trade
secret range of 	and several points
within the alleged trade secret range of
• With respect to TS 122 (relating to the powder component of Palacos
R), the same public information provides ranges of copolymer content within
the alleged trade secret range of 	multiple points within the
alleged zirconium trade secret range of 	and the exact BPO range of
• With respect to TS 123 (relating to the powder component of
Refobacin Palacos), public information provides a copolymer content within
the alleged trade secret range of 	a zirconium dioxide content within
the alleged trade secret range of 	and a BPO content value within the
alleged trade secret range of
SIB at 20-21.
Respondents cite to additional evidence that these trade secrets were disclosed publicly.
For example,
Complainants do not rebut this evidence in either their initial or reply post-hearing briefs.
Accordingly, TS 121-123 were publicly disclosed.

33
2. 	Extent Trade Secrets 121-123 Were Known Inside Heraeus
The discussion of Heraeus’ in-house protection of all of its trade secrets is discussed above
and applies with equal force to TS 121-23.
3. 	Extent of Steps Taken by Heraeus to Guard Trade Secrets 121-123
Trade secrets 121-123 were disclosed by Heraeus on a number of occasions.
Product:
See Union
Pacific R. Co. v. Mower, 219 F.3d 1069, 1075-76 (9th Cir. 2000) (holding that nondisclosure
requirements no longer apply after expiration of time limitation); ECT Intern., Inc. v. Zwerlein,
597 N.W.2d 479, 485 (Wis. 1999) (“[b]y limiting the period in which an employee agreed not to
divulge trade secrets ECTI manifested its intent that after one year there was no need to maintain
the secrecy of any sensitive and confidential information”); Structured Capital Solutions, LLC v.

34
Commerzbank AG, 177 F. Supp. 3d 816, 836 (S.D.N.Y. 2016) (“[o]nce a third party’s
confidentiality obligation . . . expires, so does the trade secret protection”).
Complainants argue that this fax does not demonstrate a lack of reasonable measures to
protect the powder trade secrets, because despite the document itself indicating that it was sent to
all three parties, and included the certificates of analysis, “no evidence concerning the contents of
the certificates has been presented. 	And, nothing suggests that the certificates of analysis were
also to be sent to 	CIB at 46-47. But the document speaks
for itself, and clearly lists the recipients and the contents.
CIB at 48. 	But actual use is not the test for
whether safeguards were reasonable. Rather, the touchstone is Heraeus’ actual protection of its
purported trade secrets, and
This disclosure under the 	project
indicates a lack of reasonable precautions to protect secrecy.
Heraeus/Merck/Biomet
The rather complicated evidence surrounding the various relationships between Heraeus
and Merck, the Biomet Merck Joint Venture, and Heraeus/Biomet agreements, further illustrate
Heraeus’ lax behavior regarding its TS 121-123. 	As a precursor, and of particular relevance, is
the evidence establishing that whenever an order of Heraeus’ bone cement was delivered, Heraeus
provided certificates of analysis with the order, and the certificates of analysis included the TS
121-123 information. Tr. (Schneider) at 353:21-354:6 (standard part of process when Heraeus is
distributing product through another entity is to include a certificate of analysis, including to

35
Biomet or the Biomet joint venture); JX-259C (Schneider Dep. Tr.) at 241:18-242:5 (“[t]here
would always be a certificate with a batch of the product delivery”); Tr. (Kluge) at 128:20-130:24
and RX-262C (certificates of analysis for finished powder and liquid batches include the asserted
powder and liquid trade secrets); Tr. (Schneider) at 354:7-356:9; (testifying regarding certificates
of analysis sent to Biomet Deutschland GmbH for Refobacin Palacos R in JX-126C with values
corresponding to TS 121 and TS 123); JX-126C, at HERAEUSITC 327287, 327289, and 327290
(certificates of analysis showing lack of confidentiality labels at time of transmission on August
24, 2005); Tr. (Blanchard) at 775:25-776:8 and RX-498C.0049. RX-498C.0114 (cover letter
showing that certificate of analysis for Refobacin Palacos R40 was sent from Heraeus to Biomet
Merck on October 20, 2004). This standard practice, too, shows a lack of reasonable precautions.
Heraeus and Merck
Biomet Merck Joint Venture

36
The record is similarly lacking in
JX-0237C at 348. Illustrating
one such order fulfillment is JX- 0126C -048 to -053, which is a fax from Heraeus to the Biomet
Merck Joint Venture that shows a shipment from Heraeus of Palacos bone cement accompanied
by the certificates of analysis for Refobacin Palacos. 	The certificates of analysis disclosed the
copolymer content, zirconium dioxide content, and BPO content specified in alleged trade secret
122 and MMA and DMPT content specified in alleged trade secret 121. See also RX-0146C (fax
to Biomet Merck in January 2003 containing certificates of analysis for Palacos R powder and

37
liquid containing the information claimed in TS 121 and 123). These shipments and certificates
of analysis were not subject to any confidentiality requirement at the time the information was sent
to the Biomet Merck Joint Venture. Thus, Heraeus did not take reasonable precautions to protect
its TS 121 and 123 in its dealings with the Biomet Merck Joint Venture.
Biomet Distribution Arrangement (U.S.)
RX-0625C.

38
illustrates Heraeus’ failure to take
reasonable precautions to protect trade secrets 121-123.
4. 	Value of Trade Secrets to Heraeus and Competitors
In discussing the value of its TS 121-123, Heraeus presents similar arguments as related to
the copolymer trade secrets. 	These arguments relate to “the importance of the copolymer
specifications 	and 	powder 	and 	liquid 	specifications 	to 	the 	Palacos 	cements’ 	handling
characteristics.” CIB at 15-16. These arguments are addressed above and need not be repeated;
suffice it to say that to the extent that TS 121-123 contribute to Palacos’ handling characteristics,
they are valuable because the handling characteristics of Palacos is important to users. 	Tr.
(DiGioia) at 1046:9-13, 1050:19-1051:1.
5. 	The Amount of Effort or Money Expended in Development
As discussed above, there is not much evidence showing how any of the asserted trade
secrets were developed. 	However, this lack of evidence is not necessarily determinative of the
existence or absence of trade secret protection, including of TS 121-123.
6. 	The Ease or Difficulty of Acquisition or Duplication by Others
Respondents make a similar argument regarding TS 121-123 as was made with TS 1-35:
the nominal values for the various elements of these trade secrets are either published or can be

39
easily measured. RIB at 66. With the nominal values, the argument goes, one skilled in the art
can establish ranges “using these approximations [in] materially the same [method] as the alleged
copolymer trade secrets.” Id. at 67 (citing Tr. (Spiegelberg) at 1335:10-1338:7 and RDX3-33).
For essentially the same reasons as given in the discussion of TS 1-35, the ranges of the
powder and liquid specifications are not readily determinable. 	Complainants’ expert explained
that in order to discover the ranges, a large number of batches of Palacos R powder and liquid
components would have to be evaluated, which would be expensive and time consuming. Tr.
(Radke) at 1476:2-1478:6. 	However, as noted, these trade secrets were disclosed publicly, so
reverse engineering would be unnecessary. 	See, e.g.,
On balance, not all factors weigh against the status of TS 121-123 as actual trade secrets.
In 	particular, 	their 	independent 	economic 	value 	weighs 	in 	favor 	of 	trade 	secret 	status,
notwithstanding the peculiarity that their full range appears to be impossible to practice:
See RIB at 67, SIB at 22. But the weightiest factor by far is that they were not
adequately protected by Heraeus and were disclosed under circumstances that nullified their trade
secret status. Complainants essentially ignore this clearly significant consideration in their post-
hearing reply brief. On balance, therefore, TS 121-123 are not protectable trade secrets.
C. 	The Asserted Chlorophyll Recipe and Procedure – TS 130-134
TS 130-134 relate to Heraeus’ procedure for coloring the liquid monomer component of
its Palacos R products green. CIB at 31. Specifically:

40
TS 130:
TS 131:
TS 132:
TS 133:
TS 134:
JX-205C.
1. 	Extent Trade Secrets 130-134 Were Known Outside Heraeus
TS 132, which calls for the use of a
was generally known. In 1983, the FDA
exempted the use of a 5% copper-based chlorophyll solution in a mixture of palm oil, peanut oil,
and hydrogenated peanut oil for coloring PMMA bone cements. JX-207C (21 C.F.R. § 73.3110,
effective in 1983); Tr. (Spiegelberg) at 1341:2-20. Complainants argue that the C.F.R. provision

41
does not disclose
used in Palacos R products. CIB at 31-32. Complainants
also state that “the evidence about what Biomet knew and did not know belies any claim that the
trade secret was generally known.” Id. However, there is no record evidence that
adds any particular value, or
that it could not have been readily reverse engineered. 	The use of 	is
irrelevant because the asserted trade secrets do not specify
See CIB at 31-32. Finally, the use of a 5% final
chlorophyll concentrate is clearly listed in the C.F.R. provision and is therefore public knowledge.
JX-207C.
Further, Heraeus’s own patents and patent applications disclose the use of a chlorophyll
solution and refined peanut oil (including Biskin oil) to color the monomer component of
Heraeus’s bone cements. CX-237C at col. 1:45-50 (U.S. Patent No. 7,569,621) (“In the case of
the polymethyl methacrylate bone cements from Heraeus Kulzer GmbH, the chlorophyllin is
dissolved in the liquid monomer component by means of refined peanut oil (Biskin) as
solubiliser.”); see also Tr. (Spiegelberg) at 1341:6-1341:17; Tr. (Kluge) at 103:3-5 (publicly
known that peanut oil can be used as a solvent in chlorophyll solutions). 	Finally, the use of
chlorophyll in Palacos and the final concentration of chlorophyll in the liquid component were
published in Dr. Kühn’s textbook. JX-0103C at 110 and 213. Complainants do not offer evidence
that contradicts this information.
Therefore, given that the details of TS 132 are publicly disclosed in the Federal Register,
in Heraeus’ patents, and Dr. Kühn’s text, TS 132 was known outside of Heraeus. See Restatement
(Third) of Unfair Competition § 39 cmt. f (“information that is disclosed in a patent or contained

