Certain Bone Cements and Bone Cement Accessories, Inv. No. 337-TA-1175

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In the Matter of

CERTAIN BONE CEMENTS AND BONE
CEMENT ACCESSORIES

Investigation No. 337-TA-1175

Publication 5309 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

*Has been recused from investigation

Address all communications to
Secretary to the Commission
United States International Trade Commission
Washington, DC 20436

U.S. International Trade Commission
Washington, DC 20436
www.usitc.gov
In the Matter of
CERTAIN BONE CEMENTS AND BONE
CEMENT ACCESSORIES
Investigation No. 337-TA-1175
Publication 5309 March2022

UNITED STATES INTERNATIONAL TRADE COMMISSION
Washington, D.C.
In the Matter of
CERTAIN BONE CEMENTS AND BONE
CEMENT ACCESSORIES Investigation No. 337-TA-1175
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 a final initial determination (“FID”) issued by the
presiding administrative law judge (“ALJ”) finding that no violation of section 337 has occurred.
The investigation is terminated.
FOR FURTHER INFORMATION CONTACT: Lynde Herzbach, Office of the General
Counsel, U.S. International Trade Commission, 500 E Street, S.W., Washington, D.C. 20436,
telephone (202) 205-3228. 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, telephone (202) 205-1810.
SUPPLEMENTARY INFORMATION: On September 23, 2019, the Commission instituted
this investigation based on a complaint filed on behalf of Zimmer, Inc. and Zimmer US, Inc. both
of Warsaw, Indiana (collectively, “Complainants”). 84 FR 49764 (Sept. 23, 2019). The
complaint alleges violations of section 337 of the Tariff Act of 1930, as amended, 19 U.S.C.
1337 (“section 337”), based on the importation or the sale within the United States of certain
bone cements and bone cement accessories by reason of the misappropriation of trade secrets,
false advertising, and tortious interference, the threat or effect of which is to destroy or
substantially injure an industry in the United States. The complaint also alleges the existence of
a domestic industry. The Commission’s notice of investigation names the following as
respondents: Heraeus Medical GmbH of Wehrheim, Germany and Heraeus Medical LLC of

2
Yardley, Pennsylvania (collectively, “Respondents”). Id. The Office of Unfair Import
Investigations (“OUII”) is named as a party in this investigation. Id.
On February 11, 2021, the ALJ issued the FID finding no violation of section 337. More
particularly, the FID finds, inter alia, that: (1) the Commission has subject matter and personal
jurisdiction; (2) Respondents imported or sold within the United States accused bone cements
and bone cement accessories; (3) a domestic industry exists under section 337(a)(1)(A)(i)
(19 U.S.C. 1337(a)(1)(A)(i)); (4) Complainants own the asserted trade secrets; (5) trade secrets
(“TS”) 10, 15, and 28 are protectable, but TS 11 is not protectable; (6) Respondents did not
misappropriate any asserted TS; (7) Respondents did not engage in false advertising;
(8) Respondents did not tortiously interfere with Complainants’ contracts or prospective business
relationships; and (9) Complainants failed to show a substantial injury or threat of injury to their
domestic industry.
On February 23, 2021, Complainants filed a petition for review seeking review of most of
the FID’s findings. On March 3, 2021, Respondents and OUII filed responses to Complainants’
petition.
On March 15, 2021, Respondents filed a submission on the public interest pursuant to
Commission Rule 210.50(a)(4) (19 CFR 210.50(a)(4)). Complainants and OUII did not file a
statement on the public interest. The Commission received no submissions in response to its
Federal Register notice calling for public interest comments. See 86 FR 12029-30 (Mar. 1, 2021).
On April 12, 2021, the Commission determined to review the FID in part and requested
briefing from the parties on certain issues under review. 86 FR 20200-02 (Apr. 16, 2021).
Specifically, the Commission determined to review the FID’s findings and conclusions as to:
(1) the alleged misappropriation of TS 10, 15, and 28, including the finding that Respondents
independently developed their own data compilation; (2) Respondents’ alleged tortious
interference with Complainants’ prospective business advantages; and (3) domestic industry and
injury. Id. 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 FID, Complainants’
petition 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 affirms, with modified reasoning, the FID’s findings
that Respondents did not misappropriate any trade secret, did not engage in false advertising, and
did not tortiously interfere with Complainants’ prospective business relationships. The
Commission has also determined to take no position regarding the FID’s domestic industry and
injury findings. The investigation is hereby terminated.
The Commission vote for this determination took place on June 23, 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: June 23, 2021

CERTAIN BONE CEMENTS AND BONE CEMENT
ACCESSORIES
Inv. No. 337-TA-1175
PUBLIC CERTIFICATE OF SERVICE
I, Lisa R. Barton, hereby certify that the attached NOTICE has been served via EDIS upon the
Commission Investigative Attorney, Megan Wantland, Esq., and the following parties as
indicated, on June 23, 2021.
Lisa R. Barton, Secretary
U.S. International Trade Commission
500 E Street, SW, Room 112
Washington, DC 20436
On Behalf of Complainants Zimmer, Inc., and Zimmer US,
Inc.:
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 for Download
On Behalf of Respondents Heraeus Medical GmbH and
Heraeus Medical LLC:
David A. Caine, Esq.
ARNOLD & PORTER KAYE SCHOLER LLP
3000 El Camino Real, Suite 500
Palo Alto, CA 94306
Email: david.caine@arnoldporter.com
☐ Via Hand Delivery
☐ Via Express Delivery
☐ Via First Class Mail
☒ Other: Email Notification
of Availability for Download

PUBLIC VERSION
1
UNITED STATES INTERNATIONAL TRADE COMMISSION
Washington, D.C.
In the Matter of
CERTAIN BONE CEMENTS AND
BONE CEMENT ACCESSORIES
Investigation No. 337-TA-1175
COMMISSION OPINION
The Commission has determined to affirm, with modifications, the presiding
administrative law judge’s (“ALJ”) final initial determination (“FID”) 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, false advertising, or tortious interference. The Commission
takes no position on the FID’s domestic industry and injury findings. This opinion sets forth the
Commission’s reasoning in support of its determination.
I. 	BACKGROUND
A. 	Procedural History
On September 17, 2019, the Commission instituted this investigation based on a
complaint filed by Zimmer, Inc. and Zimmer US both of Warsaw, Indiana (collectively,
“Zimmer Biomet” or “Complainants”). 84 Fed. Reg. 49764 (Sept. 23, 2019). The complaint
accuses the respondents of violating section 337(a)(1)(A)(i) by the importation or sale in the
United States of certain bone cements and bone cement accessories by reason of the
misappropriation of trade secrets, false advertising, or tortious interference, 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. FID at 1; 19 U.S.C. § 1337(a)(1)(A)(i). The named
respondents are Heraeus Medical GmbH of Wehrhein, Germany (“Heraeus Germany”) and

PUBLIC VERSION
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Heraeus Medical LLC of Yardley, Pennsylvania (“HMUS”) (collectively, “Respondents”).
84 Fed. Reg. 49764. The Office of Unfair Import Investigations (“OUII”) is also named as a
party. Id.
The ALJ held an evidentiary hearing from October 26-30, 2020. FID at 5.
On February 11, 2021, the presiding ALJ issued the FID finding that Respondents did not
violate section 337. The FID finds that the Commission has subject matter, personal, and in rem
jurisdiction. Id. at 22. Specifically, the FID finds that Respondents did not contest that the
accused products were imported into the United States. Id. at 21. The FID further finds that a
domestic industry (“DI”) exists. Id. at 95-98. The FID also finds that Zimmer failed to prove
substantial injury or threat thereof to an industry in the United States. Id. at 98-104.
As to the trade secret misappropriation claim, Complainants asserted various categories
of commercial trade secrets, which they presented as TS 10, 11, 15, and 28 at the evidentiary
hearing. The FID finds that TS 10, 15, and 28 are trade secrets, but that TS 11 is not a trade
secret. Id. at 23-43. The FID further finds that Respondents did not misappropriate any trade
secret, did not engage in false advertising, and did not tortiously interfere with Complainants’
contracts or prospective business relationships. Id. at 43-88.
On February 23, 2021, Complainants petitioned for review of the majority of the FID’s
findings.1 Complainants did not petition for review of the FID’s findings on importation,
1 Complainants’ Petition for Review of the Initial Determination (Feb. 23, 2021) (“Comp.
Pet.”).

PUBLIC VERSION
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jurisdiction, and whether TS 11 is a trade secret. On March 3, 2021, Respondents and OUII filed
responses to Complainants’ Petition.2
On March 15, 2021, Respondents filed a submission on the public interest pursuant to
Commission Rule 210.50(a)(4) (19 C.F.R. § 210.50(a)(4)).3 Complainants and OUII did not file
a submission on the public interest. The Commission received no filings in response to its
Federal Register notice calling for public interest comments. See 86 Fed. Reg. 12029-30 (Mar.
1, 2021).
On April 12, 2021, the Commission determined to review the FID in part. 86 Fed. Reg.
20200-2 (Apr. 16, 2021). Specifically, the Commission determined to review the FID’s findings
and conclusions as to:
(1) 	the alleged misappropriation of the asserted trade secrets, including the finding
that Respondents independently developed their own data compilation;
(2) 	Respondents’ alleged tortious interference with Complainants’ prospective
business advantages; and
(3) 	domestic industry and injury.
Id. The Commission determined not to review the remaining findings in the FID, including the
FID’s findings of no false advertisement. See FID at 58-81. The Commission requested briefing
regarding several issues, as follows:
(A) 	When evaluating the misappropriation of a trade secret, identify and discuss the
proper legal standard for wrongful disclosure or use of a trade secret that is a compilation.
Please consider whether any particular amount of disclosure or use is required to support
a finding of misappropriation, i.e., de minimis, substantial, or the entirety of the trade
secret compilation. Discuss whether there are any differences in the application of the
2 Respondents’ Response to Complainants’ Petition for Review of the Initial
Determination (March 3, 2021) (“Resp. Reply”); Office of Unfair Import Investigations’
Response to Complainants’ Petition for Review of the Initial Determination (March 3, 2021)
(“OUII Reply”).
3 Respondents’ Statement on the Public Interest (March 15, 2021).

PUBLIC VERSION
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legal standard for disclosure or use if a trade secret compilation includes publicly
available information.
(B) 	Given the legal standard identified in response to (A), please analyze the alleged
disclosure and use of TS 10, 15, and 28.
(C) 	Please discuss and provide a timeline detailing the background and development
of Heraeus Medical LLC from 2017 through 2018, including the dates that relevant
employees were hired, the relevant employees’ positions, the dates of alleged disclosures
and/or use of TS 10, 15, and 28, and the dates and relevant facts regarding Respondents’
interactions with third parties.
(D) 	What criteria should the Commission apply to determine whether activities related
to meeting FDA requirements constitute activities of a “mere importer”? For example,
should one criterion be that the activities are required to be performed in the United
States or that the activities differ from those that a wholly domestic company would
perform? Please apply the appropriate criteria to the facts of this investigation. Are any
of Complainants’ FDA-related activities different from what a wholly domestic company
would need to undertake? Which, if any, of a Complainants’ FDA activities could be
conducted abroad?
86 Fed. Reg. at 20201.
On April 30, 2021, the parties filed their opening written submissions on the issues under
review and on remedy, public interest, and bonding.4 The parties filed replies on May 7, 2021.5
B. 	The Parties
Complainants Zimmer, Inc. and Zimmer U.S., Inc. are related companies and subsidiaries
of parent company Zimmer Biomet Holdings, Inc. FID at 7. Zimmer Biomet Holdings, Inc. was
created in 2015 as a result of a merger between Zimmer Holdings, Inc. and Biomet, Inc. Id.
4 Complainants’ Brief to the Commission on Issues Under Review, Remedy, and
Bonding (Apr. 30, 2021) (“CBr.”); Respondents’ Opening Brief on Commission’s Notice to
Review-in-Part the Final Initial Determination (Apr. 30, 2021) (“RBr.”); Opening Submission of
the Office of Unfair Import Investigations in Response to the Commission’s April 12, 2021
Notice (Apr. 30, 2021) (“OUIIBr.”).
5 Complainants’ Reply Brief to the Commission on Issues Under Review, Remedy, and
Bonding (May 7, 2021) (“CBr. Reply”); Respondents’ Response to Complainants’ and Staff’s
Briefs on the Commission’s Notice to Review-in-Part the Final Initial Determination (May 7,
2021) (“RBr. Reply”); Reply Submission of the Office of Unfair Import Investigations Pursuant
to the Commission’s April 12, 2021 Notice (May 7, 2021) (“OUIIBr. Reply”).

PUBLIC VERSION
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Biomet, Inc. was the distributor of Respondents’ PALACOS products in the United States from
1996 to 2006, and Zimmer Surgical, Inc. was contracted to distribute the PALACOS products in
the United States from 2005 through 2018. Id. Complainants are currently responsible for the
marketing, distribution, and sales of Zimmer Biomet’s bone cements and bone cement mixing
and delivery accessories sold in the United States. Id. Complainants also manufacture some
accessory products, such as Allen Plugs, mixing bowls, mixing systems, centralizers, poly plugs,
restrictor plugs, medullary plugs, bone prep kits, curettes, spacer molds, and cement restrictors,
in facilities in Warsaw, Indiana and Dover, Ohio. Id. at 91-92.
Respondent Heraeus Germany is the successor-in-interest to Heraeus Kulzer GmbH and
Kulzer & Co. GmbH, which originally developed Heraeus’s bone cements. Heraeus Germany is
now responsible for designing, developing, and manufacturing certain PALACOS bone cements
and accessory products. Id. at 8. HMUS is Heraeus Germany’s U.S. affiliate and, since the
beginning of 2018, has been responsible for promoting and distributing the PALACOS products
in the United States. Id. HMUS imports and sells the accused PALACOS bone cements and
accessory products in the United States. Id.
C. 	The Asserted Trade Secrets
The three relevant trade secrets are:
Asserted Trade Secret 10 (“TS 10”) − Quarterly reports constituting a list of
customers, by territory, who purchased Heraeus cements from Zimmer Biomet in
that quarter, the full names and delivery addresses of those customers, the types
and quantities of the Heraeus cements delivered to those customers, and the prices
charged to those customers for the Heraeus cements delivered, as supplied by

PUBLIC VERSION
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Zimmer Biomet to Heraeus between October 1, 2015, and December 31, 2018,
pursuant to, and during the term of, the 2012 Agreement[.]6 [(citations omitted)].
Asserted Trade Secret 15 (“TS 15”) − Customer lists related to the sale of
PALACOS or bone cement accessory products constituting a compilation of
Zimmer Biomet’s bone cement customer identification information (see Columns
F, G, or H), customer contact information (see Columns I, J, K), and one or more
of the following: territory names (see Columns C, R), product identification
information (see Columns P, Q, or Z), product quantity (see Column S), actual
sales price (see Column T), average sales price (calculated from actual sales price
and quantity sold), and revenue (see Column U). [(citations omitted)].
Asserted Trade Secret 28 (“TS 28”) − The compilation of invoice-level sales
data, sourced from Zimmer Biomet’s sales of PALACOS between October 1,
2015[,] and January 1, 2018, that is maintained on, and accessible through,
Zimmer Biomet’s PROS system, and exported as
(citations omitted)].
FID at 8-9; JX-309C at 1-2.7 The FID notes that TS 15 and 28 include information regarding the
Mid-Atlantic region of the United States. Id. at 46.
In their prehearing and post-hearing briefs, Complainants combined TS 15 and TS 28 into
a single asserted trade secret “compris[ing] customer lists related to the sale of PALACOS or
bone cement accessory products, including the Excel file named ‘For Peterson.’” Id. at 9.
Complainants’ analysis and arguments also discussed TS 15 and TS 28 as though they were a
single trade secret. The FID and this opinion, therefore, treat TS 15 and TS 28 as a single
asserted trade secret (“TS 15/28”). Id.
6 The U.S. Distribution and Supply Agreement dated January 1, 2012 (“2012
Agreement”) (see JX-204C, Section 2.4(c)), obligated Zimmer to
FID at 23. Under the 2012
Agreement, Zimmer also had to
Id.
7 As noted above, the FID finds that TS 11 is not a protectable trade secret, and
Complainants did not seek review of that finding. FID at 39.

PUBLIC VERSION
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D. 	The Products at Issue
The products at issue are bone cements and bone cement accessory products. Bone
cements are used in hip and knee joint surgeries to help anchor the implanted joint prothesis to
the patient’s bone. Complaint at ¶ 19. The technical characteristics of bone cements are not at
issue in this investigation.
1. 	Accused Products
Complainants accused the following Heraeus products: PALACOS R, PALACOS R+G,
PALACOS FAST R+G, PALACOS LV, PALACOS LV+G, PALACOS MV, PALACOS
MV+G, PALACOS R pro 75, PALACOS R+G pro 75, PALACOS Pro nozzle short, PALACOS
Pro nozzle medium, PALAMIX uno, PALAMIX duo, PALABOWL, PALAMIX nozzle slim,
PALAMIX nozzle medium, PALAMIX nozzle medium, PALAMIX cement gun, PALAMIX
vacuum pump, PALAMIX vac hose, and the COPAL exchange G. FID at 10.
2. 	Zimmer Biomet’s Domestic Products
Complainants relied on the following products to satisfy the domestic industry
requirement: Biomet Bone Cement R (“BBCR”) and Refobacin Bone Cement R (“RBCR”)
(collectively, “ZB cements”), and a number of accessory products, including plugs, mixing
equipment, prep kits, centralizers, and spacer molds. Id. As stated above, Zimmer Biomet
manufactures some accessory products, such as Allen Plugs, mixing bowls, mixing systems,
centralizers, poly plugs, restrictor plugs, medullary plugs, bone prep kits, curettes, spacer molds,
and cement restrictors, in the United States. Id. at 91-92
II. 	COMMISSION REVIEW OF THE FINAL ID
When the Commission reviews an initial determination, in whole or in part, it reviews the
determination de novo. Certain Soft-Edged Trampolines and Components Thereof, Inv. No. 337-
TA-908, Comm’n Op. at 4 (May 1, 2015). With respect to the issues under review, “the

PUBLIC VERSION
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Commission may affirm, reverse, modify, set aside or remand for further proceedings, in whole
or in part, the initial determination.” 19 C.F.R. § 210.45(c). The Commission also “may take no
position on specific issues or portions of the initial determination,” and “may make any finding
or conclusions that in its judgment are proper based on the record in the proceeding.” Id.; see
also Beloit Corp. v. Valmet Oy, 742 F.2d 1421, 1423 (Fed. Cir. 1984).
III. 	ANALYSIS
The Commission’s findings, conclusions, and supporting analysis follow. The
Commission affirms and adopts the FID’s findings, conclusions, and supporting analysis that are
not inconsistent with the Commission’s opinion.
A. 	Trade Secret Misappropriation Issues Under Review
The FID finds that TS 10 and TS 15/28 are trade secrets. FID at 23-43. The FID further
finds that there was no misappropriation of any of the asserted trade secrets. Id. at 54. The
Commission determined to review the FID’s trade secret misappropriation findings. 86 Fed.
Reg. at 20201. On review, the Commission affirms the FID’s findings that Respondents did not
misappropriate TS 10 or TS 15/28, but with the modified analysis below.
1. 	The FID’s Trade Secret Misappropriation Findings
The FID finds that TS 10 and TS 15/28 are trade secrets. FID at 23-43. The FID further
finds that there was no misappropriation. Id. at 54.
a. 	FID’s Findings Regarding TS 10
For TS 10, the FID finds that Complainants shared the Quarterly Reports with Heraeus
Germany under Sections 2.4(c) and 3.1 of the 2012 Agreement, which required Complainants to
provide Quarterly Reports and forecasts to Heraeus Germany. Id. at 45; JX-204C. The FID
further finds that Heraeus Germany was required to
Id.

PUBLIC VERSION
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The FID finds that Respondents did not wrongfully disclose TS 10 to third parties. Id. at
47. The FID first notes that, because TS 10 is a compilation, “it is the secrecy of the claimed
trade secret as a whole that is determinative.” Id. (quoting Restatement (Third) of Unfair
Competition § 39, cmt. f (1995) (emphasis in FID)). The FID finds that “since Complainants
relied on a specific ‘comprehensive compilation of customer-specific prices’ to establish the
existence of a protectable trade secret, ‘evidence showing anything less than the use of the
comprehensive compilation’ is not sufficient for Zimmer Biomet to carry its burden of proving
misappropriation.” Id. at 47-48 (quoting OUII Post-Hearing Br.8 at 37 n.31). The FID further
finds that Complainants failed “to present evidence that the entire compilation (or even a
majority of information within the compilation) that makes up TS 10 was ever disclosed to any
party” and concludes that Respondents did not misappropriate TS 10. Id. at 48. In addition, the
FID also analyzes why Complainants’ specific allegations fail to show misappropriation of
TS 10. Id. at 48-52.
b. 	FID’s Findings Regarding TS 15/28
The FID finds that TS 15/28 was exported when James “Worth” Burns, who was
Complainants’ Director of Enterprise Solutions for the Southeastern United States, left Zimmer
on December 15, 2017, to become HMUS’s Regional Sales Director of the Mid-Atlantic. Id. at
45-46. Mr. Burns exported TS 15/28 and saved the file, named “For Peterson,”9 on a USB drive
that he took with him when he left Zimmer. Id. The FID finds that Mr. Burns violated his
employment agreement with Complainants when he took the file. Id.
8 Commission Investigative Staff’s Initial Post-Trial Brief (Nov. 13, 2020) (“OUII Post-
Hearing Br.”).
9 A “Mr. Peterson” worked for Zimmer and was responsible for Zimmer’s Mid-Atlantic
region. JX-328C (Burns) at 208:7-209:25.

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The FID, however, rejects Complainants’ allegations that Mr. Burns used the “For
Peterson” file to perform his duties for Respondents and that Respondents are “liable for Mr.
Burns’ action because he was acting within the scope of his employment.” Id. at 46. The FID
notes that Complainants did not present any evidence showing that Respondents hired Mr.
Burns in order to obtain TS 15/28. Id. Rather, the FID finds that the evidence shows
Respondents had no knowledge of the “For Peterson” file. Id. For example, the FID finds that,
although Mr. Burns sought employment with Respondents and had been responsible for
PALACOS sales in the southeastern part of the United States while employed by Complainants,
Respondents did not become aware of Mr. Burns’ actions regarding the “For Peterson” file until
later litigation in Indiana. Id. at 46-47.
Accordingly, the FID finds that Complainants’ forensic evidence fails to prove misuse of
TS 15/28 by HMUS. Id. at 53-54.
c. 	FID’s Findings Regarding Heraeus’ Independent Development
Affirmative Defense
Heraeus asserts as a defense to trade secret misappropriation that they independently
developed their customer lists and pricing. Id. at 56. The FID agrees and credits the testimony
of Heraeus’s witnesses who testified that HMUS spent independent time and effort developing a
customer targeting database primarily from the Centers for Medicare & Medicaid Services
(“CMS”) data and that HMUS was able to independently develop a targeting database after
approximately two weeks of work using less than $7,000. Id. The FID dismisses Complainants’
arguments that the testimony was uncredible speculation. Id.
2. 	Complainants’ Petition, Respondents’ Response, and OUII’s
Response
a. 	Complainants’ Petition
Complainants asserted that the FID correctly concludes that TS 10 and 15/28 are

PUBLIC VERSION
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protectable trade secrets but errs in finding no misappropriation. Comp. Pet. at 5. Specifically,
Complainants asserted that the FID makes two material errors: (i) legal error in applying an
incorrect legal standard for misappropriation; and (ii) fact errors, including the FID’s finding that
“evidence showing anything less than the use of the ‘comprehensive compilation’ is not
sufficient for [Complainants] to carry [their] burden of proving misappropriation” and the
finding that Complainants failed to meet the incorrect legal standard. Id. at 5-6.
Regarding the legal standard, Complainants argued that the FID allegedly uses a
“heightened standard for ‘use’ that departs from the uniform federal standard for
misappropriation.” Id. at 6. They asserted that there should be a low bar for improper use of a
trade secret. Id. at 6-7.10 Complainants further argued that the “[a]cquisition or disclosure of a
trade secret alone (without use) can constitute misappropriation.” Id. at 7.
Regarding the FID’s alleged factual errors, Complainants argued that the FID should not
have considered the compilation nature of the trade secrets and errs in relying on the lack of
disclosure of the entire compilation that makes up TS 10. Id. at 9 (citing FID at 48).
Complainants further argued that the FID also errs in finding that none of Respondents’ uses rose
to the level of “use of the entire compilation,” even though the users possessed and manipulated
the entire compilation. Id. at 10.
Complainants argued there is no dispute that Mr. Burns misappropriated TS 15/28 by
improper acquisition, but the FID erroneously finds that Mr. Burns’ misappropriation should not
be attributed to HMUS and that there was insufficient evidence of misuse. Id. at 26-28 (citing
10 Complainants cite the following for support: Restatement (Third) of Unfair
Competition § 40, cmt. c; 4 Milgrim on Trade Secrets § 15.01(d) (“a trade secret can be
unlawfully used in whole or in part or in some variation of the original to benefit the defendant in
direct or indirect ways”); and Crawler Cranes, Comm’n Op. at 64.

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FID at 45-46). Complainants also argued that the FID errs in finding there was insufficient
evidence that HMUS misappropriated TS 15/28. Id. at 28-29; FID at 6.
b. 	Respondents’ Response to Complainants’ Petition
Respondents argued that the FID correctly concludes that Complainants did not prove
misappropriation. Resp. Reply at 5-32. Respondents asserted that Complainants advocated for a
double standard – relying on the compilation of TS 10 to prove it is a trade secret and then
arguing there is misappropriation for an “insubstantial portion” of the full compilation. Id. at 5-
7. Respondents contend that the FID rightly concludes that, “because Zimmer fail[ed] to present
evidence that the entire compilation (or even a majority of information within the compilation)
that makes up TS 10 was ever disclosed to any party, Zimmer has not shown that TS 10 was
misappropriated.” Id. (citing FID at 48).
Respondents argued that Complainants are wrong that disclosure of an insubstantial
portion of an asserted trade secret constitutes misappropriation. Id. Respondents further argued
that the FID’s findings are supported by the evidence and that the FID uses the correct legal
standard. Id.
Regarding TS 15/28, Respondents argued that Complainants ignore the large number of
findings that support the FID’s conclusion that HMUS did not misappropriate TS 15/28. Id. at
25 (citing FID at 46-47). Respondents argued that there is no evidence that Mr. Burns used any
information in the “For Peterson” file during his employment at HMUS. Id. Respondents
further argued that the FID correctly finds that there is no evidence any information was
transferred to any HMUS file or that the “For Peterson” file was saved onto HMUS’s computer

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systems. Id. at 26 (citing FID at 54; Tr. (Vaughn11) at 408:10-15, 409:21-24). Respondents
concluded that the FID properly finds that Complainants failed to prove misappropriation of TS
15/28. Id. at 27.
c. 	OUII’s Response to Complainants’ Petition
OUII argued that the FID applies the correct legal standard and the FID’s findings of fact
are supported by the record evidence. OUII Reply at 4-14. Regarding the legal standard, OUII
noted that Complainants previously acknowledged that determining “improper use of a trade
secret is a flexible inquiry.” Id. at 6 (citing CIB12 at 50). OUII also noted Complainants’
repeated argument that asserted TS 10 should be evaluated “as a whole” when considering
whether it meets the requisite value and secrecy requirements for protectability. Id. at 7. “Here,
Complainants argued and the ALJ agreed that the fact that it is a comprehensive compilation of
customer-specific sales data is what sets asserted TS 10 apart from smaller portions of
information that are readily available from public sources.” Id. at 8. Accordingly, OUII
concluded that the FID correctly analyzes whether there was disclosure or use of the entire
compilation of TS 10 and not just a portion, which might have been readily known or readily
ascertainable on its own. Id.
OUII argued that Complainants confuse a wrongful taking, which is an element of trade
secret misappropriation, with an ultimate finding of trade secret misappropriation. Id. at 11-12.
OUII further argued that the FID correctly refuses to impute Mr. Burns’ wrongful taking of the
“For Peterson” file to Respondents. Id. at 12. Finally, OUII argued that Complainants cannot
11 James D. Vaughn is Zimmer Biomet’s expert witness on computer forensic
examination and forensic industry evidence preservation best practices. Comp. Pet. at xi.
12 Complainants’ Post-Hearing Brief (Nov. 13, 2020) (“CIB”).

