author: TARANTO, Circuit Judge.

text:
    PERSONAL WEB TECHNOLOGIES, LLC, Appellant v. APPLE, INC., Appellee
    2016-1174
    United States Court of Appeals, Federal Circuit.
    Decided: February 14, 2017

      Lawrence Milton Hadley, McKool Smith Hennigan, PC, Los Angeles, CA, argued for appellant. Also represented by Phillip Lee; Joel Lance Thollander, Austin, TX.
    Michael Jay, Boies, Schiller & Flexner LLP, Santa Monica, CA, argued for appel-lee. Also represented by Donald William Ward, Joseph E. Lasher; William A. Isaac-son, Washington, DC.
    Joseph Matal, Office of the Solicitor, United States Patent and Trademark Office, Alexandria, VA, argued for intervenor Michelle K. Lee. Also represented by Thomas W. Krause, Scott Weidenfeller, Kakoli Caprihan.
    Before TARANTO, CHEN, and STOLL, Circuit Judges.
   TARANTO, Circuit Judge.

Apple Inc. petitioned for inter partes review of various claims of PersonalWeb Technologies, LLC’s U.S. Patent No. 7,802,310, asserting unpatentability for obviousness based on two prior-art references. After instituting review, the Patent Trial and Appeal Board reviewed the claims and agreed with Apple. Personal-Web appeals the Board’s construction of certain claim terms and the ultimate obviousness determination. We affirm the Board’s claim construction. We vacate the Board’s obviousness determination as to the appealed claims, because the Board did not adequately support its findings that the prior art disclosed all elements of the challenged claims and that a relevant skilled artisan would have had a motivation to combine the prior-art references to produce the claimed ’310 inventions with a reasonable expectation of success. We remand for further proceedings.

I .

The ’310 patent describes and claims methods (or devices for carrying out methods) of locating data and controlling access to data by giving a data file a substantially unique name that depends on the file’s content — a so-called “True Name.” ’310 patent, col. 3, lines 50-62; id., col. 6, lines 20-23; id., col. 37, lines 44-64. The patent describes generating a True Name using mathematical algorithms (called “hash functions” in the abstract and some claims) that use contents of the file to generate a comparatively small-size identifier for the file. Id., col. 12, line 21, through col. 13, line 9. As relevant here, the patent calls for comparing that name with a plurality of values in a network, determining whether a user is authorized to access the data, and providing or denying access to the data based on that determination. See, e.g., id., col. 3, line 50, through col. 4, line 52; id., col. 37, lines 44-62.

Apple petitioned for inter partes review (IPR) of claims 24, 32, 70, 81, 82, and 86, arguing unpatentability, under 35 U.S.C. § 103, for obviousness based on a combination of the Woodhill reference (U.S. Patent No. 5,649,196) and the Stefik reference (U.S. Patent No. 7,359,881). Woodhill focuses on a system for backing up or restoring data. Stefik focuses on a system for managing rights to access data.

More specifically, Woodhill discloses a system for using content-based identifiers in performing file-management functions, such as backing up files. It includes a distributed storage system that identifies data items (called “binary objects”) using content-based identifiers (called “binary object identifiers”). ’196 patent, col. 1, line 66, through col. 2, line 11. A binary object identifier is calculated using the contents of a data item. Id., col 8, lines 38-42. Each binary object identifier is stored (with certain other information) in a binary object identification record. Id., col. 7, line 60-64. Woodhill uses its content-based binary object identifiers for file-management purposes, including in a backup/restore system, which checks to see if binary objects have changed since the system’s most recent backup. Id., col. 2, lines 11-46.

Stefik discloses an authentication system designed to control access to digital works stored in a repository. Each digital work is assigned a “unique identifier.” ’881 patent, col. 9, lines 47-50, 56-59. Each digital work also has associated usage rights that control access to the work. Id., col. 9, lines 52-53; id., col. 3, lines 58-65. A user demonstrates authorization _ to access a digital work through a “digital ticket,” which identifies the ticket holder as having access to the digital file because the holder has paid for access or is otherwise entitled to access. Id., col. 3, lines 58-65.

The Board instituted review on March 26, 2014. Apple Inc. v. PersonalWeb Technologies, LLC, IPR2013-00596, 2014 WL 1477691 (PTAB Mar. 26, 2014). On March 25, 2015, after conducting the review, the Board issued its Final Written Decision, holding claims 24, 32, 70, 81, 82, and 86 unpatentable as obvious based on a combination of the Woodhill and Stefik references. Apple Inc. v. PersonalWeb Technologies, LLC, IPR2013-00596, 2015 WL 1777147 (PTAB Mar. 25, 2015), at *7-13 (hereafter “Apple v. PersonalWeb”). In doing so, the Board applied the broadest-reasonable-interpretation standard in construing several phrases referring to content-based identifiers. Id. at *4. On April 24, 2015, thirteen days after the ’310 patent expired, PersonalWeb sought rehearing, but the Board denied the motion on August 3, 2015.

PersonalWeb appeals the Final Written Decision, under 35 U.S.C. §§ 141(c), 319, except as to claim 70. We have jurisdiction under 28 U.S.C. § 1295(a)(4)(A).

II

A

PersonalWeb challenges the Board’s construction of the claim terms “content-dependent name,” “content-based identifier,” and “digital identifier.” We use the term “content-based identifier” to refer to all of those terms, since no issue here turns on any differences among them. Citing the broadest-reasonable-interpretation standard, the Board construed the terms to mean “an identifier for a data item being based, at least in part, on a given function of at least some, of the bits in the particular sequence of bits of the particular data item.” Apple v. PersonalWeb, 2015 WL 1777147, at *4, *5. PersonalWeb argues that the terms require the identifier to rely on “ ‘all of the data in the data item.’” Appellant’s Opening Br. at 51 (quoting district court construction in separate litigation).

Based on the fact that the ’310 patent expired after the Final Written Decision was issued but while the rehearing request was pending before the Board, Personal-Web argues that the Board should not have, relied on the broadest-reasonable-interpretation standard in construing the terms at issue or, in any event, that we should not do so now. Apple disagrees, and so does the Director of the Patent and Trademark Office, who intervened in this appeal. We need not and do not resolve that dispute. PersonalWeb urges us to apply the principles governing identification of the best construction of the claim terms, see Phillips v. AWH Corp., 415 F.3d 1303, 1312-13 (Fed. Cir. 2005), but even under those principles, the Board’s construction is clearly correct on the point at issue.

Claim construction is a legal issue reviewed de novo, based on underlying factual findings that are reviewed for substantial evidence. Perfect Surgical Techniques, Inc. v. Olympus Am., Inc., 841 F.3d 1004, 1012 (Fed. Cir. 2016). Here, the meaning of the language is plain from the face of the claims. The content-based identifier need not be generated from “all” of the information in a data item.

In claim 24, for example, the content-dependent name is “based, at least in part, on at least a function of the data in the particular data item” and “the data used by the function to determine the content-dependent name comprises at least some of the contents of the particular data item.” ’310 patent, col. 40, lines 7-12. The “at least some” language is mirrored in the other independent claims containing the claim terms at issue. Id., col. 45, lines 40-43 (claim 81); id., col. 46, lines 27-30 (claim 86). The “at least some” language makes it impossible to interpret the terms at issue to require use of “all” of the data. And the absence of the argued “all” requirement in the terms at issue is further confirmed by the patent’s addition of such a requirement, through additional language, in dependent claim 32. Id., col. 40, lines 54-57 (“the data used by the function to determine the content-dependent name of the particular data item comprises of all of the contents of the particular data item”).

We therefore affirm the Board’s claim construction. PersonalWeb does not deny that Woodhill discloses the required content-based identifier under the Board’s construction.

B

PersonalWeb stands on firmer ground in challenging the adequacy of the Board’s findings and explanations in concluding that the claims of the ’310 patent here at issue would have been obvious to a relevant skilled artisan over a combination of Woodhill and Stefik. We agree with that challenge, concluding that the Board has not done enough to support its conclusion.

1

The Board concluded that the claimed inventions at issue would have been obvious based on a combination of Woodhill and Stefik. We review the Board’s ultimate determination of obviousness de novo and its underlying factual determinations for substantial evidence. In re Gartside, 203 F.3d 1305, 1312 (Fed. Cir. 2000). On the factual components of the inquiry, we “ask[] ‘whether a reasonable fact finder co.uld have arrived at'the agency’s decision,’” which “requires examination of the ‘record as a whole, taking into account evidence that both justifies and detracts from an agency’s decision.’” Intelligent Bio-Systems, Inc. v. Illumina Cambridge Ltd., 821 F.3d 1359, 1366 (Fed. Cir. 2016) (quoting Gartside, 203 F.3d at 1312).