42
in published materials reasonably accessible to competitors does not qualify for protection”);
Mobile Medical Intern’l Corp. v. United States, 95 Fed. Cl. 706, 734 (Fed. Cl. 2010) (“As a general
proposition and according to Comment to section 1 of the Uniform Trade Secrets Act,’ information
is readily ascertainable if it is available in trade journals, reference books, or published
materials.’”) (quoting Uniform Trade Secrets Act §1 cmt., 14 U.L.A. 437). However, as for the
other trade secrets in this group, 130, 131, 133, and 134, which generally pertain to chlorophyll
mixing recipes, there is no evidence that they are publicly known, and Respondents do not even
argue that they are. See RIB at 69-70.
2. 	Extent Trade Secrets 130-134 Were Known Inside Heraeus
The discussion of Heraeus’ in-house protection all of its trade secrets above applies to TS
130-34.
3. 	Extent of Steps Taken By Heraeus to Guard Trade Secrets 130-134
As noted, TS 132 was not protected by Heraeus, because it was disclosed in Heraeus’
patents and in Dr. Kühn’s textbook. 	With respect to TS 130, 131, 133, and 134, the evidence
shows that a Heraeus employee, Dr. Gopp, provided Heraeus’s detailed chlorophyll recipe to Dr.
Specht in response to a request for chlorophyll samples that was to be provided to an outside, third-
party dermatologist. See JX-231C. This letter contained no confidentiality markings. See id.; see
also JX-251C (Gopp Dep. Tr.) at 50:6-24; JX-225C (Gopp Dep. Tr.) at 296:12-307:23 (Dr. Gopp’s
testimony regarding this issue, including admission that the recipe was not marked confidential).
Complainants argue that Heraeus sent only the chlorophyll sample to Dr. Specht to be given to the
dermatologist, and that the later email containing the information about the chlorophyll was sent
only to Dr. Specht. JX-231 at HERAEUSITC0323693. Whether the dermatologist received the
later sent email with information is not relevant to the issue, however. Dr. Gopp admitted, and the

43
documents themselves illustrate, that the sample and information were sent without any type of
confidential indicia. At the time the information was sent, Dr. Specht was not a Merck employee
(and thus arguably under a confidentiality agreement) but rather he was employed by the Merck-
Biomet Joint Venture, which did not have a confidentiality agreement with Heraeus during the
2002 time frame. Accordingly, Heraeus did not reasonably protect TS 130-134.
4. 	Value of Trade Secrets to Heraeus and Competitors
Heraeus argues that the green color of Palacos is a “signature” characteristic that provides
a “clear contrast to bone and tissue during surgery,” and is obtained by adding chlorophyll to the
liquid monomer (as well as the powder component). 	CIB at 18 and n.7. 	The Code of Federal
Regulations, however, has disclosed a method of coloring bone cement using a 5% chlorophyll
solution for decades. See JX-207C (21 C.F.R. § 73.3110). Moreover, Heraeus’s own patents and
patent applications disclosed the use of chlorophyll to color Heraeus’s products, including that it
is dissolved in peanut oil as a solvent.
Nor is there any record evidence that the particular methods of coloring bone cement
described in the asserted trade secrets provide a competitive advantage over the publicly known
C.F.R. procedure. 	Complainants’ experts did not compare the C.F.R. provision to the asserted
chlorophyll trade secrets, so there is no expert evidence on the issue. Tr. (Mays) at 521:13-523:3.
In particular, there is no evidence that 	adds any particular value over
See CIB 31-32; JX-207C (C.F.R. provision indicating that
chlorophyll should be “diluted to a 5 percent concentration”). Nor is there evidence that following
the “comprehensive flow chart” referenced in TS 131 has any economic value. See CRB at 10 n.5.
Therefore, Complainants have not established value for TS 130-134.

44
5. 	The Amount of Effort or Money Expended by Heraeus in Developing
As discussed earlier, there is not much evidence showing how any of the trade secrets were
developed. Again, however, the lack of evidence is not necessarily determinative of the existence
or absence of trade secret protection of TS 130-134.
6. 	The Ease or Difficulty of Acquisition or Duplication by Others
As discussed, the FDA issued exemptions for bone cement colorants in which use of 5%
chlorophyll solution in vegetable oil was described, and Heraeus’ patents described how to dilute
the chlorophyll solution into a final concentration.
Tr. (Spiegelberg) at 1341:25-
1342:12; Tr. (Sobolewski) at 1188:16-25, 1205:2-15.
Complainants did not present any
evidence to the contrary. 	Thus, TS 130-134 are relatively easy to acquire and/or duplicate by
others.
Therefore, on balance Heraeus’ claimed TS 130-134 are not protectable trade secrets.
D. 	The Asserted Zirconium Dioxide Trade Secret - TS 145
According to Complainants, the “supplier and part number of the zirconium dioxide used
in the Palacos R products comprise” TS 145. CIB at 30. Specifically, the zirconium dioxide has
a 	and is supplied by 	with particular article numbers, originally under the
trademark 	See id.; CX-0002C. 	This
product was allegedly sold only to Heraeus for use in Palacos R bone cements. See CIB at 30.

45
1. 	Extent Trade Secret 145 Was Known Outside Heraeus
As with TS 121-125, during the 	project Heraeus disclosed 	as the
zirconium dioxide product it used.
As the Staff points out, there is no evidence that there is more than one
brand of zirconium dioxide. See SIB at 33.
Heraeus originally purchased zirconium dioxide ZrO2 from 	and
only later purchased it from 	JX-258C (Schneider Dep. Tr.) at 267:13-268:4.
Tr. (Smith) at 1073:25-1074:2 (Biomet previously used zirconium
dioxide from 	in its Boneloc cement). 	The
Tr. (Smith) at
1106:21-1107:3
Thus, the 	zirconium dioxide was likely
readily identifiable to people in the industry. 	There is no evidence of a confidential supply
arrangement between Heraeus and 	See Tr. (Schneider) at 347:20-348:11 (not aware of any
agreement with confidentiality provision between 	and Heraeus during the time when
supplied zirconium dioxide to Heraeus).
The record does not specifically show when Heraeus began purchasing its zirconium
dioxide from 	however, when it began, 	supplied zirconium dioxide to Heraeus
through individual purchase orders, not pursuant to a supply agreement. See JX-0259C (Schneider
Dep. Tr.) at 214:19-216:17, 264:7-266:23; JX-0248C. The purchase orders of record, which do

46
not have a confidentiality marking, identify the zirconium dioxide purchased from
See JX-0259C (Schneider Dep. Tr.) at 216:11-17, 266:16-
268:7; Tr. (Blanchard) at 760:25-761:21; 762:19-763:3; RX-291C at HERAEUSITC025740.
At some point, Heraeus discontinued purchasing 	and/or 	from
and began purchasing the same chemical substance (with a different brand name and part number)
from 	Tr. (Blanchard) at 761:22-762:1.
RX-0289C.
Furthermore, the record includes a 2011 scientific publication suggesting that Heraeus
supplied a researcher with 	zirconium dioxide for an experiment that involved a
comparison with Palacos. Tr. (Spiegelberg) at 1343:5-25 and JX-209 at ESSCHEM0117290. An
online search for 	shows 	as the supplier and the 	part number claimed
as a trade secret. Tr. (Spiegelberg) at 1344:4-13; RX-765. Lastly, the bone cement textbook by
Dr. Kühn (published in 2000) also shows zirconium dioxide used in Heraeus’ product,
See JX-103C at Fig. 8a, ZBITC-1758458.
The lack of confidentiality of an 	indicates that Heraeus did not
originally intend to protect the confidentiality of this information. Moreover, the evidence shows
a lack of reasonable precautions to protect secrecy in Heraeus’s purchase orders from, at minimum,
which did not contain confidentiality provisions. And the scientific publications
discuss TS 145, as well. So TS 145 was known outside Heraeus.

47
2. 	Extent Trade Secret 145 Was Known Inside Heraeus
Again, the discussion of Heraeus’ in-house protection all of its trade secrets is discussed
above.
3. 	Extent of Steps Taken By Heraeus To Guard Trade Secret 145
As noted, Heraeus disclosed TS 145 to
zirconium dioxide in a textbook dated 2000, by
Heraeus employee Dr. Kühn. Finally, Heraeus disclosed its use of 	to a researcher in
2011. Accordingly, Heraeus did not take reasonable measures to protect the confidentiality of its
source and specific product name.
4. 	Value of TS 145 to Heraeus and Competitors
Heraeus’ particular choice of zirconium dioxide provided a “non-neglectable influence on
the properties of the cement” due to its 	and 	JX-204C at ZBITC-
0009041; see also JX-238C (Specht Dep. Tr.) at 206:20-208:1. Therefore, TS 145 did have some
value both to Heraeus and its competitors.
5. 	The Amount of Effort or Money Expended in Developing TS 145
Heraeus did not develop this product, it simply bought it from a supplier, and this factor
weighs against finding a protectable trade secret.
6. 	The Ease or Difficulty of Acquisition or Duplication by Others
In view of Heraeus’ disclosures, as described above, it stands to reason that TS 145 could
be very easily acquired or duplicated by others.
Considering all the relevant factors, although TS 145 does have some value to Heraeus, it
was disclosed on a multitude of occasions to various third parties, was generally known in the

48
industry, is easily reverse engineered, and Heraeus spent no effort developing it. 	On balance,
therefore, TS 145 is not a protectable trade secret.
VI. 	MISAPPROPRIATION OF THE TRADE SECRETS
The next analytical step is determining whether there has been misappropriation of
Heraeus’ asserted trade secrets. 	This involves consideration of three issues: 	ownership,
confidential disclosure or wrongful acquisition, and use. 	Certain Rubber Resins, 2014 WL
7497801, at *5 (citing Certain Sausage Casings, Inv. No. 337-TA-148/169, Initial Determination
(July 31, 1984)).
A. 	Ownership
“[O]ne ‘owns’ a trade secret when one knows of it, as long as it remains a secret.” Crawler
Cranes, Inv. No. 337-TA-887, Initial Determination at 134, n. 41. 	A trade secret may be
transferred; however, “its continuing secrecy provides the value, and any general disclosure
destroys the value.” Id. (citing DTM Research, LLC v. AT&T Corp., 245 F.3d 327, 331 (4th Cir.
2001)). Heraeus asserts that it owns a propriety interest in all of the asserted trade secrets because
it developed them and has consistently used them over the decades. CIB at 9-14. Respondents
dispute that Heraeus actually developed the asserted trade secrets, and as noted, the evidence on
this is sparse. However, the evidence does show that Heraeus used and is using the asserted trade
secrets. Tr. (Kluge) at 40:24-46:1, 61:22-69:24 and CDX-0001C.008, JX-01C, CX-1032C, CX-
1034C, CX-1035C, JX-167C (copolymer specifications 1-35); Tr. (KIuge) at 47:2-52:15; CX-
13C; JX-5C (powder and liquid specifications 121-124); Tr. (Kluge) at 52:16-54:10 (chlorophyll
asserted trade secrets 130-134); Tr. (Kluge) at 54:11-55:3 (zirconium dioxide trade secret 145).
Respondents do not effectively dispute this.