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establish that Heraeus misappropriated TS 15/28 because there is simply no credible evidence
that anyone at Heraeus, including Mr. Burns, actually used the “For Peterson” file. Id. OUII
concluded that the FID correctly finds that the weight of the evidence indicates Heraeus did not
take or use TS 15/28.
3. 	Legal Standard for Misappropriation
The parties mostly agree on the standard for trade secret misappropriation, in particular in
the context of this investigation, which concerns compilation trade secrets that include public
information in part. Comp. Pet. at 10; Resp. Reply at 5-11; OUII Reply at 6-8. The parties,
however, disagree on the amount of disclosure or use required to find misappropriation. Id.
Respondents frame the issue in terms of the amount of use or disclosure that is sufficient
to show misappropriation by arguing that at least a “substantial” portion of the asserted trade
secrets must be used or disclosed to prove misappropriation of the trade secret. RBr. at 6-11.
OUII, on the other hand, frames the issue of misappropriation as turning upon what information
is found to qualify as a trade secret. In OUII’s view, the question is not what portion of a
compilation trade secret must be disclosed to constitute misappropriation; rather, the question is
if complainant establishes a trade secret based on the entirety of information comprising a
compilation, whether it can then establish misappropriation by showing anything less than
disclosure of the compilation (which is the entirety of the information comprising the
compilation). OUII Br. at 7-8. In the context of the present investigation, OUII points out that
Complainants repeatedly argued that TS 10 should be evaluated “as a whole” when considering
whether it meets the requisite value and secrecy requirements for protectability as a trade secret
(which is not surprising given that portions of the information comprising TS 10 are
ascertainable from a variety of sources). In OUII’s view, because Complainants succeeded in
arguing that the characteristics of TS 10 (i.e., that it is a comprehensive compilation) shield the

PUBLIC VERSION
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asserted trade secret from being publicly known or readily ascertainable, “demonstrating
‘substantial’ use of the trade secret should involve demonstrating that most, if not all, of the
compilation trade secret was used.” Id. For the reasons stated below, the Commission finds that
Complainants must show that Respondents’ use or disclosure of TS 10 and TS 15/28 was
substantial to establish a violation of section 337 based on trade secret misappropriation.
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., 2014 WL 7497801, at *4 (Feb. 26, 2014) (“Rubber Resins”). The elements
of misappropriation of trade secrets are as follows:
(1) a protectable trade secret exists (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) the complainant is the owner of the trade secret;
(3) 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) the respondent has used or disclosed the trade secret causing injury to
the complainant.
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 8, 52-55, 2021 WL 141507
(Dec. 16, 2020); see also Rubber Resins, 2014 WL 7497801, at *5.
While the Commission has not explicitly articulated whether a complainant must show
“any use” or “substantial use” of a trade secret to prevail, prior Commission decisions align with
the “substantial use” standard. See Crawler Cranes, Comm’n Op. at 61-62 (May 6, 2015)
(finding misappropriation despite incomplete “use” of a trade secret where thirteen of the
twenty-two features were included in the accused product); Rubber Resins, 2014 WL 7497801,

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at *27 (finding misappropriation where respondents’ “process for manufacturing the accused
tackifiers use, substantially use, and are substantially derived from Complainant’s trade secret,
i.e., the combination of the 17 aspects of Complainant’s process.” (emphasis added)); Certain
DC-DC Controllers and Prods. Containing Same, Inv. No. 337-TA-698, Enforcement ID at 94-
99 (June 8, 2012) (finding overwhelming evidence of the extent of the similarities between the
accused products and complainant’s design documents and files), unreviewed in pertinent part
by Notice (Aug. 9, 2012); Certain Processes for the Manufacture of Skinless Sausage Casings &
Resulting Product, Inv. No. 337-TA-148/169, ID, 1984 WL 273789, at *101 (July 31, 1984),
unreviewed by Comm’n Op. (Jan. 1, 1984) (finding, where complainant’s technology was not
publicly disclosed or otherwise available, that respondent’s technology “is so close in structural
details to that of [Complainant’s] that the conclusion [of misappropriation] is compelled”).
Determining whether there is “substantial” use or disclosure depends on the facts
concerning the nature of the trade secret and particularly what information is actually protectable
as a trade secret. See Restatement (Third) of Unfair Competition § 39, cmt. f (for trade secrets
that are compilations, “it is the secrecy of the claimed trade secret as a whole that is
determinative”).
In the case of a compilation trade secret that includes in part publicly known or readily
ascertainable information, the collected information derives value from keeping the whole
compilation secret. Id. However, for both compilation and non-compilation trade secrets, the
unauthorized use or disclosure of the trade secret must be “substantial” to qualify as
misappropriation. Id., § 40, cmt. c (“[U]se of any substantial portion of the secret is sufficient to
subject the actor to liability.”); Penalty Kick Mgmt. Ltd. v. Coca Cola Co., 318 F.3d 1284, 1293
(11th Cir. 2003) (finding liability for trade secret misappropriation “if the plaintiff can show that

PUBLIC VERSION
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the defendant (1) disclosed information that enabled a third party to learn the trade secret or (2)
used a ‘substantial portion’ of the plaintiff’s trade secret to create an improvement or
modification that is ‘substantially derived’ from the plaintiff’s trade secret”); 4 Milgrim on Trade
Secrets § 15.01(1)(d)(vi) (“Defendant need not appropriate every feature of plaintiff’s trade
secret to be a wrongful user, substantial appropriation is actionable (unless it is the result of
proven independent development)[.]”).
The FID finds that “since Complainants relied on a specific ‘comprehensive compilation
of customer-specific prices’ to establish the existence of a protectable trade secret, ‘evidence
showing anything less than the use of the comprehensive compilation’ is not sufficient for
Complainants to carry [their] burden of proving misappropriation” and that “because [Zimmer
Biomet] fails to present evidence that the entire compilation (or even a majority of information
within the compilation) that makes up TS 10 was ever disclosed to any party, [Zimmer Biomet]
has not shown that TS 10 was misappropriated.” FID at 48. Complainants disagree with the
FID’s finding and allege that case law supports their position that disclosure or use of any
portion of TS 10 and TS 15/28 is sufficient to find misappropriation. CBr. at 4-12. However,
the cases Complainants cite13 either involve circumstances where the court found the entirety of
13 As OUII notes, many of Complainants’ cited cases are preliminary injunction
decisions, which use a different legal standard than the standard of proof for Complainants to
establish a section 337 violation. OUIIBr. Reply at 5, n.2; compare Farmers Ins. Exch. v. Steele
Ins. Agency Inc., 2013 WL 2151553, at *10 (E.D. Cal. May 16, 2013) (moving party is “not
required to prove that misappropriation actually occurred [but must] only make a clear showing
that misappropriation likely occurred”) with Certain Bone Cements, Components Thereof &
Prods. Containing the Same (“Bone Cements (I)”), Inv. No. 337-TA-1153, Comm’n Op. at 6-7
(Jan. 12, 2021) (proving misappropriation of trade secrets requires: (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

PUBLIC VERSION
18
the trade secret had been used or disclosed or where the misappropriation turned on the nature of
the protectable trade secret information contained in a customer list or database and the
defendants’ use of that trade secret information within the list or database. Thus, the cases
Complainants cite actually support the requirement that at least “substantial” disclosure or use of
the asserted trade secret is necessary for liability and confirm that whether a use or disclosure is
“substantial” depends on facts of the case and the actual protectable trade secret.
In Crawler Cranes, the Commission determined that the full trade secret (concerning
dealer discounts and profit margins for the Manitowoc crawler crane), and not just a portion as
Complainants contend, was used to prepare a presentation to respondents’ management, to
develop a competing product, and to develop the respondent’s pricing and dealer discount
strategies. Crawler Cranes, Comm’n Op. at 65. Further, in MAI Sys. Corp., the Ninth Circuit
evaluated misappropriation based on the nature of the trade secret information in a customer
database and the defendant’s use of that secret information. MAI Sys. Corp. v. Peak Computer,
Inc., 991 F.2d 511, 521-22 (9th Cir. 1993). The court found MAI’s Customer Database to be a
protectable trade secret, which MAI argued was “a valuable collection of data assembled over
many years that allows MAI to tailor its service contracts and pricing to the unique needs of its
customers[.]” Id. at 521. The court affirmed the district court’s summary judgment that Peak
misappropriated MAI’s Customer Database, because Peak solicited new business from MAI’s
customers using the individual entries of customer information within MAI’s Customer
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
19
Database, which constituted the valuable trade secret information;14 the court did not hold that
use of an insubstantial portion of a trade secret was sufficient for misappropriation. Id. at 522
(“The Customer Database has potential economic value because it allows a competitor like Peak
to direct its sales efforts to those potential customers that are already using the MAI computer
system.”); see also MAI Sys. Corp. v. Peak Computer, Inc., No. 92-1654-R, 1992 WL 159803, at
*16 (C.D. Cal. Apr. 14, 1992) (“[T]he evidence strongly suggests that [Peak] has attempted to
appropriate for itself the valuable information in [MAI’s] Customer Database,” including that
Peak’s customer database is very similar to MAI’s Customer Database, and Peak’s database
identified whether the customer is a MAI customer).
Similarly, the Second Circuit in North Atlantic Instruments analyzed misappropriation of
specific data in a compilation customer list based on the nature of the protectable trade secret
information contained in that customer list and the defendants’ use of that secret information.
North Atlantic Instruments v. Haber, 188 F.3d 38, 44-45 (2d Cir. 1999). The court affirmed the
district court’s finding that the identities of individual engineers who purchased North Atlantic’s
customized electronic technology and their contact information within North Atlantic’s customer
list were trade secrets. Id. In contrast to the “needle-in-the-haystack character of the search for
the handful of engineers in companies of 100,000 employees who might have a use for one of
North Atlantic’s customized products,” the court affirmed the finding that certain other
information within the customer list, such as company names, could be readily ascertained from
public information and thus was not a protectable trade secret. Id. at 44-45. In assessing
misappropriation, the court considered the defendants’ use of the entirety of the particular
14 In MAI Sys. Corp., the identification of and details regarding each customer is valuable,
and the value does not come from the entire database as a whole, as Complainants argued and the
FID finds, in the present investigation. Id. at 511, 521-522.

PUBLIC VERSION
20
information found to constitute trade secrets, i.e., the individual engineer identities and their
contact information, rather than the use of an insubstantial portion of a compilation, as
Complainants argue. Id. at 47 (considering “whether the defendants’ use of a trade secret −
specifically the list of client contacts − was in breach of a duty [not to compete with the former
employer].”). Likewise, in Paz Sys. Inc., the court held that the defendant was using Paz’s
customer/design database trade secret because the individual pieces of data within the database
constituted the protectable trade secret and the defendant was using all of the data. Paz Sys. Inc.
v. Dakota Group Corp., 514 F. Supp. 2d 402, 406, 408 (E.D.N.Y. 2007).
Complainants also rely on cases where the actionable misappropriation involved the
defendant’s use of specific customer information that was not readily ascertainable and otherwise
unknown, which is distinguishable from Complainants’ asserted trade secrets that comprise
whole compilations made up in part of publicly-available or readily ascertainable information.
Surgidev Corp. v. Eye Tech., Inc., 648 F. Supp. 661, 680-96 (D. Minn. 1986) (finding that certain
types of customer information are not readily ascertainable such that the use of that secret
information to solicit plaintiff’s customers is sufficient to establish disclosure or intent to
disclose the putative trade secrets); Abernathy-Thomas Eng’g Co. v. Pall Corp., 103 F. Supp. 2d
582, 600-601 (E.D.N.Y. 2000) (finding that while “it is unclear on the present record exactly
how much of Abernathy’s customer information was supplied to Fluid Flow,” evidence of some
disclosure of otherwise unknown customer information, which would have taken substantial time
and effort to develop, was sufficient for a jury to find that the trade secrets had been
misappropriated). Accordingly, while the Restatement and numerous decisions support that
disclosure or use of the trade secret information must be substantial for liability, Complainants’

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21
cited cases do not support their argument that an “insubstantial portion” or “slight” use or
disclosure is sufficient to demonstrate misappropriation. CBr. at 10, 13.
In sum, both the Restatement (Third) of Unfair Competition and case law require that
disclosure or use of the asserted trade secret must be substantial in order to subject the actor to
liability, regardless of whether the trade secret is a compilation or not. Here, Complainants
successfully urged the ALJ to find that the entirety of Zimmer’s compilations of information
contained in TS 10 and TS 15/28 constituted protectable trade secrets owing to the nature of
these compilations. FID at 34-35; 40-42. Accordingly, having relied upon the entirety of these
compilations as their asserted trade secrets, Complainants were required to show that Heraeus’s
use or disclosure of the entirety of these compilations was substantial. The Commission finds
that the FID applies the correct legal standard for misappropriation consistent with the
Commission’s prior precedents and the court cases discussed above, wherein misappropriation
was determined based on whether the unauthorized use or disclosure was substantial given the
nature of the protectable trade secrets at issue. See, e.g., FID at 47 (“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.”).
4. 	Analysis of Alleged Disclosure and Use of TS 10
Complainants alleged that Respondents wrongfully disclosed TS 10 to third parties (
) and to Mr. Devin Childers15 and HMUS. FID at 45,
47-52. 	Under the “substantial use” standard discussed above, and with the additional analysis
15 As explained below, Mr. Childers was hired in September 2017 as Heraeus Germany’s
U.S. country manager and he later became HMUS’s general manager.

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22
below, the Commission affirms the FID’s finding that Complainants failed to show that
Respondents misappropriated TS 10.
a. 	Analysis of Alleged Disclosures of TS 10 to Third Parties
The FID states two independent reasons for finding no misappropriation of TS 10 with
respect to third parties 	. FID at 47-50. First, the FID
finds that “since Complainants relied on a specific ‘comprehensive compilation of customer-
specific prices’ to establish the existence of a protectable trade secret, ‘evidence showing
anything less than the use of the comprehensive compilation’ is not sufficient for Complainants
to carry its burden of proving misappropriation” and because Complainants have failed “to
present evidence that the entire compilation (or even a majority of information within the
compilation) that makes up TS 10 was ever disclosed to any party, Zimmer has not shown that
TS 10 was misappropriated.” Id. at 47-48. Second, the FID finds that Heraeus Germany was
entitled to share “Confidential Information” with “
.”
Id. at 49-50. The FID further finds that the 2012 Agreement permitted the disclosure to the third
parties. Id. The Commission affirms the FID’s findings that the 2012 Agreement authorized
Heraeus Germany to share confidential information with its agents and representatives and that
the disclosures to third parties were authorized disclosures. The Commission also affirms the
FID’s findings that Complainants failed to prove misappropriation, with the supplemental
analysis described below concerning the first finding.
With respect to the first reason for the FID’s finding of no misappropriation (as described
above), under the proper legal standard, Complainants needed proof of at least “substantial” use
or disclosure of TS 10 to constitute wrongful use or disclosure. Crawler Cranes, Comm’n Op. at
61-62; Restatement (Third) of Unfair Competition § 40, cmt. c. TS 10 is comprised of Quarterly

PUBLIC VERSION
23
Reports, which include spreadsheets of information. FID at 8. The FID found that the
compilation of the quarterly reports as a whole is the protectable trade secret and cited testimony
of Complainants’ witnesses that “emphasized and relied on the fact that the asserted trade secrets
are compilations of data, rather than individual data points.” Id. at 34-35.16 Here, the
Complainants’ evidence does not show that Respondents substantially disclosed the TS 10
16 For example, when opining on the trade secret during direct examination,
Complainants’ expert, Dr. Blanchard, testified that TS 10 was not readily ascertainable due to its
voluminous nature:
Q. How hard would it be for a competitor to properly acquire or duplicate
Trade Secret 10 data?
A. Yeah, I think it would be very, very difficult, frankly, if not impossible
to recreate the data that’s embodied in Trade Secret 10.
Q. Why is that?
A. 	Well, in order to do that, someone would have to go speak with each
and every customer. They would have to speak to each and every surgeon
or hospital system in the United States, many of whom aren’t Palacos users
or wouldn’t have been Palacos users, find out if they use Palacos, find out
if the Palacos users, how much they were using and how much they were
paying for it. 	So, A, that would take a very, very long time, and a large
number of resources to do that, and, B, you would have to make an
assumption that they would tell you that information. And I think in most
cases they wouldn’t, because they are under confidentiality to not provide
that information to someone who asks.
Tr. (Blanchard) at 195:10-196:3; see also id. at 205:4-11 (“Q. Let’s talk about Palacos
customers. Could a supplier easily acquire or duplicate a list of Palacos customers from industry
sources? A. No, they couldn’t. Again, I think the only way you could recreate that list would be
to go out and query every hospital that does total joints and expect them to give you their
confidential information and give it to you truthfully.”). Additionally, Dr. Blanchard also
emphasized the customer-specific nature of the compilation when she discounted generic,
publicly available bone cement price data because it was not “customer specific.” See id. at
203:25-204:18 (“. . . private databases gather their data by, again, having members provide data
to them, but they provide that data under the guise that it won’t be disclosed according to
customer-specific and product-specific information. So they roll the data up and they provide it
back to their members or people who pay for the data in an aggregated format, not in a customer-
specific format, and it’s typically presented back in sort of ranges or percentiles . . .”).

PUBLIC VERSION
24
compilation, which constitutes the trade secret (FID at 34-35), to
.
Heraeus Germany provided its consultant, 	, with three charts identifying Heraeus’s
top twenty customers grouped by “All Palacos,” “Palacos R+G/LV+G (Genta Only),” and
“Major Total Joint Replacement,” categories. The charts also included the customer names and
addresses as well as the total sales value, quantity, and average sales price for each customer.
CX-1488C, at 2-5; FID at 48-49. In its briefing to the Commission, Complainants argued that
through this disclosure of the summary charts to 	, Heraeus misappropriated TS 10 because
these charts were “derived from entire compilations of TS 10 data[.]” CBr. at 13. Complainants
argue that the disclosure was substantial because “Heraeus disclosed to 	information
comprising and derived from the entirety of TS 10.” CBr. at 25 (citing Ex. A at 1; CX-1358C;
CX-1296C; CX-1594C; CX-1595C). None of these cited documents, however, prove that the
chart information was “comprising and derived from the entirety of TS 10” as Complainants
contend.17 Aside from attorney argument, Complainants cite no documentary or testimonial
17 One portion of Dr. Blanchard’s testimony exemplifies the analytical divergence
between the subject matter that Complainants claimed as a trade secret and the far narrower
subject matter that they relied on in arguing that Respondents misappropriated TS 10:
Q. Well, but for purposes of determining whether misappropriation of a
compilation trade secret -- that Trade Secret 10 has occurred, it’s your
position that Complainants don’t need to show use or disclosure of the entire
compilation, right?
A. Again, I think it’s situational. It’s pretty situationally dependent, so I
think it depends.

PUBLIC VERSION
25
evidence to back up their claim that the charts provided to 	comprised or were derived from
the entire compilation that makes up TS 10. Id. at 14.18 Given Complainants’ argument that the
charts provided to 	were from “the entirety of TS 10,” Complainants failed to cite any
evidence or expert testimony analyzing data from each of the TS 10 Quarterly Reports, which list
thousands of rows of customer and sales information, to prove this point. See, e.g., CX-2093C
(containing over 3,700 rows of information). Moreover, the FID notes that Complainants’ expert
testified that she was unaware of any evidence showing substantial disclosure of TS 10 to any
third party. ID at 48. Thus, Complainants failed to prove that the charts supplied to 	were a
substantial unauthorized use or disclosure of TS 10. Id.; FID at 48-49.
The information that Heraeus Germany presented to 	, a surgical supplier,
consisted of estimates concerning the number of customers (regardless of the amount of product
they purchased) and the number of customers that would make significant purchases (e.g., high-
volume purchasers). See CX-3261C at slide 8 (indicating that, in 2016, there were “
,” and that “
”); Tr. (Petermann) at 775:8-18; JX-320C (Williamson) at 158:2-159:1;
JX-334C (Petermann) at 98:13-17; see FID at 49-50. 	received the same statistics
Q. Well, you’ve opined 30 minutes ago, 45 minutes ago on what you call
use of Trade Secret 10 information that only involved little pieces of the
information, correct, in terms of the disclosure?
A. It involved pieces of information from the full disclosure that could not
have been obtained or would have been useful without using the full dataset.
Tr. (Blanchard) at 253:13-254:1.
18 For instance, Complainants did not demonstrate that Heraeus improperly disclosed a
Quarterly Report file, which might have established wrongful disclosure of the entire secret
compilation.

PUBLIC VERSION
26
provided to 	. JX-139C at 16 (“
. 	,” and that “ 	”); CIB at 60; see also
FID at 49-50. In its briefing to the Commission, Complainants made the same arguments with
respect to 	and 	as it did for 	, without supporting evidence to
prove that Heraeus made unauthorized substantial uses or disclosures of TS 10 to
. 	as discussed above. CBr. at 13-16. The Commission affirms the FID’s
conclusion that the information given to 	, Heraeus’ marketing
partner, was neither precise nor substantial enough to “enable[] another to learn the trade secret.”
FID at 50 (citing Restatement (Third) of Unfair Competition § 40, cmt. c). The Commission
affirms the FID’s findings concerning 	. Id. at 49-50.
In sum, we agree with the FID that Complainants failed to prove that the information
shared with 	was a substantial use or disclosure of TS 10.
Accordingly, the Commission has determined to affirm, with the supplemental analysis
discussed above, the FID’s finding that Complainants did not prove that Respondents’ disclosure
to third parties, 	, amounted to misappropriation of TS
10. Moreover, as noted above, the Commission affirms the FID’s findings that the disclosures
made to third parties were authorized under the 2012 Agreement.
b. 	Analysis of Alleged Disclosure of TS 10 to Mr. Childers and
HMUS
The FID finds that: (1) the transmission of information from TS 10 to Mr. Childers was
allowed under the 2012 Agreement; and (2) Complainants failed to prove that HMUS’s
employees alleged use of TS 10 was either wrongful or substantial use. FID at 50-52.

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i. 	Mr. Childers, as U.S. Country Manager, Was Allowed
Access to the Quarterly Reports Under the 2012
Agreement
Complainants alleged that information from TS 10 was wrongfully disclosed to Mr.
Childers, and allegedly thereby to HMUS, on three occasions in fall 2017. Comp. Pet. at 11
(citing FID at 50-51). Complainants’ arguments assume that Mr. Childers was originally hired
and served only as the general manager of HMUS, but they fail to consider that Mr. Childers was
initially hired for the position of U.S. country manager for Heraeus Germany. CBr. at 27-28;
Resp. Reply at 13-14. Complainants do not dispute that Heraeus Germany’s U.S. country
manager was allowed access to the Quarterly Reports under the 2012 Agreement. See Comp.
Pet. at 11-14.19 Thus, the dates on which information from the Quarterly Reports was disclosed
and the position that Mr. Childers occupied on those dates are important to the analysis of
whether the disclosures to Mr. Childers were unauthorized. In addition, Complainants
mischaracterized the FID as finding “that Heraeus was allowed to disclose TS 10 data to
HMUS,” whereas the FID actually finds that Heraeus Germany was allowed to disclose TS 10 to
Mr. Childers, Heraeus Germany’s U.S. country manager. Compare Comp. Pet. at 11 with FID at
50-51.
The FID finds that “when Heraeus Germany sent the Quarterly Reports to Mr. Childers,
he was Heraeus Germany’s U.S. country manager” but does not state precisely when Mr.
Childers transitioned from Heraeus Germany’s U.S. country manager to HMUS’s general
manager. FID at 50-51. For the reasons discussed below, the Commission agrees with the FID
that Mr. Childers was first hired in September 2017 as Heraeus Germany’s U.S. country manager
19 Further, Complainants previously sent the Quarterly Reports directly to Mr. Tom
Stafford, the U.S. country manager prior to Mr. Childers. See CX-1567C.