Under the obviousness theory presented by Apple and adopted by the Board, the Board had to make findings, supported by evidence and explanation, on two points. First, the Board had to find in Woodhill and Stefik all of the elements of the ’310 patent claims at issue. But that would not be enough. See In re Kotzab, 217 F.3d 1365, 1371 (Fed. Cir. 2000) (explaining that a finding of obviousness “cannot be predicated on the mere identification in [the prior art] of individual components of claimed limitations”). Second, the Board had to find that a person of ordinary skill in the art would have been motivated to combine the prior art in the way claimed by the ’310 patent claims at issue and had a reasonable expectation of success in doing so. See In re NuVasive, Inc., 842 F.3d 1376, 1381-82 (Fed. Cir. 2016); In re Warsaw Orthopedic, Inc., 832 F.3d 1327, 1333-34 (Fed. Cir. 2016); Ariosa Diagnostics v. Verinata Health, Inc., 805 F.3d 1359, 1364-67 (Fed. Cir. 2015).

The Supreme Court in KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 127 S.Ct. 1727, 167 L.Ed.2d 705 (2007), explained that, “because inventions in most, if not all, instances rely upon building blocks long since uncovered, and claimed discoveries almost of necessity will be combinations of what, in some sense, is already known,” “it can be important to identify a reason that would have prompted a person of ordinary skill in the relevant field to combine the elements in the way the claimed new invention does.” Id. at 418-19, 127 S.Ct. 1727. The required “expansive and flexible approach,” id. at 415, 127 S.Ct. 1727, may look at a variety of facts, including prior-art teachings and marketplace demands and artisans’ background knowledge, “in order to determine whether there was an apparent reason to combine the known elements in the fashion claimed by the patent at issue,” id. at 418, 127 S.Ct. 1727; see also id. at 420-421, 127 S.Ct. 1727. The Supreme Court added: “To facilitate review, this analysis should be made explicit.” Id. at 418, 127 S.Ct. 1727. We have repeatedly applied those requirements in reviewing the adequacy of the Board’s obviousness analysis, noting that the amount of explanation needed will vary from case to case, depending on the complexity of the matter and the issues raised in the record. See NuVasive, 842 F.3d at 1381-82; Ariosa, 805 F.3d at 1364-66; In re Lee, 277 F.3d 1338, 1343 (Fed. Cir. 2002).

Our review of the Board is rooted not just in the law of obviousness but in basic principles of administrative law. We review the Board’s IPR decisions to ensure that they are not “arbitrary, capricious, an abuse of discretion, ... otherwise not in accordance with law ... [or] unsupported by substantial evidence.” 5 U.S.C. § 706(2)(A), (E); see Pride Mobility Prods. Corp. v. Permobil, Inc., 818 F.3d 1307, 1313 (Fed. Cir. 2016). Critically, in order to “allow effective judicial review, ... the agency is obligated to ‘provide an administrative record showing the evidence on which the findings are based, accompanied by the agency’s reasoning in reaching its conclusions.’ ” Synopsys, Inc. v. Mentor Graphics Corp., 814 F.3d 1309, 1322 (Fed. Cir. 2016) (quoting Lee, 277 F.3d at 1342); see Lee, 277 F.3d at 1342 (“For judicial review to be meaningfully achieved within these strictures, the agency tribunal must present a full and reasoned explanation of its decision. The agency tribunal must set forth its findings and the grounds thereof, as supported by the agency record, and explain its application of the law to the found facts.”). The Board, as an administrative agency, “must articulate ‘logical and rational’ reasons for [its] decision[].” Synopsys, 814 F.3d at 1322; see Power Integrations, Inc. v. Lee, 797 F.3d 1318, 1326 (Fed. Cir. 2015).

The Supreme Court set forth two rationales for this approach in its pre-Adminis-trative Procedure Act decision in SEC v. Chenery Corp., 318 U.S. 80, 63 S.Ct. 454, 87 L.Ed. 626 (1943). Remanding to the Securities and Exchange Commission for further consideration, the Court explained: “[C]ourts cannot exercise their duty of review unless they are advised of the considerations underlying the [agency] action under review.... [T]he orderly functioning of the process of review requires that the grounds upon which the administrative agency acted be clearly disclosed and adequately sustained.” Id. at 94, 63 S.Ct. 454. In addition to enabling needed judicial review of agency action, the Court also explained that the clear-explanation requirement prevents judicial intrusion on agency authority to make factual, policy, and discretionary determinations committed to the agency. Id. at 88, 63 S.Ct. 454. We have applied those principles repeatedly, in various settings. See, e.g., CS Wind Vietnam Co., Ltd. v. United States, 832 F.3d 1367, 1380-81 (Fed. Cir. 2016); Timken U.S. Corp. v. United States, 421 F.3d 1350, 1355 (Fed. Cir. 2005) (“[A]n agency must explain its action with sufficient clarity to permit ‘effective judicial review.’ ”); Mullins v. U.S. Dep’t of Energy, 50 F.3d 990, 992 (Fed. Cir. 1995) (“[AJgencies have a duty to provide reviewing courts with a sufficient explanation for their decisions so that those decisions may be judged against the relevant statutory standards.”).

2

The Board’s decision here is inadequate. The Board did not sufficiently explain and support the conclusions that (1) Woodhill and Stefik disclose all of the elements recited in the challenged claims of the ’310 patent and (2) a relevant skilled artisan would have been motivated to combine Woodhill and Stefik in the way the ’310 patent claims and reasonably expected success.

For example, claim 24 requires “causing the content-dependent name of the particular data item to be compared to a plurality of values.” ’310 patent, col. 40, lines 16-17; see also id., col. 46, lines 3-4 (claim 81); id., col. 46, lines 35-37 (claim 86). The Board found this element satisfied. Apple v. PersonalWeb, 2015 WL 1777147, at *8 (“As discussed by Apple, the process of matching the identifier for the work would involve comparing it with a plurality of values, and providing for selective access. Pet. 42.”). That discussion, however, mentions only Stefik, not Woodhill, and yet Apple has made clear that it relies solely on Woodhill as disclosing this claim element. Appellee’s Br. at 25-29. The Board-cited page of Apple’s petition does not explain Woodhill’s disclosure of this element. J.A. 1045 (Pet. 42). The Board’s discussion does not cite, let alone explain or analyze or adopt, an earlier portion of Apple’s petition that refers to part of column 17 of Woodhill. J.A. 1036-37 (Pet. 33-34).

A-later portion of the Board opinion, in responding to an argument by Personal-Web that Woodhill does not use its binary object identifiers “to access, search for, or address binary objects,” Apple v. PersonalWeb, 2015 WL 1777147, at *11, refers to a part of column 17 of Woodhill, id. But the Board’s discussion does not address, or at least does not clearly address, the “plurality of-values” comparison element. Id. When referring to a determination “as to whether the content-based' identifier for the particular data item corresponds to an entry in a database,” id., the Board’s opinion does not explicitly say, let alone explain, how Woodhill shows that determination to involve a comparison between the content-based identifier and a plurality of values. We might attempt on our own to parse Woodhill, and column 17 specifically, to find such a comparison, but this is not an issue on which we could confidently rely on our independent reading, without more help than we have received from the Board. Neither column 17 of Woodhill nor any other portion identified for us is self-explanatory on this point.

The Board’s reasoning is also deficient in its finding that a relevant skilled artisan would have had a motivation to combine Woodhill and Stefik in the way claimed in the ’310 patent claims at issue and would have had a reasonable expectation of success in doing so. The Board’s most substantial discussion of this issue merely agrees with Apple’s contention that “a person of ordinary skill in the art reading Woodhill and Stefik would have understood that the combination of Woodhill and Stefik would have allowed for the selective access features of Stefik to be used with Woodhill’s content-dependent identifiers feature.” Id. at *8 (emphasis added). But that reasoning seems to say no more than that a skilled artisan, once presented with the two references, would have understood that they could be combined. And that is not enough: it does not imply a motivation to pick out those two references and combine them to arrive at the claimed invention. See Belden Inc. v. Berk-Tek LLC, 805 F.3d 1064, 1073 (Fed. Cir. 2015) (“[Obviousness concerns whether a skilled artisan not only could have made but would have been motivated to make the combinations or modifications of prior art to arrive at the claimed invention.”); InTouch Techs., Inc. v. VGO Communications, Inc., 751 F.3d 1327, 1352 (Fed. Cir. 2014).

If the Board’s statement were read more broadly, it would not be adequately explained and grounded in evidence. Indeed, the Board nowhere clearly explained, or cited evidence showing, how the combination of the two references was supposed to work. At least in this case, such a clear, evidence-supported account of the contemplated workings of the combination is a prerequisite to adequately explaining and supporting a conclusion that a relevant skilled artisan would have been motivated to make the combination and reasonably expect success in doing so.