49
On the other hand, as explained above a number of the asserted trade secrets have not
remained secret. See discussion relating to TS 121-124, 130-134, and 145. Therefore, Heraeus
owns only TS 1-35, because these are the only ones that remain secret. Additionally, of course,
they are the only trade secrets that remain protectable.
B. 	Disclosure or Wrongful Acquisition
Misappropriation requires evidence that the “complainant disclosed the trade secret to
respondent while in a confidential relationship or that the respondent wrongfully took the trade
secret by unfair means.” Certain Rubber Resins, 2014 WL 7497801, at *5. A taking is wrongful
if, for instance, the respondent used a trade secret acquired by an employee under circumstances
giving rise to a secrecy obligation. See Certain Rubber Resins, Comm’n Op., at *19-20 (affirming
ID’s reasoning that Respondent “wrongfully took Complainant’s trade secrets by unfair means”
through copying information obtained by Complainant’s former employees under confidentiality
agreements); Certain Rubber Resins, Initial Determination, 2013 WL 4495127, at * 136-*140
(June 17, 2013).
Here, there was misappropriation by a Merck employee who originally was under an
obligation to keep Heraeus’ trade secrets confidential. Dr. Specht2 worked in the Merck laboratory
for bone cement starting in 1991. JX-238C (Specht Dep. Tr.) at 27:2-13. During this time,
See JX-125C; JX-134C. Technical confidential information about the Palacos
and Refobacin-Palacos bone cements were given to Dr. Specht during his tenure at Merck. JX-
2 Complainants argue that Respondents wrongfully secured Dr. Specht’s absence from the
evidentiary hearing, and that this weighs in favor of a finding of misappropriation. See CIB at 54-
55. Although the circumstances of Dr. Specht’s absence are suggestive, they do not warrant an
adverse inference or otherwise support a finding of misappropriation.

50
238C (Specht Dep. Tr.) at 28:15-30:21. Dr. Specht then joined the Biomet Merck Joint Venture,
and around 2002, this Joint Venture began working on “Project Galapagos,” an effort to develop
a Palacos-like cement. Tr. (Mays) at 391:18-392:4; JX-238C (Specht Dep. Tr.) at 76:8-21. The
project was headed by Roger Van Broeck, who had never been a Merck employee, and he chose
the name Galapagos because “it sounds [similar] to ‘Palacos.’” JX-0238C (Specht Dep. Tr.) at
76:8-21. Dr. Specht and others at Zimmer Biomet, including Dan Smith, knew that Dr. Specht
possessed 	non-public 	Heraeus 	technical 	information 	about 	Palacos, 	and 	knew 	that 	such
information was being used for the Galapagos bone cement development project. See, e.g., CX-
307C (email from R. Specht to D. Smith comparing potential copolymers to Plex 6612 and Plex
6613 specifications); JX-204C (email from R. Specht to D. Smith discussing zirconium dioxide
source and indicating this was not public information).
Although Respondents characterize this evidence as a “theory,” and note, as described
above, that some of the asserted trade secrets were not subject to lasting confidentiality agreements,
they do not expressly dispute that Dr. Specht learned the trade secrets during the course of his
employment with Merck. See RRB at 36-38. Therefore, Dr. Specht had knowledge of Heraeus’
confidential information, which he originally obtained while a secrecy obligation was in effect.
As discussed below, Respondents used this confidential information for the development of what
ultimately became Zimmer Biomet’s -1 and -3 formulations of Biomet Bone Cement R and
Refobacin Bone Cement R.
C. 	Use of the Asserted Trade Secrets
“Use” of a trade secret occurs “when goods that embody a trade secret are marketed, the
trade secret is employed in manufacturing or production, or is relied on to assist or accelerate
research or development.” 	Certain Crawler Cranes, Initial Determination, at 26-27 (citing

51
Restatement (Third) of Unfair Competition § 40, comment c). 	“An actor is liable for using the
trade secret with independently created improvements or modifications if the result is substantially
derived from the trade secret.” Id.
1. 	The Asserted Copolymer Trade Secrets TS 1-35
Respondents’ -1 Products
Biomet sought to create a bone cement 	CX-514C at
ZBITC-1696367, is a May 8, 2003 email chain among personnel of the Biomet Merck Joint
Venture and Biomet, Inc., stating,
CX-515C at ZBITC-1696371 is another Biomet
email regarding “Priority List for Bone Cement Projects,” including an entry for a
See also CX-563, at ZBITC-1753934 (August 25, 2005 presentation on “Background
and quality of Biomet Bone Cement”) (“Target for production: Make the cements as close as
possible to the existing ones . . . Use of same raw materials if possible or Use of materials with the
same specifications.”).
Biomet contracted with Esschem, the same copolymer manufacturer the Biomet Merck
Joint Venture had used, and consequently Esschem already knew of at least one Palacos copolymer
specification. 	See JX-238C (Specht Dep. Tr.) at 112:14-113:6, 115:16-20 (Mr. Norquist at
Esschem received at least one copolymer specification from Biomet-Merck); JX-24C; Tr.
(Sobolewski) at 1209:11-1211:6; JX-20C. For example, in June 2004, when evaluating copolymer
candidates from Esschem, Dr. Specht compared the copolymers against the Heraeus specifications
for Plex 6612 and Plex 6613, to “see where we are in comparison with the ‘original’ material.”

52
CX-307C at ZBITC-0009027. Dr. Specht specifically identified
See id. at ZBITC-0009022; see also JX-239C (Specht Dep. Tr.) at
235:22-242:13; JX-238C (Specht Dep. Tr.) at 120:4-122:22, 136:7-16, 158:16-161:7 (Dr. Specht
admits comparing tests on copolymer samples to
JX-0023C; CX-0082C: CX 272C: CX-83C; CX-87C.
Tr. (Mays) at 421:3- 422:8 and CX-38 (discussing change in
in next iteration of samples).
Respondents’ guidance to Esschem involved at least three other features of the -1 product.
First, Dr. Specht proposed a 	in the R262 and R263 copolymer beads, an
element of the Plex 6612 and Plex 6613 specifications, but
See Tr. (Mays) at 423:25-424:17; CX-38C (discussing specifications for
JX-0061C at ZBITC-0001397 (proposing specifications including
for R262 and R263); JX-239C (Specht Dep. Tr.) at 264:12-265:8. Second, he proposed a particular
that was an element of the asserted copolymer trade secret
specifications. 	See JX-61, at ZBITC-0001397 (April 19, 2005 email from R. Specht to E.
Sobolewski re “Specifications for 262 and 263”). Third, Respondents used the
See Tr. (Mays) at
427:17-431:9 and CX-1888, “Table 42-58” (showing
and “Table 6-94” (showing
Therefore, Respondents’ guidance to Esschem, especially by Dr. Specht, confirms that
Biomet made significant use of the asserted copolymer trade secret specifications in developing

53
the -1 product. See Tr. (Mays) at 431:10-21; cf. Computer Assoc. Int’l v. Quest Software, 333 F.
Supp. 2d 688, at 696-697 (N.D. Ill. 2004) (finding strong likelihood of misappropriation where
employees were “assigned to tasks that were nearly identical” to former employment and
“repeatedly accessed” the asserted trade secret during development). To be sure, Respondents also
engaged in their own research and development, both by themselves and via Esschem. 	See
generally RIB at 80-92. 	For instance, the R262 and R263 copolymers have an additional
specification, 	which is not a feature of the asserted trade secrets, and the
eventual 	of R262 and R263 are
somewhat different from the asserted trade secrets. See Tr. (Spiegelberg) at 1357:1-1358:16; JX-
0205C at TS 35; JX-0229. 	But engaging in some independent development is not enough to
establish independent development as a legal defense; the relevant efforts must actually be
“independent.” See Sausage Casings, 1984 WL 273789, at *95 (“it is not enough to assert that a
secret process could have been developed independently, without access to the confidential source
of information”). 	The development of Respondents’ -1 product copolymers was clearly not
independent in any meaningful sense.
The -3 Products
The same is true of the -3 product copolymers. In June 2014, a German court found Biomet
had misappropriated Heraeus’ trade secrets in developing its -1 product and enjoined the
production of -1 in Germany. See CIB at 55; RRB at 45. Biomet started developing a different
product, which was ultimately named the -3 product. 	Dr. Specht and Dan Smith, who were
involved in misappropriating trade secrets for the -1 cements,
See 	CX-643C 	at 	59 	(Zimmer 	Biomet’s 	Responses 	to

54
Interrogatories) (describing
Tr. (Smith) at 1164:7-25.
Dr. Specht 	with the goal of
See Tr. (Mays) at 432:21-433:4
which were derived using Heraeus’s specifications). The selection
of the -3 copolymers involved comparing 	to the specification for R262 (which was
developed through comparison to Heraeus’s Plex 6613). See Tr. (Mays) at 437:11-440:6; CX-482
at ZBITC-1191765 (Biomet December 2014 Validation Master Plan comparing specifications of
CX-
541C (March 2, 2015 email from Axel Steiof to D. Smith and R. Specht stating the plan
had already been chosen as an alternative to R263 in connection
with the -1 products, and Biomet determined to use 	as the R263 substitute for -3 products,
as well. See Tr. (Spiegelberg) at 1421:7-16; CX-468 at ZBITC-0080291 (technical report for -3
formulation indicating that R263 	CX-530C at 375.
Biomet’s work with 	for the -1 products included a comparison to the Plex 6612 and Plex
6613 particle size specifications. 	See Tr. (Mays) at 427:21-431:9; CX-1888 at “Table 42-58”
(showing Heraeus Plex 6612 particle size specification and comparison 	and “Table 6-
94” (showing Plex 6613 particle size specification). 	And Respondents considered a candidate
copolymer
although it was ultimately rejected after comparison with Plex 6613. JX-0239C (Specht Dep. Tr.)

55
at 323:20-324:7; see CX-0463C (2014 email containing comparison of R262, Plex 6613, and
Respondents argue that there is no evidence showing that any “alleged technical
information obtained by Dr. Specht was provided by Heraeus subject to confidentiality agreements
between Heraeus and Merck” because the
RRB at 36. Even assuming this point applies to the copolymer trade secrets,
however, the
long after the misappropriation took place. Respondents also argue that the -3
copolymers were developed independently. 	See RIB at 94.
See
CIB at 81-82.
See Tr. (Mays) at 436:25-444:6; CX-0482C at 764-65; JX-0101C at 651
As with the -1 product, therefore, the development of Respondents’ -3 product copolymers
was 	clearly 	not 	independent 	in 	any 	meaningful 	sense 	and 	was 	instead 	the 	product 	of
misappropriation of Heraeus’ trade secrets. So Respondents misappropriated and used Heraeus’
TS 1-35 in the development of their -1 and -3 bone cements.