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and served in that position through at least December 2017, and thus Mr. Childers was permitted
access to the Quarterly Reports in fall 2017 pursuant to the 2012 Agreement. Id.
HMUS was incorporated in June 2017. Tr. (Petermann) at 793:25-794:4; FID at 8. Mr.
Childers received a formal offer letter from Heraeus Germany on July 27, 2017, and he accepted
on July 31, 2017. CX-2142C. Mr. Childers started as Heraeus Germany’s U.S. country manager
in September 2017. See Tr. (Petermann) at 757:4-17; 778:9-17; Tr. (Childers) at 849:6-14,
883:6-9; JX-320C (Williamson) at 41:17-25; JX-311C at 64; JX-311C at 85. Also in September
2017, Respondents made the decision to sell PALACOS directly to customers in the United
States, but HMUS was not yet up and running. Tr. (Petermann) at 778:18-779:5, 780:24-781:1.
Ms. Nicole Petermann, Heraeus Germany’s Co-President, testified that sending the
Quarterly Reports to Mr. Childers in fall 2017 was following Heraeus Germany’s practice of
sharing the same analyses with Mr. Childers’ predecessor as U.S. country manager, Tom
Stafford. FID at 51 (citing Tr. (Peterman) at 756:23-757:17). The transmission of the Quarterly
Reports to Heraeus Germany’s U.S. country manager, including Mr. Childers, was not misuse of
the trade secret, but was allowed under the 2012 Agreement. Id. (citing JX-204C at 34).
Even in December 2017, Mr. Childers was still the U.S. country manager. Tr. (Childers)
at 849:6-14, 886:24-887:10; JX-320C (Williamson) at 41:17-25; see also FID at 50-51. HMUS
was not yet up and running in September 2017. Tr. (Petermann) at 780:24-781:1. Mr. Childers
testified that he did not know the exact date that he transitioned from the U.S. country manager
to HMUS’s general manager. Tr. (Childers) at 887:2-10. However, Mr. Childers further
testified that at least on December 6, 2017, he still had the title of U.S. country manager. Id. at
911:24-912:12. His testimony is corroborated by a December 6, 2017 email from Mr. Childers
with a signature block, “Devin Childers CFA, Country Manager US, Heraeus Medical”). CX-

PUBLIC VERSION
29
369C.20 Given that the three disclosures to Mr. Childers occurred during the time period when
he was employed as the U.S. country manager for Heraeus Germany, Complainants failed to
show that these disclosures were not authorized under the 2012 Agreement.
The Commission affirms, with modified reasoning above, that Complainants failed to
show the disclosure of Quarterly Reports to Mr. Childers constituted misappropriation of TS 10.
ii. 	Complainants’ Forensic Evidence Does Not Prove That
HMUS Employees Misused TS 10
The FID finds that other alleged misuse of TS 10 by HMUS is not supported by
Complainants’ forensic evidence, which the FID finds is speculative. FID at 51-52. To prove
improper use of TS 10 by HMUS, Zimmer presented forensic evidence that a “PALACOS
Customers USA File” was saved on HMUS employees’ computers and opened on a number of
dates. Id. at 51. However, the FID finds that the forensic evidence “shows no more than that
certain files were opened, saved, and sent to others.” Id. Further, the FID credits the testimony
of Heraeus employees in finding that they did not rely on data from TS 10 in their work. Id.
(“By contrast, Heraeus employees testified (both during the evidentiary hearing and by
deposition) that they did not rely on information obtained from Zimmer Quarterly Reports.”).
The FID further credits the testimony of HMUS employees and evidence that HMUS spent
considerable time and effort developing its own customer targeting database primarily from
CMS data. Id. at 52.
Complainants argued that there is ample circumstantial evidence that proves HMUS used
TS 10 in 2017 and 2018, and the FID allegedly errs in finding this evidence is speculative.
Comp. Pet. at 15-23. According to Complainants, the FID fails to consider forensic evidence
20 The Commission notes that Complainants, who bear the burden on misappropriation,
have not shown when Mr. Childers began his tenure as HMUS’s general manager.

PUBLIC VERSION
30
and documents that establish the TS 10 files were purposefully modified, and these modifications
show how the data was being used. Id. at 16.
The Commission disagrees that the FID failed to consider Complainants’ arguments and
forensic evidence, as is clear from the FID’s findings. FID at 51-52. Further, the Commission
agrees with the FID’s findings that Complainants’ evidence “shows no more than that certain
files were opened, saved, and sent to others.” Id. at 52. With their forensic evidence in hand,
Complainants had the opportunity to question the HMUS employees in depositions and at the
hearing to ascertain whether HMUS employees wrongfully used TS 10. Complainants failed to
elicit testimony to prove their theory of liability, however. The Commission also does not
disturb the FID’s findings that Heraeus employees credibly testified that they did not rely on
information obtained from the Quarterly Reports. Id. (citing JX-339C (R. Kolbe Dep.) at 44-47;
JX-335C (Cruz Dep.) at 59-60, 80-81; Tr. (Childers) at 870:17-871:4; Tr. (Webb) at 972:10-
973:1). Accordingly, the Commission affirms the FID’s finding that Complainants’ forensic
evidence of alleged use of the TS 10 Quarterly Reports by HMUS does not prove
misappropriation of TS 10.
5. 	Analysis of Alleged Disclosure and Use of TS 15/28
The Commission adopts, without modification, the FID’s analysis and findings that
Complainants did not show that Respondents misappropriated TS 15/28. FID at 45-47, 53-54.
Accordingly, the Commission affirms that there was no misappropriation of TS 15/28.
6. 	Analysis of Respondents’ Independent Development of HMUS’s
Customer Targeting Database
The FID finds that Respondents independently developed their customer lists and pricing,
which is an affirmative defense to trade secret misappropriation. FID at 56. The FID credits the
testimony of Respondents’ witnesses who testified that HMUS spent independent time and effort

PUBLIC VERSION
31
developing a customer targeting database primarily from CMS data and that HMUS was able to
independently develop a targeting database after approximately two weeks of work using less
than $7,000. Id. The FID dismisses Complainants’ arguments that the testimony was uncredible
speculation. Id.
Complainants argued that Mr. Webb, HMUS Vice President of Marketing and Education,
who developed HMUS’s customer targeting database, had access to files containing TS 10 data.
Comp. Pet. at 31. Complainants further argued that the FID mischaracterizes evidence that Mr.
Webb received input from others who had access to TS 10 data as mere speculation. Id. at 32.
Complainants argued that there is “a heavy burden” in proving independent development and a
“clean room” approach must be established. Id. at 30-32 (citing Bone Cements (I), ID at 53
(May 6, 2020) (“engaging in some independent development is not enough to establish
independent development as a legal defense”)).
Respondents argued that Complainants do not, and cannot, contradict or rebut Mr.
Webb’s detailed explanation as to the steps he used to create the customer targeting database
without use of information from the TS 10 Quarterly Reports, or any other Zimmer Biomet
information. RBr. Reply at 27 (citing Tr. (Webb) at 952:7-981:4). As OUII noted, the phrase
“clean room” does not appear in the Bone Cements (I) ID, and both OUII and Respondents
agreed that the case law does not support requiring proof of a “clean room.” OUII Reply at 14-
15 (citing Bone Cements (I), ID); Resp. Reply at 32, 39-40.21
21 As a leading treatise notes, “clean room” development can be “a particularly fact
intensive matter.” See 1A M ILGRIM ON TRADE S ECRETS App. 7A: Independent (Clean Room)
Development (2021). Here, the evidence Heraeus has presented is sufficient to “withstand
scrutiny in the specific circumstances” of this investigation. Id.

PUBLIC VERSION
32
The evidence of record supports the FID’s finding that Respondents independently
developed their customer targeting database. Mr. Webb, who never worked for Complainants,
developed Respondents’ customer targeting database. Tr. (Webb) at 952:25-954:15. Mr. Webb
developed the database using information from publicly available sources. FID at 56; Tr.
(Webb) at 954:7-955:6, 956:6-10; JX-53C (targeting database); JX-52C (cover email attaching
targeting database); Tr. (Webb) at 971:22-972:9, 969:7-21. Mr. Webb alone kept and maintained
access to the master database. Tr. (Webb) at 970:7-23. Mr. Webb credibly testified that he did
not include any information from Complainants or any third party’s proprietary information. Tr.
(Webb) at 972:10-15. Thus, the evidence of record supports the FID’s findings that HMUS’s
database was not created using TS 10. FID at 56. Based on this evidence, the FID correctly
finds that HMUS did not rely on TS 10 in creating its own customer targeting database. Id.
Moreover, Complainants failed to analyze the facts under even the stringent “clean room”
standard they argued should govern. Comp. Pet. at 30-32. Indeed, Complainants described all
the ways the HMUS database is materially different from TS 10. Id. at 33-34. As noted in Bone
Cements (I), if the independently created improvements or modifications are “substantially
derived from the trade secret” then there is liability. Bone Cements (I), ID at 51. Here, however,
Complainants appear to admit that the HMUS database is materially different from, and therefore
not substantially derived from, TS 10.
Accordingly, the Commission adopts and affirms, with the additional analysis above, the
FID’s findings that Respondents independently developed their own customer targeting database.
B. 	Tortious Interference With Prospective Business Advantages Issues Under
Review
Alleged violations of section 337(a)(1)(A) predicated on non-statutory causes of action,
such as tortious interference, may be brought under principles of federal common law. See

PUBLIC VERSION
33
TianRui, 661 F.3d at 1327-28. To prove a claim for tortious interference with a prospective
economic advantage, a complainant is required to show “[1] that it had a reasonable expectation
of economic advantage, [2] which was lost as a direct result of [the respondent’s] malicious
interference, and [3] that it suffered losses thereby.” Avaya Inc., RP v. Telecom Labs, Inc., 838
F.3d 354, 382-83 (3d Cir. 2016).22
1. 	Summary of the FID’s Tortious Interference Findings
Before the ALJ, Complainants alleged that Respondents committed tortious interference
in two ways: (1) Respondents induced their employees to use Complainants’ confidential and
trade secret information to sell PALACOS bone cement in the United States; and
(2) Respondents tortiously interfered with Complainants’ prospective economic advantage. FID
at 82. The FID finds that Complainants failed to prove either of these allegations. Id. at 81-88.
More specifically, Complainants alleged that Respondents interfered with Complainants’
“prospective economic advantage to convert existing customers [to Zimmer’s own bone cement
products] in three ways: (i) by refusing to supply [Complainants’] affiliate (Zimmer Surgical,
Inc.) with PALACOS in breach of the Distribution Agreement, (ii) by using [Complainants’]
trade secret and confidential information, and (iii) by falsely advertising about [Complainants’]
right and ability to sell PALACOS and the superiority of PALACOS over RBCR.” Id. at 84.
The FID notes that Complainants modified their tortious interference allegations from
interference with existing contracts to interference with prospective advantage,23 but under both
22 Because the parties have principally framed their arguments around Avaya’s three-
factor test, the Commission will use that test to assess Complainants’ allegations.
23 Under the theory presented in their pre-hearing brief, Complainants argued that
Respondents interfered with Complainants’ existing contracts for PALACOS. See

PUBLIC VERSION
34
theories, Complainants rely on the same three sources of interference: (i); (ii); and (iii). Id. at
85.
The FID finds that allegations (ii) and (iii) fail for the same reasons that Complainants’
underlying trade secret and false advertising claims fail, respectively. Id. at 84-85; see also FID
at 58-81 (finding no false advertising). The FID further finds no proof of interference or injury
(allegation (i)). Id. at 85-88. In particular, the FID finds that Complainants offered no evidence
that Respondents knew of any specific contracts that Complainants had with specific customers
or any specific contractual details. Id. at 86. The FID further finds no proof of interference
because Complainants provided no evidence connecting the alleged breach of the 2012
Agreement to any prospective business relationships – “no expert evidence, no internal [Zimmer
Biomet] documents or communications, and no customer statements or testimony.” Id.
Regarding alleged injury related to allegation (i), the FID finds that Complainants failed
to identify any clause in the 2012 Agreement or any evidence that establishes a time for
Complainants to introduce their own cements. Id. at 87-88. Accordingly, the FID finds that
Complainants failed to prove that Respondents’ alleged tortious interference was the proximate
cause of any injury. Id.
2. 	Analysis of Alleged Tortious Interference with Prospective Economic
Advantage
Because the Commission affirms the FID’s findings that there was no misappropriation
or false advertising, Complainants’ allegations (ii) and (iii) fail for the same reasons that those
Complainants’ Pre-Hearing Brief (Sept. 25, 2020) (“CPrHB”) at 134-138. In their post-hearing
brief, Complainants argued interference with Complainants’ attempts to convert their current
PALACOS customers to Zimmer’s ZB cements customers. CIB at 96-98. Complainants did not
preserve their pre-hearing argument regarding the alleged interference with existing PALACOS
customer contracts, and that argument is waived. CPrHB at 134-138; CIB at 96-98; Order No. 2
at Ground Rule 13.1 (Sept. 23, 2019).

PUBLIC VERSION
35
underlying claims fail. FID at 84-85. The Commission also affirms, under a modified analysis
explained below, the FID’s finding that Complainants failed to prove the tortious interference in
allegation (i). Id. at 85-88.
A claim of tortious interference with prospective business or economic advantage
requires a complainant to prove that the complainant had a reasonable expectation of economic
advantage, which is lost as a direct result of the respondent’s malicious interference causing the
complainant to suffer losses. Avaya, 838 F.3d at 382 (explaining “what is actionable is the luring
away, by devious, improper and unrighteous means, of the customer of another”) (internal
quotations and citations omitted). This standard applies to Complainants’ allegations of tortious
interference with prospective business economic advantages. Id.; see also FID at 16, 81-82. The
parties agree that this is the correct standard. Comp. Pet. at 61; Resp. Reply at 67-68; OUII
Reply at 31-32. Thus, while the FID analyzes the existence and knowledge of a contract,
analysis of an existing contract is not necessary for allegations of tortious interference with a
prospective economic advantage. See FID at 86.
For Complainants’ allegation (i), they argued that Respondents’ refusal to supply
PALACOS to Zimmer Biomet after July 2018 was unjustified and qualifies as “wrongful means”
and unfair competition because it was allegedly a breach of the 2012 Agreement. CIB at 98-99.
Complainants asserted that they had a reasonable expectation of the prospective economic
advantage of transitioning a substantial portion of PALACOS customers to purchase their
ZB cements after Respondents elected mutual non-exclusivity on January 2, 2018 based on the
strength of Complainants’ relationships with PALACOS customers and other competitive
advantages. Id. at 97. Complainants alleged that Respondents’ refusal to supply PALACOS to

PUBLIC VERSION
36
Zimmer Biomet after July 2018 reduced the time agreed to in the 2012 Agreement that Zimmer
Biomet had to introduce its own cements to customers. Id. at 98-102.
Respondents and OUII argued that Complainants’ evidence is insufficient to prove
tortious interference because: (1) Complainants did not prove they had a reasonable expectation
of transitioning PALACOS customers to its ZB cements; (2) Respondents’ alleged withholding
of PALACOS supply was not malicious interference; and (3) Complainants failed to prove any
losses. Resp. Reply at 66-72; OUII Reply at 31-34. Also, as OUII pointed out, Respondents’
decision to withhold PALACOS supplies at the end of 2018 is insufficient to establish a claim
for interference with prospective economic advantage. See, e.g., Cavalieri-Conway v. L.
Butterman & Assocs., 992 F. Supp. 995, 1012 (N.D. Ill. Jan. 28, 1998) (“It is also well-
established that ‘the tortious interference allegedly committed by the defendant must be directed
toward a third party – not the plaintiff.’” (quoting Silk v. City of Chicago, 1997 WL 790598,
at *19-20 (N.D. Ill. Dec. 17, 1997)).
The FID’s findings of fact support the conclusion that there was no tortious interference
with prospective business advantages. FID at 84-88. Specifically, the FID notes that
Complainants rely on two pieces of evidence: (1) an email between two Heraeus executives
which states that “[i]f [Zimmer Biomet has] more time for conversion, they will convert more
customers to [RBCR];” and (2) the testimony of Respondents’ expert on Swiss law. Id. at 87
(citing CX-1320C at 1; JX-363C (Rohm24 Dep.) at 120:1-9). The FID finds that Complainants
failed to explain or provide evidence as to how Respondents’ conduct “decreased
[Complainants’] time to transition its customers to the ZB Cements” or exactly how that
transition time was affected. Id. at (citing CPrHB at 98). The FID also finds that the testimony
24 Dr. Patrick Rohn was Respondents’ expert on Swiss law. FID at 87.

PUBLIC VERSION
37
of Respondents’ expert on Swiss law, who opined that it was commercially reasonable for
Respondents to consider potential loss of market share in deciding to refuse Complainants’ firm
orders, did not demonstrate tortious interference and actually undermined Complainants’ case.
Id. (citing JX-363C (Rohn Dep.) at 120:1-9). The FID observes that Complainants cite no other
evidence connecting the alleged breach of the 2012 Agreement to any prospective business
relationships − no expert evidence, no internal Zimmer Biomet documents or communications,
and no customer statements or testimony. Id.
The FID further finds that Complainants failed to prove that Respondents’ alleged
tortious interference was the proximate cause of any alleged injury. Id. at 88. The FID finds that
the email upon which Complainants rely regarding their alleged time frame to introduce their
own bone cements does not discuss any “agreed” time that was not met as a result of
Respondents’ conduct. Id. The FID also finds that Complainants failed to provide an injury
analysis for tortious interference separate from that of trade secret misappropriation and false
advertising. Id.
Accordingly, the Commission adopts and affirms the FID’s findings that Respondents did
not tortiously interfere with Complainants’ prospective business relationships, but under Avaya’s
legal standard for tortious interference with prospective business advantage and with the
modified analysis above.
C. 	Domestic Industry and Injury Issues Under Review
The Commission determined to review the FID’s DI and injury findings. 	86 Fed. Reg. at
20201. On review, the Commission has determined to take no position on the FID’s DI and
injury findings. FID at 88-104; Beloit, 742 F.2d at 1423. The Commission affirms the FID’s
findings that there was no misappropriation, no tortious interference, and no false advertising.

PUBLIC VERSION
38
Because the Commission has affirmed these findings, taking no position on the FID’s DI and
injury findings does not affect the Commission’s finding of no violation of section 337.
IV. 	CONCLUSION
For the reasons set forth above, the Commission determines that Complainants have not
established a violation of section 337 by Respondents by reason of misappropriation of trade
secrets, false advertising, or tortious interference. 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: 	July 9, 2021

CERTAIN BONE CEMENTS AND BONE CEMENT
ACCESSORIES
Inv. No. 337-TA-1175
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, Megan Wantland, Esq., and the following
parties as indicated, on July 9, 2021.
Lisa R. Barton, Secretary
U.S. International Trade Commission
500 E Street, SW, Room 112
Washington, DC 20436
On Behalf of Complainants Zimmer, Inc., and Zimmer US,
Inc.:
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 for Download
On Behalf of Respondents Heraeus Medical GmbH and
Heraeus Medical LLC:
David A. Caine, Esq.
ARNOLD & PORTER KAYE SCHOLER LLP
3000 El Camino Real, Suite 500
Palo Alto, CA 94306
Email: david.caine@arnoldporter.com
☐ Via Hand Delivery
☐ Via Express Delivery
☐ Via First Class Mail
☒ Other: Email Notification
of Availability for Download

UNITED STATES INTERNATIONAL TRADE COMMISSION
Washington, D.C.
In the Matter of
CERTAIN BONE CEMENTS AND BONE
CEMENT ACCESSORIES 	Investigation No. 337-TA-1175
NOTICE OF COMMISSION DETERMINATION TO REVIEW IN PART A FINAL
INITIAL DETERMINATION FINDING NO VIOLATION OF SECTION 337;
SCHEDULE FOR FILING WRITTEN SUBMISSIONS ON THE ISSUES UNDER
REVIEW AND ON REMEDY, PUBLIC INTEREST, AND BONDING
AGENCY: 	U.S. International Trade Commission.
ACTION: 	Notice.
SUMMARY: Notice is hereby given that the U.S. International Trade Commission
(“Commission”) has determined to review in part a final initial determination (“FID”) of the
presiding administrative law judge (“ALJ”) finding no violation of section 337 of the Tariff Act
of 1930, as amended, in the above-captioned investigation. 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: Lynde Herzbach, Office of the General
Counsel, U.S. International Trade Commission, 500 E Street, S.W., Washington, D.C. 20436,
telephone (202) 205-3228. 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, telephone 202-205-1810.
SUPPLEMENTARY INFORMATION: On September 23, 2019, the Commission instituted
this investigation based on a complaint filed on behalf of Zimmer, Inc. and Zimmer US, Inc. both
of Warsaw, Indiana (collectively, “Complainants”). 84 FR 49764 (Sept. 23, 2019). The
complaint alleges violations of section 337 of the Tariff Act of 1930, as amended, 19 U.S.C.
1337 (“section 337”), based on the importation into the United States, the sale for importation,
and the sale within the United States after importation of certain bone cements and bone cement
accessories by reason of the misappropriation of trade secrets, false advertising, and tortious
interference, the threat or effect of which is to destroy or substantially injure an industry in the
United States. The complaint also alleges the existence of a domestic industry. The
Commission’s notice of investigation names the following as respondents: Heraeus Medical

2
GmbH of Wehrheim, Germany and Heraeus Medical LLC of Yardley, Pennsylvania
(collectively, “Respondents”). Id. The Office of Unfair Import Investigations (“OUII”) is
named as a party in this investigation. Id.
On February 11, 2021, the ALJ issued the FID, finding no violation of section 337. More
particularly, the FID finds, inter alia, that: (1) the Commission has subject matter and personal
jurisdiction; (2) Respondents sold for importation into the United States, imported, or sold after
importation accused bone cements and bone cement accessories; (3) a domestic industry exists
with respect to Complainants’ accessory products under section 337(a)(1)(A)(i) (19 U.S.C.
1337(a)(1)(A)(i)); (4) Complainants own the asserted trade secrets; (5) trade secrets (“TS”) 10,
15, and 28 are protectable, but TS 11 is not protectable; (6) Respondents did not misappropriate
any asserted TS; (6) Respondents did not engage in false advertising; (7) Respondents did not
tortiously interference with Complainants’ contracts or prospective business relationships; and
(6) Complainants failed to show a substantial injury or threat of injury to their domestic industry.
The FID includes the ALJ’s recommended determination (“RD”), which recommends
that, if the Commission finds a violation of section 337, the Commission should issue a limited
exclusion order and a cease and desist order directed to Respondents. The RD further
recommends imposing a bond of five and a half (5.5) percent during the period of Presidential
review.
On February 23, 2021, Complainants filed a petition for review that seeks review of most
of the FID’s findings. On March 3, 2021, Respondents and OUII filed responses to
Complainants’ petition.
On March 15, 2021, Respondents filed a submission on the public interest pursuant to
Commission Rule 210.50(a)(4) (19 CFR 210.50(a)(4)). Complainants and OUII did not file a
statement on the public interest. The Commission received no filings in response to its Federal
Register notice calling for public interest comments. See 86 FR 12029.
Having examined the record in this investigation, including the FID, the petitions for
review, and the responses thereto, the Commission has determined to review the FID in part. In
particular, the Commission has determined to review the following:
(1) 	The FID’s findings and conclusions as to the alleged
misappropriation of the asserted trade secrets, including the
finding that Respondents independently developed their own
data compilation;
(2) 	The FID’s findings and conclusions as to Respondents’ alleged
tortious interference with Complainants’ prospective business
advantages; and
(3) 	The FID’s findings on domestic industry and injury.
The Commission has determined not to review the remainder of the FID.

3
In connection with its review, the Commission requests that the parties brief their
positions regarding the following questions with reference to the applicable law and the
evidentiary record:
(A) 	When evaluating the misappropriation of a trade secret, identify and
discuss the proper legal standard for wrongful disclosure or use of a trade
secret that is a compilation. Please consider whether any particular
amount of disclosure or use is required to support a finding of
misappropriation, i.e., de minimis, substantial, or the entirety of the trade
secret compilation. Discuss whether there are any differences in the
application of the legal standard for disclosure or use if a trade secret
compilation includes publicly available information.
(B) 	Given the legal standard identified in response to (A), please analyze the
alleged disclosure and use of TS 10, 15, and 28.
(C) 	Please discuss and provide a timeline detailing the background and
development of Heraeus Medical LLC from 2017 through 2018, including
the dates that relevant employees were hired, the relevant employees’
positions, the dates of alleged disclosures and/or use of TS 10, 15, and 28,
and the dates and relevant facts regarding Respondents’ interactions with
third parties.
(D) 	What criteria should the Commission apply to determine whether
activities related to meeting FDA requirements constitute activities of a
“mere importer”? For example, should one criterion be that the activities
are required to be performed in the United States or that the activities
differ from those that a wholly domestic company would perform? Please
apply the appropriate criteria to the facts of this investigation. Are any of
Complainants’ FDA-related activities different from what a wholly
domestic company would need to undertake? Which, if any, of a
Complainants’ FDA activities could be conducted abroad?
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

4
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 ALJ’s RD on remedy and bonding.
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.
Written submissions, including proposed remedial orders must be filed no later than the
close of business on April 30, 2021. Reply submissions must be filed no later than the close of
business on May 7, 2021. No further submissions on these issues will be permitted unless
otherwise ordered by the 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-1175”) 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.