The amount of explanation needed to meet the governing legal standards — to enable judicial review and to avoid judicial displacement of agency authority — necessarily depends on context. A brief explanation may do all that is needed if, for example, the technology is simple and familiar and the prior art is clear in its language and easily understood. See Añosa, 805 F.3d at 1365-66. On the other hand, complexity or obscurity of the technology or prior-art descriptions may well make more detailed explanations necessary. Here, the Board’s explanation is wanting. Apple’s attempts in this court to explicate both the Board’s explanation and the underlying evidence do not persuade us otherwise.

We conclude that the Board’s reasoning does not meet the requirements for a sustainable obviousness determination in this case. We do not address whether the Board’s ultimate obviousness determination would be permissible, or should be made, on this record. We leave such issues for the Board to consider on remand. The remand is not for explanation or clarification of what the Board meant in the decision we have under review now, or what it considered in reaching that decision. The remand is for the Board to reconsider the merits of the obviousness challenge, within proper procedural constraints. See id. at 1366-67.

Ill

For the foregoing reasons, while we affirm the Board’s claim construction, we vacate the Board’s Final Written Decision regarding obviousness of the appealed claims and remand for further proceedings.

No costs.

AFFIRMED IN PART, VACATED AND REMANDED IN PART.

      . We recently held the broadest-reasonable-interpretation standard inapplicable, outside the IPR setting, where the patent at issue had expired in a reexamination before the Board reviewed the examiner’s decision. In re CSB-Sys. Int'l, Inc., 832 F.3d 1335, 1340-41 (Fed. Cir. 2016). In the IPR setting, the PTO regulations applicable to the present case stated simply that the broadest-reasonable-interpretation standard applied to "[a] claim in an unexpired patent.” 37 C.F.R. § 42.100(b) (2015). A recent revision, not applicable to the present case, now states that the broadest-reasonable-interpretation standard applies to “[a] claim in an unexpired patent that will not expire before a final written decision is issued,” but allows an IPR party to "request a district court-type claim construction approach to be applied” if the patent will expire within 18 months of the IPR petition’s filing (as further specified in the rule). 37 C.F.R. § 42.100(b) (2016). The 18-month rule, had it been in effect, would not have applied here: the time from the relevant filing date (September 27, 2013) to expiration (April 11, 2015) was just over 18 months.


source: Caselaw Access Project

author: O’MALLEY, Circuit Judge.

license: Public Domain

text:
    ORGANIK KIMYA, SAN. VE TIC. A.S., Organik Kimya Netherlands B.V., Organik Kimya US, Inc., Appellants v. INTERNATIONAL TRADE COMMISSION, Appellee Rohm and Haas Company, Rohm and Haas Chemicals LLC, Dow Chemical Company, Intervenors
    2015-1774
    2015-1833
    United States Court of Appeals, Federal Circuit.
    Decided: February 15, 2017

      Catherine Emily Stetson, Hogan Lo-vells US LLP, Washington, DC, argued for appellants. Also represented by John Robert Robertson, Benjamin Holt.
    Sidney A. Rosenzweig, Office of the General Counsel, United States International Trade Commission, Washington, DC, argued for appellee. Also represented by Dominic L. Bianchi, Wayne W. Herrington.
    Raymond N. Nimrod, Quinn Emanuel Urquhart & Sullivan, LLP, New York, NY, argued for intervenors. Also represented by William Adams, James Baker; S. Alex Lasher, Paul F. Brinkman, Washington, DC; Charles Kramer Verhoeven, San Francisco, CA.
    Before LOURIE, MAYER, and O’MALLEY, Circuit Judges.
   O’MALLEY, Circuit Judge.

Organik Kimya San. ve Tic., A.§., Organik Kimya Netherlands B.V., and Organik Kimya US, Inc. (collectively, “Organik Kimya”) appeal from the International Trade Commission’s (“the Commission” or “ITC”) decision imposing default judgment sanctions for spoliation of evidence and entering a limited exclusion order against Organik Kimya. See Certain Opaque Polymers, Inv. No. 337-TA-883, 2015 ITC LEXIS 139, at *5-6 (Apr. 17, 2015); see also Certain Opaque Polymers, Inv. No. 337-TA-883, at 16-24, available at http://www.itcblog. com/images/commopin883.pdf (“Commission Opinion”); Certain Opaque Polymers, Inv. No. 337-TA-883, USITC Order No. 27, 2014 WL 5768586 (Oct. 20, 2014) (“ALJ Order”). Because the Commission did not abuse its discretion in entering default judgment as a sanction for Organik Kimya’s spoliation of evidence and further did not abuse its discretion in entering the limited exclusion order, we affirm.

I. Background

This case involves trade secrets relating to opaque polymers, which are hollow spheres used as paint additives for interior and exterior paints to increase the paint’s opacity. Organik Kimya and Dow Chemical Company (“Dow”) both manufacture opaque polymers. Dow is the market leader in supplying opaque polymers to paint manufacturers, both in the United States and worldwide. Dow has maintained this position through a combination of patent and trade-secret protections.

In May 2013, Dow filed a complaint with the ITC requesting an investigation into whether Organik Kimya’s opaque polymer products infringed four Dow patents. The ITC granted Dow’s request, and the parties began discovery. During the proceedings, Dow amended its complaint to add allegations of trade secret misappropriation when it discovered that Organik Kim-ya may have coordinated the production of its opaque polymers with the assistance of former Dow employee Dr. Dilip Nene. Dow discovered that other former Dow employees, Dr. Guillermo Perez and Leonard Strozzi, also may have assisted Organ-ik Kimya with its development of opaque polymers. As Dow attempted to obtain discovery relating to the activities of Dr. Perez, Dr. Nene, and Strozzi, however, Dow discovered spoliation of evidence on a staggering scale.

A. Administrative Law Judge’s Findings

1. Findings Relating to Dr. Perez

In response to a discovery order issued by the Administrative Law Judge (“ALJ”), Dow’s forensic investigators traveled to Turkey in February 2014 to inspect Dr. Perez’s laptop computer. ALJ Order, 2014 WL 5768586, at *15. Four days before the forensic investigation took place, and three days after the ALJ issued the discovery order authorizing the examination of the computer, Organik Kimya began overwriting the laptop’s hard drive by copying the Program Files folder at least 108 times. Id. at *15-16. While performing this overwriting, Organik Kimya also backdated the computer’s internal clock so that the meta-data on the copied files would hide the fact that the overwriting took place only days before the inspection. Id. at *16. Organik Kimya even ran a program called CCleaner “multiple times to delete a large percentage of the C drive and all of the D drive in Dr. Perez’s laptop.” Id. To ensure that its efforts had been successful, Organ-ik Kimya also used a program called Win-Hex at least twelve times to see whether it could recover any of the deleted information before the court-ordered forensic investigation took place. Id. at *52.

After Dow informed the ALJ of the forensic examiners’ findings, Organik Kim-ya submitted a letter to the ALJ explaining that the IT work done on Dr. Perez’s computer was simply maintenance undertaken because Dr. Perez was encountering troubles with the computer. Id. at *46-47. Organik Kimya also asserted that there was “no ill-intent or desire to destroy evidence.” Id. at *47.

The ALJ found Organik Kimya’s explanation to be “a work of fiction.” Id. He found that Organik Kimya’s actions made it impossible to know the exact volume and content of any previously recoverable data, but noted it was at least clear that it involved “potentially hundreds of thousands of files.” Id. at *16. The ALJ also found that there was “no innocent explanation” for Organik Kimya’s conduct relating to the use of the CCleaner program. Id. at *52.

The ALJ concluded that this evidence “leads me to the inescapable conclusion that Organik Kimya acted in bad faith when, in contravention of Order No. 16, Organik Kimya undertook the massive spoliation of evidence on Dr. Perez’s laptop .... In fact, were there such a thing, I would find Organik Kimya’s egregious behavior to be gross bad faith.” Id. at *54. The ALJ further stated that Organik Kim-ya’s actions, “coupled with the multitude of lies Organik Kimya knowingly and deliberately presented to the undersigned to hide or explain away its wrongdoing, leave[ ] no doubt that Organik Kimya destroyed evidence on Perez’s laptop with the intent to impair Dow’s ability prove [sic] its allegations of trade secret misappropriation.” Id. The ALJ found the spoliated evidence “relevant to Dow’s allegation of trade secret misappropriation and its destruction prejudicial to Dow’s ability to prosecute same.”. Id. at *58.

2. Findings Relating to Dr. Nene

Organik Kimya failed to identify Dr. Nene in response to an interrogatory seeking the identification of all former Dow employees who had worked for Organik Kimya. J.A. 14878-79. When Dow discovered Dr. Nene’s involvement with Organik Kimya and served a subpoena upon him, Dr. Nene asserted that his communications with Organik Kimya were never of a technical nature. ALJ Order, 2014 WL 5768586, at *22. A forensic inspection conducted by Dow, however, found that Dr. Nene engaged in various technical discussions with Organik Kimya. Id. at *23. Dow also uncovered two emails relating to Dr. Nene’s involvement with Organik Kimya and evidence of Organik Kimya’s attempt to purge those emails; these emails read: “Confidential information related to the consultant [Dr. Nene] are still recorded here, they were supposed to be erased by the IT department,” id. at *15; and “Ba-sak, can you print them and give them to me please? Then we should erase them from the system please,” J.A. 4073.