56
2. 	The Asserted Powder and Liquid Specification Trade Secrets
As discussed above, TS 121-123 are not valid trade secrets. 	However, to the extent TS
121-123 are found to be protectable trade secrets, the evidence shows that they were used to gain
regulatory approval for the -1 and -3 products. See generally JX-0076C. As one example, when
seeking regulatory approval for Refobacin Bone Cement R in 2017, Respondents represented to
the FDA that the “bone cement powder and monomer materials used for the different sizes of
Refobacin Bone Cement R are the same as the materials used in [Refobacin Palacos R],” except
for the green colorant. Id. at 66. That is, Respondents represented that their powder and liquid
ingredients were the same as the powder and liquid ingredients in Refobacin Palacos R, except for
the chlorophyll.
Respondents make little effort to dispute this. 	See generally RIB at 108-09. 	Mr. Smith
testified that the -3 product’s liquid and powder components were developed independently, by
starting with target nominal values and developing specification ranges consistent with ISO
protocols. See Tr. (Smith) at 1114:13-1116:14. There is reason to doubt this, given
See JX-0215C; Tr. (Smith) at 1166:17-1167:12. 	But even
accepting Mr. Smith’s testimony on this point, his additional testimony that the words “the
materials used . . . are the same as” in Respondents’ FDA application really meant “the types of
material are the same” is facially unbelievable. 	Tr. (Smith) at 1118:23-1119:8. 	It is also
uncorroborated by Dr. Spiegelberg, because FDA applications for other bone cements claim
substantial equivalency but not identical ingredients, except where the application is for a product
made by the same manufacturer. See Tr. (Spiegelberg) at 1359:1-1360:5 (citing RDX-0003.51);
RX-0737.0002 (application for a Tecres bone cement where the “bone cement formulation is
identical” to a previous Tecres bone cement) (emphasis in original). 	Respondents bluntly

57
represented that the -3 product’s ingredients were “the same as” the ingredients in Refobacin
Palacos R, and they could only have made that representation if they knew both sets of ingredients,
that is, if they knew TS 121-23 and determined to use it in their FDA application. 	And
Respondents similarly employed TS 121-23 in connection with the European regulatory filings for
the -1 product. See JX-0228C at 84-87. Therefore, Respondents misappropriated TS 121-23 in
relation to the -1 and -3 products.
3. 	The Asserted Chlorophyll Trade Secrets
As discussed above, TS 130-134 are not valid trade secrets. Moreover, to the extent that
they are found to be protectable, they were not used by Respondents. TS 130-32 all require
but the -1 product used an
and the -3 product uses a 	See Tr. (Mays) at 473:3-474:12 (discussing JX-
0228C at 85). TS 133 and 134 require
(TS 133), and
(TS 134). 	The record appears to be silent on whether either of these steps occurred in
coloring the -1 product, and the record affirmatively demonstrates that the
See RX-0438C.0015; JX-0076C at 66 (chlorophyll “is present in the monomer”). Therefore,
even though Dr. Specht had informed Mr. Smith that
and Respondents use chlorophyll as a colorant, Respondents did not misappropriate TS 130-134
in developing the accused bone cement products because they did not use the specific asserted
trade secrets.

58
4. 	The Asserted Zirconium Dioxide Trade Secret
TS 145, pertaining to zirconium dioxide, is not a valid trade secret, but to the extent it is
found to be, the evidence shows it was misappropriated. 	Admittedly, there is no evidence
Respondents practice TS 145, because they do not obtain their zirconium dioxide from
under the relevant brand names and part numbers. See Tr. (Smith) at 1106:7-1107:8; JX-0205C
at 26 (reciting the particulars of TS 145). In fact, Respondents did not even select the zirconium
dioxide for their bone cements; that selection was made by a contractor. See Tr. (Smith) at 1106:7-
15. Nonetheless, both Dr. Specht and Mr. Smith were aware no later than 2004 that Heraeus used
See generally CX-0518C. 	Although Mr.
Smith’s testimony suggests that uncovering the identity of that vendor 	would not have been
difficult, because
Respondents represented to the FDA and to European regulators that the materials used for both
the -1 product and the -3 product “are the same as the materials used” in Refobacin Palacos R. JX-
0076 at 66; see Tr. (Smith) at 1106:16-1107:8; JX-0228C at 83 (“The supplier of the zirconium
dioxide remains the same.”). 	As with the asserted powder and liquid trade secrets, this
representation “ease[d] 	the regulatory 	process” and 	was 	made possible by Respondents’
knowledge of the asserted zirconium dioxide trade secret. Tr. (Mays) at 466:7-16. This constitutes
misappropriation as to both the -1 product and the -3 product.
D. 	Summary
In summary, Respondents used and misappropriated protectable trade secrets relating to
the copolymer specifications (TS 1-35), and to the extent they are found to be protectable trade
secrets, the powder and liquid specifications (TS 121-123) and zirconium dioxide source (TS 145).

59
The evidence does not support a finding of use or misappropriation for the asserted trade secrets
relating to chlorophyll (TS 130-134).
E. 	Harm to Heraeus by Respondents’ Misappropriation
This issue is intertwined with the domestic industry discussion and is addressed below.
VII. 	DOMESTIC INDUSTRY
In a case like this where Complainants’ product is manufactured outside the U.S., a
domestic industry may be established through activities having a close relationship to the products
at issue – in this case bone cement. Cast-Iron Stoves, Inv. No. 337-TA-69, USITC Pub. No. 1126,
Comm’n Op. at 11 (Jan. 1981) 	Moreover, the domestic industry need not involve use of the
asserted trade secrets at issue; however, the domestic industry must be the industry that is targeted
by, or that directly competes with, the unfair imports. TianRui, 661 F.3d at 1337. While there is
no bright-line rule to determine whether a domestic industry exists, it is necessary to distinguish
Complainants’ domestic activities from those of a mere importer. See Schaper, 717 F.2d at 1373.
As noted, one approach to evaluating domestic industry in this situation is a “value-added”
analysis, where domestic activities that add value to a product are scrutinized. E.g., Certain Cube
Puzzles, 	Comm’n 	Op. 	at 	30 	(quality 	control, 	packaging, 	and 	repair 	operations 	added
“approximately 50 percent of the value of the cube puzzle”). 	As the Staff observes, however,
Complainants have not pursued this approach. See SIB at 69; Tr. (Prowse) at 592:19-23. Another
method is to consider activities that do not necessarily add value to a product, but are connected
to the product in some concrete way, such as repair and installation work. E.g., Certain Airtight
Cast-Iron Stoves, Comm’n Op. at 11. Complainants have not pursued this method, either.
Instead, Complainants assert that a domestic industry exists under Section 337(a)(1)
“through its investments in education, training, domestic support, research and development,

60
quality control, domestic component manufacturing, distribution, marketing, and sale of Heraeus’
bone cement products and related mixing systems.” CIB at 85 (citing Schaper, 717 F.2d at 1373).
Complainants provide a brief history of the alleged domestic industry, explaining that Zimmer
Biomet distributed Palacos before HMUS was established, and once HMUS was established,
Complainants decided to
CIB at 92 (citing Tr. (Childers) at 151:19-22). But most
of Complainants’ investments have been in areas that any mere importer would also invest in,
including “sales, marketing, regulatory compliance and research.” Tr. (Prowse) at 592:3-8. And
investments that might be analyzed under a “value-added” or repair/installation rubric have been
withdrawn (as with mixing and delivery systems). See Order No. 30 (Nov. 19, 2019).
So of the various categories of investments Heraeus relies on for its domestic industry,
several do not qualify. 	The qualifying categories include education, training, research and
development, and quality control. See CIB at 85. With this background in mind, Heraeus’ specific
domestic activities can be analyzed to determine whether they qualify as legitimate “domestic
industry expenses.” See id. at 91-114.
A. 	Training and Education
The first activity that Heraeus alleges makes up its domestic industry is training and
education, and the expenditures for this involve a number of different events. 	One event is the
Heraeus sponsored “Reduce Revisions” initiative, which is a program to reduce “total joint
arthroplasty” (TJA) revisions (i.e., multiple surgeries to replace the same joint). Tr. (Prowse) at
545:3-9; CDX-0003.14. 	Heraeus presented evidence that Reduce Revisions includes a website,
roundtable discussions, an annual survey, live symposia, and live web seminars that are managed
by an editorial board of surgeons. CIB at 95. JX-0141C; Tr. (Childers) at 166:10-15; Tr. (Prowse)

61
at 546:22-547:8. 	Heraeus further alleges that its Reduce Revisions initiative is “not focused on
the sale of Palacos bone cement products, but [is] instead geared towards providing an educational
platform and resource relevant to existing Palacos users, as well as other health care professionals
using bone cements in performing TJA’s.” CIB at 94-95 (footnote omitted) (citing Tr. (Childers)
at 165:10-21; Tr. (Prowse) at 547:23-548:7). Heraeus alleges that it invested 	in support
of the various Reduce Revisions programs, excluding labor and prior to the filing of the complaint.
CIB at 97, citing Tr. (Prowse) at 550:9-24; JX-0140C; JX-0175C; CX-1276C, CX-1277C, CX-
1278C, CX-1279C, CX-1280C, CX-1281C, CX-1283C, CX-1284C, CX-1285C, CX-1286C, CX-
1287C, CX-1288C, CX-1289C, CX-1290C, CX-1291C; CX-1380C; CX-1385C; CX-1471C; CX-
1534C; CX-1536C; CX-1598C.
Another 	aspect 	of 	the 	alleged 	training 	and 	education 	expenditures 	is 	Heraeus’
“Palacademy,” which it describes as a “Heraeus-conducted Product Training and Education
institution.” CIB at 98, citing Tr. (Childers) at 156:7-15, 162:24-163:6; Tr. (Prowse) at 550:25-
551:11; JX-0040C at 518. Heraeus submits that the purpose of the Palacademy is “to make training
and education (e.g. hands on training, lectures and presentations) on [Heraeus’] products and
Medical Technologies available to [Healthcare Professionals].” CIB at 98-99 (citing JX-0040C;
Tr. (Childers) at 156:7-12). CIB at 98-99. Before March 2019 (the filing date of the complaint),
Heraeus put on two major Palacademy events and many local regional Palacademy events. See
Tr. (Childers) at 158:7-10, 207:23-208:6 (“So there have been several national and then there’s
been many local and regional and they take many different forms from in servicing at a hospital
on how to use products, doing grand rounds or journal club, different forms.”). Heraeus further
asserts that the Palacademy events are highly technical and educational in nature, because the
events contract with medical professionals to author and present lectures, and the majority of