5
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 April 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: April 12, 2021

CERTAIN BONE CEMENTS AND BONE CEMENT
ACCESSORIES
Inv. No. 337-TA-1175
PUBLIC CERTIFICATE OF SERVICE
I, Lisa R. Barton, hereby certify that the attached NOTICE has been served via EDIS upon the
Commission Investigative Attorney, Megan Wantland, Esq., and the following parties as
indicated, on April 12, 2021.
Lisa R. Barton, Secretary
U.S. International Trade Commission
500 E Street, SW, Room 112
Washington, DC 20436
On Behalf of Complainants Zimmer, Inc., and Zimmer US,
Inc.:
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 for Download
On Behalf of Respondents Heraeus Medical GmbH and
Heraeus Medical LLC:
David A. Caine, Esq.
ARNOLD & PORTER KAYE SCHOLER LLP
3000 El Camino Real, Suite 500
Palo Alto, CA 94306
Email: david.caine@arnoldporter.com
☐ Via Hand Delivery
☐ Via Express Delivery
☐ Via First Class Mail
☒ Other: Email Notification
of Availability for Download

1
UNITED STATES INTERNATIONAL TRADE COMMISSION
Washington, D.C.
In the Matter of
CERTAIN BONE CEMENTS AND BONE
CEMENT ACCESSORIES
Inv. No. 337-TA-1175
INITIAL DETERMINATION ON VIOLATION OF SECTION 337 AND
RECOMMENDED DETERMINATION ON REMEDY AND BOND
Administrative Law Judge Cameron Elliot
(February 11, 2021)
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 And Bone Cement Accessories, Investigation No. 337-TA-
1175.

i
TABLE OF CONTENTS
I. 	INTRODUCTION............................................................................................................................... 5
A. 	Procedural Background ................................................................................................................. 5
B. 	The Parties ....................................................................................................................................... 7
C. 	The Asserted Trade Secrets ........................................................................................................... 8
D. 	Products at Issue ........................................................................................................................... 10
Accused Products ...................................................................................................................... 10
Zimmer’s Domestic Products................................................................................................... 10
II. 	STANDARDS OF LAW ............................................................................................................... 11
A. 	Protectable Trade Secrets ............................................................................................................ 11
B. 	False and Misleading Advertising ............................................................................................... 14
C. 	Tortious Interference .................................................................................................................... 16
D. 	Domestic Industry ......................................................................................................................... 17
III. 	IMPORTATION AND SALE ...................................................................................................... 21
IV. 	JURISDICTION ........................................................................................................................... 22
V. 	THE ASSERTED TRADE SECRETS ............................................................................................ 23
A. 	Trade Secret 10 ............................................................................................................................. 23
Extent Trade Secret 10 Was Known Outside Zimmer .......................................................... 23
Extent TS 10 Was Known Inside Zimmer .............................................................................. 25
Extent of Steps Taken By Zimmer to Guard Trade Secret 10 .............................................. 27
Value of Trade Secret 10 to Zimmer and Competitors ......................................................... 30
The Amount of Effort or Money Expended in Development ................................................ 32
The Ease or Difficulty of Acquisition or Duplication by Others........................................... 33
B. 	Trade Secret 11 ............................................................................................................................. 35
Extent Trade Secret 11 Was Known Outside Zimmer .......................................................... 35
Extent Trade Secret 11 Was Known Inside Zimmer ............................................................. 36
Extent of Steps Taken by Zimmer to Guard Trade Secret 11 .............................................. 37
Value of TS 11 to Zimmer and Competitors .......................................................................... 37
The Amount of Effort or Money Expended in Development ................................................ 38
The Ease or Difficulty of Acquisition or Duplication by Others........................................... 38
C. 	The Asserted Trade Secrets 15 and 28 ........................................................................................ 39
Extent Trade Secrets 15 and 28 Were Known Outside Zimmer .......................................... 40
Extent Trade Secrets 15/28 Were Known Inside Zimmer .................................................... 40

ii
Extent of Steps Taken By Zimmer to Guard Trade Secrets 15/28 ....................................... 41
Value of Trade Secrets 15/28 to Zimmer and Competitors................................................... 41
The Amount of Effort or Money Expended by Zimmer ....................................................... 42
The Ease or Difficulty of Acquisition or Duplication by Others........................................... 42
VI. 	MISAPPROPRIATION OF THE TRADE SECRETS ............................................................. 43
A. 	Ownership...................................................................................................................................... 43
B. 	Disclosure or Wrongful Acquisition ............................................................................................ 44
TS 10 and TS 11 ........................................................................................................................ 45
TS 15/28...................................................................................................................................... 45
C. 	Use of the Asserted Trade Secrets ............................................................................................... 47
TS 10........................................................................................................................................... 47
TS 11........................................................................................................................................... 53
TS 15/28...................................................................................................................................... 53
D. 	Summary........................................................................................................................................ 54
E. 	Harm to Zimmer by Misappropriation....................................................................................... 54
VII. 	HERAEUS’ DEFENSES .............................................................................................................. 56
A. 	Heraeus Independently Developed its Own Data Compilation ................................................ 56
B. 	Heraeus’ Use Was Not Licensed .................................................................................................. 57
C. 	No Prospective Relief for Harm Relating Only to PALACOS Sales ........................................ 57
D. 	Zimmer’s Claims Are Not Barred by Unclean Hands or Material Breach ............................. 58
VIII. 	FALSE AND MISLEADING ADVERTISING ...................................................................... 58
A. 	Statements Regarding Zimmer’s Right/Ability to Supply PALACOS .................................... 59
Falsity of Statements ................................................................................................................. 59
Actual Deception or Tendency to Deceive .............................................................................. 67
Materiality ................................................................................................................................. 71
Interstate Commerce ................................................................................................................ 72
Likelihood of Injury .................................................................................................................. 72
B. 	Statements Regarding Product Quality ...................................................................................... 73
Falsity of Statements ................................................................................................................. 73
Actual Deception or Tendency to Deceive .............................................................................. 79
Materiality ................................................................................................................................. 80
Interstate Commerce ................................................................................................................ 81
Likelihood of Injury .................................................................................................................. 81

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IX. 	TORTIOUS INTERFERENCE ................................................................................................... 81
A. 	Interference with Confidentiality Agreements with Former Employees ................................. 82
Existence and Knowledge of Zimmer Employment Contracts ............................................. 82
No Intentional Actions Resulted in Breach of Employment ................................................. 83
Agreements ........................................................................................................................................ 83
B. 	Tortious Interference With Prospective Business Relationships .............................................. 84
Existence of and Knowledge of a Contract ............................................................................. 86
No Proof of Interference ........................................................................................................... 87
No Proof of Injury ..................................................................................................................... 87
X. 	DOMESTIC INDUSTRY ................................................................................................................. 88
A. 	Characterization Testing and Regulatory Compliance ............................................................. 89
B. 	Manufacturing Accessories .......................................................................................................... 91
C. 	Customer Service and Technical Support .................................................................................. 93
D. 	Technical Marketing ..................................................................................................................... 94
E. 	Analysis .......................................................................................................................................... 95
F. 	Substantial Injury To Domestic Industry ................................................................................... 98
Lost sales, Lost Market Share, and Price Erosion of ............................................................. 99
Bone Cements and Accessories ........................................................................................................ 99
Reputational Harm and Injury to Goodwill ......................................................................... 102
Testing, Customer Service and Technical Support/Marketing .......................................... 103
XI. 	CONCLUSIONS OF LAW ........................................................................................................ 104
XII. 	RECOMMENDED DETERMINATION ON REMEDY AND BOND .................................. 105
A. 	Limited Exclusion Order ............................................................................................................ 107
B. 	Cease and Desist Order .............................................................................................................. 109
C. 	Bond ............................................................................................................................................. 109
XIII. 	INITIAL DETERMINATION AND ORDER ...................................................................... 111

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

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I. 	INTRODUCTION
A. 	Procedural Background
Complainants, Zimmer, Inc. and Zimmer US (“Zimmer” or “Complainants”) filed a
Complaint with the Commission on August 19, 2019. 	EDIS Doc. ID 685690 (Aug. 19, 2019).
The Commission instituted the investigation on September 17, 2019. 84 Fed. Reg.49764 (Sept.
23, 2019). 	The named respondents are Heraeus Medical GmbH and Heraeus Medical LLC
(“Heraeus” or “Respondents”).
By publication of a notice in the Federal Register on September 23, 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 products identified in paragraph (2) by reason of the misappropriation of
trade secrets, false advertising, or tortious interference, 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 products, which defines the scope of the
investigation, is "Heraeus' PALACOS® bone cements, including PALACOS® R,
PALACOS® R+G, PALACOS® MV, PALACOS® MV+G, PALACOS® LV+G,
PALACOS® LV, and other similar bone cements, as well as Heraeus' bone cement
accessories, 	including 	the 	PALACOS® 	All-in-One 	Fixation 	Systems, 	the
PALAMIX® vacuum mixing systems, the PALABOWL vacuum mixing bowls,
and other similar accessories used for mixing and applying bone cements."
84 Fed. Reg. 49764 (Sept. 23, 2019).
On September 4, 2020, Respondents filed a Motion for Summary Determination of No
Violation, which was timely opposed by Complainants and Staff. 	The motion was denied on
October 2, 2020. Order No. 9, EDIS Doc. ID 721085.
An evidentiary hearing was held October 26-30, 2020. Following the evidentiary hearing,
and pursuant to the procedural schedule, the parties submitted initial and reply post-hearing briefs

6
on November 13, 2020 (EDIS Doc. 725008 (Complainant), EDIS Doc. 725035 (Respondents),
EDIS 	Doc. 	725051(Commission 	Staff)) 	and 	December 	4, 	2020 	(EDIS 	Doc. 	727244
(Complainant), EDIS Doc. 727257 (Respondents), EDIS Doc. 727231 (Commission Staff)),
respectively.
On October 13, 2020, prior to the evidentiary hearing, Zimmer filed a motion for adverse
inferences in view of Heraeus’ alleged spoliation of evidence. Mot. 1175-023. Heraeus filed a
response (“Resp.” EDIS Doc. 722829) as did the Staff (“SResp” EDIS Doc. 723117). Both parties
opposed the motion. The motion was held in abeyance until after the hearing so that any relevant
evidence could be presented at the hearing.
Zimmer alleges that Heraeus destroyed evidence that it was under an obligation to preserve,
thus prejudicing Zimmer. Heraeus allegedly spoliated evidence on two separate occasions: first,
when former Zimmer employee James “Worth” Burns destroyed a personal USB device
containing a file, the “For Peterson” file, after receiving a litigation hold-style notice letter from
Complainants’ counsel; and second, when Heraeus had employees’ work computers updated
pursuant to a global company equipment “refresh” without first forensically imaging the
employees’ devices. Memorandum in Support of Its Motion for Adverse Interferences In View of
Heraeus’ Spoliation of Evidence (Memo.) at 2-5.
The Federal Circuit states that “‘a party can only be sanctioned for destroying evidence if
it had a duty to preserve it.’” Micron Tech., Inc. v. Rambus Inc., 645 F.3d 1311, 1320 (Fed. Cir.
2011)), aff’d in relevant part by, Comm’n Op. at 12-19 (Apr. 30, 2015). (quoting Zubulake v. UBS
Warburg LLC, 220 F.R.D. 212, 216 (S.D.N.Y. 2003)). As will be discussed in more detail later,
Zimmer fails to present evidence that Heraeus had knowledge of Mr. Burns’ personal USB device,
and moreover, did not have control over the USB when it was destroyed. As to Zimmer’s second

7
allegation, an Indiana court in a related case issued a preliminary injunction in 2018 enjoining
Robert Kolbe, James “Worth” Burns, and Heraeus from, inter alia, “possessing, using or
disclosing Zimmer Biomet’s Confidential Information.” Resp. at 3, Ex. 2. Complainants did not
request that forensic images be taken of these individual’s computers at that time, and the Indiana
court did not require it. See Resp. at 3 (first request for additional forensic images beyond what
was provided in discovery in Indiana was in this Investigation in June 2020); see also Resp. at 15,
Ex. 14 (the Indiana court order enjoining possession of any Zimmer Biomet confidential
information was based on language suggested by Zimmer). And Zimmer cites no support for the
proposition that a duty of preservation of evidence must necessarily include forensic images.
Later, the computers in question were part of a routine software update and equipment refresh.
Zimmer fails to present any evidence that this routine update was done in bad faith, therefore
justifying sanctions. See, e.g., Micron, 645 F.3d at 1326 (finding “bad faith” requires a showing
of purposeful intent to impair the ability of a party to bring its claims).
Accordingly, Zimmer’s motion for adverse inferences (Mot. 1175-023) is denied.
B. 	The Parties
Complainants Zimmer, Inc. and Zimmer U.S., Inc. are both Delaware corporations with
principal places of business in Warsaw, Indiana. 	Complaint ¶¶ 9, 11. Complainants are
subsidiaries of parent company Zimmer Biomet Holdings, Inc., which was created in 2015 as the
result of a merger between Zimmer Holdings, Inc. and Biomet, Inc. Complaint ¶ 3. Biomet, Inc.
(or a related entity) was the distributor of Heraeus’s PALACOS products in the U.S. from 1996 to
2006. See CIB at 7. Zimmer Surgical, Inc. (and/or related entities) was contracted to distribute
Heraeus’s PALACOS in the U.S. from 2005 through 2018. 	CIB at 7, 8; Complaint ¶ 31.
Complainants are currently responsible for the marketing, distribution, and sales of Zimmer’s bone

8
cements and bone cement mixing and delivery accessories sold in the United States. 	CPB at 5
(noting also that Zimmer U.S., Inc. “manages the sales agreements for the [Zimmer Biomet]
Cements and bone cement accessories in the United States”). See Complaint ¶¶ 9-12.
Respondent Heraeus Medical GmbH is a German company with a principal place of
business in Wehrheim, Germany. Heraeus Medical GmbH is the successor-in-interest to Heraeus
Kulzer GmbH and Kulzer & Co. GmbH, which developed bone cements originally. Now, Heraeus
Medical GmbH is responsible for designing, developing, and manufacturing certain Heraeus
PALACOS bone cements and accessory products. RPB at 10.
Heraeus Medical LLC (“HMUS”), a distributor for Heraeus Medical GmbH, is a Delaware
limited liability company formed in June 2017 with a principal place of business in Yardley,
Pennsylvania. 	Since the beginning of 2018, HMUS has been responsible for promoting and
distributing the PALACOS products in the United States. RPB at 10. HMUS imports and sells
the accused PALACOS bone cements and accessory products in the United States. Complaint ¶¶
9-12. 	See JX-0334 (Petermann Dep.) at 19:20-20:16, 21:14-25.
C. 	The Asserted Trade Secrets
As set forth in Zimmer’s Fifth Updated Final Identification of Trade Secrets, dated August
12, 2020 (EDIS Doc. ID 717126), the four asserted trade secrets are:
Asserted Trade Secret 10 (“TS 10”) Quarterly reports constituting a list of
customers, by territory, who purchased Heraeus cements from Zimmer Biomet in
that quarter, the full names and delivery addresses of those customers, the types and
quantities of the Heraeus cements delivered to those customers, and the prices
charged to those customers for the Heraeus cements delivered, as supplied by
Zimmer Biomet to Heraeus between October 1, 2015, and December 31, 2018,
pursuant to, and during the term of, the 2012 Distribution Agreement (see Appendix
A for embodiments of Trade Secret 10, including non-asserted embodiments), and
including 	the 	data 	found 	in 	Excel 	files 	“ZB 	Analysis”
(HERAEUSITC_II_0029774) 	and 	“PALACOS 	Customers 	USA 	Fiscal 	Year
2016”) (HERAEUSITC_II_0013962).

9
Asserted Trade Secret 11. (“TS 11”) Annual rolling forecasts constituting
inventory information, inventory forecasts, sales forecasts, sales projections, and
binding orders, as supplied by Zimmer Biomet to Heraeus pursuant to Article III,
et seq., of the 2012 Distribution Agreement, supplied between October 1, 2015, and
December 31, 2018. See Appendix A for embodiments of Trade Secret 11.
Asserted Trade Secret 15. (“TS 15”) Customer lists related to the sale of
PALACOS or bone cement accessory products constituting a compilation of
Zimmer Biomet’s bone cement customer identification information (see Columns
F, G, or H), customer contact information (see Columns I, J, K), and one or more
of the following: territory names (see Columns C, R), product identification
information (see Columns P, Q, or Z), product quantity (see Column S), actual sales
price (see Column T), average sales price (calculated from actual sales price and
quantity sold), and revenue (see Column U). See ZBHO-00224488 (10/31/15-
12/31/15); ZBHO-00224489 (01/01/16-12/31/16); ZBHO-00224486 (01/01/17-
12/31/17); and ZBHO-00224487 (01/01/18-10/31/18); see also Appendix A for
additional embodiments of Trade Secret 15.
Asserted Trade Secret 28. (“TS 28”) The compilation of invoice-level sales data,
sourced from Zimmer Biomet’s sales of PALACOS between October 1, 2015 and
January 1, 2018, that is maintained on, and accessible through, Zimmer Biomet’s
PROS system, and exported as
See 	ZBHO-00224488 	(10/31/15-12/31/15); 	ZBHO-00224489 	(01/01/16-
12/31/16); 	ZBHO-00224486 	(01/01/17-12/31/17); 	and 	ZBHO-00224487
(01/01/18-10/31/18); see also Appendix A for additional embodiments of Trade
Secret 28.
See JX-0309C.0001-2.
In its Prehearing and Post-Hearing briefs Zimmer collapsed TS 15 and TS 28 into a single
asserted trade secret “compris[ing] customer lists related to the sale of PALACOS or bone cement
accessory products, including the Excel file named ‘For Peterson.’” See CIB at 10 and CPB at 8.
Complainants’ analysis and arguments also discuss TS 15 and TS 28 as if they are a single trade
secret. Therefore, this Initial Determination will treat asserted TS 15 and TS 28 as a single asserted
trade secret (“TS 15/28”).

10
D. 	Products at Issue
Accused Products
Heraeus imports into and sells the following Accused Products in the United States:
PALACOS R, PALACOS R+G, PALACOS FAST R+G, PALACOS LV, PALACOS LV+G,
PALACOS MV, PALACOS MV+G, PALACOS R pro 75, PALACOS R+G pro 75, PALACOS
Pro nozzle short, PALACOS Pro nozzle medium, PALAMIX uno, PALAMIX duo, PALABOWL,
PALAMIX nozzle slim, PALAMIX nozzle medium, PALAMIX nozzle medium, PALAMIX
cement gun, PALAMIX vacuum pump, PALAMIX vac hose, and the COPAL exchange G. See
JX-0311C.0002-3; JX-0334C (Petermann Dep.) at 21:14-18; Tr. (Petermann) at 794:5-796:5.
Zimmer’s Domestic Products
Zimmer’s domestic products at issue in this case are Biomet Bone Cement R (“BBCR”)
and Refobacin Bone Cement R (“RBCR”) (collectively, “ZB cements”), and a number of
accessory products, including plugs, mixing equipment, prep kits, centralizers, and spacer molds.
See CX-3272C.0008-13 (Complainants’ 6th Supp. Objects. and Resps. to Staff’s 1st Set of
Interrogatories) (listing specific product and part numbers/SKUs for each alleged domestic
industry product in response, as supplemented, to Interrogatory No. 2). Zimmer also sells other
accessory products in the United States, including mixing bowls and spatulas, vacuum mixing
systems, cement delivery systems, components used for mixing and applying cement, various
types of plugs, nozzles, and other accessories used in cemented joint replacement procedures. CX-
3067C; Tr. (Armstrong) at 32:14-33:14; CDX-0008C.4.

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 a trade secret is a prerequisite of a trade secret misappropriation claim.
Certain Rubber Resins, 2014 WL 749801, at * 5 (citing 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”). 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

12
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, 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.
Sausage Casings, Inv. No. 337-TA-148/169, Initial Determination, 1984 WL 273789, at *94 (July
31, 1984) (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 1336, 1340 (9th Cir. 1982)). Also, a confidential

14
relationship can exist in the absence of a confidentiality agreement; “an 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. 	False and Misleading Advertising
The Commission recognizes false advertising as a form of unfair competition under 19
U.S.C. § 1337(a)(1)(A). See Certain Light-Emitting Diode Prods. and Components Thereof, Inv.
No. 337-TA-947, Initial Determination at 432 (July 29, 2016) (“Certain LEDs”). To establish a
false advertising claim under the Lanham Act, a complainant must prove that:
1.) The [respondent] made false or misleading statements about his own or
another person’s product;
2.) There is actual deception or at least a tendency to deceive a substantial
portion of the intended audience;
3.) The deception is material in that it is likely to influence purchasing
decisions;
4.) The advertised good traveled in interstate commerce; and
5.) There is a likelihood of the injury to the complainant in terms of
declining sales, loss of good will, etc.
Certain Woven Textile Fabrics and Prods. Containing Same, 337-TA-976, Order No. 21, 2016
WL 7010667, at *5 (Nov. 10, 2016) (“Woven Textile Fabrics”); see also Certain LEDs, Initial
Determination at 430-31. To demonstrate element (1) – a false or misleading statement of fact –
a complainant must prove that the statement is either (i) literally false, or (ii) literally true, but
ambiguous and likely to mislead, confuse, or deceive consumers. 	Woven Textile Fabrics, 2016
WL 7010667, at *5; see also Clorox Co. Puerto Rico v. Proctor & Gamble Commercial Co., 228

15
F.3d 24, 33 (1st Cir. 2000) (“A plaintiff can succeed on a false advertising claim by proving either
that an advertisement is false on its face or that the advertisement is literally true or ambiguous but
likely to mislead and confuse consumers.”).
The question of literal falsity is a factual one. Clorox Co., 228 F.3d at 34. The factfinder
must first identify the claim that is conveyed by the advertisement, then determine whether that
claim is false. Id. at 33; Woven Textile Fabrics, 2016 WL 7010667, at *6. Literal falsity can be
shown based on express claims in advertisements or by demonstrating that the advertisement
conveys a falsity by “necessary implication.” Southland Sod Farms v. Stover Seed Co., 108 F.3d
1134, 1139 (9th Cir. 1997); see also Clorox Co., 228 F.3d at 35 (explaining “[a] claim is conveyed
as false by necessary implication when, considering the advertisement in its entirety, the audience
would recognize the claim as readily as if it had been explicitly stated.”).
With respect to deception (element 2 above), the Lanham Act does not require proof that
consumers were actually deceived if the statement is false. Id. In the case of a literally true but
misleading statement, however, a complainant must show that the statement deceived a substantial
portion of the purchasing public. 	United Indus. Corp. v. Clorox Co., 140 F.3d 1175, 1182 (8th
Cir. 1998). Alternatively, if there is proof that the respondent acted with an intent to deceive, then
deception may be presumed. 	Certain LEDs, Initial Determination at 433 (citing Cashmere &
Camel Hair Mfrs. Inst. v. Saks Fifth Ave., 284 F.3d 302, 316 (1st Cir. 2002) (cert. denied 537 U.S.
1001 (2002)).
With respect to materiality (element 3 above), the false or misleading statement must be
material to a substantial part of the relevant audience. 	That is, “[i]f a significant number of
prospective purchasers are likely to attach importance to the representation in determining whether
to engage in a proposed transaction, the representation is material.” 	See Restatement (Third)

16
Unfair Competition § 3 cmt. b. 	The deceptive representation need not be the sole or even the
predominant factor influencing the conduct of the prospective purchasers. Nor is it necessary to
demonstrate that purchasers would have acted differently in the absence of the representation. It
is sufficient if the representation is likely to influence prospective purchasers to some substantial
degree. Id.
C. 	Tortious Interference
The Commission recognizes that alleged violations of Section 337(a)(1)(A) predicated on
non-statutory causes of action, such as tortious interference, may be brought under principles of
federal common law. See TianRui, 661 F.3d at 1327-28; see also Certain Indus. Automation Sys.
and Components Thereof Including Control Sys., Controllers, Visualization Hardware, Motion
Control Sys., Networking Equip., Safety Devices, and Power Supplies, Inv. No. 337-TA-1074,
Initial Determination at 52 (Oct. 23, 2018) (EDIS Doc. ID 661890) (“Indus. Automation Sys.”).
To prove a claim of tortious interference, either with a contract or a business relationship,
Complainants must prove: (1) there was a contract or existing valid relationship, (2) the respondent
knew of it, (3) the respondent’s intentional act was a significant factor in causing breach of contract
or interference, (4) the act was without justification, and (5) the act caused injury. 	See Indus.
Automation Sys., Initial Determination at 52 (citing WaveDivision Holdings, LLC v. Highland
Capital Mgmt., L.P., 49 A.3d 1168, 1174 (Del. 2012)); Certain Foodservice Equip. and
Components Thereof, Inv. No. 337-TA-1166, Order No. 23, 2020 WL 2094134, at *1 (Mar. 30,
2020).
To determine whether alleged interference is improper, a number of factors must be
examined, including: “(a) the nature of the actor’s conduct, (b) the actor’s motive, (c) the interests
of the other with which the actor’s conduct interferes, (d) the interests sought to be advanced by

17
the actor, (e) the social interests in protecting the freedom of action of the actor and the contractual
interests of the other, (f) the proximity or remoteness of the actor’s conduct to the interference and
(g) the relations between the parties.” Restatement (Second) of Torts § 767. Because interference
with a contract or business relationship is an intentional tort, the actor’s motive must be examined
to discern whether the actor intended to cause the injury by his or her actions or be substantially
certain of the harmful results to be caused by his or her actions. 	Id. at § 767 cmt. b. 	The
Restatement counsels that “[i]ntent alone, however, may not be sufficient to make the interference
improper, especially when it is supplied by the actor’s knowledge that the interference was a
necessary consequence of his conduct rather than by his desire to bring it about.” Id. at § 767 cmt.
d (if the sole motive of the interference was the interference, it “is almost certain” the interference
was improper). Therefore, it is important to analyze all the factors in their appropriate context.
In fact, acts may be “proper” where the relationship between the parties is that of
competitors:
The relation between the parties is often an important factor in determining whether
an interference is proper or improper. In a case where A is the actor, B is the injured
party and C is the third party influenced by A’s conduct, the significant relationship
may be between any two of the three parties. Thus A and B may be competitors,
and A’s conduct in inducing C to not deal with B may be proper, though it would
have been improper if he had not been a competitor.
Restatement at § 767 cmt i; but see Restatement at § 768 cmt e (“If the actor employs wrongful
means, he is not justified under the rule stated in this Section.”).
D. 	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),

18
(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
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

19
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 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
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

20
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 an 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” 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

21
the United States is a significant factor in determining whether the U.S. operation of a foreign
corporation is part of the domestic industry”).
In its most recent opinion on the topic, Certain Bone Cements, Components Thereof, And
Products Containing The Same, Inv. 337-TA-1153 Comm’n Op’n at 17 (January 12, 2021), the
Commission further clarified the necessary analysis for determining whether a domestic industry
exists when the complainant is a foreign manufacturer. 	“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.” 	Id. at 21. 	The first consideration is “the nature of
[complainant’s] activities in the United States related to its [domestic industry product],” which is
evaluated “to determine whether these activities should be considered for inclusion in an ‘industry’
in the United States.” 	Id. at 27. 	The investments in these activities are then compared to
complainant’s sales of its domestic product to determine if the expenditures in the United States
are significant when compared to its sales in the United States. 	Id. at 35-36. 	“In sum, . . . 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.” Id. at 27.
III. 	IMPORTATION AND SALE
Respondents “do not contest” that the accused products have been imported into the United
States. See RPB at 19; see also JX-0334C (Petermann Dep.) at 19:20-20:16, 21:14-25.

22
IV. 	JURISDICTION
The scope of the Commission’s in rem jurisdiction encompasses articles that are imported
into the United States. See 19 U.S.C. § 1337(a)(1)(C). In view of the Respondents’ statements
regarding importation of its accused products, 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). Zimmer 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 Commission.”).
Heraeus argues that the Commission lacks subject matter jurisdiction over at least the false
advertising and tortious interference allegations, because section 337 provides a remedy for unfair
acts and unfair methods of competition, which requires competition. 	Respondents argue that
Zimmer Biomet “no longer competes against Heraeus in selling Palacos.” RPB at 8. These are
substantive questions of fact, which will be addressed in the ID. Respondents do not, however,
contest that the Commission has subject matter jurisdiction over the trade secret misappropriation
allegations.
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).

23
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 these factors are relevant, each is discussed below with respect to each of
the asserted trade secrets, although the analysis is sometimes the same for all groups.
A. 	Trade Secret 10
Extent Trade Secret 10 Was Known Outside Zimmer
The U.S. Distribution and Supply Agreement dated January 1, 2012 (“2012 Agreement”)
(see JX-0204C, Section 2.4(c)) obligated Zimmer to
Under the 2012 Agreement, Zimmer also had
to

24
JX-0204C.0015. Zimmer asserts that the quarterly reports data that it
provided to Heraeus Germany between October 1, 2015 and December 31, 2018 is the data that
comprises TS 10. CPB at 12; see also Tr. (Armstrong) at 24:10-16; Tr. (Petermann) at 755:3-20
Section 3.1 of the 2012 Agreement obligated
Zimmer to
JX-0204C.0019-20; see also Tr.
(Armstrong) at 24:24-25:8.
Zimmer states that for trade secrets that are compilations, such as TS 10, “it is the secrecy
of the claimed trade secret as a whole that is determinative.” RIB at 12 (citing Restatement (Third)
of Unfair Competition § 30, cmt. F (1995)). The evidence shows that the compilations within the
2012 Agreement contained confidentiality provisions that were acknowledged by both Zimmer
and Heraeus. 	See JX-0204C.0113-0115; see also Tr. (Petermann) at 760:4-10 (“[T]his section
made very clear that we had to treat the quarterly report as confidential information under section
8.1.”); Tr. (Armstrong) at 24:17-23 (noting the quarterly reports were
1
Heraeus states that under Section 2.4(c) of the 2012 Agreement, Heraeus was authorized
to use the Quarterly Reports “for the purpose of building an internal sales organization for the
Products in the Territory or directly . . . selling the Products in the United States or Germany to
Zimmer’s customers in the Territory” from January 1, 2019 forward.” 	See Tr. (Blanchard) at
1 Staff points out that Zimmer customers also were expected to keep the terms of their respective
purchase agreements confidential. SPB at 24. While the confidentiality requested by Zimmer of
its customers shows that Zimmer intended this information to remain confidential, the individual
customers’ information is merely part of, and does not amount to, the compilations that comprise
TS 10.