During discovery, Dow uncovered a suspicious meeting between Dr. Nene and Organik Kimya’s co-CEO at a hotel in Rotterdam. ALJ Order, 2014 WL 5768586, at *44. After Dow served Organik Kimya with the complaint in this matter, Mr. Kaslowski, Organik Kimya’s co-CEOs called Dr. Nene directly and directed him to travel to Rotterdam for a “safety audit.” Id. When Dr. Nene traveled to Rotterdam about a month later, Mr. Kaslowski was the first person to meet with Dr. Nene. They met at Dr. Nene’s hotel rather than at Organik Kimya’s offices. Id. Both Dr. Nene and Organik Kimya’s co-CEO denied having this meeting, but the forensic investigation confirmed that it occurred. Id.

Dr. Nene also admitted that, around the time he received the call from Mr. Kaslow-ski asking Dr. Nene to travel to Rotterdam for the “safety audit,” Dr. Nene “removed the hard drive from his personal computer and smashed it with a hammer and threw it in the garbage.” Id. Dr. Nene testified that he smashed the hard drive to make sure that the information on the drive could not be recovered. Id. at *25. He also admitted to destroying a bag full of zip drives. Id. The ALJ found this evidence “very significant, as well as extremely troubling, as it shows not only joint purpose, but tends to establish Dr. Nene and Mr. Kaslowski recognized the obvious implication that such a meeting would have since it occurred shortly after this investigation commenced.” Id. at *44. The ALJ also determined that “it seems unlikely the co-CEO of Organik Kimya would participate in a routine safety audit and meet in a hotel to discuss it and then lie about the meeting afterwards.” Id.

The ALJ found sufficient evidence to conclude that Organik Kimya had the ability to control Dr. Nene and had failed to act responsibly to preserve Dr. Nene’s information, thereby rendering Organik Kimya in reckless disregard of its duty to preserve Dr. Nene’s information. Id. at *57. But the ALJ determined that there was insufficient evidence to link Dr. Nene’s deletion of evidence to a design by Organik Kimya to destroy the data deliberately. Id. The ALJ accordingly found “no sanetion-worth[y] spoliation” relating to Dr. Nene’s documents. Id. at *65.

3. Findings Relating to Strozzi

On March 21, 2014, one day after the ALJ ordered Strozzi’s files to be preserved and four days prior to the scheduled forensic examination of Strozzi’s computer, someone logged into the computer and deleted 2,742 user-created files and folders, many of which were later recovered and found to be responsive to previously identified keyword search terms. Id. at *20-21. The inspectors also found evidence of numerous undisclosed and unproduced USB storage devices used on Strozzi’s work computer. Id. at *21. But before Dow learned about the existence of the external storage devices, Strozzi took his computer bag, which had his computer and storage devices, “into a bathroom of a highway rest stop, but ‘accidentally’ left [it] there.” Id.

The ALJ found that Organik Kimya had control over Strozzi’s laptop but not the external storage devices. Id. at *54. The ALJ also found that Organik Kimya had never given its employees a litigation hold notice, instead leaving it up to each individual employee whether to save or delete electronic files. Id. at *56. Although the evidence from Strozzi’s laptop was later recovered through forensic investigation, the ALJ determined that the deletion of the files “evinces an attempt to cover-up wrong doing. What is even more shocking is that at the time I issued my Preservation Order, Organik Kimya was already on notice of the massive spoliation of evidence on Dr. Perez’s laptop.” Id. at *56. The ALJ noted that “[t]he matter is even worse when discussing the loss of the laptop itself, for Organik Kimya had the laptop in its possession for the forensic inspection and yet inexplicably returned it to Strozzi, which allowed him to ‘lose’ it.” Id. at *57. Additionally, Dow only received a small portion of the deleted documents because only a few were responsive to the search terms the parties identified prior to the forensic search. Id. at *63. The ALJ noted, however, that many of the additional files for which Dow received the file name but never saw the full document seemed plainly relevant to the case based on the file names, whether or not associated with the identified search terms. Id. The ALJ determined that Organik Kimya failed to show that these documents were neither relevant nor prejudicial. Id.

As to Organik Kimya’s conduct relating to Strozzi’s laptop, the ALJ found “the spoliation of evidence on the Strozzi laptop and the spoliation of the Strozzi laptop itself was done in an effort to prevent Dow from access to evidence it might use to support its allegations in this investigation.” Id. at *57. The ALJ concluded that “the spoliation of evidence on the Strozzi laptop and the loss of the Strozzi laptop itself was in bad faith.” Id. The ALJ also found “at least some of the documents deleted from the Strozzi laptop to be relevant and prejudicial to Dow’s allegations in this investigation.” Id. at *63.

4. The ALJ’s Conclusions

On May 19, 2014, Dow moved for sanctions, including a default judgment against Organik Kimya. Id. at *2. Two days later, Organik Kimya filed a motion to terminate the investigation by consent order. Id. at *66 n.19. Organik Kimya “agreed to completely and indefinitely withdraw the accused products from the U.S. market.” J.A. 9142. Organik Kimya admitted that “a portion of the hard drive of Mr. Perez’s computer was overwritten in such a way that previously deleted files were potentially rendered unrecoverable through forensic means.” ALJ Order, 2014 WL 5768586, at *29. Nevertheless, Organik Kimya urged the ALJ to enter its proposed consent order rather than a default judgment.

The ALJ conducted a two-day hearing on Dow’s sanction motion and Organik Kimya’s consent order motion. At the hearing, Organik Kimya also argued in the alternative that any sanction be limited to an adverse inference precluding Dr. Perez from testifying about Organik Kimya’s alleged independent development of its opaque polymers. J.A. 11509 at 399:24-400:14. The ALJ granted Dow’s motion for default judgment in a 119-page initial determination. See generally ALJ Order, 2014 WL 5768586. The opinion recounted Organik Kimya’s destruction of evidence in detail. It included the following excerpt as part of its Executive Summary:

[A]s will be made clear in the pages that follow this is an extreme case, for Or-ganik Kimya flouted its obligation to preserve evidence, deliberately destroyed evidence, and then actively attempted to deceive the undersigned as to what it had done. Given: (1) the grave damage Organik Kimya’s deliberate conduct potentially could have on the administration of justice; (2) the need to deter such egregious conduct in the future; and (3) the certain prejudice to Dow, only the strongest remedy available is sufficient.

Id. at *2.

When discussing a sanction, the ALJ stated that Organik Kimya’s “willful, bad faith misconduct” had deprived Dow of its ability to pursue its trade secret misappropriation claim effectively and the ALJ of his “ability to oversee a prehearing process that would facilitate a fair and timely resolution of this investigation on its merits.” Id. at *65. The ALJ therefore found that “[n]o sanction short of default is available to return the parties to the position in which they would have been but for the deliberate destruction by Organik Kimya of evidence potentially favorable to Dow.” Id. The ALJ then explained why shifting the burden of proof and using adverse inferences would not address adequately Organik Kimya’s conduct in this case. Id. at *66. According to the ALJ, “no lesser sanction will adequately deter the repetition of this kind of easily accomplished and highly prejudicial destruction of evidence.” Id.

The ALJ further clarified that he found “Organik Kimya’s abhorrent conduct” with regard to Dr. Perez’s laptop and flies to be “more than sufficient to justify the Default Sanction against Organik Kimya.” Id. at *76. He found “Organik Kimya’s contumacious and inexplicable conduct” with regard to Strozzi and his documents “to independently justify the most severe sanction, even were I to heed Organik Kimya’s lack of prejudice argument.” Id.

B. The Commission Affirms the ALJ’s Conclusions

The Commission determined that the initial determination “recites in detail the discovery-related misconduct in this investigation,” and the Commission affirmed and adopted all of the initial determination’s factual findings. Commission Opinion, at 6. The Commission also “affirm[ed] and adopt[ed] the ALJ’s determination of default.” Id.; see also id. at 12 (“We affirm all of the [initial determination’s] findings concerning the default sanction.”). The Commission determined that the spoliation of evidence on Dr. Perez’s computer “alone is more than sufficient to justify the sanctions ordered by the ALJ.” Id. at 13. It went on to find that the intentional deletion of files by Strozzi “is at least circumstantial evidence relating to the culpable state of mind found by the ALJ.” Id. at 14.