62
attendees are users of Palacos. See Tr. (Childers) at 156:20-157:5; 159:12-160:9, 161:18-162:13;
Tr. (Prowse) at 551:12-552:1.
Heraeus alleges that it invested 	in conducting the Palacademy events in the United
States, excluding labor, prior to the filing of the complaint in this Investigation. See Tr. (Prowse)
at 554:5-18; JX-0139C; JX-0140C; JX-0175C; JX-232C; CX-1054C; CX-1276C— CX-1292C;
CX-1437C; CX-1444C; CX-1469C; CX-1482C; CX-1524C; CX-1549C; CX-1556C; CX-1559C;
CX-1565C; CX-1577C; CX-1587C—CX-1589C. 	Invoices related to associated speaker costs,
such as travel, lodging, the speakers’ time, and meals, are, according to Heraeus’ Code of Conduct,
“modest in value and subordinate in time and focus to the training and/or educational purpose of
the meeting.” CIB at101, citing JX-0040C at 519.
Heraeus further alleges that “Other Educational Events and Medical Conferences” also are
part of the training and education section of its domestic industry. 	Heraeus includes costs for
exhibition booths and costs to sponsor education events and medical conferences in this category.
See CIB at 56-58. Heraeus alleges that it spent 	in sponsoring and participating in these
other conferences. Id. at 103. Heraeus contends that it plays “an important role in enhancing the
learning experience for attendees.” Id. at 103 (quoting RX-0694, which is the 2019 Association
of Hip and Knee Surgeon Annual Meeting website).
On balance, the Reduce Revisions initiative is fairly characterized as an educational tool.
The Reduce Revisions “Project Plan” document states that the goal is to “Reduce total joint
arthroplasty (TJA) revisions by,” for example, having clinicians communicate, collaborate, and
share information “in a way that improves the quality of patient care.” JX-0141C at 4. The Staff
argues against finding the Reduce Revisions to be educational, noting that the company that
develops content for the Reduce Revisions website, 	is a marketing and advertising

63
company. See SIB at 55 (citing Tr. (Childers) at 191:7-14 (Heraeus hired 	“for
strategy, consulting, marketing, branding”)). And another goal of the program is to “Associate the
Heraeus brand” with the initiative (id.), however, the website and seminars actually do contain
educational content relating to total joint replacement (JX-106). The site has a number of articles
related to TJA, which appear to be aimed at medical professionals, and do not relate to HMUS’
Palacos. 	See JX-106. 	In fact, the initiative has no obvious link to Palacos bone cement at all,
especially when considering the goal of the initiative is to reduce the number of TJAs. 	Thus,
Complainants’ assertion that the Reduce.revisions.org website is “not a vehicle to convey
marketing material to tout Heraeus’ product” is reasonably accurate. 	CPB at 138. 	Overall, the
Reduce Revisions is somewhat related to bone cement and joint replacement, and thus, does
contribute to Complainants’ education and domestic industry.
However, Respondents and the Staff are correct that the Palacademy events are primarily
marketing activities. Heraeus’ sales reps attend the Palacademy events, and Heraeus holds them
at expensive restaurants and hotels, including five star properties in Las Vegas (the Green Valley
Ranch Resort and the Aria Resort), and tourist attractions such as the Greenbrier (an event which
included a tour of a distillery and a presentation on the Impact of War and Bourbon on the
Evolution of Orthopedics). 	See RIB at 122 	(citing JX-0249C (Childers Dep. Tr.) at 151:9-13,
162:14-19; CX-1394C; CX-1434C; CX-1438C; JX-49C). The Staff notes that Heraeus generally
pays travel and lodging costs for attendees, and many attendees are not presently Heraeus
customers. 	See SIB at 56-57 (citing JX-249C (Childers Dep. Tr.) at 147:17-19, 148:3-9
(invitations may be sent out to “all the members of a society or a congress”); JX-249C (Childers
Dep. Tr.) at 155:15-156:18 (generally Palacademy attendees’ food and hotel costs are paid for);
Tr. (Childers) at 211:24-212:4 (Heraeus will pay for airfare for health professionals and food at

64
the events); Tr. (Prowse) at 602:23-603:14 (evidence indicates that one-third of attendees at 2018
Palacademy event were not customers); id. at 617:2-13 (for May 2019 Palacademy event, evidence
indicates that more than half of attendees were not customers)). 	Further, Nicole Petermann,
President of Heraeus Medical, testified that Palacademy events are “part of the marketing budget”
in the United States. See JX-256C (Petermann Dep. Tr.) at 37:18-19, 84:4-7. Thus, the location
of the events, the paid travel and lodging costs for attendees, and the majority of non-related topics
covered in the programs all indicate that the events are marketing activities.
Moreover, the Palacademy has only an attenuated relationship to Heraeus’ bone cement
product. For example, the Staff points to the presentation “Why Revisions Matter” (CX-0154C),
which was highlighted by Heraeus’s Country Manager as “typical.” 	Tr. (Childers) at 159:12-
160:24. 	But this presentation had little to no information on bone cements. 	See generally CX-
0154C. 	Similarly, another Palacademy presentation entitled “Healthcare Change Management”
contained little or no information on bone cements. See CX-151C; Tr. (Childers) at 209:7-211:17
(identifying CX-151C as a Palacademy presentation). And although some Palacademy activities
appear to relate to bone cement use, as the Staff points out, these activities were not separately
accounted for. See SIB at 57-58 (citing Tr. (Prouse) at 596, 671).
Respondents and the Staff are also correct that HMUS’ spending for attendance and
participation at trade shows and conferences are clearly marketing and sales expenses that any
importer incurs. 	The Staff identifies numerous examples of Heraeus’ trade show booths where
marketing material is displayed. 	See generally SIB at 58-59; Tr. (Mulhern) at 914:21-915:22;
RDX-0002C.10; JX-249C (Childers Dep. Tr.) at 171:4-172:3; JX-250C (Cruz Dep. Tr.) at 140:5-
15, (trade shows are “part of the marketing effort by Heraeus with respect to cements”); JX-255C
(Kolbe Dep. Tr.) at 67:20-68:13 (stating that at industry events such as the Association of

65
Operating Room Nurses meeting, “[w]e have the sales collateral available, we have banners, there
might be an advertisement in a periodical that’s associated with the event, we have a booth at the
event”); JX-256C (Petermann Dep. Tr.) at 83:9-84:13 (“we do a lot of . . . congresses and trade
fairs in the United States . . . we are present there, represent our products, and are there with sales
reps explaining the products, and too are very active in – in marketing our products”). Thus, these
expenses are not part of Complainants’ education and training domestic industry.
B. 	Domestic Facility Expenditures
Heraeus asserts that it had rent and lease expenditures of 	for office and storage
facilities that should be seen as part of its education and training domestic industry. See CIB at
104 (citing Tr. (Prowse) at 563:8-16). Specifically, Heraeus claims that it rents an office facility
in Yardley, Pennsylvania, “where [Heraeus] house[s] [its] Human Resources, Analysis, Customer
Service, and Operations functions.” Tr. (Childers) at 152:20-22; JX-0249C (Childers Dep. Tr.) at
24:19-22. Heraeus alleges that the rent and lease expenses for this office facility were 	in
2017 and 	in 2018. Tr. (Prowse) at 563:3-16; CX-0146C; CX-0173C. Heraeus further
claims a storage unit in Nashville, Tennessee, rented from Extra Space Storage, as a domestic
industry expense. 	The storage space holds literature and samples of Heraeus’ bone cement
products and accessories for use at various training and education events. See JX-0249C (Childers
Dep. Tr.) at 40:21-22; CX-0180C. 	The rent for this storage facility, prefiling, was 	Tr.
(Prowse) at 563:8-16; CX-1450C.
Similar to the expenses incurred by Complainants at marketing events, discussed above,
the expenses incurred in renting the office and storage space are marketing expenses and do not
contribute to Complainants’ domestic industry. The Pennsylvania office supports primarily sales
and marketing functions (SIB at 67 (citing Tr. (Mulhern) at 911:10-912:2)) and the Nashville

66
facility stores literature used at sales and marketing conferences (id. (citing Tr. (Mulhern) at 912:7-
12. RIB at 131-132)).
C. 	Domestic Labor Expenditures
Heraeus claims that it paid 	for 76 employees’ salaries in the United States, and
these employees are involved in “activities pertaining to Palacos bone cement products and their
delivery and mixing system. CIB at 104. The main employees are:
(1) President and Country/General Manager, Devin Childers, whose job responsibilities
include regulatory, research and development, clinical education, operations, marketing, and
finance functions. See Tr. (Childers) at 149:5-11, 171:11-172:9; 180:16-181:1. Heraeus submits
that Mr. Childers spends approximately 45% of his time on training and education, regulatory,
quality affairs, and research and development functions, and on that basis Heraeus claims it spent
for his services through the filing of the complaint. CIB at 105 (citing Tr. (Childers)
at 172:10-14; CDX-003C.00040; JX-0161C—JX-0163C; CX- 0193C; CX-1615C).3
(2) Vice President of Marketing and Education, Baxter (William) Webb, who performs
activities relating to Heraeus’ education and training programs and oversees other members of the
marketing and education department at Heraeus. Mr. Webb allegedly spends approximately 45-
55% of his time on either clinical training and education, regulatory affairs, or research and
development, and Heraeus claims it spent between 	and 	through the filing of
the complaint. See CIB at 106 (citing Tr. (Childers) at 174:18-23; CDX-003C.00040; JX-0161C-
JX-0163C; CX-0193C; CX-1615C).
(3) 	HMUS’ 	Scientific 	Quality 	Affairs 	Analyst, 	Carly 	Ducharme, 	had 	two 	main
responsibilities: regulatory (e.g., she “maintain[ed] the US system for FDA compliance” (JX-
3 Heraeus’ evidence related to time percentages of Mr. Childers and Mr. Webb are the allegedly
new evidence that is the subject of Respondents’ motion to strike.