25
213:23-214:2, 350:5-12. 	Thus, Heraeus argues that the limitation on the duration of the
confidentiality of the reports “demonstrates that [Zimmer] did not make a reasonable effort to
protect its trade secret.” RPB at 14 (emphasis in original). Heraeus further points to Investigation
No. 337-TA-1153, where a ten year time limitation on a confidentiality obligation was seen as
evidence against a finding that, in that case, the trade secret was not properly protected. Id. (citing
Certain Bone Cements, Components Thereof & Prods. Containing the Same, Inv. No. 337-TA-
1153, Hearing Transcript at 871:17-22, 350:13-352:25, 354:21-355:11)).
In this case, however, the TS 10 information (and, as will be discussed later, to an even
greater extent TS 11) is ephemeral because the lists of customers and prices change over time.
Thus, putting a time limit on this type of sales information is not unreasonable and does not place
the trade secrets in jeopardy for the time for which Zimmer protected them. Moreover, TS 10 is
defined as quarterly reports “supplied by Zimmer Biomet to Heraeus between October 1, 2015,
and December 31, 2018, pursuant to, and during the term of, the 2012 Distribution Agreement.”
By its own terms, therefore, TS 10 ceased to be a trade secret on January 1, 2019, and the time
limit Heraeus criticizes is not especially relevant.
In any event, the evidence shows that TS 10 was treated as confidential by both Zimmer
and Heraeus, and not widely known outside of Zimmer during the term of the 2012 Agreement,
regardless of the length of that term.
Extent TS 10 Was Known Inside Zimmer
The evidence shows that the specific compilations asserted to be TS 10 were not widely known
within Zimmer or within the industry at large. In particular, the data contained in the quarterly reports,
which is the asserted TS 10, was generated by Zimmer using PALACOS customer sales data captured
and stored by Zimmer’s PROS system, which

26
CX-3272C.0106-107 (Complainants’ 6th Supp. Response to Staff’s First
Set of Interrogatories); see also Tr. (Smith) at 115:25-116:1
see, e.g., CX-2172C; CX-2094C; Tr. (Armstrong) at 25:25-26:8; Tr. (Smith) at
125:6-8 (“Q: Does Trade Secret 10 comprise data that’s available via PROS? A.
”). Zimmer presented evidence that t he PROS system
Tr. (Smith) at 116:8-12; JX-0346C (Armstrong Dep.) at 79:4-21.
According to Zimmer’s team leader responsible for maintaining the PROS system, Mr. Michael
Smith, there are currently about 	total active users with access to PROS, while Zimmer
currently has about 10,000 U.S. employees and independent contractor sales reps. Tr. (Armstrong)
at 81:19-82:1. Furthermore, Mr. Smith testified that
Id. at 119:7-10, 25-120:2. 	As for the restricted access employees, Zimmer
requires that a PROS user must have
Tr. (Smith) at 117-120.
Heraeus argues that files exported from PROS are not automatically password protected or
marked confidential, thus negating trade secret security. JX-0352C (Kunkelmann Dep.) at 266:11-
16, 269:4-21, 270:7-10, 319:15-320:3; JX-0347C (Bezjak Dep.) at 310:15-311:7, 312:5-18, 313:8-
17; Tr. (Smith) at 121:23- 122:5, 149:1-19. Heraeus further argues that Zimmer does not police
its distributors’ protocols, and the distributor witnesses testified that
See, e.g., JX-0351C (Fox Dep.) at 47:6-17, 47:20-48:7 (
); JX-

27
0348C (Ervin Dep.) at 47:1-48:1
JX-0353C (Parker Dep.) at 101:19-102:6, 135:2-4, 135:13-136:18,
153:1-4, 153:9-154:1, 154:7-155:13
RX-0363C; RX-0365C.
Although Zimmer does not dispute these observations, Mr. Smith testified that
Tr. (Smith) at 118:20-25. 	Moreover,
Id. at 119:4-6. This limited amount of information is not TS
10, which Zimmer describes as the “[c]ompilation as a whole.” Thus, on balance TS 10 was not
widely known within the company.
Extent of Steps Taken By Zimmer to Guard Trade Secret 10
Zimmer had physical and contractual measures in place to protect its confidential information
internally, some of which have already been discussed. TS 10 was generated by and/or stored within
the PROS system, which is
Tr (Smith) at 117:20 – 118:1. Mr. Smith testified that
Tr. (Smith) at 117:20-118:11 (noting that
Mr. Smith further
testified that, as an additional security measure, a record of PROS user activity is
which allows Zimmer Biomet 	Tr. (Smith) at 121:17- 22; id. at
165:12-17

28
see also JX-0352C (Kunkelmann Dep.) at 274:5-10
See also CX-3272C.110-31 (Complainants’ 6th Supp. Responses to Staff’s 1st Set of Rogs)
(noting that, among other measures,
And
PROS users receive
Tr. (Smith) at 120:5-12;
see also CX-3167C (PROS Training Manual).
Zimmer also maintains a number of internal confidentiality protections, including
See CX- 3272C.0110-31 (Complainants’ 6th Supp.
Responses to Staff’s 1st Set of Interrogatories); JX-0347C (Bezjak Dep.) at 383:3-14
JX-0346C (Armstrong Dep.) at 32:1-33:14
see also Tr. (Blanchard) at 184:17-185:10 (listing a number of protective
measures undertaken by Zimmer). Zimmer has similar confidentiality provisions within its standard
agreements with its distributors and independent sales representatives. 	See, e.g., CX-2716C.0014
(Riccione Orthopedics Inc. Distributorship Agreement); CX-2700C.0012-.0013 (Zimmer Biomet
Oregon 	Distributorship 	Agreement); 	CX-2704C.0016-.0018 	(Ervin 	and 	Associates 	LLC
Distributorship Agreement); see also JX-0348C (Ervin Dep.) at 318:20-320:14. Zimmer’s distributors
also undertake measures to preserve the confidentiality of Zimmer Biomet’s sales data. See, e.g., JX-
0354C (Young Dep.) at 74:17-75:11 (Zimmer Biomet Southwest Ohio requires
JX-0348C (Ervin Dep.) at 320:15-322:3 (tying all of
distributor’s salespeople to 	including

29
324:15-22 (information stored in an employee’s email
account would be
Zimmer employees testified that Zimmer expected its customers to keep the terms of their
respective purchase agreements, including pricing, confidential. See, e.g., CX-2402C.0002; see also
Tr. (Smith) at 128:22-129:13 (Zimmer fact witness Michael Smith discussing the confidentiality
provision included in customer contracts); JX-0352C (Kunkelmann Dep.) at 114:19-115:7 (“So our
customers are bound by confidentiality.”), 153:5-16 (explaining the importance of ensuring customers
understand pricing information is confidential); Tr. (Senn) at 1074:12-18 (Heraeus’s expert testifying
that in the industry vendors typically consider sales and pricing information confidential); JX-0329C
(Vulgamott Dep.) at 51:15-21 (Heraeus witness agreeing it is “a common practice” in the bone cement
industry to not make customer-specific pricing and quantity information public). And to the extent it
reflects internal confidentiality, the 2012 Agreement itself contained confidentiality provisions that
were acknowledged by both Zimmer and Heraeus. See JX-0204C.0113-0115; see also Tr. (Petermann)
at 760:4-10 (“[T]his section made very clear that we had to treat the quarterly report as confidential
information under section 8.1.”); Tr. (Armstrong) at 24:17-23 (noting the quarterly reports were
required to be treated as “confidential for the purposes of section 8.1 [of the 2012 Distribution
Agreement]”).
Taken as a whole, Zimmer’s measures to protect its alleged trade secrets meet the required
standard of reasonableness. See Merckle GmbH v. Johnson & Johnson, 961 F. Supp. 721, 732 (D.N.J.
1997) (“The test is one of reasonable, not absolute, precautions, and the jury will be charged with
considering the entire record to determine whether Merckle’s alleged trade secrets were, in fact,
secret.”).

30
Value of Trade Secret 10 to Zimmer 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
can obtain economic value from its disclosure or use.” 	Uniform Trade Secrets Act (“UTSA”)
§1(4). The compilation of customer and pricing data identified as asserted TS 10 has independent
economic value; the data compiled within the PROS system, including the customer name,
customer address, quantity of PALACOS purchased, and price(s) paid for PALACOS, which make
up TS 10, has competitive value because such information is used “to inform pricing decisions”
and provides a “competitive advantage” when responding to customer pricing inquiries. See Tr.
(Smith) at 116:19-117:13; see also Tr. (Childers) at 938:2-939:3 (Heraeus corporate witness
testifying that knowing PALACOS usage data is valuable to sales efforts).
Even Heraeus’s witnesses testified to the importance of the TS 10 type of information. Mr.
Webb testified that Heraeus’s own targeting data base, which is similar to the PALACOS customer
database maintained in the Zimmer PROS system, was valuable in developing Heraeus’
PALACOS sales strategy. 	See Tr. (Webb) at 973:2-973:21; see also Tr. (Senn) at 1100:17-22
(Heraeus’ expert acknowledging that
Moreover, the data
compilations that are asserted as TS 10 (and TS 11, which is discussed later) were required to be
reported to Heraeus pursuant to the terms of the 2012 Distribution Agreement. JX-0204C.0015
(2012 Distribution Agreement); see also Tr. (Armstrong) at 24:13-16, 25:5-8; Tr. (Petermann) at
755:3-15.
And Heraeus used the data itself to
Tr. (Petermann) at 755:3-20; see also JX-0334C (Petermann Dep.) at

31
37:8-18
Thus, both Zimmer and Heraeus placed value on the
information contained in asserted TS 10 and TS 11.
Heraeus argues that “[c]ourts routinely reject affording trade secret status to information
with a short ‘shelf life’ in terms of usefulness and value. See, e.g., Abrasic 90 Inc. v. Weldcote
Metals, Inc., 364 F.Supp. 3d 888, 903 (N.D. Ill. 2019).” RPB at 21. Heraeus further submits that
“Zimmer admits that the information underlying TS 10 is ‘dynamic in nature, and [is] constantly
under development, based on an ever-changing marketplace for the sale of bone cements and bone
cement accessories.’ CX-3264C at Complainants’ Resp. to Interrogatory No. 2; see also Tr. (Senn)
at 1046:6-1047:2.” Id.
However, the allegations in this Investigation are of trade secret misappropriation that took
place between 2017 and early 2019. During this period, the data of TS 10 was valuable because,
as Zimmer notes, “it was customer-specific, detailed, accurate, and allegedly allowed Heraeus to
assess its market opportunity in the U.S., identify and prioritize PALACOS customers to target,
allegedly giving HMUS a head start on making sales and generating revenue – from both cement
and accessories. Tr. (Blanchard) at 208:14-216:8; CDX-0003C.31-39.” CPB at 18; see also JX-
0320C (Williamson Dep.) at 148:3-149:13
JX-0334C
(Petermann Dep.) at 55:8-57:10
JX-0331C (Kiontke Dep.) at 82:3-86:19, 113:15-115:16, 117:18-120:3

32
Therefore, TS 10 had independent economic value during the period of the alleged
misappropriation.
The Amount of Effort or Money Expended in Development
Staff argues that because the alleged trade secrets were not intentionally developed as such,
the evidence weighs against a finding that Zimmer actually expended great effort and/or money in
developing the alleged trade secrets. 	SPB at 16. 	Staff further submits that the compilations
comprising the alleged trade secrets were “merely the result of Complainants’ contractual
obligations to aggregate and report specific data to Heraeus.” Id. at 16-17. While this is technically
true, the fact remains that Zimmer expended effort and expense in creating the compilations that
are asserted as trade secrets. 	As Zimmer points out, “in order to generate sales data, Zimmer
Biomet must make sales in the first place, and doing so requires a significant amount of time and
effort, including establishing price guidelines, responding to RFP requests, negotiating with
customers, and making pricing decisions.” 	CPB at 23, citing Tr. (Armstrong) 25:25-26:18; Tr.
(Smith) at 108:3-6, 111:5-25, 167:17-23; Tr. (Blanchard) at 192:16-193:5, 193:23-194:9; Tr.
(DiGioia) at 442:19-444:11; Tr. (Shapiro) at 1233:24-1234:14.
Although such efforts presumably pale in comparison to, say, bone cement formulation
research and development efforts, the type of expenditure here is nonetheless recognized as a
legitimate effort in developing a trade secret. Whether the party creates the information to be a
trade secret in the first instance, or uses the information created over time to create a compiled set
of data that it treats as a trade secret, is of no moment. In Crawler, for example, Trade Secret 14
was defined as: “Manitowoc’s pricing of its cranes within the domestic industry targeted by the

33
Sany SCCS500 Crane, including distributor discounts, profit margins, unit and dollar volumes,
and manufacturing costs.” Crawler, Inv. No. 337-TA-887, Initial Determination, at 174. This was
found to be a trade secret, in part because Manitowoc:
spends substantial time and resources setting dealer discount prices. Many factors
are determined and analyzed prior to a discount being established, including dealer
stocking expectations, typical sales cycle and costs, product support requirements,
product development costs and retail purchase price. . . . Manitowoc expends
considerable time and effort developing its detailed cost and pricing information by
dedicating time during the development of each of its crane models to generating
that information. and by working with its dealers several times each year to get
feedback on its current pricing.
Id. Zimmer similarly presents evidence of its time, expense, and effort to create its own Crawler-
type compilations.
Thus, the effort put forth by Zimmer in creating the compilation that makes up TS 10
weighs at least somewhat in favor of finding that TS 10 is a protectable trade secret.
The Ease or Difficulty of Acquisition or Duplication by Others
Zimmer asserts that TS 10 includes the specific prices and quantities for all PALACOS
sold to Zimmer’s PALACOS customers, on a quarterly basis, during the life of the 2012
Agreement. 	Thus, Zimmer submits that TS 10 is extremely difficult to duplicate because
“someone would have to go speak with each and every customer . . . find out if [they are]
PALACOS users, how much they were using and how much they were paying for it” 	Tr.
(Blanchard) at 195:10-22.
Heraeus, on the other hand, argues that Zimmer’s bone cement pricing and customer
information is not secret because “it is common practice for customers to disclose the prices they
paid (including Zimmer’s) to competitors like Heraeus.” RPB at 20. Heraeus further argues that
“benchmarking organizations” such as Orthopedic News Network (“ONN”) gather the actual
invoice information from hospitals and medical centers and distribute pricing information to its

34
members. Id. at 18, 20 See also Tr. (Armstrong) at 61:5-62:7, 68:20-69:14, 70:3-6, 70:14-71:9,
71:12-14; JX-0177C (“2017 Bone Cement Update,” which includes pricing information); RX-
0976C (Zimmer marketing strategy, including pricing); Tr. (Childers) at 861:19-862:11, 878:19-
883:3; JX-0037C (emails between Heraeus and third parties, including pricing information); Tr.
(Senn) at 1015:4-25, 1019:11-16, 1019:24-1020:11, 1028:5-13, 1028:19-1030:10, 1038:17-
1040:14; JX-0344C (Mendenhall Dep.) at 19:2-22:17, 24:20-26:11, 36:6- 38:7, 39:12-41:1, 41:10-
22, 51:21-57:14, 59:11-60:22, 65:3-7, 68:1-14, 69:21-70:6. Finally, Heraeus argues that anyone
in the industry can ascertain the identity of Zimmer’s customers by asking a surgeon or hospital
what bone cement they currently purchase. RPB at 20; see also Tr. (Blanchard) at 258:15-269:3
(during her time at Zimmer she was able to determine which competitors’ bone cements the larger
customers were using and noting that surgeons will actually disclose exactly which products they
are using), 260:4-21 (agreeing that when a customer engages in all-play pricing, a vendor will
know the target price that all vendors must meet), 260:24-261:22 (agreeing that where customers
set capitated pricing, vendors competing for that business are aware of the price they must meet to
engage with that customer); 262:2-5 (admitting that customers “can, and sometimes they do” share
pricing information despite contractual confidentiality obligations).
While the evidence shows that some portions of the asserted TS 10 compilation may have
been easily ascertainable, the entirety of the specific PALACOS prices and quantities for all
customers in a given quarter was not easily ascertainable. 	Zimmer’s witnesses emphasized and
relied on the fact that the asserted trade secrets are compilations of data, rather than individual data
points. See, e.g., Tr. (Armstrong) at 27:11-15 (explaining that the “entire compilation of all that
data really represents the value of what our entire business is worth”); Tr. (Blanchard) at 252:10-
16 (agreeing that asserted TS 10 is a compilation of various data). 	None of the testimony and

35
evidence showing select pricing and quantity disclosures establishes that the entire compilation
claimed to be TS 10 was readily ascertainable from the various industry sources such as
benchmarking organizations, IDNS and GPOs, or customers themselves. As Staff points out, none
of the examples of industry sources demonstrate that the pricing and usage/quantity information
for all health systems using PALACOS in a given quarter (i.e., the compilation of data of asserted
TS 10) would have been known to and distributed by a given health system. SPB at 27.
Accordingly, the evidence shows that the compilation asserted as TS 10 is not readily
ascertainable. And balancing the evidence relating to all six parameters, Zimmer’s Trade Secret
10 is a protectable trade secret.
B. 	Trade Secret 11
Trade Secret 11 (“TS 11”) is defined as:
Annual rolling forecasts constituting inventory information, inventory forecasts,
sales forecasts, sales projections, and binding orders, as supplied by Zimmer
Biomet to Heraeus pursuant to Article III, et seq., of the 2012 Distribution
Agreement, supplied between October 1, 2015, and December 31, 2018.
Extent Trade Secret 11 Was Known Outside Zimmer
TS 11 was created from the
Tr. (Armstrong) at 28:4-13; 28:19-22 (TS 11
comprises 	that is used to
Zimmer was obligated to send this inventory forecast
information to Heraeus Germany pursuant to the terms of the 2012 Agreement. 	Thus, the
information always was known to Heraeus Germany, and within that organization, the Customer
Service Department provided the reports to Heraeus’s Market Intelligence department, who would
See 	JX-0311C.0091 	(Respondents’ 	8th 	Supp. 	Responses 	to

36
Complainants’ First Set of Interrogatories); Tr. (Petermann) at 822:16-21 (describing Ms. Thiele
as the Heraeus employee “responsible for the relationship with Zimmer Surgical”); see also JX-
0320C (Williamson Dep.) at 247:19-25
JX-0334C (Petermann Dep.) at 36:21-37:25
Zimmer argues, however, that TS 11 was protected as “Confidential Information” under
the 2012 Agreement, and thus, the limited number of Heraeus employees were the only outside
personnel who had access to this information. RRB at 5; see Tr. (Petermann) at 760:4-10 (“[T]his
section made very clear that we had to treat the quarterly report as confidential information under
section 8.1.”); Tr. (Blanchard) at 356:10-357:1, 358:8-359:1; JX-0204C.15, 33-34. To be sure, as
with the discussion regarding TS 10 above, Heraeus presented evidence showing that customer
pricing and sales information is readily ascertainable by those in the industry because the
customers themselves often share this data and it is published in various industry publications.
However, also similar to TS 10, no evidence was presented showing that the specific entire
compilations that are claimed as TS 11 are publicly known or known within the wider industry.
Thus, as with TS 10, the evidence shows that TS 11 was not widely known outside of
Zimmer.
Extent Trade Secret 11 Was Known Inside Zimmer
The discussion of Zimmer’s internal protection of TS 11 is similar to that of TS 10 because
the information used for TS 11 also is 	As discussed previously, the
limited number of employees involved in creating the compilations and the security measures

37
Zimmer uses in granting access to the PROS system illustrate that Asserted TS 11 was not
generally known within Zimmer.
Extent of Steps Taken by Zimmer to Guard Trade Secret 11
Zimmer asserts that TS 11 was protected “by the general measures Zimmer Biomet
undertakes to protect its confidential information discussed above . . . with respect to TS 10.” RRB
at 12. 	The Staff supports this position. 	SPB at 22-24. 	Heraeus presented no evidence to the
contrary.
Accordingly, the evidence shows that Zimmer took reasonable steps to guards TS 11.
Value of TS 11 to Zimmer and Competitors
The forecasts and inventory reports that comprise TS 11 were generated pursuant to the
terms of the 2012 Agreement, and the last of the rolling forecasts was provided to Heraeus long
before that Agreement terminated. 	See Tr. (Armstrong) at 76:7-10 (indicating the last time an
annual rolling forecast was provided to Heraeus was in September 2017 for the following 2018
year). 	Mr. Armstrong testified that each annual rolling forecast submitted to Heraeus was later
replaced by an updated quarterly forecast. 	Tr. (Armstrong) at 75:11-18. 	Furthermore, Mr.
Armstrong testified that the rolling forecasts did not contain customer identification information,
could not be used to target customers, did not include a price list or any pricing information
(including historical pricing data), could not be used to determine what price a customer paid or
what quantity they purchased, and did not include any Zimmer Biomet sales or marketing strategy
information. Tr. (Armstrong) at 76:11-78:4. Finally, Heraeus’ expert Mr. Senn opined that these
rolling forecasts have no real value, at least because the forecasts are constantly updated and
replaced, rendering the prior forecast obsolete. Tr. (Senn) at 1065:23-1066:3.

38
Zimmer argues that TS 11 was valuable to understand forecasts and to determine its current
inventory, and that TS 11 was valuable to Heraeus because Heraeus had no other source of U.S.
market information at the time. 	CPB at 32. 	However, the fact remains that the information
contained within TS 11 became outdated every quarter and was necessarily especially ephemeral.
Thus, TS 11 had little independent economic value to Zimmer and its competitors.
The Amount of Effort or Money Expended in Development
Zimmer failed to provide much information or evidence related to its effort expended in
developing TS 11. The only statement Zimmer made regarding such effort is that it
which required tremendous
efforts and investments.” CPB at 33. Zimmer relied on and compared the effort it expended in
creating TS 10 as translating to effort in developing TS 11. Such a comparison is not especially
apt; TS 10 is a relatively comprehensive compilation of data, while TS 11 is a collection of short-
lived forecasts. 	Generating such forecasts may have required considerable effort, but Zimmer
provided little evidence of that.
Therefore, this factor does not weigh in favor of finding that TS 11 is a protectable trade
secret.
The Ease or Difficulty of Acquisition or Duplication by Others
The information within TS 11, which was provided by Zimmer to Heraeus pursuant to the
2012 Agreement, was likely not easily ascertainable to the public or to competitors other than
Heraeus, because it constituted forecasts and projections. 	Nonetheless, Zimmer provides no
evidence specific to TS 11 regarding this factor (see CPB at 35), and it stands to reason that TS 11
could have been readily duplicated by Heraeus. The evidence shows that Heraeus

P| As Heraeus states, even apart from any Zimmer reports “Heraeus Germany knew how
much inventory it sold to Zimmer because Heraeus Germany manufactured and shipped those
exact quantities to Zimmer.” RPB at 24 (emphasis in original) (citing Tr. (Petermann) at 833:21-
834:4, 834:21-23: Tr. (Senn) at 1064:15-1065:3).2

On balance, not all factors weigh against the status of TS 11 as a trade secret. In particular,
TS 11 was not known to a great extent either inside or outside of Zimmer, and Zimmer took
reasonable steps to keep TS 11 secret. However, Zimmer failed to adequately show how valuable
the information of TS 11 was, what effort went into creating the information, and how easy or
difficult it was for others to ascertain the information of TS 11. In fact, the evidence shows that
Heraeus itself was likely fully capable of generating the same forecasts and projections of TS 11
independently of Zimmer’s input. On balance, therefore, TS 11 is not a protectable trade secret.

Cc. The Asserted Trade Secrets 15 and 28

In its Post-Hearing Brief, Zimmer defined Trade Secrets 15 and 28 to “comprise

compilations of customer and sales data stored in and accessible via the PROS system. The ‘For

2 Staff points out that there is some evidence suggesting that Zimmer also readily provided the
type of inventory/forecast information alleged to be asserted TS 11 to companies with whom it did
not have a confidential business relationship. For example, when trying to sell Palacos R+G
cement, Zimmer’s VP for Group Purchasing Organizations

SPB at 28, n. 22. Even discounting this evidence,
al factor does not weigh in favor of protectability.
39

40
Peterson’ file is an embodiment of TS 15 and 28.” CPB at 33-34 (citing CX-2622C; Tr. (Senn)
at 1081:8-15). The evidence shows that the “For Peterson” file was downloaded from the Zimmer
PROS system by a former Zimmer employee the evening before his final day at Zimmer. 	Tr.
(Smith) at 123:15-23. Zimmer’s fact witness, Michael Smith, testified that the “For Peterson” file
“includes a full customer list for the Mid-Atlantic territory [as well as] a substantial amount of
invoice data for that territory related to bone cement and accessories.” 	Tr. (Smith) at 123:24-
124:3; 162:13-18 (the data in the “For Peterson” file is limited to data from 2016 to 2017). Staff
further notes that asserted TS 15 includes customer sales data for accessory products (in addition
to PALACOS bone cements) while asserted TS 28 is identified as invoice-level PALACOS sales
information stored in the PROS system. 	SPB at 29, n. 23. 	Naturally, many of the factors
considered above for TS 10 and 11 will apply to the alleged TS 15/28 because these also are
compilations residing on the PROS system.
Extent Trade Secrets 15 and 28 Were Known Outside Zimmer
As noted, the compilations that make up TS 15/28 were stored on the PROS system. Thus,
the same precautions that Zimmer took in protecting TS 10 from disclosure are equally applicable
with respect to TS 15/28. 	See CPB at 34. 	However, the customer-specific data related to the
accessory product sales that were in the “For Peterson” file was not information that Zimmer was
obliged to share with Heraeus under the 2012 Agreement. 	Tr. (Smith) at 124:4-25; JX-0328C
(Burns) at 196-201. Thus, the compilations of TS 15/28 were not known outside Zimmer until the
“For Peterson” file was created and removed from Zimmer on a thumb drive.
Extent Trade Secrets 15/28 Were Known Inside Zimmer
The in-house protection of Zimmer’s TS 15/28 is the same as its protection of TS 10,
because all the information was stored on the PROS system. In fact, the “For Peterson” file itself

41
was technically known only to Mr. Burns, because he logged into PROS and personally generated
it. 	See JX-0328C (Burns) at 187:18-188:14, 201:25-202:6, 209:2-14. Thus, TS 15/28 were
reasonably protected within Zimmer.
Extent of Steps Taken By Zimmer to Guard Trade Secrets 15/28
The same steps taken to protect TS 10 were taken by Zimmer in protecting TS 15/28
because, again, this information resided on the PROS system. 	Accordingly, Zimmer took
reasonable steps to guard TS 15/28.
Value of Trade Secrets 15/28 to Zimmer and Competitors
The evidence regarding the value of asserted TS 10 also is generally applicable to the “For
Peterson” file, because the “For Peterson” file consists of a compilation of specific customer
pricing and usage/quantity data aggregated for bone cement products and accessory products for
Zimmer’s customers in its Mid-Atlantic sales region. 	See CX-2622C. 	Thus, similar to the
discussion of asserted TS 10, the data compilation in the “For Peterson” file has competitive value
because it may be used to
Tr. (Smith) at 125:9-21.
Zimmer argues that the “For Peterson” file actually had additional value over TS 10 data
because it
CX-2622C; Tr. (Blanchard) at 239:3-10; Tr. (Senn) at 1053:11-17. This stands to
reason; the value of TS 15/28 to Heraeus was increased because
CPB at 35 (citing JX- 0320C (Williamson Dep.) at 65:8-23). Moreover,
for Heraeus such specific information had particular value because
Id. (citing CX-1727C.0012).