Organik Kimya argued that the ALJ failed to consider its proposed lesser sanctions. See id. at 14-17. The Commission rejected Organik Kimya’s argument as to the consent order, noting that “[t]he Commission has always reserved the right to deny termination by consent in appropriate circumstance.” Id. at 15. The Commission also noted that “allowing Organik Kimya to exit the investigation on consent ‘without accepting the full measure of its responsibility for its egregious actions’ would not be a sufficient deterrent” because, “[i]f such termination were allowed here, future parties may decide to engage in discovery abuse with the understanding that if they are caught they can merely exit the investigation through the consent order procedures without being held accountable for their misconduct.” Id. at 15-16. As to an adverse inference or some lesser sanction, the Commission stated that “[t]he ALJ also explained why any sanction less than default would be insufficient” and that the Commission could “discern no conflict between the ALJ’s determination and Shepherd [v. American Broadcasting Cos., 62 F.3d 1469 (D.C. Cir. 1995) ],” which Organik Kimya had cited in support for its argument. Commission Opinion, at 17.

The Commission found that an exclusion order and a cease and desist order were appropriate remedies. Id. at 21. Based on the record evidence, the Commission determined that the evidence demonstrated it would have taken Organik Kimya 25 years to develop a commercial opaque polymer comparable to Dow’s without using Dow’s trade secrets. Id. The Commission therefore found that a 25-year period would be an appropriate length for the exclusion order. Id. The exclusion order included a narrowing provision, however, that allows Organik Kimya to seek an opinion from the Commission that would allow Organik Kimya to import products that it shows were developed without using Dow’s misappropriated trade secrets. Id. at 23-24.

II. Discussion

A. Default Judgment Sanction

Any sanctions imposed by the Commission are reviewed for an abuse of discretion. Genentech, Inc. v. U.S. Int’l Trade Comm’n, 122 F.3d 1409, 1414 (Fed. Cir. 1997). An abuse of discretion occurs if “the Commission’s sanction decision (1) is clearly unreasonable, arbitrary, or fanciful; (2) is based on an erroneous conclusion of law; (3) rests on clearly erroneous fact findings; or (4) follows from a record that contains no evidence on which the decision-making body could rationally base its decision.” Id. at 1415.

The parties initially dispute the proper standard for reviewing the Commission’s decision to impose default judgment sanctions against Organik Kimya. The ITC and Dow argue that we need only look to 19 C.F.R. § 210.33(b) and Federal Rule of Civil Procedure 37(b) in our review of the sanctions. Under 19 C.F.R. § 210.33(b), the ALJ in an ITC investigation has the authority to issue non-monetary sanctions for failure to comply with an order compelling discovery. The list of possible sanctions includes “any other non-monetary sanction available under Rule 37(b) of the Federal Rules of Civil Procedure.” 19 C.F.R. § 210.33(b)(6). Rule 37(b) states that a court may “render[ ] a default judgment against the disobedient party” if the party fails to obey a discovery order. Fed. R. Civ. P. 37(b)(2)(A)(vi). Because Organik Kimya disobeyed the ALJ’s. express discovery orders through its spoliation of evidence, the ITC and Dow argue that 19 C.F.R. § 210.33(b) and Rule 37(b) support affirmance of the default judgment sanction.

Organik Kimya argues that the discussion of default judgment sanctions in Micron Technology, Inc. v. Rambus Inc., 645 F.3d 1311 (Fed. Cir. 2011), controls our decision. In Micron, we addressed a default judgment sanction imposed by a district court under its inherent authority to control litigation and the judicial process. Id. at 1326. In reviewing the district court’s decision, we analyzed the district court’s findings with respect to: (1) bad faith, (2) prejudice to the opposing party caused by the spoliation, and (3) availability or efficacy of lesser sanctions..Id. at 1326-29. Organik Kimya does not challenge the finding of bad faith in this case, but it argues that the Commission erred under Micron because the degree of prejudice to Dow was minimal and the Commission did not adequately address the efficacy of lesser sanctions.

We agree with the ITC and Dow that we should consider the sanctions in this case under the standard of 19 C.F.R. § 210.33(b) and Rule 37(b), because the ALJ and the Commission based their decisions on Organik Kimya’s express disobedience of the ALJ’s discovery orders. See ALJ Order, 2014 WL 5768586, at *4 n.2 (explaining that the ALJ used 19 C.F.R. § 210.33(b) and Rule 37, not his inherent authority — to the extent he has such authority — to sanction Organik Kimya); see also Commission Opinion, at 12-14 (affirming the ALJ’s findings). The ALJ explicitly ordered the forensic inspection of Dr. Perez’s computer. ALJ Order, 2014 WL 5768586, at *15. After allegations arose that Dow was unable to procure certain discovery from Organik Kimya because documents and files had been destroyed, the ALJ ordered Organik Kimya to preserve its documents and even warned that he would be “mortally annoyed if anything was done to alter, destroy or otherwise mess with the evidence in this case.” Id. at *18. Organik Kimya’s destruction of thousands of documents, despite the ALJ’s explicit orders to conserve the documents, brings this case under the purview of 19 C.F.R. § 210.33(b) and Rule 37(b).

As explained above, 19 C.F.R. § 210.33(b) states that an ALJ may order any non-monetary sanction available under Rule 37(b) that is not already included in § 210.33(b). Rule 37 permits a court to render a default judgment against a party that fails to obey an order to provide or permit discovery. Fed. R. Civ. P. 37(b)(2)(A)(vi); see also Shepherd, 62 F.3d at 1480 (acknowledging that Rule 37(b) “expressly authorizes dismissal or default for noncompliance with a discovery order”); Everyday Learning Corp. v. Larson, 242 F.3d 815, 817-18 (8th Cir. 2001) (“When the facts show willfulness and 'bad faith, as in this case, the district court need not investigate the propriety of a less extreme sanction. In such cases, the ‘selection of a proper sanction, including dismissal, is entrusted to the sound discretion of the district court.’ ” (quoting Avionic Co. v. Gen. Dynamics Corp., 957 F.2d 555, 558 (8th Cir. 1992))). Although the entry of a default judgment for failure to comply with a discovery sanction may seem harsh, the Supreme Court has explained that the most severe sanctions must be available to district courts in appropriate cases:

There is a natural tendency on the part of reviewing courts, properly employing the benefit of hindsight, to be heavily influenced by the severity of outright dismissal as a sanction for failure to comply with a discovery order. It is quite reasonable to conclude that a party who has been subjected to such an order will feel duly chastened, so that even though he succeeds in having the order reversed on appeal he will nonetheless comply promptly with future discovery orders of the district court.
But here, as in other areas of the law, the most severe in the spectrum of sanctions provided by statute or rule must be available to the district court in appropriate cases, not merely to penalize those whose conduct may be deemed to warrant such a sánction, but to- deter those who might be tempted to such conduct in the absence of such a deterrent.

Nat’l Hockey League v. Metro. Hockey Club, Inc., 427 U.S. 639, 642-43, 96 S.Ct. 2778, 49 L.Ed.2d 747 (1976).

Despite these authorities, Organik Kim-ya argues that 19 C.F.R. § 210.33 effectively mirrors the inherent authority standard discussed in Micron, rather than the Rule 37 standard, because it states that the ALJ can grant relief “as may be sufficient to compensate for the lack of withheld testimony, documents, or other evidence.” 19 C.F.R. § 210.33(b)(6). But we have stated previously that § 210.33(b) is “coextensive” with Rule 37. Genentech, 122 F.3d at 1418. We further explained that the “only difference between [§ 210.33] and Rule 37, as construed by the Commission, is that [§ 210.33] does not provide authority to award reasonable expenses and attorney fees as a sanction for cases instituted before August 31, 1994.” Id. at 1418 n.9; see also Final Rules for Investigations and Related Proceedings Concerning Unfair Practices in Import Trade, 59 Fed. Reg. 39,020 (Aug. 1, 1994) (noting that § 210.33(b) was based on Rule 37(b)).

The Commission therefore can issue default judgment sanctions in appropriate cases when a party disobeys a discovery order if the Commission determines that the conduct at issue warrants such sanctions. This does not mean that a party’s failure to comply with a discovery order will warrant imposing default judgment sanctions in every case; instead, such sanctions can be imposed in appropriate cases “to penalize those whose conduct may be deemed to warrant such a sanction” and “to deter those who might be tempted to such conduct in the absence of such a deterrent.” Nat’l Hockey League, 427 U.S. at 643, 96 S.Ct. 2778. We leave the determination of such cases to the sound discretion of the ALJ and the Commission, whose decisions we review for an abuse of discretion. See Genentech, 122 F.3d at 1414.