67
0052C; Tr. (Childers) at 173:3-10)), and scientific affairs (e.g., she “work[ed] with the Head of
Marketing to plan, get approval, contract and manage US-based research studies” (JX-0052C)).
In addition, Ms. Ducharme allegedly supported HMUS’ educational efforts. See Tr. (Childers) at
154:12-21. Ms. Ducharme spent almost 100% of her time on these functions, and Heraeus submits
that it expended 	for her services through the filing of the Complaint. CIB at 106 (citing
CDX-003C.00040; JX-0161C-JX-0163C; CX-0193C; CX-1615C).
(4) Clinical education employees, responsible for educating nurses, doctors, physician
assistants, scrub technicians, and other clinical personnel, and Heraeus’ internal team, on the
treatment of patients using the Palacos bone cement products and their delivery and mixing
systems. 	See Tr. (Childers) at 172:15-173:3; CX-0170C (internal anatomy presentation); CX-
0192C (internal total joint arthroplasty presentation). Heraeus states it expended 	for the
clinical education team’s services through the filing of the Complaint. CIB at107 (citing CDX-
003C.00040; JX-0161C-JX-0163C; CX- 0193C; CX-1615C).
Heraeus alleges that these salaries (totaling 	represent between 	and
of its gross sales of Palacos through the filing of the Complaint. CIB at 107 (citing CDX-
003C.00040; JX-0161C-JX-0163C; CX-0193C; CX-1615C; JX-0047C).4 The Staff’s assessment
of this aspect of Complainants’ domestic industry allegations is correct. See SIB at 60-61. Only
three clinical education employees and one quality affairs employee should be considered as
qualifying expenses related to Heraeus’ education and training domestic industry; in particular,
three clinical education employees 	“appear to
conduct and oversee training related to the bone cements.” 	SIB at 60-61. 	These salaries were
CDX-0003C.0040 	(listing 	“Clinical 	Education 	Subtotal”). 	Furthermore, 	Ms.
4 The percent of gross sales evidence, too, is part of Respondents’ motion to strike.

68
Ducharme’s activity should be considered a non-sales and marketing expense, because, giving
Heraeus the benefit of the doubt, at least some of her work focuses specifically on clinical research
studies. Thus, salaries totaling 	fairly comprise a part of Complainants’ claimed domestic
industry. 	The other employees (Mr. Childers and Mr. Webb), who are quite senior, likely do
engage in some educational, training, research, and quality control-related activities, particularly
of an administrative and supervisory nature. However, aside from Mssrs. Childers and Webb, only
four of Heraeus’ 76 domestic employees engage in its domestic industry, accounting for only
out of a total payroll of 	It is therefore implausible that Mr. Childers and Mr.
Webb (who, as noted, is responsible for both marketing and education) spend 45% or more of their
time on the domestic industry. It is much more likely that they are focused on activities that any
importer would typically incur, rather than education, training, research, and quality control, and
their contribution to legitimate payroll expenses is at best de minimis.
D. 	Contracting Costs
Finally, Heraeus submits that its contracts with other professionals and companies for
assistance related to quality assurance, customer service, and education should be viewed as
domestic industry expenditures. Heraeus lists the following:
(1) 	which assists Heraeus “with its quality systems to ensure that” products
are in compliance with manufacturing specifications and provides consulting on FDA market
approval and other government regulations. 	CIB at 109 (citing Tr. (Childers) at 176:2-22; CX-
0616). Heraeus alleges that it spent 	in fees paid to the 	CIB at 109. On the
one hand, the Staff is correct that the work done by the 	is “not sales and marketing
expenses.” 	SIB at 63-64. On the other hand, Respondents are correct that the activities of the

69
“are no different than those undertaken by a ‘mere importer,’ and therefore, are not
relevant to the domestic industry inquiry.” RIB at 128.
(2) 	was hired by Heraeus for three different tasks: to provide assistance with
licensure to enable shipping to all 50 states, to advise on aspects of commercializing Palacos in
the U.S., and to provide information for the manufacture of Heraeus’ mixing system components.
See CIB at 109-11 (citing CX-0140C). Heraeus claims expenses of 	for these three tasks.
See Tr. (Prowse) at 563-64. As the Staff notes, however, the 	website defines its role
as “support to marketing, sales and distribution activities.” 	See SIB at 64 (citing RX-734); see
also Tr. (Mulhern) at 904:22-906. 	Complainants’ retained this company to aid Complainants’
marketing strategy, and thus, the associated expenses are not part of Complainants’ education and
training domestic industry.
(3) 	is a consulting agency that Heraeus hired to provide “medical education”
services, along with a range of marketing planning and support initiatives. CIB at 110. Heraeus
contends that its expert, Dr. Prowse, separated out the educational work from the marketing work
before presenting his opinions of domestic industry expenditures. 	Heraeus accordingly alleges
that it spent 	on educational assistance from 	activities include creation of
a website for the Reduce Revisions initiative, website strategy for the Palacademy initiative, and
unspecified services related to other educational events and medical conferences. See CIB at 110-
111. 	As the Staff and Respondents both contend, however, 	is principally a
marketing firm engaged to help Heraeus with brand development. See SIB at 64-65; RIB at 127.
Numerous facts point to this conclusion: the firm holds itself out as providing
(RX-0881.0001); it promotes the idea that

70
(RX-0882.0002); it advocates use of
(id.);
(JX-0139C at 1); and the testimony of even Heraeus’
witnesses suggests that 	services were primarily marketing-oriented (see Tr.
(Childers) at 190-91; JX-0255C (Kolbe Dep. Tr.) at 66 	is “an ad agency”); Tr.
(Prowse) at 623:10-624:17). Although Dr. Prowse did not count the entirety of Heraeus’ payments
to 	in forming his opinion, because he recognized that some payments were for
marketing, the basis for his allocation is to a large extent either not well-founded or not entirely
clear. See Tr. (Prowse) at 559:6-560:2. Specifically, he included 	work related to
Palacademy (which, as discussed above, is more marketing than education) and he lumped a
number of 	activities into the catch-all category “Other Education and Training,”
which is unduly vague, particularly given 	conflation of marketing and education
in its own marketing materials, and which may refer to the other education and conferences found
above to be non-qualifying. 	See id. (citing CDX-0003C.0037); CIB at 56-58. 	So the
preponderance of the evidence does not show that 	expenses contribute to
Complainants’ education and training domestic industry.
(4) Medical professionals who Heraeus hired to give lectures and lead training and
educational sessions at, for example, Palacademy and Reduce Revisions events. Heraeus states it
invested 	in fees for these medical professionals. Tr. (Prowse) at 563-64. Because they
contend that Palacademy and Reduce Revisions events are sales events, the Staff and Respondents
assert that these expenses are primarily sales and marketing investments and should not be part of
the domestic industry expenditures. See SIB at 66; RIB at 126. To be sure, it is not clear to what

71
extent these professionals worked only on the Reduce Revisions initiative (which counts toward
the domestic industry) or Palacademy (which does not), or both, or neither. See generally CIB at
111-12. Nonetheless, giving Complainants the benefit of the doubt, the entirety of this category
of expenses will be counted, so the lecturers and participants in Complainants’ education and
training endeavors are part of Complainants’ education and training domestic industry.
(5) 	is a warehouse in which Heraeus rents about 4,000 sq. ft.
for “warehousing and distribution, as well [as] establishing and maintaining ‘a device complaint
record system,’ complying ‘with its Medical Device Reporting (MDR) obligations,’ and
maintaining ‘regulatory compliance,’ customer support, and more.” CIB at 112 (citing JX-0039C;
Tr. (Childers) at 203:15-22; Tr. (Prowse) at 564:19-22). Heraeus alleges that it spent 	in
fees paid to 	for these services. 	CIB at 112. 	But rental of storage space is a typical
expense for any importer of products into the United States, and these expenses are not part of
Heraeus’ claimed domestic industry. See Certain Portable Electronic Calculators, Inv. No. 337-
TA-198, Initial Determination, 1985 WL 303607, at *51 (April 18, 1985) (“warehousing is
considered an activity of the type typically engaged in by importers and also will not be considered
part of the domestic industry”).
(6) 	allegedly assists Heraeus with “sales management to gain and
maintain new contracts through [relationships] with a targeted group.” 	CIB at 113 (citing JX-
005C; Tr. (Prowse) at 564:18-19). Heraeus states it paid 	in fees to 	CIB
at 113. As with 	above, Complainants’ own characterization of this entity as an aid to
sales management clearly portrays it as a marketing relationship and not part of the domestic
industry.

72
(7) Domestic Component Expenditures includes adapters and medical hoses that are used
with Heraeus’ Palacos bone cements and are purchased from a company named
See CIB at 113. The hoses allegedly are custom fabricated through direction from
Heraeus. 	See Tr. (Childers) at 177:13-22; Tr. (Prowse) at 565:4-17. 	Heraeus states it invested
towards the manufacture of these components. CIB at 113. But these components are
not part of this investigation, and they also have no connection to the claimed education, training,
research, and quality control domestic industry.5
E. 	Analysis
Complainants’ activities in the U.S., beyond those activities of a “mere importer,” revolve
around education and training related to total joint replacements and to a lesser degree to bone
cement usage, as well as research and development; there is little evidence, however, that quality
control is part of the claimed industry. The investments in these categories of activities include
for the Reduce Revisions initiative, 	for payroll, and 	for medical
professionals. The amount of expenditures is not necessarily even relevant to the analysis, because
in trade secret investigations the significant/substantial requirement of Section 337(a)(3) does not
expressly apply. See CIB at 88-89 (citing 19 U.S.C. § 1337(a)(3)). But even if Complainants were
required to make a showing of significance or substantiality, they have done so.
F. 	Substantial Injury To Domestic Industry
So understood, however, the domestic industry is disconnected from Complainants’ bone
cement product to a degree that it is simply not “subject to injury or destruction as a result of
respondents’ unfair acts.” CIB at 90 (quoting Steel Railway Wheels, ID at 79-80). There are two
particular problems.
5 This evidence also was part of Respondents’ motion to strike.