42
Overall, TS 15/28 was valuable to itself and to Heraeus.
The Amount of Effort or Money Expended by Zimmer
Zimmer did not present evidence regarding the development of TS 15/28, but instead relied
on the evidence related to TS 10. See CPB at 35. As pointed out by Staff, Zimmer presented no
evidence quantifying its efforts related solely to the development of the “For Peterson” file, nor is
there an apportionment of efforts specific to the aggregation of the data in the “For Peterson” file.
SPB at 31. In fact, the evidence indicates that the data within the PROS system is
See, e.g., CX-3272C.0106-107 (describing the
many different types of data compiled and stored in PROS
Tr. (Smith) at 164:9-23 (PROS has 	”
that have been 	165:1-4 (describing
how sales data
Therefore, the evidence does not indicate that Zimmer expended great effort or money in
developing TS 15/28 beyond that of TS 10.
The Ease or Difficulty of Acquisition or Duplication by Others
Zimmer also did not present evidence regarding ease or difficulty of duplication by others.
See CPB at 35. Nonetheless, because TS 15/28 contains detailed, customer-level information as a
compilation of various sources, it is likely that others (including Heraeus) would have been hard-
pressed to duplicate it. See JX-0309.0001-2 (Complainants’ Fifth Updated Final Identification of
Trade Secrets, defining Asserted TS 15/28 as customer lists that contain detailed customer contact
and sales information, including data such as customer identification information, customer
contact information, product and quantity sold information, sales price or average sales price,

43
invoice data, and revenue). And no evidence was presented to show that the entire compilation
was easily procured. Thus, TS 15/28 was not easy to acquire and/or duplicate by others.
On balance, although not all factors weigh heavily in favor of protectability, more do than
with TS 11, and the fact that TS 15/28 essentially did not exist until it was created by one person
suggests a confidentiality and value that far exceeds that of TS 11. 	Therefore, TS 15/28 are
protectable trade secrets, largely based on the same analysis as for TS 10.
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)).
Zimmer alleges that it owns the trade secrets because its “personnel, affiliates, agents, and
independent contractors” developed the information “for use in carrying out Zimmer Biomet’s
business.” CPB at 35-36 (citing Tr. (Armstrong) at 31:12-22; Tr. (Blanchard) at 223:23-224:9).
Respondents dispute that Zimmer actually developed and owns the asserted trade secrets, claiming
Zimmer “inherited many legacy customers from Smith & Nephew, a distributor that Heraeus

44
engaged to sell PALACOS in the United States before Biomet and Zimmer Biomet. In fact,
Zimmer has not provided any evidence that it initially created the relationships with the customers
it claims are trade secrets.” RPB at 25-26 (citing RX-2316C (Krebs Dep.) at 28:21-25, 29:8-10,
45:2-5
This
argument is misplaced. The trade secrets are detailed compilations of information gathered over
the course of a few, recent years. Even if the Smith & Nephew witness’ testimony is accurate –
and the activity referred to occurred almost 25 years ago – there is no direct evidence of specific
information that was shared between Zimmer and Smith & Nephew, nor is there sufficient
evidence to undermine the conclusion that Zimmer developed, possesses, and uses the trade secrets
asserted here (including TS 11, even though it is not protectable).
On balance, therefore, the evidence shows that Complainants possess these secrets and
have the right to use them in their business, and have kept the compilations secret such that they
own them. See Tr. (Armstrong) at 24:13-25:8, 25:25-26:8, 28:4-13 (quarterly reports and rolling
forecasts/inventory), 29:11-23, 30:15-21 (“For Peterson” data), 31:12-13 (testifying that Zimmer
is the owner of the asserted trade secrets); Tr. (Blanchard) at 223:23-224:9.
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 example, 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 the respondent “wrongfully took Complainant’s trade secrets by unfair means”

45
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).
TS 10 and TS 11
The information embodied in TS 10 (and TS 11, to the extent it is found to be a protectable
trade secret) was shared by Zimmer with Heraeus Germany under the 2012 Agreement.
Specifically,
JX-0204C.0015, .0019. 	Heraeus
Germany was required
JX-
0204C.0033-0034; Tr. (Petermann) at 760:4-10, 761:18-23; Tr. (Blanchard) at 190:16-191:22; JX-
0334C (Petermann Dep.) at 36:21-37:5, 40:25-41:133, 46:4-10; JX-0320C (Williamson Dep.) at
40:17-18, 42:1-20, 43:4-6, 47:14-18. 	Moreover, Heraeus Germany was required
JX-0204C.0034, § 8.1(d); Tr. (Blanchard) at 186:2-18; JX-0362C (Hofer Dep.) at 84:11-
86:2; JX-0363C (Rohn Dep.) at 53:3-54:9.
Therefore, Respondents obtained TS 10 and TS 11 from Complainants while in a
confidential relationship.
TS 15/28
The evidence shows that James “Worth” Burns, Zimmer Biomet’s Director of Enterprise
Solutions for the Southeastern United States, left Zimmer on December 15, 2017 to become
Heraeus’ Regional Sales Director, Mid-Atlantic. JX-0328C (Burns Dep.) at 177:6-17; CX-0116
(Burns resumé). 	The night before leaving Zimmer, Mr. Burns exported TS 15 and TS 28,

46
containing bone cement and accessory customer information and sales data from the Mid-Atlantic
region from Zimmer’s PROS system, saved it on a USB key, naming the file “For Peterson,” and
took the USB key with him. JX-0328C (Burns Dep.) at 177:6-17, 186:19-195:13, 210:2-5; CX-
2278C; Tr. (Senn) at 1081:8-15. The information on the “For Peterson” file included, in addition
to some information that was disclosed to Heraeus under the 2012 Agreement, additional
customer-specific data concerning accessory products. Tr. (Blanchard) at 184:5-12. This was a
violation of his employment agreement with Zimmer Biomet. CX-2268C; see Tr. (Armstrong) at
123:15-18 (noting that CX-2622C is the file Mr. Burns downloaded from PROS); Tr. (Blanchard)
at 239:3-10. Zimmer alleges that Mr. Burns then used the “For Peterson” file to perform his job
duties at Heraeus, which makes Heraeus “liable for Mr. Burns’ action because he was acting within
the scope of his employment.” CPB at 76.
Zimmer’s position is not supported by the evidence. Absolutely no evidence was presented
that showed that Heraeus hired Mr. Burns in order to obtain the data contained in the “For
Peterson” file. Instead, the evidence shows that Heraeus had no knowledge of the “For Peterson”
file or its relationship to Mr. Burns. See Tr. (Childers) at 851:6-18 (testifying that neither he nor
anyone else at HMUS were aware that Mr. Burns had taken information from Zimmer Biomet at
the time Mr. Burns joined Heraeus). In fact, Heraeus did not seek Mr. Burns out for employment
– Mr. Burns sought employment with Heraeus. JX-0328C (Burns Dep.) at 151:10-152:10. And
the “For Peterson” file contained information regarding the Mid-Atlantic region, but while
employed with Zimmer, Mr. Burns was responsible for sales activity in the Southeastern part of
the United States. See JX-0328C (Burns Dep.) at 149:12-18, 49:11-50:20, 177:21-24; see also JX-
0311.0069 (Resp. 8th Supp. Responses to 1st set of Interrogatories). Mr. Burns would not have

47
been able to use the “For Peterson” file to carry out his duties at Heraeus, and there is no evidence
he disclosed the file to anyone who would have been able to do so.
The evidence further shows that Heraeus and Mr. Childers (Mr. Burns’ superior) did not
even become aware of Mr. Burns’ actions with respect to “For Peterson” file until the Indiana
litigation. Tr. (Childers) at 851:6-18. And finally, Mr. Childers testified that he had never seen
the contents of the “For Peterson” file. Tr. (Childers) at 852:6-8.
Therefore, there was no disclosure or wrongful taking by Heraeus of TS 15/28.
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 [it] is relied on to assist or accelerate
research or development.” 	Certain Crawler Cranes, Initial Determination, at 26-27 (citing
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.
TS 10
Disclosures by Heraeus Germany to Third Parties
Zimmer alleges that Heraeus wrongfully disclosed TS 10 to a number of third parties, and
these disclosures amounted to a wrongful use that caused injury to Zimmer. 	However, the
evidence fails to show either wrongful disclosure or injury. As has been discussed throughout this
case, Zimmer’s alleged trade secrets are compilations, and “it is the secrecy of the claimed trade
secret as a whole that is determinative.” Restatement (Third) of Unfair Competition § 30, cmt. F
(1995)(emphasis added). 	The Staff argues that since Complainants relied on a specific
“comprehensive 	compilation 	of 	customer-specific 	prices” 	to 	establish 	the 	existence 	of 	a

48
protectable trade secret, “evidence showing anything less than the use of the ‘comprehensive
compilation’ is not sufficient for Zimmer Biomet to carry its burden of proving misappropriation.”
SPB at 37, n. 31. In other words, “the very characteristics of a ‘comprehensive compilation’ that
were used to shield the asserted trade secret from being deemed publicly known or readily
ascertainable cannot then be used as a sword to allege misappropriation with only some partial
portion of the compilation.” Id. I agree. And because Zimmer fails to present evidence that the
entire compilation (or even a majority of information within the compilation) that makes up TS 10
was ever disclosed to any party, Zimmer has not shown that TS 10 was misappropriated. See Tr.
(Senn) at 1063:15-22 (opining that the entire compilation was not disclosed); see also Tr.
(Blanchard) at 194:19-23 (Zimmer’s expert agreeing that she had seen no evidence that substantial
portions of asserted TS 10 had been shared beyond Zimmer and Heraeus).
Nonetheless, Zimmer’s specific allegations will be addressed. 	Zimmer contends that
Heraeus Germany improperly shared information derived from a Quarterly Report (which, in part,
makes up TS 10) with 	in May 2017. Tr. (Blanchard) at 205:15-
206:13; see also Tr. (Senn) at 1054:14-1058:4.
JX-0334C (Petermann Dep.) at 160:22-161:16; 770:21-
25; CX-1729C; JX-0320C (Williamson Dep.) at 105:2-19. 	For that workshop, 	asked
Heraeus Germany to provide a
Tr. (Blanchard) at 205:23-206:4; CX-1358C. Zimmer alleges that the
information that Heraeus Germany sent to 	was “derived from TS 10 data.” 	CPB at 54.
Zimmer, however, does not even allege, much less prove, that 	received the whole of TS 10.

49
For its part, Heraeus contends that “the alleged use or disclosure was permitted by the
Agreement, which allowed Heraeus Germany to
RPB at 31-32, citing JX-0204C.0034, §
8.1(b). Heraeus offers evidence that
Tr. (Petermann) at
771:25-772:6. Moreover, the information was subject to the parties’ NDA, which restricted
use or disclosure of the document. 	CX-1729C; Tr. (Petermann) at 771:25-772:6; JX-0320C
(Williamson Dep.) at 105:2-12. Such evidence rebuts any claim of wrongful taking of TS 10 by
Heraeus.
Zimmer also alleges that Heraeus Germany misappropriated TS 10 in 2017 when it gave
information, which was derived from a Quarterly Report, to
Tr. (Petermann) at 774:21-25; JX-0334C (Petermann Dep.)
at 48:3-49:1. Heraeus’ discussions with 	took place in May-September 2017 and
were subject to an NDA. 	Tr. (Petermann) at 775:1-776:2; JX-0158C. 	The information that
Heraeus provided 	was, as even Zimmer describes, “abridged TS 10 data” and data
“derived” from TS 10. CPB at 58, 57. The information consisted of a chart that contained three
numbers allegedly derived from a 2016 Quarterly Report:
and 	CX-3261C.
Heraeus Germany also provided data identifying customers as low- to high-volume. Tr.

50
(Petermann) at 775:8-18; JX-0320C (Williamson Dep.) at 158:2-159:1; JX-0334C (Petermann
Dep.) at 98:13-17. 	Therefore, Heraeus did not share with 	any of the Quarterly
Reports, any pricing, quantities sold, or customer identification information. Tr. (Petermann) at
774:21-778:4, 804:16-21, 805:1-808:8, 809:5-22. 	As Heraeus points out, “the numbers shared
with 	cannot constitute a disclosure of Trade Secret 10 because most of the numbers are
round-number ‘approximations,’ and the numbers do not correspond with the data in the alleged
source document.” RPB at 32, citing Tr. (Senn) at 1055:8-1056:3. Thus, the information that was
given to 	was neither precise nor substantial enough to “enable[ ] another to learn
the trade secret.” Restatement (Third) of Unfair Competition § 40, cmt. (c).
Finally, Zimmer alleges misappropriation of 	TS 10 when Heraeus 	Germany sent
a presentation marked “Confidential!” in July 2017. 	JX-0139C; CX-1496C.
According to Zimmer, this presentation included “the same statistics derived from a substantial
portion of TS 10 data for 2016 that were shared with 	CPB at 60 (citing 	JX-
0139C.0016). As discussed, this type of information does not amount to TS 10 because it is not
the 	entire 	compilation. 	Furthermore, 	Heraeus 	signed 	confidentiality 	agreements 	with
dated July 31, 2017 (RX-2469C), September 11, 2017 (RX-2470C), and October
10, 2017 (CX-0347C).
Zimmer therefore fails to prove that TS 10 was wrongfully misappropriated by Heraeus’
communications with third parties.
Wrongful Use By HMUS
Zimmer alleges that Heraeus Germany’s transmission of its internal analyses of the
Zimmer Quarterly Reports to Mr. Childers was improper. However, when Heraeus Germany sent
the Quarterly Reports to Mr. Childers, he was Heraeus Germany’s U.S. country manager. 	Ms.

51
Petermann testified that sending such files to Mr. Childers at that time was in keeping with its
practices of sharing the same analyses with his predecessor as U.S. country manager, Tom
Stafford. Tr. (Peterman) at 756:23-757:17. Thus, this type of transmission was not misuse of the
trade secret, but was instead allowed under the 2012 Agreement. JX-0204C.0034.
Zimmer also cites a number of specific incidents that it submits proves misuse of TS 10 by
Mr. Childers and others at HMUS. 	However, the evidence that Zimmer offers is speculative.
Zimmer used forensic evidence from HMUS employees’ computers, but was only able to compare
versions of the PALACOS customer USA file that originally was sent from Heraeus Germany to
files that were on HMUS employees’ computers. 	CPB at 42-43. 	According to Zimmer, “Mr.
Childers relied extensively on the PALACOS Customers USA File to
” CPB at 44 (citing, inter alia, CDX-0048C.4-5; CDX-0046C, rows 74-75, 80-81, 83-84,
88, 93, 95-98 (indicating file was in an open state on each of Jan. 30-Feb. 2, twice on Feb. 6, on
Feb. 8, twice on Feb. 13, on Feb. 14, and twice on Feb. 15, 2018)). Zimmer further alleges that
Mr. Childers sent a “modified version of the PALACOS Customers USA File to Robert Kolbe.”
CPB at 46. 	Mr. Kolbe allegedly then saved the file and modified it by listing customers in
alphabetical order by state, and then in descending order by Sales Amount within each state, and
sent his version to National Sales Directors, Paul Cruz and Keith Vulgamott on January 1, 2018.
Id. at 46-47. 	Zimmer followed the forensic trail of these files and notes that the PALACOS
customers USA File was “in an open state 50 times on 19 separate dates” between Jan 20 and
February 15, 2018. Id. at 48 (emphasis in original). Zimmer also followed the forensic trail of
Mr. Vulgamott’s computer and found that Mr. Vulgamott created files containing region-specific
folders. Id. at 49 (emphasis in original).

52
Zimmer alleges that this forensic evidence proves that HMUS used the TS 10 files in 2017
and 2018 “for purposes of setting up a sales force and making sales, in direct contravention of the
Distribution Agreement.” CPB at 52. However, this evidence shows no more than that certain
files were opened, saved, and sent to others. By contrast, Heraeus employees testified (both during
the evidentiary hearing and by deposition) that they did not rely on information obtained from
Zimmer Quarterly Reports. See, e.g., JX-0339C (R. Kolbe Dep.) at 44-47; JX-0335C (Cruz Dep.)
at 59-60, 80-81; Tr. (Childers) at 870:17-871:4; Tr. (Webb) at 972:10-973:1. 	Mr. Vulgamott
claimed he did not recall making or using these files. 	JX-0329C (Vulgamott Dep.) at 107-116
(discussing JX-0154C), at 130-136 (discussing CX-1677C), at 122-123 (discussing JX-0153C), at
123-128 (discussing JX-0155C), 126-138. He also denied using the PALACOS Customers USA
File to perform his job duties. Id. at 135:1-136:24.9. Mr. Kolbe could not recall why he sent Cruz
and Vulgamott the file, or if he discussed it with them. JX-0339C (R. Kolbe Dep.) at 100:9-101:15.
Mr. Cruz does not recall opening the “Copy of PALACOS Customers USA FY 2016” file that he
received from Mr. Kolbe or discussing the email with Mr. Kolbe. 	JX-0335C (Cruz Dep.) at
151:13-152:18. 	He also does not recall seeing the file before, or saving it to his computer, or
editing it. JX-0335C (Cruz Dep.) at 170:5-172:7. And Heraeus presented evidence that HMUS
spent considerable time and effort developing a customer target database primarily from CMS
data. Mr. Webb, HMUS’ Vice President of marketing, testified in detail how HMUS was able to
independently develop a targeting database in approximately two weeks of work for less than
$7,000. Tr. (Webb) at 971:12-21, 969:7-14.
So the forensic evidence of use of Zimmer Quarterly Reports by Heraeus does not show
misappropriation, and the totality of the record does not support a finding of misappropriation of
TS 10 by Heraeus.

53
TS 11
As discussed above, TS 11 is not a valid trade secret. 	However, to the extent TS 11 is
found protectable, the evidence fails to show wrongful use by Heraeus causing injury to Zimmer.
Zimmer alleges that, “Heraeus misappropriated TS 11 in 2017 when it used the ‘2018 Forecast
and Binding Order’ to evaluate its 2018 market opportunity.” CPB at 61 (citing CX-1307C.0003).
Zimmer further alleges that Heraeus “misappropriated TS 11 in mid-2018 when it used the
information to decide not to fill Zimmer Biomet’s firm orders and project when Zimmer Biomet
would run out of PALACOS.” CPB at 62 (citing JX-0334C (Petermann Dep.) at 135:23-137:8;
CX-1319C; CX-1365C; CX-1366C).
Zimmer provides little to no evidence of misappropriation and misuse of TS 11. To the
extent Heraeus used the rolling forecasts and inventory information of asserted TS 11, the evidence
shows that the use was permitted under the terms of the 2012 Agreement because the use was “in
connection with the discharge of [Heraeus’s] obligations.” 	JX-0204C.0034, § 8.1(b); see also,
e.g., Tr. (Petermann) at 763:9-764:12; JX-0334 (Petermann Dep. Tr.) at 140:5-141:9. As discussed
earlier, Heraeus Germany did not need TS 11 data because it knew how much inventory it sold to
Zimmer. 	RPB at 24 (emphasis in original) (citing Tr. (Petermann) at 833:21-834:4, 834:21-23;
Tr. (Senn) at 1064:15-1065:3)). 	Furthermore, as Staff points out, Complainants’ expert Dr.
Blanchard 	provided 	no 	opinion 	or 	evidence 	that 	asserted 	TS 	11 	was 	misappropriated.
Consequently, there is insufficient evidence of misappropriation of TS 11.
TS 15/28
As noted, TS 15/28 are valid trade secrets but were not wrongfully taken by Heraeus.
Assuming they were, however, Zimmer points to misuse of the “For Peterson” file by HMUS
through its forensic expert, Mr. Vaughn. 	Mr. Vaughn testified that the “For Peterson” file was

54
opened (from a flash drive) on Mr. Burns’ Heraeus computer on the same day the “Worth Burns -
First 200 Hospitals” list was opened and sent to Mr. Burns by Mr. Webb, the National Sales
Director at HMUS. See, e.g., Tr. (Vaughn) at 371:13-23, 391:23-392:12. This evidence fails to
prove misuse. 	First, the fact that these two files may have been open “around the same time”
proves nothing, and certainly does not prove that Heraeus misused information on the “For
Peterson” file in some way. Moreover, there is no evidence, even from Zimmer’s forensic expert,
that the files were definitely open at the same time. 	Tr. (Vaughn) at 371:3-23, 408:23-409:7.
Second, there is no evidence that any information was transferred between the files (Tr. (Vaughn)
at 409:21-24, 410:23-411:1, 411:24-412:12), or that the “For Peterson” file was ever saved onto
HMUS’ computer systems, or that any other HMUS employees were aware of or used the file.
Therefore, there is insufficient evidence of misappropriation of TS 15/28 by Heraeus.
D. 	Summary
In summary, Heraeus did not use or misappropriate protectable trade secrets TS 10 and TS
15/28, and to the extent it is found to be a protectable trade secret, also did not use or
misappropriate TS 11.
E. 	Harm to Zimmer by Misappropriation
The finding that none of the asserted trade secrets were misappropriated used by Heraeus
results in a finding that Zimmer did not suffer injury.
Should misappropriation of Zimmer’s purported trade secrets be found, however, Zimmer
has failed to show that the misappropriation resulted in injury to Zimmer’s domestic industry. In
brief, Zimmer alleges “lost sales, lost market share, and price erosion,” as well as a threat of future
injury. CPB at 141-42. However, they offer no evidence connecting that allegation to TS 15/28

55
and do not even allege injury arising from misappropriation of TS 11; they instead focus on TS
10. See id. at 119, 134 (“misuse of TS 10, 15, and 28 data”); see generally id. at 119-42.
Zimmer has not sufficiently shown that any of the disclosures of TS 10 to third parties
resulted in injury. As to 	for instance, Zimmer asserts that Heraeus relied on the data and
advice 	provided to
giving Heraeus a head start to unfairly compete with Zimmer. 	See CPB at 123. 	But Heraeus’
engagement of 	See Tr. (Petermann) at 770:17-
20; JX-0334C (Petermann Dep.) at 161:2-16. Zimmer does not show a sufficient nexus between
such limited interactions with 	and a loss of customers or other harm in 2018. As to
Zimmer fails to show any connection between any disclosure to 	and injury
to Zimmer. 	See CPB at 121. In fact, Heraeus Germany ultimately did not
Tr. (Petermann) at 777:16-778:4. And as to
although there is evidence 	Zimmer does not
even attempt to link that work to any harm Zimmer suffered. See JX-0325C (Wilemon Dep.) at
32:9-33:4; 69:9-70:2; see generally CPB at 119-42.
Similarly, Zimmer’s evidence of injury arising from HMUS’ use of TS 10 is speculative
and lacks a nexus between the trade secret – which, again, is a compilation, not bits and pieces of
data – and the injury alleged. See CPB at 122-24. Lastly, Zimmer fails to provide any evidence
that Mr. Burn’s creation and taking of the “For Peterson” file resulted in any particular injury to
Zimmer. See CPB at 119. As noted, there is insufficient evidence Mr. Burns or anyone at Heraeus
ever even used the data within the file. See, e.g., Tr. (Vaughn) at 370:24-371:23 and CDX-0006C.6
(finding only a single instance in which the USB drive with the “For Peterson” file was connected
to Mr. Burns’ Heraeus work computer).

56
Thus, Zimmer cannot prove injury based on trade secret misappropriation.
VII. 	HERAEUS’ DEFENSES
Heraeus raises five affirmative defenses: (1) Heraeus independently developed its own
customer target lists and pricing; (2) Heraeus’ purported use and disclosure was licensed; (3)
Zimmer cannot obtain prospective relief for past harm; (4) Zimmer’s claims are barred by its
unclean hands; and (5) Zimmer’s claims are barred by its prior material breaches. RPB at 46-52.
A. 	Heraeus Independently Developed its Own Data Compilation
Heraeus alleges that it independently developed the customer target lists and pricing that it
used when it began selling PALACOS in the United States. 	RPB at 66-70. 	As discussed
previously, Heraeus presented witnesses who testified that HMUS spent independent time and
effort developing a customer target database primarily from CMS data. Mr. Webb, HMUS’ Vice
President of marketing, testified in detail how HMUS was able to independently develop a
targeting database in approximately two weeks of work using less than $7,000. 	Tr. (Webb) at
971:12-21, 969:7-14. Moreover, the record shows that customer and pricing information is readily
available from a number of sources, including customers and industry organizations and
publications.
Zimmer’s critique of this evidence, in sum, is that the testimony of Messrs. Webb and
Childers is not credible in light of the evidence that they had access to TS 10 while developing
Heraeus’ own data compilation. See CRB at 18-22. But speculation cannot replace hard evidence,
and as noted, Heraeus’ witnesses testified that they did not rely on TS 10 in creating their own
work product. Thus, Heraeus proved that it independently developed its customer lists and pricing.