The ALJ in this case made extensive findings regarding Organik Kimya’s spoliation of evidence on multiple occasions despite explicit orders from the ALJ to preserve the evidence. The facts of this case were so extreme that they led the ALJ to explain, “were there such a thing, I would find Organik Kimya’s egregious behavior to be gross bad faith.” ALJ Order, 2014 WL 5768586, at *54. Organik Kimya compounded its actions when it “actively attempted to deceive the [ALJ] as to what it had done.” Id. at *2. The Commission, in reviewing the ALJ’s decision, stated that it “affirm[ed] and adopt[ed]” all of the ALJ’s factual findings and his determination of default. Commission Opinion, at 6. The Commission did not abuse its discretion in implementing default judgment sanctions because Organik Kimya destroyed “potentially hundreds of thousands of files,” ALJ Order, 2014 WL 5768586, at *66, despite explicit orders from the ALJ to preserve documents and then tried to deceive the ALJ as to its actions. Indeed, these facts put this case squarely within the Supreme Court’s admonition that “the most severe in the spectrum of sanctions provided by statute or rule must be available to the district court in appropriate cases” to penalize a party’s sanctionable conduct and to deter future parties from repeating such conduct. Nat’l Hockey League, 427 U.S. at 643, 96 S.Ct. 2778.

B. The Limited Exclusion Order

If a party is found in default, the Commission can implement relief against the party in default upon the motion of the complainant. 19 C.F.R. § 210.16(c)(1); see also 19 C.F.R. § 210.16(a)(2) (specifying that this section applies to parties found in default under § 210.33(b) for failure to make or cooperate in discovery). The Commission will presume' the facts alleged in the complaint to be true, and the Commission may issue an exclusion order, a cease and desist order, or both. Id. § 210.16(c)(1). This is consistent with 19 U.S.C. § 1337, which states that the Commission shall enter a limited exclusion order if it determines that a violation of § 1337 has occurred and public interest factors do not counsel against its issuance. 19 U.S.C. § 1337(d)(1); see also Spansion, Inc. v. U.S. Int’l Trade Comm’n, 629 F.3d 1331, 1358 (Fed. Cir. 2010) (“By statute, the Commission is required to issue an exclusion order upon the finding of a Section 337 violation absent a finding that the effects of one of the statutorily-enumerated public interest factors counsel otherwise.”).

“[T]he Commission has broad discretion in selecting the form, scope, and extent of the remedy” after finding a violation of 19 U.S.C. § 1337. Hyundai Elecs. Indus. Co. v. U.S. Int’l Trade Comm’n, 899 F.2d 1204, 1209 (Fed. Cir. 1990) (quoting Viscofan, S.A. v. U.S. Int’l Trade Comm’n, 787 F.2d 544, 548 (Fed. Cir. 1986)). We can set aside the Commission’s choice of remedy “only if it is legally erroneous, arbitrary and capricious, or constitutes an abuse of discretion.” Fuji Photo Film Co. v. U.S. Int’l Trade Comm’n, 386 F.3d 1095, 1106 (Fed. Cir. 2004).

After finding Organik Kimya in default and in violation of § 1337, the Commission determined that a limited exclusion order against Organik Kimya and a cease and desist order against Organik Kimya’s U.S. subsidiary were appropriate. Commission Opinion, at 21. Based on the facts in the record, the Commission found 25 years, the length sought by Dow and supported by Dow’s expert, to be the proper length for the limited exclusion order and the cease and desist order. Id. The Commission, however, expressly allowed Organik Kimya to bypass the limited exclusion order and import products using opaque polymers into the United States prior to the completion of the 25-year period as long as Organik Kimya shows the Commission that it has developed its opaque polymers without the use of Dow’s misappropriated trade secrets. Id. at 23.

On appeal, Organik Kimya does not challenge the cease and desist order; Or-ganik Kimya only challenges the limited exclusion order, alleging that the Commission committed legal error by failing to consider Organik Kimya’s arguments regarding the proper remedy, including its challenge to the 25-year term. The Commission considered Organik Kimya’s briefing, however, and determined that its arguments as to the scope of the exclusion order relied entirely on arguments regarding the merits of the trade secret allegations. Id. at 19-20. Because Organik Kim-ya defaulted on those claims due to the discovery sanctions imposed, the Commission determined that Organik Kimya could not relitigate the underlying merits of the trade secret claims by collaterally attacking the merits in its remedy briefing. Id. at 20.

The Commission also found- Dow’s expert credible when he opined that it would take Organik Kimya 15 to 25 years to develop opaque polymers independently. Id. at 21. Dow’s expert explained the basis for his calculation and supported his opinion with extensive facts from the record. The Commission, in its discretion, found 25 years to be the proper length for the exclusion order, and that decision finds ample support in the record. Given this basis for the Commission’s decision, and that Organik Kimya can end the exclusion order period at any time by seeking an advisory opinion or initiating a modification proceeding before the Commission and showing that Organik Kimya has produced opaque polymers independently, we do not find that the Commission abused its discretion or committed legal error in this case.

In an attempt to rebut the Commission’s decision to impose a 25-year exclusion order in this case, Organik Kimya points to various cases to support its assertion that exclusion orders in trade secret misappropriation cases typically last five to ten years. As Organik Kimya itself recognizes, however, the Commission bases the time period of a limited exclusion order on a “reasonable research and development period” or an “independent development time” for the trade secrets at issue. Certain Cast Steel Ry. Wheels, Certain Processes for Mfg. or Relating to Same & Certain Prods. Containing Same, USITC Inv. No. 337-TA-655, 2009 ITC LEXIS 2387, at *11 (Oct. 29, 2009)). The length of the exclusion order therefore depends on the trade secrets at issue and evidence in the record, not the particular length of exclusion orders in other cases. See id. As discussed above, the record in this case supports the limited exclusion order imposed by the Commission.

Organik Kimya also attempts to find fault with the Commission’s citation of 19 U.S.C. § 1337(g). According to Organik Kimya, the Commission relied on § 1337(g), which relates to parties that fail to respond to a complaint, as a basis for refusing to consider Organik Kimya’s arguments regarding the proper remedy. The Commission’s opinion confutes this argument. The Commission first used § 1337(g) as support for presuming that the allegations of Dow’s amended complaint were true based upon Organik Kim-ya’s default. Commission Opinion, at 19. This use of § 1337(g) comports with 19 C.F.R. § 210.16(c)(1) and is not legally erroneous. The Commission then used § 1337(g) merely as support for its assertion that Congress has spoken to the existence of remedial orders in default cases. Commission Opinion, at 22. These uses of § 1337(g) in the Commission opinion do not amount to legal error; indeed, the Commission does not even use the citations in the manner Organik Kimya claims.

The record in this case supports the Commission’s limited exclusion order of 25 years with the opportunity for Organik Kimya to bypass the exclusion order period at any time if it can show that it has developed its opaque polymers without using Dow’s misappropriated trade secrets.

III. Conclusion

We have considered Organik Kimya’s remaining arguments and find them unpersuasive. For the foregoing reasons, the decision of the Commission is affirmed.

AFFIRMED.

Costs

Costs to Appellee.

      . This opinion uses "the Commission” to refer to the entity rendering the decision in this case and "ITC” to refer to the party in this appeal and the agency generally.

      . Rohm and Haas Company and Rohm and Haas Chemicals LLC became subsidiaries of Dow after Dow acquired Rohm and Haas in 2009. This opinion collectively refers to the companies as "Dow.”

      . Genentech refers to 19 C.F.R. § 210.36(b) instead of § 210.33(b) because the interim rule was found at § 210.36(b). See Interim Rules Governing Investigations and Enforcement Procedures Pertaining to Unfair Practices in Import Trade, 53 Fed. Reg. 33,043 (Aug. 29, 1988). In 1994, the rule was moved to § 210.33(b) as part of the final rules. See Final Rules for Investigations and Related Proceedings Concerning Unfair Practices in Import Trade, 59 Fed. Reg. 39,020 (Aug. 1, 1994).