73
First, the domestic industry is not really an industry as that term is conventionally
understood, because it does not turn a profit. 	Although Complainants’ sales revenues are not
entirely of Palacos products – for instance, they include other goods such as “Palabowl” – there
is no record evidence that the domestic industry generates any revenues at all. 	See JX-0047C
(sales spreadsheet). It is not required to, of course; as Complainants explain, it is sufficient but
not necessary for the existence of a domestic industry if Section 337(a)(3) is satisfied, and Section
337(a)(3) focuses entirely on expenses rather than revenues. 	See CIB at 88-89; 19 U.S.C. §
1337(a)(3). 	But an industry that consists entirely of expenditures on education, training, and
research and development, with no concomitant revenues, is an industry that is wholly insulated
from competition. 	The domestic industry proven here could conceivably continue even if
Respondents captured the entirety of the domestic bone cement market.
Second, even assuming that the domestic industry generates some revenues, its nature is
such that it is not subject to injury as a result of Respondents’ importation of bone cement. See
Rubber Resins, Comm’n Op., 2014 WL 7497801, at *5 (“Therefore, there is a requirement not
only that the complainant demonstrate the existence of a domestic industry, but also that there be
actual injury or the threat of substantial injury to a domestic industry.”). The question is whether
the unfair imports have, or threaten to have, a substantial adverse effect on the domestic industry.
19 U.S.C. § 1337(a)(1)(A)(i). 	The domestic industry is education, training, and research and
development. 	But 	Complainants 	fail 	to 	provide 	any 	evidence 	that 	the 	importation 	of
Respondents’ bone cement causes harm or threatens to cause harm to Complainants’ education,
training, and research and development activities. Respondents do not argue this point, but rather
focus on the alleged injury to the sale of Heraeus’ bone cement. See RIB at 132-47. The Staff,
on the other hand, recognizes the problem and correctly notes that “Complainants have provided

74
no expert testimony indicating that the alleged unfair imports have affected Heraeus’ investments
in education and training, compliance costs, or clinical education employee salaries.” SIB at 79;
see Certain Activity Tracking Devices, Inv. 337-TA-963, Initial Determination, 2016 WL
11596099, at *43 (finding failure to show substantial injury due, inter alia, to the lack of evidence
“connecting 	[Complainant’s] 	sales 	to 	the 	alleged 	domestic 	industry 	in 	research 	and
development”).
These two considerations are fatal to Complainants’ case. 	Complainants’ domestic
industry is not capable of being injured by Respondents’ unfair acts, and, assuming it is,
Complainants fail to meet their burden of proving harm to their domestic industry as a result of
Respondents’ unfair acts. 	So the evidence does not support a finding of substantial injury or a
threat of substantial injury to the Complainants’ domestic industry, as required by Section
337(a)(1)(A)(i).
Nonetheless, to the extent that a domestic industry is found to exist with respect to Heraeus’
bone cement – and this is the focus of the parties’ briefing on the subject – Heraeus similarly failed
to establish injury, as explained below.
G. 	Customer Confusion
Heraeus alleges that Respondents “sewed customer confusion” in an effort to sell the
accused products instead of Palacos. 	CIB at 125. 	Heraeus presents evidence that once
Respondents had the Accused Products available to sell in the U.S., they began to sell off their
remaining Palacos bone cement and told customers that the Accused Products were similar to or
the same as Palacos and “were replacements for Palacos.” Id. at 125-128. Complainants call this
strategy Zimmer Biomet’s “conversion program.” CIB at 117. Heraeus alleges that this strategy

75
ultimately resulted in lost sales of Palacos (id. at 128), significant future lost sales (id. at 129), and
price erosion (id. at 139).
With respect to the lost sales allegations, Complainants present market share evidence that
purportedly shows a loss to Heraeus. 	Complainants allege that in 2017, Zimmer Biomet sold
approximately 	and in 2018, when Respondents introduced their
own products and HMUS started selling Palacos in the U.S. directly,
See CIB at 130 (citing Tr. Prowse at 676:10-
677:23). They further allege that “[n]early that entire revenue shortfall was made up by Zimmer
Biomet’s sales of the Accused Products 	and HMUS’ sales of Palacos 	CIB
at 130. 	Thus, Complainants argue, the presence of Accused Products resulted in less sales of
Palacos by Respondents. 	However, the evidence also shows an increase in market share by
Heraeus’ own sales of its Palacos product in 2018, which occurred because that was the first year
HMUS directly sold its own product in the United States. 	Thus, Complainants own allegations
fail to show lost market share. If any loss occurred, it actually was Respondents’ loss of market
share of sale of Palacos. This loss is not an injury to Complainants’ domestic industry.
Complainants further contend that the above evidence of Respondents’ lower sales of
Palacos illustrates that HMUS would have had substantially greater sales in 2018 were it not for
Zimmer Biomet selling their own products. Id. at 131 (“The only logical conclusion from the fact
that the two companies are direct competitors is that some portion of Zimmer Biomet’s sales would
have gone to HMUS had the Accused product not been on the market.”). But the relevant market
is not a two-party market; there are at least three other significant (and non-accused) similar bone
cement products for sale – products by Stryker (the market leader), DePuy, and DJO Surgical. See
Tr. (Mulhern) at 945:11-946:10; RDX-2C.15-16 (a summary of deposition testimony regarding

76
Heraeus’ competitors). 	And because this is a multi-party market, Complainants simply did not
prove that but for Respondents’ products, Heraeus would have made a sale. Moreover, as the Staff
points out, other considerations go into a buyer’s decision making, such as whether the bone
cement supplier also can supply other articles, such as the implants, whether the seller offers
volume discounts, and surgeon preferences. See SIB at 74 (citing Tr. (Mulhern) at 951-55).
While Heraeus argues that Palacos and the Accused Products are almost identical, and thus,
all sales of the Accused Products would have gone to Heraeus’ sales of Palacos, the record
evidence does not support this because of the similarities between all competing bone cements.
See, e.g., Tr. (DiGioia) at 1038:25-1039:3, 1039:22-1040:9, and 1041:16-1043:3. 	Dr. DiGioia
testified that he used Palacos, the Accused Products, Stryker’s Simplex High Viscosity, and BBCR
in surgery. 	See id. 	Dr. DiGioia further testified that Stryker products Simplex HV and BBCR
were similar to Palacos, and that neither were identical in terms of usability or handling. 	Id. at
1021:14-20, 1041:12-1042:10. 	Dr. DiGioia also testified that in his experience, bone cements
within a viscosity class are interchangeable with each other. Id. at 1042:11-1043:3. Thus, sales
of Respondents’ products would not necessarily have been sales of Palacos.
Complainants further contend the importation and sale of the Accused Products have
eroded Palacos prices. Heraeus presents evidence that Respondents charged lower prices for its
accused bone cement than what it charged for Palacos. See Tr. (Prowse) at 588:2-6. Complainants
further present evidence that Respondents “undercut Palacos on price [of its own product]” in order
to gain sales and still make profits. See id. at 583:25-583:4-24. Complaints present a number of
instances when Respondents set the price of its product to be 	below that of Palacos.
See, e.g., CX-0424C at 222

77
JX-0245C (Armstrong Dep. Tr.) at 193:23-194:11; CDX-0003C.00066; Tr
(Prowse) at 587:3-587:16.
JX-0102C; CX-
0212C; CDX-0003C.00067; Tr. (Prowse) at 587:17-588:6, 677:24-678:15. 	Dr. Prowse’s
testimony regarding price erosion relied primarily on instances of Zimmer Biomet charging lower
prices for the accused bone cement products than for Zimmer Biomet’s Palacos products. See Tr.
(Prowse) at 588:2-6 (discussing Zimmer Biomet’s sales of the accused product at lower prices than
Zimmer Biomet was selling Palacos). According to Dr. Prowse, the “natural effect” of this pricing
strategy produced a downward pressure on the amounts that HMUS could charge for its Palacos
products “because Heraeus’s PALACOS has got to compete with the accused products.” 	Tr.
(Prowse) at 583:16-24. Thus, according to Complainants, the pricing strategy forced HUMUS to
lower the price of Palacos. See CIB at 142.
As with lost sales, Complainants’ price erosion fails to account for a competitive market
involving multiple bone cement suppliers and non-accused bone cement products. Complainants
do not take into consideration any of the other competitors in the bone cement industry, even
though Dr. Prowse acknowledged that the target price set by hospitals is “usually put together
based on their knowledge of market conditions, which would include what all the other companies
are selling their products for.” Tr. (Prowse) at 641:18-23; 655:11-17 (price pressure from Stryker
could affect Heraeus’s prices). In fact, Stryker’s Simplex product dropped in price between 2017
and 2018. 	See Tr. (Prowse) at 643:23-647:11; RX-775, at 20; CX-668 at 1. 	Thus, the record
evidence is insufficient to reach any meaningful conclusions about the causes behind any bone
cement seller’s pricing decisions and price fluctuations.

78
Moreover, Complainants’ evidence all relates to the price of Palacos that Respondents
charged, not the price that Heraeus charged for its own product. Dr. Mulhern, Respondents’ expert,
testified that a comparison of the accused bone cements to Palacos shows “no systematic
undercutting” of HMUS’s prices by Zimmer Biomet’s accused products. Tr. (Mulhern) at 957:10-
958:6; RDX-2C.19; see also Tr. (Prowse) at 657:6-18 (prices charged by HMUS for Palacos when
compared with Zimmer Biomet’s prices for the accused products were “fairly close” and “it’s hard
to get a conclusive determination”). 	Other evidence showed significant other sources of price
pressure in the marketplace, including an industry trend towards cost containment, and price
competition from third party competitors and non-accused products. See Tr. (Mulhern) at 943:2-
947:6, 958:7-25, 985:10-13, 990:12-991:25; RX-703; RDX-2C.15; JX-0087C at ZBITC-0412951.
And there is evidence of aggressive pricing by Stryker and others. See Tr. (Mulhern) at 947:7-22;
JX-255C (Kolbe) at 81:8-13, 82:8-11, 82:17-20, 82:25-83:4
Tr. (Childers) at 203:23-207:6; RX-234C (testifying about email from HMUS customer
who identified Stryker, Smith & Nephew, and Dupuy—but not Zimmer Biomet—as having “more
cost effective options for the antibiotic cement” than HMUS).
Therefore, Complainants failed to prove injury or threat of substantial injury to their
domestic industry – be that the education, training, and research and development or sale of
Palacos bone cement.
VIII. 	CONCLUSIONS OF LAW
1. 	The Commission has subject matter and personal jurisdiction over the Accused Products.
2. 	Respondents have sold for importation into the United States, imported or sold after
importation accused products, and thus, the importation or sale requirement of Section 337
is satisfied.