57
B. 	Heraeus’ Use Was Not Licensed
Heraeus argues that it cannot have misappropriated Zimmer’s alleged trade secrets because
the 2012 Agreement provided Heraeus with license to use and disclose them. See JX-0204C.0034,
§ 8.1(b); see also Tr. (Petermann) at 760:13-18, 762:5-11; JX-0363C (Rohn Dep.) at 56:15-57:23.
Heraeus further argues that the 2012 Agreement expanded Heraeus’ right to use the Zimmer
Quarterly Reports after January 1, 2019. See JX-0204C.0015, § 2.4(c); Tr. (Blanchard) at 213:23-
214:2, 350:5-12; JX-0362C (Hofer Dep.) at 88:1-4. 	Zimmer makes little effort to refute these
points other than speculation regarding Heraeus’ actions and earlier statements. See, e.g., CRB at
23. Nonetheless, Heraeus presents no evidence of a license agreement separate from its evidence
that the 2012 Agreement permitted it to use the data contained in TS 10 and TS 11, and it does not
even address TS 15/28. See RPB at 51. Staff is therefore correct that insufficient evidence has
been presented to support this defense. See SRB at 20.
C. 	No Prospective Relief for Harm Relating Only to PALACOS Sales
Heraeus 	asserts 	that 	Zimmer 	cannot 	obtain 	relief 	for 	the 	asserted 	trade 	secret
misappropriation because the purported misappropriation ceased, and any alleged injury also
ceased before the initiation of this Investigation. RPB at 71. To the extent that Zimmer’s claims
for relief arise from rights to sell PALACOS, such claims are, in fact, moot, because Zimmer no
longer possesses such rights. See, e.g., Certain Elec. Fireplaces, Components Thereof, Manuals
for Same, Certain Processes for Mfg. or Relating to Same and Certain Prods. Containing Same,
Inv. No. 337-TA-791/826, Comm’n Op. at 9 (May 1, 2013) (EDIS Doc. ID 510087) (“Electric
Fireplaces”) (vacating as moot a finding of violation to the extent it was based on expired contract
provisions); see also Certain Lighting Control Devices Including Dimmer Switches and Parts
Thereof, Inv. No. 337-TA-776, Comm’n Notice, 77 Fed. Reg. 43612-14 (July 25, 2012) (vacating

58
in pertinent part an initial determination finding a section 337 violation based on infringement of
a patent that expired during the course of the investigation); Tessera, Inc. v. Int’l Trade Comm’n,
646 F.3d 1357, 1371 (Fed. Cir. 2011) (vacating as moot Commission determinations relating to
expired patents). However, Heraeus’ arguments on this defense are otherwise sketchy, and do not
even address, for example, alleged ongoing lost market share for Zimmer’s products, so
Respondents have not otherwise met their burden to show that relief is entirely unwarranted. See
RPB at 51-52.
D. 	Zimmer’s Claims Are Not Barred by Unclean Hands or Material Breach
Heraeus asserts that it cannot be found liable because Zimmer misappropriated Heraeus’
trade secrets pertaining to PALACOS in its development of BBCR and RBCR, which constitutes
unclean hands and a material breach of the parties’ 2012 Agreement. See RPB at 52. 	Heraeus
barely presents its case on these two defenses at all, and Staff is correct that there is insufficient
evidence to support them. See id.; SRB at 20.
VIII. 	FALSE AND MISLEADING ADVERTISING
As stated earlier, to establish a false advertising claim under the Lanham Act, a
complainant must prove that: 1) The [respondent] made false or misleading statements about his
own or another person’s product; 2) There is actual deception or at least a tendency to deceive a
substantial portion of the intended audience; 3) The deception is material in that it is likely to
influence purchasing decisions; 4) The advertised good traveled in interstate commerce; and 5)
There is a likelihood of injury to the complainant in terms of declining sales, loss of good will, and
similar harm. Certain Woven Textile Fabrics, 2016 WL 7010667, at *5 (Nov. 20, 2016) (“Woven
Textile Fabrics”); see also Certain LEDs, Initial Determination at 430-31. To demonstrate element
(1) – a false or misleading statement of fact – a complainant must prove that the statement is either

59
(i) literally false, or (ii) literally true, but ambiguous and likely to mislead, confuse, or deceive
consumers. Woven Textile Fabrics, 2016 WL 7010667, at *5.
Zimmer presents two categories of allegedly false or misleading statements made by
Heraeus about their own or Zimmer’s products: (1) statements concerning Zimmer’s right and/or
ability to supply PALACOS, and (2) statements about the relative quality or superiority of
PALACOS compared to Zimmer’s bone cement products. Complaint, ¶¶ 78-86; CIB at 79.
A. 	Statements Regarding Zimmer’s Right/Ability to Supply PALACOS
Falsity of Statements
Statements Regarding Zimmer’s Right to Supply PALACOS
The first category of alleged false advertising relates to Zimmer’s right to supply
PALACOS to customers in the U.S. In 2018, after Heraeus elected non-exclusivity, Heraeus and
Zimmer each had the right to, and did, distribute PALACOS in the U.S. JX-0204C.0008, .0013;
JX-0362C (Hofer Dep.) at 29:1-8, 211:3-212:6. Following the co-distribution period, Zimmer had
the right to 	JX-0204C.0040;
JX-0362C (Hofer Dep.) at 211:3-212:6; JX-0363C (Rohn Dep.) at 73:14-74:13. Zimmer alleges
that false statements “were widely distributed to PALACOS customers in the U.S. beginning in
early 2018 at the start of the co-distribution period.” CPB at 66. Zimmer alleges that the alleged
false or misleading statements concerning Complainants’ “ongoing right and ability to sell
PALACOS” fall within four sub-categories:
• Widely distributed letters, form emails, and pamphlets that are non-specific about
the timing of Zimmer Biomet’s right to distribute (see e.g., JX-0068C);
• Individual communications that are non-specific about the timing of Zimmer
Biomet’s right to distribute (see e.g., CX-0494C);
• Individual communications that misidentify the timing of Zimmer Biomet’s right
to distribute (see e.g., CX-2057.0005); and

60
• Individual communications that misstate Zimmer Biomet’s inability to distribute
PALACOS due to the alleged insufficiency of Zimmer Biomet’s PALACOS supply
(see e.g., CX-1927C).
CIB at 85-86; see also CDX-0005C.16, CDX-0005C.22, CDX-0005C.26, CDX-0005C.31.
As a preliminary matter, the evidence shows that the specific statements at issue in each of
the above categories qualify as “commercial advertising or promotion.” 	See, e.g., Proctor &
Gamble Co. v. Haugen, 222 F.3d 1262, 1273 (10th Cir. 2000) (citing Gordon & Breach Science
Publishers, S.A. v. American Institute of Physics, 859 F. Supp. 1521, 1535-36 (S.D.N.Y. 1994)).
The statements at issue are speech by Heraeus for the purpose of persuading its customers or
potential customers to purchase its bone cement products, and are, therefore, commercial. See id.
(setting forth the test for what constitutes “commercial advertising or promotion” under the
Lanham Act); see, e.g., JX-0326 (Childers Dep.) at 538:11-539:8.
As for the statements, a Heraeus customer letter (among other similar communications)
was sent in February 20183 to supply chain contacts at hospitals across the U.S. 	Tr. (Webb) at
1000:5-8. The letter stated:
Heraeus Medical — the inventor and exclusive manufacturer of PALACOS® — is
proud to announce that it is transitioning to become its sole provider. Heraeus
Medical is committed to easily and seamlessly transitioning our customers from
our United States distributor Zimmer Biomet to Heraeus, ensuring immediate and
continuous access to the PALACOS® portfolio of high-quality cements.
. . .
In order to provide you with the bone cement you know and trust, simply fill out
the attached form to continue to receive your PALACOS® products, now from
Heraeus Medical, or visit www.Heraeus-Medical-USA.com and fill out the Contact
Us form.
JX-0068C.0001
3 Shortly thereafter, Heraeus sent a mass email with similar language. 	CX-1061C; CX-0511C.
An “AAOS Mailer” containing nearly identical language was sent to the list of attendees of the
American Academy of Orthopedic Surgeons in early 2018. Tr. (Webb) at 999:12-24; CX-0486C.

61
In August 2018, Heraeus distributed a “Second Customer Letter” with slightly different
language:
As 	you 	know, 	Heraeus 	Medical 	has 	manufactured 	the 	industry-leading
PALACOS® line of Bone Cement for many years. Heraeus had distributed those
products in the United States through Zimmer (now known as Zimmer Biomet
Holdings) …. Effective January 1, 2019, Heraeus and its network of distributors
will be the only parties authorized to purchase authentic PALACOS bone cement
products from the manufacturer and resell them in the United States…. If you wish
to continue to receive the premier PALACOS line after January 1, 2019, directly
from 	our 	distributor, 	please 	contact 	1-833-PALACOS 	or
HMEUSA@Heraeus.com.
CX-0737C.
“Literal falsity can be found based either on the face of the advertisement or by necessary
implication.” Castrol Inc. v. Pennzoil Co., 987 F.2d 939, 943, 946 (3d Cir. 1993). Further, a “literally
false message” can be either (i) explicit or (ii) ‘conveyed by necessary implication when, considering
the advertisement in its entirety, the audience would recognize the claim as readily as if it had been
explicitly stated.’” Woven Textile Fabrics, 2016 WL 7010667 at 5 (citing Groupe SEB USA, Inc. v.
Euro-Pro Operating LLC, 774 F.3d 192, 198 (3d Cir. 2014)). 	Zimmer argues that, in view of the
standard, each of the above letters is literally false.
Zimmer’s expert, Dr. DiGioia, opines that statements “such as ‘transitioning from’ and ‘sole
provider,’ ‘transitioning our customers for our United States distributor to Heraeus’ [is] just not true,
because at this point Zimmer Biomet had the right to
Tr. (DiGioia) at 466:9-19 (discussing February 2018 letter (JX-0068C)). He argues
that this language generates a “sense of urgency . . . when Zimmer
Tr. (DiGioia) at 466:15-19, 24-467:5. Dr. DiGioia further states that
by failing to also state that Zimmer was a co-distributor during the transition period and because they
gave no specific date for the transition, the statements falsely imply that customers must immediately
order from Heraeus. See Tr. (DiGioia) at 467:15-21, 468:2-11. Dr. DiGioia further opines that even

62
if the letter is not false, it is misleading because it “impl[ies] that Zimmer Biomet cannot sell or
distribute during this time frame.” Id. at 468:12-21.
Dr. DiGioia also takes issue with the August 2018 letter because the letter does not properly
reflect the full scope of the parties’ relationship during the transition. Specifically, Dr. DiGioia argues
that the letter’s use of the past tense to describe that Heraeus “had distributed” PALACOS in the United
States through Zimmer does not properly reflect that as of August 2018, “Zimmer could still continue
to distribute.” 	Tr. (DiGioia) at 470:9-471:1. 	He contends that the second letter’s statement that
“[e]ffective January 1, 2019, Heraeus and its network of distributors will be the only parties authorized
to purchase authentic PALACOS bone cement products from the manufacturer and resell them in the
United States,” is misleading because it implies that “Zimmer could not sell any PALACOS [in 2019],
which, is not true.” Id.
Zimmer’s points are not well taken. When the statements are read as a whole, which they must
be, the communications explain that the transition to being the sole provider is an ongoing process
rather than an immediate event. See, e.g., Castrol Inc. v. Pennzoil Co., 987 F.2d 939, 946 (3d Cir.
1993) (determination of whether an advertising claim is literally false – whether explicitly on its face
or by necessary implication – requires that the claim be analyzed in its full context). As the Staff points
out, the Heraeus’ “communications not only introduce existing PALACOS customers to the
manufacturer of PALACOS, but also introduce those customers to the idea that, following a transition
period, Heraeus would be the sole provider of PALACOS.” SPB at 49 (citing Tr. (DiGioia) at 529:2-
8 (agreeing the customer letter did not explicitly or implicitly give a time)). Similarly, the statement
“[e]ffective January 1, 2019, Heraeus and its network of distributors will be the only parties authorized
to purchase authentic PALACOS bone cement products from the manufacturer and resell them in the
United States” is not false or misleading. By focusing on only part of the statement, i.e., the “resell”
portion, Zimmer argues that the statement is false because Zimmer still had the right to resell any

63
additional PALACOS it had. See Tr. (DiGioia) at 470:19-471:1. However, when the statement is read
as a whole, it says that Heraeus and its distributors would be the only parties authorized to do two
things: both purchase PALACOS and resell that PALACOS.
See JX-0204C.0039 (2012 Agreement).
The statement, read as a whole, is not false or misleading.
Heraeus Statements Distributed by Its Sales Agents
The second allegedly false statements include similar language as the first category, but
the statements allegedly were distributed by Heraeus’ sales agents to individual purchasers in early
2018:
“Attached is the letter announcing Heraeus as the sole provider of PALACOS.”
CX-0494C (Feb. 2018 email to Northwell) .
“Heraeus Medical, the inventor and manufacturer of PALACOS bone cement, is
becoming the sole provider of the product.” JX-0032C (Feb. 2018 email to Baptist
Healthcare) (emphasis added).
These statements also qualify as advertising even though some of the statements can be characterized
as “individual communications” with customers. See Seven-Up Co. v. Coca-Cola Co., 86 F.3d 1379,
1385 (5th Cir. 1996) (discussing that “both the required level of circulation and the relevant
‘consuming’ or ‘purchasing’ public . . . will vary according to the specifics of the industry”). This is
because, as the evidence shows, sales representatives in the bone cement industry used directed
communications to customers and potential customers to sell bone cement products. See, e.g., CX-
1328C.0010 (market entry strategy deck discussing need to build “direct, proprietary communication
channel to surgeons, techs, and administrators”); JX-0326C (Childers Dep.) at 245:17-246:5, 538:11-
539:8; JX-0341C (Lyon Dep.) at 132:6-133:10; JX-0333C (Bair Dep.) at 77:1-6.
Zimmer alleges that the first document listed above, CX-0494C, is evidence of the sales
training information being disseminated to customers. 	However, CX-0494C actually is an internal

64
communication from Heraeus to one of its independent distributors/sales representatives. Tr. (DiGioia)
at 476:6-17 (noting that the communication is between Heraeus and its sales agent). While Dr. DiGioia
opines that the letter “leads the customer to believe that PALACOS can only be provided by Heraeus”
(id. at 476:12-23), Dr. DiGioia offers no evidence that this internal communication describing the
announcement of “Heraeus as the sole provider of PALACOS” was distributed to customers or anyone
beyond the recipient of the email at CX-0494C. Moreover, the statement is literally true (that is, the
description of the letter’s contents is literally true, and Heraeus had announced that it was transitioning
to being the sole provider of PALACOS), and Zimmer offers no evidence that anyone was misled by
the statement. See CPB at 73-74.
The second example given above is a February 16, 2018 email from Heraeus employee Sara
Dorsey to 	The statement that “Heraeus Medical, the inventor and manufacturer of
PALACOS bone cement, is becoming the sole provider of the product” is true. 	JX-0032C. Zimmer
points to no evidence contradicting this conclusion, or that the statement is misleading. See CPB at
70, 73-74.
Sales Agents Told Customers That Zimmer Could Not Sell
PALACOS After 2018
Zimmer alleges the following statements made by Heraeus or its sales agents amount to
false advertising:
“PALACOS had been distributed by Zimmer Biomet Holdings for the previous 10
years. Recently that relationship has been terminated.” 	CX-2057C.0005 (April
2018 email to 	). See also JX-0213C; CX-1912C; CX-1429C; CX-1852C;
CX-1856C; CX-1855C; CX-1870C.
“As of the end of 2018, Zimmer will no longer have the right to buy/distribute
PALACOS bone cement.” CX-1193C (June 2018 email to
). 	See also CX-1817C; CX-1811C; CX- 1813C; RX-1026C; CX-
1919C; CX-1932C; CX-1939C; CX-1920C; CX-1927C; CX-1929C; CX-1935C;
CX-1937C; CX-1938C; CX-1940C; CX-1941C; CX-1945C; CX-1114C; CX-
0578C; CX-1804C; CX-1144C; CX-0776C; CX-1870C; CX-1863C; CX-1829C;
CX-1825C.

65
CPB at 74. 	These statements qualify as commercial advertising for the same reasons discussed
earlier.
Zimmer presents the April 2018 message (the first statement given above) that HMUS
distributor Synergy Surgical Products LLC sent to “at least six bone cement customers, including
the 	system” as representative of the messages at issue. 	CPB at 74 (citing JX-
0213C.0009-14). 	Zimmer argues that these types of messages to customers amount to false
advertising because they misidentify the time period in which Zimmer had the right to distribute
PALACOS and/or when the relationship was terminated. CPB at 74-75.
The statement is literally true. “[T]hat relationship,” as it had existed between Zimmer and
Heraeus Germany, in which Zimmer was the exclusive distributor of PALACOS in the United
States, ceased to exist as of 	. 	See JX-0203C (election of mutual non-exclusivity);
JX-0240 (2012 Agreement). 	Nothing in the communication states or necessarily implies that
PALACOS is exclusively available from Heraeus at that specific time. Admittedly, counsel for
Synergy stated that the company would “be sending e-mails in which it will rescind and correct
the 	misstatements,” 	but 	counsel 	provided 	little 	explanation 	for 	why 	they 	believed 	the
Zimmer/Heraeus relationship had not been terminated. JX-0213C.
Moreover, these emails were not authorized by Heraeus or the principals at Synergy
Surgical. 	JX-0213C.0001; Tr. (Shapiro) at 1247:16-1248:10. 	Thus, Heraeus cannot be held
accountable for the statements in any event.
To be sure, the statement “[a]s of the end of 2018, Zimmer will no longer have right to
buy/distribute 	PALACOS 	bone 	cement,” 	does 	have 	arguably 	ambiguous 	“buy/distribute”
language. 	However, the statement as a whole is not misleading.

66
See JX- 0204C. And Zimmer’s right to sell PALACOS
was indeed limited. 	See JX-0204C.0039; see also JX-0346C (Armstrong Dep.) at 462:16-22
Statements Regarding Zimmer’s PALACOS Inventory
The final communications that Zimmer alleges are false or misleading are statements made
by Heraeus’ sales agents and distributors to customers that allegedly misrepresented Zimmer’s
ability to supply PALACOS (the level of its inventory or stock), as opposed to Zimmer’s
contractual right to supply PALACOS. 	CPB at 75-76 (citing CX-1927C (June 17, 2018 email
stating, “Again, ZB can sell PALACOS until the end of the year, but they have an allotted amount
which may run out before then.”)). These statements also qualify as commercial advertising for
the same reasons discussed earlier.
Dr. DiGioia asserts that the statement made in the June 17, 2018 email is false because
when the statement was made “it was clear that Zimmer could both purchase PALACOS from
Heraeus as well as distribute it.” Tr. (DiGioia) at 483:8-19. Dr. DiGioia further asserts that if the
statement is not false outright, it is misleading because the statement implies a lack of supply
during a time in which “Zimmer could both purchase and distribute [PALACOS].” Tr. (DiGioia)
at 483:8-484:3.
The statement in the email was literally false. 	The assertion that “they have an allotted
amount which may run out before then” was not true at the time, because it was not until the
following month that Heraeus stopped fulfilling Zimmer’s purchase orders. See CX-2335C.0003.
As of June 2018, when the statement at issue was made, Zimmer did not have an “allotted amount
which may run out before [the end of the year],” because Heraeus was still selling Zimmer
PALACOS on an as-needed basis. 	In fact, on July 12, 2018 Heraeus sent an email to Zimmer

67
asking for an “update” on “Firm orders for Q4 2018,” which suggests that as of July 2018 Heraeus
was still willing to sell Zimmer an undetermined – i.e., unallotted – quantity of PALACOS. 	CX-
2335C.0007.
Actual Deception or Tendency to Deceive
Zimmer states that because Heraeus’ statements regarding Zimmer’s right and ability to
supply PALACOS are literally false, the actual effect on the buying public need not be shown.
CPB at 76. However, the statements in question are true (except the one statement noted above).
Zimmer argues in the alternative that even if the statements are true, they are misleading. Again,
the evidence shows that the statements are not misleading. 	Nonetheless, in the event that the
Commission finds the statements to be misleading, Zimmer states that “the evidence shows actual
deception by Heraeus via: (i) Heraeus’ intent to deceive customers into believing that they had to
immediately transition PALACOS supply contracts to Heraeus, and (ii) actual customer responses
to Heraeus’ marketing messages demonstrating that a substantial number of customers were
actually deceived.” Id. at 77.
Zimmer must prove either that Heraeus acted with an intent to deceive, and thus the
deception may be presumed (See Certain LEDs Inv. No. 337-TA-947, Initial Determination at
433) (citing Cashmere & Camel Hair Mfrs. Inst. v. Saks Fifth Ave., 284 F.3d 302, 316 (1st Cir.
2002))); or that the challenged statements deceived a substantial portion of the purchasing public.
United Indus., 140 F.3d at 1182. In “proving actual deception, the complainant must show that
the statement ‘conveys a misleading message to the viewing public’ and must show ‘how
consumers actually reacted to the challenged advertisement rather than merely demonstrating how
they could have reacted.’” Woven Textile Fabrics, 2016 WL 7010667, at *6 (quoting Clorox Co.,
228 F.3d at 33); see also Certain Cigarettes and Packaging Thereof, Inv. No. 337-TA- 424, Initial

68
Determination, 2000 WL 1726827 at *38 (Oct. 16, 2000) (unreviewed by Commission) (“As set
forth above, when making a claim based on misleading implication or context, a party cannot rely
on its own intuitive reaction to an advertisement, or on the intuitive reaction of the finder of fact,
but must introduce evidence that the relevant recipients of the advertisement find it misleading”)
(citing United Indus., 140 F.3d at 1182); Johnson & Johnson Merck Consumer Pharm. Co. v.
Smithkline Beecham Corp., 960 F.2d 294, 297-98 (2d Cir. 1992) (in the absence of finding literal
falsity, “[i]t is not for the judge to determine, based solely upon his or her own intuitive reaction,
whether the advertisement is deceptive,” rather, “the success of a plaintiff’s claim usually turns on
the persuasiveness of a consumer survey”). Zimmer failed to prove either that Heraeus intended
to deceive or that Heraeus’ statements actually deceived a substantial portion of the purchasing
public.
Zimmer first argues that Heraeus intended to deceive consumers into believing that
Zimmer’s right and ability to supply PALACOS was ending immediately. CPB at 77-78. Zimmer
cites Heraeus’ marketing materials and internal belief
Id. Complainants also argue that Heraeus’ failure to discuss Zimmer’s part
in selling PALACOS and failure to provide an “exact timepoint” in its communications with
PALACOS customers proves that Heraeus purposefully chose to deceive customers about the
timing of the transition to PALACOS. 	Id., citing CX-1053C. 	These examples do not prove an
intent to deceive. 	See Phone-Poulenc Rorer, 19 F.3d at 131-32 (declining to find an intent to
deceive where there was no evidence of “deliberate conduct” that is of an “egregious nature”).
The internal discussions with Heraeus’s marketing partner 	and the internal FAQs
demonstrate Heraeus was only trying to communicate the fact of the distribution transition, and

69
further that Heraeus wanted customers to reach out for more details depending on their respective
circumstances and needs, so that each customer received accurate information. See, e.g., JX-0326
(Childers Dep.) at 185:10-24; 539:17-540:23; JX-0146C (“I don’t have an exact date . . . .”); RX-
1026C (“We want to make sure we have the story straight . . . and not create or add to any
confusion”).
In the alternative, Zimmer argues that a substantial portion of customers were actually
deceived regarding Zimmer Biomet’s ability to continue to distribute PALACOS. 	CPB at 78.
However, Dr. DiGioia testified that he did not identify what percentage of the purchasing public
constitutes a substantial portion of customers. Tr. (DiGioia) at 522:6-18; id. at 525:9-13 (admitting
that in rendering his opinions he did not assess the number of customers that received the
challenged statements and discarded or did not rely on the statement). 	Only two instances of
“customer reactions” purportedly showed that the customers were being misled. 	Dr. DiGioia
explained that the first such “reaction” was from a supply chain manager, who stated that he
believed that Heraeus’ August 2018 letter meant that “Zimmer Biomet will no longer distribute
PALACOS cement.” 	Tr. (DiGioia) at 471:16-24 (discussing CX-1068C). 	This is at best
ambiguous; there is no evidence (such as customer testimony) that this customer understood the
August 2018 letter to require an immediate transition to Heraeus or that Zimmer Biomet would
immediately not be able to distribute PALACOS. See Tr. (DiGioia) at 522:19-23 (agreeing that
he relied only on his personal experience to render his opinions), 523:12-15 (agreeing that he did
not analyze or apportion how the purchasing public would have relied on each challenged
statement). As Staff points out, a review of the entire communication indicates that the customer
knew that PALACOS was still available from Zimmer Biomet. SPB at 50 (citing Tr. (DiGioia) at
531:2-14 	(discussing 	response at 	CX-1068C.002 	and 	admitting 	that 	someone within 	the

70
purchasing organization of the health center was aware that PALACOS would still be available
from Zimmer Biomet)).
The second customer reaction also fails. 	The customer writes that
JX-
0003C.0001; see Tr. (DiGioia) at 472:6-21. Whether this one (unnamed) customer was misled is
a matter of speculation, again principally because we have no direct testimony from that customer.
Moreover, even Zimmer was
See, e.g., JX-0001C at p.6 (email from a Zimmer distributor to
see also Tr (DiGioia) at 534:16-535:23
(admitting that a Zimmer Biomet distributor was
539:7-11 (admitting that
Heraeus was telling the truth when it informed
In fact, there is considerable evidence that
customers did not think the need to transfer business to Heraeus was immediate, and instead simply
wondered when the transition would take place. 	See, e.g., JX-0047C.0001
JX-0118C
JX-0146C.0001
Not only do the cited communications fail to support Zimmer’s assertion (see Staff Br. at
56-57 (citing customer questions that indicate customers were not deceived)), but there were no

71
customer surveys to evaluate how the challenged statements actually were understood by the
purchasing public. 	Tr. (DiGioia) at 522:19-21. 	Instead, Dr. DiGioia used only his personal
experience when offering his opinions. 	Tr. (DiGioia) at 522:19-21. 	Although such evidence is
probative, and customer-oriented evidence is not necessarily an absolute requirement, two
examples supported only by an expert’s subjective views is not sufficient. See Aviva Sports, Inc.
v. Fingerhut Direct Mktg., Inc., 829 F. Supp. 2d 802, 813-14 (D. Minn. 2011) (“Unless a claim is
literally false, or a trier of fact has determined that a competitor acted willfully with intent to
deceive in bad faith, a party seeking relief under this section of the Lanham Act bears the ultimate
burden of proving actual deception by using reliable consumer or market research.”) (quoting
United Indus. Corp., 140 F.3d at 1183) (internal quotations omitted).
Thus, the evidence fails to show that Heraeus had an intent to deceive customers or that
any customer was actually deceived by Heraeus’ letters.
Materiality
Zimmer asserts that Heraeus’ statements relating to the supply of PALACOS are material
“because a significant number of purchasers are likely to attach importance to the representations
in determining whether to engage in a proposed transaction.” CPB at 79. Respondents and Staff
criticize Zimmer’s evidence because, among other things, no customer surveys were performed.
See RPB at 70-71; SPB at 58. 	Certainly such surveys, and similar evidence, would have
strengthened the case for materiality, but the materiality threshold is low. 	See Woven Textile
Fabrics, 2016 WL 7010667, at *5 (“likely to influence purchasing decisions”). It stands to reason
that the reliability of product supply is important to purchasers, particularly sophisticated
purchasers such as those working for medical organizations. And Dr. DiGioia, who has “personal
experience as a user, purchasing committee member, and thought leader with exposure to a