      . Even if we were to analyze this case under Micron, the result would be the same. Organ-ik Kimya did not contest the finding that it acted in bad faith. The degree of prejudice to Dow was high. The ALJ and the Commission, which adopted the ALJ’s findings, found that Organik Kimya destroyed "potentially hundreds of thousands of files,” ALJ Order, 2014 WL 5768586, at *66, making it "impossible to know the exact volume and content of the destroyed data,” Commission Opinion, at 17. This "willful, bad faith misconduct” deprived Dow of “its ability to pursue its claim of trade secret misappropriation” and deprived the ALJ of his "ability to oversee a prehearing process that would facilitate a fair and timely resolution of this investigation on its merits.” ALJ Order, 2014 WL 5768586, at *65. The Commission determined that the lesser sanctions Organik Kimya sought were inadequate. Commission Opinion, at 15-16. The Commission also reviewed and adopted the ALJ’s findings, which included the determination that "no lesser sanction will adequately deter the repetition of this kind of easily accomplished and highly prejudicial destruction of evidence.” ALJ Order, 2014 WL 5768586, at *66. The Commission accordingly did not abuse its discretion under Micron.


text:
    CHANGZHOU HAWD FLOORING CO., LTD., Dunhua City Jisen Wood Industry Co., Ltd., Dunhua City Dexin Wood Industry Co., Ltd., Dalian Huilong Wooden Products Co., Ltd., Kunshan Yingyi-Nature Wood Industry Co., Ltd., Karly Wood Product Limited, Fine Furniture (Shanghai) Limited, Lumber Liquidators Services, LLC, Armstrong Wood Products (Kunshan) Co., Ltd., Plaintiffs-Appellants, Home Legend, LLC, Plaintiff, v. UNITED STATES, The Coalition for American Hardwood Parity, Defendants-Appellees.
    2015-1899
    2015-1901
    2015-1903
    2015-1904
    United States Court of Appeals, Federal Circuit.
    Decided: February 15, 2017

      Jeffrey S. Grimson, Mowry & Grimson, PLLC, Washington, DC, argued for all plaintiffs-appellants. Plaintiff-appellant Fine Furniture (Shanghai) Limited also represented by Kristin Heim Mowry, Jill A. Cramer, Sarah M. Wyss.
    Gregory S. Menegaz, DeKieffer & Hor-gan, PLLC, Washington, DC, for plaintiffs-appellants Changzhou Hawd Flooring Co., Ltd., Dunhua City Jisen Wood Industry Co., Ltd., Dunhua City Dexin Wood Industry Co., Ltd., Dalian Huilong Wooden Products Co., Ltd., Kunshan Yingyi-Nature Wood Industry Co., Ltd., Karly Wood Product Limited. Also represented by James Kevin Horgan, Alexandra H. Salzman.
    Arthur K. Purcell, Sandler Travis & Rosenberg, P.A., New York, NY, for plaintiff-appellant Lumber Liquidators Services, LLC. Also represented by Mark Ludwikowski, Kristen Smith, Washington, DC; Michelle L. Mejia, Chicago, IL.
    Harold Deen Kaplan, Hogan Lovells US LLP, Washington, DC, for plaintiff-appellant Armstrong Wood Products (Kunshan) Co., Ltd. Also represented by Craig Anderson Lewis.
    Tara K. Hogan, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for defendant-appellee United States. .Also represented by Benjamin C. Mizer, Jeanne E. Davidson, Claudia Burke; Shelby Anderson, Office of Chief Counsel for Trade Enforcement and Compliance, United States Department of Commerce, Washington, DC.
    Jeffrey Steven Levin, Levin Trade Law PC, Bethesda, MD, for defendant-appellee The Coalition for American Hardwood Parity.
    Before LOURIE, TARANTO, and CHEN, Circuit Judges.
   TARANTO, Circuit Judge.

This case arises from the U.S. Department of Commerce’s antidumping-duty investigation of multilayered wood flooring imports from the People’s Republic of China. The appellants here are Chinese entities that Commerce found had demonstrated their independence from the Chinese government and so deserved a “separate” antidumping-duty rate, not the so-called China-wide rate that applies to entities that had not shown their independence from the Chinese government. Commerce did not individually investigate appellants to determine firm-specific dumping margins. Instead, it assigned them a rate that, though not specified numerically, was declared to be more than de minimis, even though it found zero or de minimis dumping margins for all three of the Chinese firms that it had individually investigated. The Court of International Trade affirmed that determination.

Appellants contend that they are entitled to a de minimis rate. After the Court of International Trade rendered its decision in this case, our court made clear that the “separate rate” method used by Commerce here is a departure from the con-gressionally approved “expected method” applicable when all of the individually investigated firms have a zero or de minim-is rate, which is the case here, and that certain findings are necessary to justify such a departure. Albemarle Corp. & Subsidiaries v. United States, 821 F.3d 1345, 1348 (Fed. Cir. 2016). Under the “expected method,” appellants would be entitled to a de minimis rate. Because Commerce did not make the findings needed to justify departing from the expected method, we vacate the Court of International Trade’s judgment, and we remand.

I

In 2010, the Department of Commerce initiated an antidumping-duty investigation of multilayered wood flooring from China, based on a petition filed by the Coalition for American Hardwood Parity under 19 U.S.C. § 1673a(b). Multilayered Wood Flooring from the People’s Republic of China: Initiation of Antidumping Duty Investigation, 75 Fed. Reg. 70,714 (Dep’t of Commerce Nov. 18, 2010). In order to select particular Chinese firms to be individually investigated as mandatory respondents, Commerce sent questionnaires to the Chinese exporters and producers identified in the petition, asking about the quantities and value of the goods at issue sent to the United States. Id. at 70,717-18. Of the 190 recipients of the questionnaire, 80 timely responded. Multilayered Wood Flooring from the People’s Republic of China: Preliminary Determination of Sales at Less Than Fair Value, 76 Fed. Reg. 30,656, 30,657 (Dep’t of Commerce May 26, 2011). Commerce selected “the three largest exporters (by volume)” as mandatory respondents. Id. at 30,658. Although several firms offered to be individually investigated as voluntary respondents, id., the three mandatory respondents are the only firms that Commerce individually investigated in this investigation. See Changzhou Hawd Flooring Co. v. United States, 44 F.Supp.3d 1376, 1389 n.31, 1390 (Ct. Int’l Trade 2015).

Commerce deems China to be a non-market economy, and it presumes that each Chinese exporter and producer is state-controlled, and thus covered by a single China-wide antidumping-duty rate, but a firm may rebut the presumption. See Changzhou Wujin Fine Chem. Factory Co. v. United States, 701 F.3d 1367, 1370 (Fed. Cir. 2012). Here, Commerce determined that 74 firms established their independence from the Chinese government. See Multilayered Wood Flooring from the People’s Republic of China: Final Determination of Sales at Less Than Fair Value, 76 Fed. Reg. 64,318, 64,321-22 (Dep’t of Commerce Oct. 18, 2011). For those 74 firms— not individually investigated, but not covered by the China-wide rate — Commerce had to calculate a “separate rate.”

Commerce published its Final Determination on October 18, 2011, finding that the subject merchandise was being sold at less than fair value (dumped) in the United States. Id. at 64,318. Commerce determined that one of the three mandatory respondents had a de minimis dumping margin, but it assigned margins of 3.98% and 2.63% to the other two mandatory respondents. See id. at 64,323. After a voluntary remand from the Court of International Trade, Commerce revised the mandatory respondents’ dumping margins, finding all three to be zero or de minimis. J.A. 101941. Commerce calculated the “separate rate,” not by simply using the zero¡de minimis rates for the three mandatory respondents, but by averaging those three zero figures with the 25.62% rate it adopted as the China-wide rate— yielding a separate rate of 6.41%. J.A. 101942.

On review, the Court of International Trade affirmed the dumping margins for the mandatory respondents but remanded for further explanation of how the separate rate related to economic reality. Baroque Timber Indus. (Zhongshan) Co. v. United States, 971 F.Supp.2d 1333, 1336 (Ct. Int’l Trade 2014). On remand, Commerce reasoned that the separate rate for the period of investigation should not be drawn entirely from the three mandatory respondents, all having a de minimis rate. Commerce gave two reasons. First, Commerce said, “if [any of] the 110 companies .[that did not respond to the quantity-and-value questionnaires] had chosen to cooperate, the examined company’s rate would have been above de minimis ... and would have been assigned to the separate rate plaintiffs as a separate rate in the Final Determination.” J.A. 102099. Second, merely as confirmation, Commerce pointed to the recent results of its first administrative review under 19 U.S.C. § 1675, in which Commerce found dumping even for imports made after the announcement of the antidumping-duty order, notwithstanding that “the discipline of an antidumping order often results in lower or no margins ... as companies may change their pricing practices to eliminate the price discrimination found in the period of investigation.” J.A. 102100. That result, Commerce said, confirmed the likelihood that it would have found above-cfe minimis. dumping had it investigated more individual firms during the investigation. Id. On that basis, although Commerce did not reaffirm its 6.41% rate for the “separate rate” (not individually investigated) Chinese entities, it declared that they would be subject to a rate that it .did not specify but declared to be more than de minimis.

Appellants challenged that determination in the Court of International Trade. That court affirmed, concluding that “Commerce’s determination regarding the group ... is based on a reasonable reading of the law and record evidence.” Changzhou Hawd Flooring, 44 F.Supp.3d at 1380. The court held that Commerce’s methodology was permissible because the statute allows “any reasonable method.” Id. at 1384. After one further remand, which brought Changzhou Hawd Flooring within the “separate rate” applicable to government-independent but not individually investigated firms, the Court of International Trade entered a final judgment. Changzhou Hawd Flooring Co. v. United States, 77 F.Supp.3d 1351, 1359-60 (Ct. Int’l Trade 2015).