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3. 	A domestic industry exists with respect to Complainants’ education, training, and research
and development.
4. 	Complainants own the asserted Trade Secrets.
5. 	TS 1-35 are protectable trade secrets
6. 	TS 121-123 are not protectable trade secrets
7. 	TS 130-134 are not protectable trade secrets
8. 	TS 145 is not a protectable trade secret
9. 	Respondents misappropriated TS 1-35.
10. 	There is not and has not been a substantial injury or threat of injury to the Complainants’
domestic industry by Respondents’ misappropriation of TS 1-35.
11. 	There is no violation of Section 337 with respect to the Complainants’ trade secrets.
IX. 	RECOMMENDED DETERMINATION ON REMEDY AND BOND
The Commission’s Rules provide that subsequent to an initial determination on the
question of violation of section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1337, the
administrative law judge shall issue a recommended determination concerning the appropriate
remedy in the event that the Commission finds a violation of section 337, and the amount of bond
to be posted by respondent during Presidential review of the Commission action under section
337(j). See 19 C.F.R. § 210.42(a)(1)(ii).
The Commission has broad discretion in selecting the form, scope, and extent of the
remedy in a section 337 proceeding. 	Viscofan, S.A. v. Int’l Trade Comm’n, 787 F.2d 544, 548
(Fed. Cir. 1986). 	Under Section 337(d)(1), if the Commission determines as a result of an
investigation that there is a violation of section 337, the Commission is authorized to enter either
a limited or a general exclusion order. 19 U.S.C. § 1337(d)(1). A limited exclusion order instructs

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the U.S. Customs and Border Protection (“CBP”) to exclude from entry all articles that are covered
by the trade secrets at issue and that originate from a named respondent in the investigation. A
general exclusion order instructs the CBP to exclude from entry all articles that are covered by the
trade secrets at issue, without regard to source. Certain Purple Protective Gloves, Inv. No. 337-
TA-500, Comm’n Op. at 5 (Dec. 22, 2004). Under section 337(f)(1), the Commission may issue
a cease and desist order in addition to, or instead of, an exclusion order. 19 U.S.C. § 1337(f)(1).
The Commission generally issues a cease and desist order directed to a domestic respondent when
there is a “commercially significant” amount of infringing, imported product in the United States
that could be sold, thereby undercutting the remedy provided by an exclusion order. See Certain
Crystalline Cefadroxil Monohydrate, Inv. No. 337-TA-293, USITC Pub. 2391, Comm’n Op. on
Remedy, the Public Interest and Bonding at 37-42 (June 1991); Certain Condensers, Parts Thereof
and Prods. Containing Same, Including Air Conditioners for Automobiles, Inv. No. 337-TA-334
(Remand), Comm’n Op. at 26-28, 1997 WL 817767, at *11-12 (U.S.I.T.C. August 20, 1997).
Additionally, during the 60-day period of Presidential review under 19 U.S.C. § 1337(j),
“articles directed to be excluded from entry under subsection (d) . . . shall . . . be entitled to entry
under bond prescribed by the Secretary in an amount determined by the Commission to be
sufficient to protect the complainant from any injury.” 	See 19 U.S.C. § 1337(j)(3). 	“The
Commission typically sets the bond based on the price differential between the imported infringing
product and the domestic industry article or based on a reasonable royalty. However, where the
available pricing or royalty information is inadequate, the bond may be set at one hundred (100)
percent of the entered value of the infringing product.” 	Certain Industrial Automation Systems
and Components Thereof Including Control Systems, Controllers, Visualization Hardware,
Motion and Motor Control Systems, Networking Equipment, Safety Devices, and Power Supplies,

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Inv. No. 337-TA-1074, Comm’n Op. at 13 (Apr. 23, 2019) (“Automation Systems”) (public
version) (citation omitted).
Although Section 337 also mandates consideration of the effect of exclusion on (1) public
health and welfare; (2) competitive conditions in the U.S. economy; (3) U.S. production of articles
that are like or directly competitive with the articles subject to the investigation; and (4) U.S.
consumers, the public interest inquiry was not delegated to me. See 84 Fed. Reg. 14394 (April 10,
2019); 19 U.S.C. § 1337(d)(1).
A. 	Limited Exclusion Order
Section 337 has not been violated. 	However, should a violation be found, the evidence
supports a limited exclusion order as to those entities involved in the sale for importation,
importation, and sale after importation of the accused products for which a violation is found. The
evidence shows that Respondents’ -1 products have not and will not be imported in significant
amounts, and thus these products are not part of the order.
“The duration of an [exclusion] order in a trade secret misappropriation case is set as the
time it would have taken to independently develop the trade secrets.” Certain Rubber Resins,
Comm’n Op., 2014 WL7497801, at *43; see also Certain Sausage Casings, Comm’n Op, 1984
WL 273970, at *11 (“The facts of this investigation, particularly the fact that the misappropriation
involved an actual theft of trade secrets, support the conclusion that Viscofan should not be
credited with the time between the misappropriation and the entry of the Commission’s remedial
order.”). The copolymer trade secrets, TS 1-35, are protectable, and Dr. Spiegelberg testified that
the typical time frame for a bone cement development project is two to three years. 	See Tr.
(Spiegelberg) at 1295:11-16. 	Heraeus’s witness, Dr. Kühn, likewise testified that developing a
bone cement (apart from regulatory timing) would take “one to two to three years.” See JX-247C

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(Kühn Dep. Tr.), at 260:15-24, 261:2-14. 	Dr. Kühn also testified that it would take longer to
develop a new bone cement that has the same characteristics as Palacos. See JX-247C (Kühn Dep.
Tr.) at 262:1-14.
Complainants argue
that any limited exclusion order should be “perpetual” because Zimmer Biomet failed to develop
a successful bone cement. In view of the evidence, however, a limited exclusion order of 5 years
is reasonable.
With respect to the other categories of asserted trade secrets, a limited exclusion order with
a duration of approximately 2 years or less is reasonable. See Trial Tr. (Giffard) at 1281:13-20 (a
second round of testing zirconium dioxide would require “anywhere from several months to two
years”).
B. 	Cease and Desist Order
If a violation of Section 337 is found, a cease and desist order is appropriate because
Respondents maintain a significant inventory of the -3 products in domestic inventory. Tr.
(Prowse) at 588:19-589:9; CDX-3C.00068 (indicating 	units of the -3 formulation of
BBCR and 	units of the -3 formulation of RBCR in domestic inventory as of August 2019,
with an approximate value of 	and 	respectively); CX-
643C at 38-40 and Appendix 2 attached thereto). Respondents do not dispute that they hold
significant domestic inventory. See Resp. PHB at 187. Therefore, a cease and desist is appropriate
in the event of a violation.
C. 	Bond
If the Commission determines to enter an exclusion order and/or a cease and desist order
in this investigation, the affected articles are entitled to entry or sale under bond during the 60-day

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Presidential review period. 	Complainants’ expert testified that a bond of 100% is reasonable
because “a price comparison is not feasible” (Tr. (Prowse) at 539:24-540:2) and because “a
hundred percent bond rate from an economic perspective would be appropriate” given Heraeus’
and Zimmer Biomet’s status as direct competitors (id. at 540:4-8, 589:10-19). But Complainants
did not provide a price differential analysis, and Complainants’ argument that a 100 percent bond
is appropriate simply because Heraeus and Zimmer are competitors is not consistent with
Commission precedent. See, e.g., Certain Graphics Systems, Components Thereof, and Consumer
Products Containing the Same, Inv. No. 337-TA-1044, Comm’n Op., 2018 WL 8648378, at *43
(Sept. 18, 2018) (setting zero percent bond where complainant “failed to show why a bond based
on price differential or royalty rate would be inadequate to protect Complainants from any injury,
particularly in view of Complainants’ contention that Respondents’ accused products compete
directly with Complainants’ and their licensees’ products”). 	Moreover, while the parties are
competitors, they are not alone in this market.
On the other hand, Respondents’ expert, Dr. Mulhern, provided evidence regarding royalty
rates in the medical field or involving health care products generally showing a range between 2.5
and 7 percent, and license agreements relating to bone cement technology with a range of 2.5 to
10 percent. See Tr. (Mulhern) at 966:9-967:15; RX-836.
Accordingly, to the extent a violation is found, the evidence supports a bond near the
middle of these ranges, or 5% of entered value.
D. 	Public Interest
None of the parties address the statutory public interest factors, and there is no evidence
that the requested relief would meaningfully impact public health and welfare, competitive
conditions, 	domestic 	production 	of 	articles, 	or 	U.S. 	consumers. 	Accordingly, 	it 	is 	my

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recommended determination that issuance of a remedial order in this investigation would not be
contrary to the public interest.
X. 	INITIAL DETERMINATION AND ORDER
Based on the foregoing, it is my Initial Determination that there is no violation of Section
337 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1337, in the importation into the United
States, the sale for importation, or the sale within the United States after importation of bone
cements, and products containing the same, in connection with the Complainants’ trade secrets.
Furthermore, it is my determination that a domestic industry in the United States does not exist
that practices or exploits the trade secrets.
I certify to the Commission this Initial Determination, together with the Record of the
hearing in this Investigation consisting of the following: the transcript of the evidentiary hearing,
with appropriate corrections as may hereafter be ordered; and the exhibits accepted into evidence
in this Investigation, as listed by the parties, attached herein as Appendix A with appropriate
corrections as may hereafter be ordered. The pleadings of the parties filed with the Secretary need
not be certified as they are already in the Commission’s possession in accordance with
Commission rules.
Pursuant 	to 	19 	C.F.R. 	§ 	210.42(h), 	this 	Initial 	Determination 	shall 	become 	the
determination of the Commission unless a party files a petition for review pursuant to 19 C.F.R. §
210.43(a) or the Commission, pursuant to 19 C.F.R. § 210.44, orders on its own motion a review
of the Initial Determination or certain issues therein.
This Initial Determination is being issued as confidential, and a public version will be
issued pursuant to Commission Rule 210.5(f). 	Within seven (7) days of the date of this Initial

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Determination, the parties shall jointly submit: (1) a proposed public version of this opinion with
any proposed redactions bracketed in red; and (2) a written justification for any proposed
redactions specifically explaining why the piece of information sought to be redacted is
confidential and why disclosure of the information would be likely to cause substantial harm or
likely to have the effect of impairing the Commission’s ability to obtain such information as is
necessary to perform its statutory functions.
SO ORDERED.
________________________________
Cameron Elliot
Administrative Law Judge

CERTAIN BONE CEMENT, COMPONENTS THEREOF
AND PRODUCTS CONTAINING THE SAME
Inv. No. 337-TA-1153
PUBLIC CERTIFICATE OF SERVICE
I, Lisa R. Barton, hereby certify that the attached INITIAL DETERMINATION has
been served via EDIS upon the Commission Investigative Attorney, Monica Bhattacharyya,
Esq., and the following parties as indicated, on 5/19/2020.
Lisa R. Barton, Secretary
U.S. International Trade Commission
500 E Street, SW, Room 112
Washington, DC 20436
On Behalf of Complainants Heraeus Medical LLC and
Heraeus Medical GmbH:
David A. Caine, Esq.
ARNOLD & PORTER KAYE SCHOLER LLP
3000 El Camino Real, Suite 500
Palo Alto, CA 94306-3807
Email: david.caine@arnoldporter.com
☐ Via Hand Delivery
☐ Via Express Delivery
☐ Via First Class Mail
☒ Other: Email Notification
of Availability to Download
On Behalf of Respondents Zimmer Biomet Holdings, Inc.,
Biomet, Inc., Zimmer Surgical, Inc., Biomet France S.A.R.L.,
Biomet Deutschland GmbH, Zimmer Biomet Deutschland
GmbH, Biomet Global Supply Chain Center B.V., Zimmer
Biomet Nederland B.V., Biomet Orthopedics, LLC, and
Biomet Orthopaedics Switzerland GmbH:
Eric S. Namrow, Esq.
MORGAN, LEWIS & BOCKIUS LLP
1111 Pennsylvania Avenue, NW
Washington, DC 20004
Email: eric.namrow@morganlewis.com
☐ Via Hand Delivery
☐ Via Express Delivery
☐ Via First Class Mail
☒ Other: Email Notification
of Availability to Download