Appellants, who are separate-rate entities, have timely appealed the above-cfe minimis separate rate, arguing for a de minimis separate rate. They assert that, although no rate was numerically specified, the assignment of an above-de minimis rate harms them because it subjects them to the antidumping-duty order and its continuing consequences, including subsequent periodic reviews under 19 U.S.C. §, 1675, whereas assigning them a de min-imis rate in this investigation would remove them from the order and relieve them from its consequences. See 19 C.F.R. § 351.204(e)(1) (excluding from final determination “any exporter or producer for which the Secretary determines an individual weighted-average dumping margin ... rate of zero or de minimis”); Dupont Teijin Films USA, LP v. United States, 407 F.3d 1211, 1216 (Fed. Cir. 2005); Tung Mung Dev. Co. v. United States, 354 F.3d 1371, 1375 n.3 (Fed. Cir. 2004); see also 19 U.S.C. §§ 1673b(b)(3), 1673d(a)(4) (disregarding weighted dumping margin that is de minimis). Commerce does not disagree that appellants have a stake in challenging the above-de minimis rate. We have jurisdiction under 28 U.S.C. § 1295(a)(5).

II

“Commerce’s determination will be sustained unless it is unsupported by substantial evidence on the record, or otherwise not in accordance with law.” Yangzhou Bestpak Gifts & Crafts Co. v. United States, 716 F.3d 1370, 1377 (Fed. Cir. 2013); 19 U.S.C. § 1516a(b)(1)(B)(i). Appellants argue that Commerce erred by not relying on the three mandatory respondents’ zero/de minimis rates to generate a de minimis “separate rate.” We agree that Commerce has not justified its departure from that method.

In investigations involving exporters from market ' economies, 19 U.S.C. § 1673d(c)(5) establishes the method for determining the rate for entities that are not individually investigated, the so-called all-others rate. Commerce has relied on that statutory provision in determining the separate rate for exporters and producers from nonmarket economies that demonstrate their independence from the government but that are not individually investigated. See Albemarle, 821 F.3d at 1348.

■ The statute says that where the “estimated weighted average dumping margins established for all exporters and producers individually investigated are zero or de minimis margins, or are determined entirely under [19 U.S.C. § 1677e],” Commerce “may use any reasonable method to establish the estimated all-others rate for exporters and producers not individually investigated, including averaging the estimated weighted average dumping margins determined for the exporters and producers individually investigated.” 19 U.S.C. § 1673d(c)(5)(B). But the Statement of Administrative Action accompanying the Uruguay Round Agreements Act — which Congress has deemed “authoritative,” 19 U.S.C. § 3512(d) — states that the “expected method” is to “weight-average the zero and de minimis margins and margins determined pursuant to the facts available, provided that volume data is available.” Uruguay Round Agreements Act, Statement of Administrative Action, H.R. Rep. No. 103-316, vol. 1, at 873 (1994), reprinted in 1994 U.S.C.C.A.N. 4040, 4201 (quoted in Albemarle, 821 F.3d at 1352 & n.5). If Commerce reasonably concludes that “this method is not feasible” or would resuit “in an average that would not be reasonably reflective of potential dumping margins for non-investigated exporters or producers,”, it “may use other reasonable methods.” Id.

Albemarle explains that Congress thus expressed a preference for the expected method, 821 F.3d at 1351-54, a preference reflecting how Commerce selects mandatory respondents, id. at 1353. Here, Commerce chose the exporters whose quantity-and-value questionnaires indicated that they were the largest exporters by volume, as expressly authorized by 19 U.S.C. § 1677f-1(c)(2) (2010). Albe-marle explains: “The very fact that the statute contemplates using data from the largest volume exporters suggests an assumption that those data can be viewed as representative of all exporters.” 821 F.3d at 1353. “The statute assumes that, absent [evidence that the largest exporters are not representative], reviewing only a limited number of exporters will enable Commerce to reasonably approximate the margins of all known exporters.” Id. “[T]he representativeness of the investigated exporters is the essential characteristic that justifies an 'all others’ rate based on a weighted average for such respondents.” Id. (quoting Nat’l Knitwear & Sportswear Ass’n v. United States, 779 F.Supp. 1364, 1373-74 (Ct. Int’l Trade 1991)). And, recognizing that the presumption of representativeness may be overcome, Albemarle holds that, in order to depart from the expected method, “Commerce must find based on substantial evidence that there is a reasonable basis for concluding that the separate respondents’ dumping is different.” Id.

Pointing to Albemarle’s, observation that the mandatory respondents in that case accounted for “a majority of the market,” id. at 1353, Commerce argues that Albe-marle’s requirement of a showing of un-representativeness for departing from the expected method does not apply where the mandatory respondents do not account for “a majority of the market.” Appellee’s Br. 22. But that argument takes too narrow a view of Albemarle. The court did not rely for its statutory analysis on the observation that the particular respondents accounted for a “majority of the market.” It relied on the statutory standards for selecting mandatory respondents under § 1677f — 1(c)(2), which, the court held, make the mandatory respondents representative unless evidence shows otherwise. Albemarle, 821 F.3d at 1353. The statutory standards — involving either a statistical sample, 19 U.S.C. § 1677f-1(c)(2)(A), or the largest exporters by volume, id. § 1677f-1(c)(2)(B) — are not tied to a “majority” share of a “market,” of the imports at issue, or any other class or collection.

Thus, the mandatory respondents in this matter are assumed to be representative. Under Albemarle, Commerce could not deviate from the expected method unless it found, based on substantial evidence, that the separate-rate firms’ dumping is different from that of the mandatory respondents. But it has not done so.

Commerce did articulate a reason addressing firms that did not respond to the quantity-and-value questionnaires: it said that those firms likely “would have cooperated with the Department’s investigation if they could have obtained a low rate.” J.A. 102119. But that rationale does not suggest the needed inference about the separate-rate firms, all of which did respond to the questionnaires. Indeed, under Commerce’s reasoning, the separate-rate firms’ decisions to respond to the questionnaires might suggest that they are more similar to other firms, like the mandatory respondents, that responded. And Commerce may have suggested the same when, in its first “final determination,” it calculated the separate rate by averaging the rates of the two mandatory respondents that had margins above de minimis. Multilayered Wood Flooring from the People’s Republic of China: Final Determination of Sales at Less Than Fair Value, 76 Fed. Reg. at 64,322.

Ill

Because Commerce has not made the findings necessary to justify departing from the “expected method” here, we vacate the judgment of the Court of International Trade, and we remand with instructions to remand to Commerce for it to reconsider its separate-rate determination. We find it unnecessary to address appellants’ other challenges to the separate-rate determination.

Costs awarded to appellants.

VACATED AND REMANDED.

      . Of the 110 entities that did not respond to the quantity-and-value questionnaires, Commerce removed one, located in Taiwan, from the investigation. J.A. 101424.

      . Commerce also determined that it need not calculate a specific separate rate for all but one of the separate-rate litigants (appellant Changzhou Hawd Flooring Company) because "the rate determined in the first administrative review supersedes the cash deposit rate established in the final determination of the investigation.” J.A. 102100. As to Chang-zhou Hawd Flooring, Commerce announced that it would conduct an individual investigation, J.A. 102102, but it decided to delay the actual investigation until after the Court of International Trade reviewed the remand determination. See Changzhou Hawd Flooring, 44 F.Supp.3d at 1382 & n.13.

      .In Changzhou Hawd Flooring, 44 F.Supp.3d at 1390, the court held to be arbitrary and capricious Commerce's decision to conduct a full individual investigation of Changzhou Hawd Flooring so late in the investigation. On remand, Commerce applied the same above-de minimis but unspecified separate rate- to Changzhou Hawd Flooring that it applied to the other separate-rate firms. The Court of International Trade approved that decision. Changzhou Hawd Flooring, 77 F.Supp.3d at 1359, Commerce does not challenge the rejection of its attempt to individually investigate Changzhou Hawd Flooring.

      . The language of "margins determined pursuant to the facts available” refers to margins determined under 19 U.S.C. § 1677e. The statutory context, 19 U.S.C. § 1673d(c)(5)(B), makes clear that the language refers to margins so determined for firms that are individually investigated. Commerce has not suggested that, in the present case, there are any such § 1677e-based margins to be included in the average. Thus, only “zero and de minimis margins” are part of the average here.
      In this respect, the case is unlike Yangzhou Bestpak Gifts & Crafts Co. v. United States, 716 F.3d 1370 (Fed. Cir. 2013), where Commerce calculated a "separate rate” by averaging the two individually investigated firms' rates — one de minimis, the other a high § 1677e-based rate. This court held Commerce’s result to be unreasonably high on the record in the particular case. Id. at 1377-81. Here, in contrast, there is no issue of an unreasonably high average of the individually investigated firms’ rates; as in Albemarle, 821 F.3d at 1349, the average in this case is zero or de minimis.

      . The section was amended in 2012, but the relevant language is- unchanged. 19 U.S.C. § 1677f-1 (c)(2).