72
national audience on issues relating to medical device purchasing,” explicitly opined that these
messages were material. CPB at 79; see Tr. (DiGioia) at 489:8-490:1; see generally Tr. (DiGioia)
at 441-445. Such evidence is sufficient to establish materiality.
Interstate Commerce
Respondents do not dispute that PALACOS traveled in interstate commerce. See RPB at
19.
Likelihood of Injury
Zimmer asserts that in order to prove injury due to false advertising it “need only prove
that it has ‘a reasonable basis for the belief that it is likely to be damaged as a result of the false
advertising,’ either in terms of lost sales (or other economic injury) or lost goodwill.” CPB at 81
(quoting Certain LEDs, ID at 480). The case on which Certain LEDs relies, however, does not set
forth a subjective, “reasonable belief” test. 	See Certain LEDs, ID at 480 (citing Johnson &
Johnson v. Carter-Wallace, Inc., 631 F.2d 186, 190 (2d Cir. 1980)). Instead, it clarifies that “[t]he
correct standard is whether it is likely that [the allegedly false] advertising has caused or will cause
a loss of [Complainants’] sales,” which requires a “likelihood of injury and causation” to “be
demonstrated.” 631 F.2d at 190. Under this standard, the “causation” element is conspicuously
missing, because the complained-of statements all pertain to Zimmer’s distribution of PALACOS,
rather than its own products. Heraeus makes this point succinctly – “Zimmer Biomet cannot be
injured in the future because it can no longer sell PALACOS” – and Zimmer makes no effort to
rebut it. RPB at 72; see CRB at 46. Furthermore, even if Zimmer was injured in 2018 and 2019
from the alleged false statements, such injury is alone insufficient because Zimmer is not entitled
to prospective relief for purely past harm. See Electric Fireplaces, Comm’n Op. at 9. Therefore,
even assuming that Zimmer proved all the other elements of false advertising with respect to

73
statements regarding its right and ability to supply PALACOS, it has not proven the element of
injury.
B. 	Statements Regarding Product Quality
Falsity of Statements
Statements About MAUDE Quality Events
Zimmer alleges that Heraeus falsely claimed, in its sales training materials, that according
to the MAUDE database, “Refobacin has 2.5 times as many global quality events as PALACOS.”
JX-0066C.0005; see also JX-0070C (“Refobacin has significantly more quality events reported
(~210) than PALACOS (~80) . . . (so if you were to calculate a rate of quality complaints Refobacin
would have 8 times the complaints of PALACOS.)”); JX-0182C (“[Q]uality issues with Refobacin
are likely increasing.”); JX-0013C; CX-0201C; CX-0218; CX-1751C; CX-1893C; CX-1897C;
CX-1913C; CX-1908C; CX-1909C; CX-1910C.A
“MAUDE” stands for “Manufacturer and User Facility Device Experience” and is an FDA
database that “is a repository of medical device reports or MDRs (Managed Detection and
Response) that [document] device problems or failures.” 	Tr. (Spiegelberg) at 557:14-17. 	The
reports submitted to MAUDE – either voluntary or mandatory – are used “to monitor device
performance, 	detect 	potential 	device-related 	safety 	issues 	and 	contribute 	to 	benefit-risk
assessments of these products.” 	See JX-0283 (MAUDE web homepage printout); see also Tr.
(Mays) at 1176:20-24 (discussing JX-0283).
The statements concerning the MAUDE database are
See JX-0066C
(flashcards); JX-0070C (email). 	The parties do not question whether these statements actually
qualify as advertising. 	Given that the statements were conveyed to Heraeus sales agents being

74
trained to interact and use the information with customers, it is reasonable to believe that the sales
agents, in turn, communicated the information to customers. 	Thus, the statements qualify as
advertising.
Zimmer argues that it need not prove Refobacin actually does not have 2.5 times more
global quality events, but rather it need only “demonstrate that the data on which Heraeus relies
does not support its statement.” CPB at 82 (citing McNeil-P.C.C., 938 F.2d at 1549 (finding an
advertisement literally false when the underlying data is “not sufficiently reliable to permit one to
conclude with reasonable certainty that they established the claim made”)). Specifically, Zimmer
argues that Heraeus’ statements may not be accurate because there is a potential that MAUDE may
contain 	possible 	instances 	of 	double 	reporting, 	non-relevant 	mentions 	of 	a 	product, 	or
misreporting. 	As Staff states, “Dr. Spiegelberg [Zimmer’s expert] offers only reasons to
potentially mistrust the challenged statement, and no evidence showing the challenged statement
is actually false.” SPB at 61. In fact, Dr. Spiegelberg does not even assert that the statement “2.5
times more” is inaccurate, but rather that the phrase “global quality events” may be misleading.
Tr. (Spiegelberg) at 611:17-22; see also Tr. (Mays) at 1176:2-8; 1177:16-20 (“the dispute is not
about the numbers, but it’s about the term ‘global quality events’”). And while “every MAUDE
report relates to a quality event,” the number of reports submitted to MAUDE may not accurately
reflect the number of quality events. Tr. (Spiegelberg) at 611:23-25; 563:12-17 (a single quality
event may result in multiple MAUDE reports). 	Finally, Dr. Spiegelberg explains that MAUDE
data may be unreliable because a product may have a MAUDE report when the product was not
the cause of the reported quality event, and also because not all companies report events to
MAUDE at the same rate, due to different internal reporting procedures. 	Tr. (Spiegelberg) at
563:23-564:1.

75
Dr. Spiegelberg’s testimony regarding MAUDE is speculative, and does not prove that
Heraeus’ statements were false or misleading. He admits that he did not find actual evidence of
underreporting of PALACOS MAUDE entries. 	Tr. (Spiegelberg) at 612:7-9. 	He also does not
identify any instances of more than one report per quality event in MAUDE, or reporting having
nothing to do with a global quality event for either Zimmer’s bone cements or PALACOS. Tr.
(Spiegelberg) at 613:2-16. Therefore, Zimmer has failed to show that Heraeus’ statements related
to MAUDE data are either false or misleading.
Statements About Product Recalls
Zimmer next asserts that Heraeus made false statements to U.S. consumers by telling them
that versions of Refobacin have been recalled three times in other countries while PALACOS has
had zero “safety or quality recalls.” CPB at 84 (citing JX-0066C.0005; JX-0013; JX-0168C; JX-
0174C; JX-0182C; JX-0187C; JX-0241C; CX-0186; CX-1908C; CX-1909C; CX-1910C; CX-
1959C). 	These statements are part of the sales agents’ training material as well as emails to
customers, and thus, qualify as advertising.
Zimmer alleges that the statements regarding Refobacin are false because “there have been
no recalls of the ZB Cements sold in the U.S.” 	CPB at 84 (citing Tr. (Spiegelberg) at 570:20-
571:2; Tr. (Mays) at 1215:2-8; Tr. (Shapiro) at 1296:14-1297:4)). 	Zimmer asserts that the
statements were false because the statements were made to U.S. customers and “there’s only one
version of Refobacin bone cement that’s sold in the U.S. market and it’s never been recalled.” Tr.
(Spiegelberg) at 570:20-25. However, the two statements which Dr. Spiegelberg cites make clear
that the recalls were for Refobacin, or “versions of Refobacin,” sold in other countries, including
Canada and the U.K., and the recalled products contain Refobacin and have “Refobacin” in their
names. CPB at 84; Tr. (Spiegelberg) at 569-74 (citing JX-0066C, JX-0187C)). The statements

76
are therefore not false, either literally or by necessary implication. 	Furthermore, they are not
misleading, and Zimmer in any event fails to present any evidence that customers were actually
misled. See, e.g., Tr. (Spiegelberg) at 630:12-14 (he did not conduct a consumer survey), 631:7-
11 (he did not communicate with any bone cement consumers or purchasers for the purposes of
this Investigation). The evidence thus shows that Heraeus’ statements regarding Refobacin recalls
are not false or misleading.
Heraeus’ statements that PALACOS has had “zero safety or quality” recalls raise a
question of interpretation. The evidence shows that there have been at least two U.S. PALACOS
recalls related to packing and labelling issues, which are Class 2 recalls. 	Tr. (Spiegelberg) at
593:5-595:12. The FDA defines a Class 2 recall as one which “may cause temporary or medically
reversible adverse health consequences or where the probability of serious adverse health
consequences is remote.” CX-2096. Thus, Zimmer’s expert argues that a Class 2 recall is based
on a “risk to health,” and as such, the PALACOS Class 2 recalls amount to safety recalls. 	Tr.
(Mays) at 1219:25-1220:22; Tr. (Spiegelberg) at 594:5-7.
However, the Class 2 recall definition states that the product “may” cause health issues, so
the recall does not necessarily relate to safety. See RPB at 129-130. Moreover, Heraeus’ expert,
Dr. Mays, testified that one PALACOS recall related to possible mislabeling and the other related
to packaging, and Dr. Mays testified that neither of these are “safety” issues. 	Tr. (Mays) at
1188:13-1189:24. 	And although the use of “may” in the FDA definition makes the statements
somewhat ambiguous, that ambiguity itself rules out the possibility of outright falsity.
To establish that the statements are misleading, Zimmer must prove both that the
statements convey a misleading message and how consumers reacted to the message. 	Woven
Textile Fabrics, 2016 WL 7010667, at *6. 	But Zimmer conducted no surveys related to the

77
statements, and presented no evidence of actual consumer confusion. Tr. (Spiegelberg) at 617:18-
20 (admitting he had no evidence showing how recipients of the statements understood or reacted
to those statements). Accordingly, the evidence is insufficient to prove that Heraeus’ statements
regarding recalls are either false or misleading.
Statements About PALACOS Consistency and Time On the
Market
Zimmer asserts that the statements (1) “PALACOS® was introduced in 1957, has been
unchanged for 30 years . . .:” (2) “PALACOS® . . . has been unchanged for 60 years;” and (3)
“PALACOS hasn’t changed or reformulated in over 50 years” are false. Statement (1) appears in
Heraeus’ 	training 	flashcards 	(JX-0066C.0008); 	statement 	(2) 	comes 	from 	a 	competitive
comparison argument manual (JX-0170C); and statement (3) comes from a Heraeus distributor
email (JX-0182C). Tr. (Spiegelberg) at 597:12-16, 598:1-7. For the same reasons as discussed
above, these statements qualify as advertising.
Zimmer argues that these statements are false because “PALACOS has undergone three
changes over its lifetime,”
Tr. (Spiegelberg) at 598:15-599:2. Zimmer’s contention that the statements
are false is based on a reading of the statements to mean that
.
Tr. (Spiegelberg) at 598:13-599:2. 	However, even Zimmer’s expert admits that each statement
refers to the original PALACOS R, and not all versions of PALACOS products. Tr. (Spiegelberg)
at 622:9-12; 623:18-21. 	But Zimmer did not present evidence on what aspect of the original
PALACOS R had changed and when and why the statements that PALACOS R “has been
unchanged for 30 [or 60] years” was purportedly false. Tr. (Spiegelberg) at 598:13-599:2.

78
Moreover, Zimmer’s expert admitted that each statement refers to the composition of
PALACOS R being unchanged, and “composition” is defined as a “description of ingredients that
make up the cement.” Tr. (Spiegelberg) at 622:12-18, 623:22-24; see also Tr. (Mays) at 1194:21-
23 (“Composition is what a material is made of. It’s basically the ingredients that are used to make
the cement in this case.”); 1195:1-2 (“Composition would include a list of ingredients.”). 	The
experts for both Zimmer and Heraeus testified that the composition of the product does not include
the amounts of ingredients, properties of ingredients, or source of the ingredients, which are the
features that Zimmer contends create the false statements. 	Tr. (Mays) at 1195:1-16, 1226:19-
1227:20; Tr. (Spiegelberg) at 622:19-25 (Physical properties are separate things from the
description of ingredients.). Thus, the 	in
PALACOS about which Dr. Spiegelberg testified, even if they applied to PALACOS R, would not
have constituted changes to the composition. As for the change in 	Heraeus
presents evidence showing that a 2013 bone cement book discussed the composition of PALACOS
R, and stated that the composition had not changed because
Tr. (Mays) at 1194:6-19 (citing JX-0161, a text book on cements); 1196:25-
1197:20 (citing JX-0161 at -716). Thus, the composition of PALACOS R did not change because
the
Tr. (Mays) at 1196:12-15.
Accordingly, the statements are not literally false. 	Dr. Spiegelberg testified that the
statements “mislead purchasers into believing that they can rely on the long clinical history of
PALACOS with the assumption that the formulation hasn’t changed over the entire lifetime.” Tr.
(Spiegelberg) at 600:4-8. 	However, Zimmer did not perform consumer surveys regarding this

79
issue, nor did Dr. Spiegelberg speak with customers about these statements. See Tr. (Spiegelberg)
at 630:12-14 (no consumer surveys), 631:7-11 (no discussions with consumers). Thus, Zimmer
failed to present evidence of customers being misled by any of Heraeus’ statements.
Accordingly, the statements regarding the composition of PALACOS are neither literally
false nor misleading.
Actual Deception or Tendency to Deceive
Zimmer states that since Heraeus’ statements regarding product quality are literally false,
it need not show actual deception. 	CPB at 88. 	However, the statements in question are true.
Zimmer also argues that it proved deception in two ways: first, Heraeus intended to deceive
customers into believing that Zimmer’s cements are inferior to PALACOS, and second, that
customers expressed concern about the quality of Zimmer’s cement due to Heraeus’ advertising.
Id at 89.
As for the first point, Zimmer offers evidence only that Heraeus was internally discussing
ways to distinguish PALACOS from the Zimmer Biomet cements, and training its sales team
CPB
at 81 (citing JX-0138C.0040); see Tr. (Spiegelberg) at 604:8-605:2 (citing an internal guidance
document at JX-0140C); see also CIB at 121. And Heraeus presented evidence illustrating that it
intended to be truthful in its advertising. See Tr. (Mays) at 1178:6-21
Moreover, as discussed, the statements
at issue are not false or misleading. Without further evidence, Zimmer fails to prove Heraeus had
an intent to deceive customers.

80
As for the second point, Zimmer states that it “and its sales force received numerous
communications from customers expressing concern about the quality of RBCR and BBCR due to
Heraeus’ advertising.” See JX-0350C (Fenton Dep.) at 233:16-235:20, 259:4-13, 261:19-262:9,
354:10-357:4; Tr. (Spiegelberg) at 607:25-609:6. 	However, all of the citations listed as
purportedly showing “numerous communications” refer to the same instance of customer
confusion – a surgeon who “expressed concerns about information he received about Refobacin
bone cement recalls and needed information about what was going on with the recall.” 	Tr.
(Spiegelberg) at 607:25-608:17. Without further evidence, Zimmer fails to prove that a significant
or “substantial” portion of the consuming public” was deceived. United Indus. Corp. v. Clorox Co.,
140 F.3d 1175, 1182 (8th Cir. 1998).
Materiality
Materiality is not presumed when the statements at issue are not found to be literally false.
Accordingly, Complainants must demonstrate that the statements are “likely to influence
prospective purchasers to some substantial degree.” Certain LEDs, Initial Determination at 433-
34 (quoting Restatement (Third) Unfair Competition § 3 cmt. b).
Zimmer presents evidence that purchasers generally find the safety and quality of bone
cements important when making purchasing decisions. 	See, e.g., Tr. (DiGioia) at 451:13-17
(discussing factors that are import in selecting a bone cement, factors include “quality and safety
of the cements themselves”), 497:1-2 (stating “quality is very important to the decision of
purchasers”). 	Heraeus witnesses also testified that product quality and safety are generally
relevant to purchasing decisions. 	See, e.g., JX-0341C (Lyon Dep.) at 83:3-20; JX-0333C (Bair
Dep.) at 96:14-24; JX-0324C (Rupp Dep.) at 119:14-123:9. The materiality element is therefore
satisfied.

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Interstate Commerce
Again, Respondents do not dispute that PALACOS traveled in interstate commerce. See
RPB at 19.
Likelihood of Injury
In contrast to the alleged false statements regarding PALACOS, the alleged false
statements regarding product quality, if otherwise proven, might satisfy the “likelihood of injury”
element. See CPB at 91-92. Nevertheless, this category of false statements suffers from the same
problem as the other category – lack of proof of causation. Zimmer’s expert candidly admitted
that she had not “disentangled” false advertising from all the other alleged violations that could
have caused the various forms of injury Zimmer asserts. Tr. (Mulhern) at 709:9-710:3. Zimmer
therefore has not met its burden of showing that it was injured from any false advertising, even
assuming that Heraeus’ advertising was, in fact, false.
In summary, Zimmer failed to prove its false advertising case.
IX. 	TORTIOUS INTERFERENCE
As noted, to prove a claim of tortious interference — either with a contract or a business
relationship — Zimmer must prove: (1) there was a contract or existing valid relationship, (2) the
respondent knew of it, (3) the respondent performed an intentional act that was a significant factor
in causing breach of contract or interference, (4) the act was without justification, and (5) it caused
injury. 	See Indus. Automation Sys., Initial Determination at 52 (citing WaveDivision Holdings,
LLC v. Highland Capital Mgmt., L.P., 49 A.3d 1168, 1174 (Del. 2012)); Certain Foodservice
Equip. and Components Thereof, Inv. No. 337-TA-1166, Order No. 23, 2020 WL 2094134, at *1
(Mar. 30, 2020).

82
Zimmer asserts that Heraeus tortiously interfered with Zimmer’s business opportunities in
two ways. 	First, Heraeus induced its employees to use Zimmer’s confidential and trade secret
information to sell PALACOS bone cement in the United States. 	Second, Heraeus tortiously
interfered with Zimmer’s prospective economic advantage by refusing to provide a contractual
supply of PALACOS, using Zimmer’s confidential and trade secret information to convert
customers to Heraeus, and falsely advertising to the detriment of Zimmer. See CPB at 92.
A. 	Interference with Confidentiality Agreements with Former Employees
Zimmer argues that Heraeus hired “a number of employees away from Zimmer Biomet,”
and then induced these former employees to breach their respective agreements by setting up
HMUS and having its employees directly compete with Zimmer Biomet. CPB at 94-95. Zimmer
specifically identifies D. Childers, R. Kolbe, P. Cruz and W. Burns. See id. For example, Zimmer
points to Devin Childers, the former National Commercialization Director, Biologics at Zimmer,
who was hired by Heraeus to lead its U.S. bone cement sales force while having never hired sales
agents, prepared a bone cement business plan, or otherwise obtained appropriate experience. See
CPB at 94. Zimmer asserts that Heraeus induced each of these former Zimmer employees, who
had signed confidentiality, non-competition, and non-solicitation agreements with Zimmer, to
violate the Agreements and to use Zimmer’s trade secret information during their “employment
duties at Heraeus.” Id. at 95. Zimmer’s assertions are unsubstantiated.
Existence and Knowledge of Zimmer Employment Contracts
Each of the former Zimmer employees (Messrs. D. Childers, R. Kolbe, P. Cruz and W.
Burns) signed a confidentiality, non-competition, and non-solicitation agreement (“Employee
Agreement”) with Zimmer. The Employee Agreements required the employees to
CX-

83
1028C; CX-2270C: RX-2392C; CX-2268C. 	Heraeus knew of the Employee Agreements that
these individuals had with Zimmer because Heraeus’ legal department reviewed the agreements
when each of the employees were hired. JX-0326C (Childers Dep.) at 546:19-457.5.
No Intentional Actions Resulted in Breach of Employment
Agreements
However, with the exception of Mr. Burns, discussed earlier, Zimmer fails to provide any
evidence to show that these employees breached their respective Employee Agreement. Moreover,
Zimmer fails to provide evidence that Heraeus “intentionally and without justification” induced
any of the former Zimmer employees, including Mr. Burns, to breach their contracts. 	Zimmer
argues that Heraeus’ market entry was such that Heraeus must have intentionally induced the
former employees to use Zimmer confidential and/or trade secret information to the benefit of
Heraeus. See CIB at 131-32. Zimmer Biomet reasons that “Heraeus gave HMUS the unrealistic
goals of simultaneously minimizing price erosion while converting as many customers as quickly
as possible to preserve its long-term revenue trajectory.” CPB at 95 (citing CX-1576C.0006; CX-
1320). “HMUS was a new U.S. market entrant. It is highly unlikely that, as a new market entrant,
HMUS could achieve these diametrically opposed goals through normal competition with Zimmer
Biomet.” CPB at 95.
Zimmer provides no evidence to prove this allegation, however. Zimmer does not cite any
evidence demonstrating that the actions of Heraeus in setting sales goals and hiring former Zimmer
employees were intended to cause those former Zimmer employees to breach their agreements.
See CPB at 94-96. 	Mr. Childers testified at length to the contrary, describing how he hired
personnel and created the sales and marketing plan. See JX-0326C (Childers Dep.) at 34:14-35:18;
36:14-24; 38:18-41:24; 45:6-25; 88:11-89:8 (collectively showing Mr. Childers’s experience); id.
(Childers Dep.) at 149:1-4 (explaining Mr. Childers hired individuals like Baxter Webb who were

84
“incredibly adapt at harvesting data” because of prior experience in startups). 	Moreover, the
evidence shows that Heraeus did not approach the former employees with offers of employment
with the intention of having those employees breach their respective agreements; rather, the former
employees sought out employment opportunities with Heraeus. See, e.g., JX-0326C (Childers
Dep.) at 61:16-63:11; JX-0339C (R. Kolbe Dep.) at 17:1-6; JX-0335C (Cruz Dep.) at 85:4-88:18;
JX-0328C (Burns Dep.) at 151:10-152:10.
Zimmer also argues that these former employees breached their employment agreements
with Zimmer by failing to notify Zimmer “of any circumstances 	which may constitute
unauthorized disclosure, transfer, or use.” 	CPB at 96. 	Heraeus is correct that this argument is
new, and Zimmer therefore waived this theory of tortious interference. 	RPB at 44. 	Moreover,
Zimmer failed to identify or prove any “unauthorized disclosure, transfer, or use” of its
“Confidential Information” by the former employees in question, and did not prove any
participation in a possible breach by Heraeus. See CPB at 96.
Accordingly, Zimmer’s first allegation of tortious interference fails.
B. 	Tortious Interference With Prospective Business Relationships
Zimmer also alleges that Heraeus interfered with Zimmer’s “prospective economic
advantage to convert existing customers in three ways: (i) by refusing to supply Zimmer Biomet’s
affiliate (Zimmer Surgical, Inc.) with PALACOS in breach of the Distribution Agreement, (ii) by
using Zimmer Biomet’s trade secret and confidential information, and (iii) by falsely advertising
about Zimmer Biomet’s right and ability to sell PALACOS and the superiority of PALACOS over
RBCR.” CPB at 96-97. Zimmer’s allegation (ii), which is tortious interference through misuse or
disclosure of Zimmer asserted trade secrets, fails for the same reasons that Zimmer’s underlying

85
trade secret claims fail. Similarly, Zimmer’s allegation (iii), which is tortious interference through
false advertising, fails for the same reasons that Zimmer’s underlying false advertising claims fail.
Staff correctly notes that Zimmer’s tortious interference allegations have been revised from
their original position. 	See SRB at 32-33. 	Zimmer originally focused on existing customer
contracts as the relevant “prospective business relationships” (see CIB at 134-38), but now focuses
on the impact of Heraeus’s actions on Zimmer’s ability to convert PALACOS into BBCR and
RBCR customers (see CPB at 96-98). 	Under both theories, however, Zimmer advances three
specific sources of interference, and as noted, the second and third lack merit for the same reasons
Zimmer’s trade secret misappropriation and false advertising claims lack merit. 	For its part,
Heraeus contends that Zimmer never even disclosed the second and third sources of interference
until Zimmer’s prehearing brief. See RPB at 95-96. Again, though, these two positions lack merit,
and it is unnecessary to find waiver. See id.
This leaves only Zimmer’s allegation of interference with its prospective economic
advantage caused by Heraeus’ refusal to supply PALACOS to Zimmer Surgical, Inc. starting in
July 2018, pursuant to the 2012 Agreement. 	Zimmer argues that “Heraeus’ refusal to supply
PALACOS was unjustified and qualifies as ‘wrongful means’ and unfair competition because it
was a breach of the Distribution Agreement.” 	CPB at 98-99 (citing Conoco, Inc. v. Inman Oil
Company, Inc., 774 F.2d 895, 907 (8th Cir. 1985)).
Article 3 of the 2012 Distribution Agreement defines how
JX-0204C.0019-20; JX-0362C (Hofer Dep.) at 204:5-206:7. 	Specifically, every
September, Zimmer Surgical was
JX-

86
0204C.0019, 	.0022 	(Sections 	3.1(b) 	and 	3.4(b)). 	Heraeus 	Germany 	was 	then 	to
Id. at .0020 (Section 3.3(b)).
See id. at .0019, .0039 (Sections 3.1(a), 11.1(a)).
JX-0232C; JX-0363C (Rohn Dep.) at
114:17-22; JX-0362C (Hofer Dep.) at 204:3-206:7. 	In response, however, Heraeus Germany
refused to deliver PALACOS products to Zimmer Surgical for the remainder of 2018. See CX-
2335C. 	Zimmer now asserts that this refusal amounts to tortious interference with its ability to
convert existing customers to its own products. See CPB at 98-102.
Existence of and Knowledge of a Contract
Zimmer offers no evidence that Heraeus knew of any specific contracts Zimmer had with
specific customers or any specific contractual details that might have a bearing on conversion to
Zimmer’s own products. The evidence does show, of course, that Zimmer had customer contracts
for PALACOS bone cements in 2018 when HMUS became a co-distributor of PALACOS in the
U.S., and that Heraeus knew of some of these Zimmer customers as a result of its own efforts to
acquire customers. See, e.g., CX-0574C.0001 (discussing companies they learned have contracts
with Zimmer beyond 2018); JX-0065C (same); CX-1804C (same). However, Zimmer provides
no evidence that Heraeus knew the specific contractual details of any of these customer contracts.
More to the point, Zimmer offers no evidence that Heraeus knew that Zimmer intended to
transition any specific customer contract to Zimmer’s own products, or that any particular
prospective business relationship would be affected by Heraeus’ actions.

87
No Proof of Interference
The bulk of Zimmer’s discussion of whether Heraeus interfered with prospective business
relationships by tortiously refusing to supply it with PALACOS pertains to allegations of breach
of the 2012 Agreement. See CPB at 98-102. Very little pertains to how that breach, assuming it
occurred, interfered with Zimmer’s effort to convert PALACOS customers into Refobacin
customers, and in fact, only two items of evidence even reference such conversion. The first is an
email between two Heraeus executives which states that “[i]f [Zimmer has] more time for
conversion, they will convert more customers to Refo.” CX-1320C.0001. 	Although this is not
inconsistent with Zimmer’s basic theory that Heraeus’ conduct “decreased Zimmer Biomet’s time
to transition its customers to the ZB Cements,” Zimmer does not otherwise provide specifics on
exactly how that transition time was affected. CPB at 98. The second is the testimony of Heraeus’
expert on Swiss law,4 Dr. Patrick Rohn, who apparently opines that it was commercially
reasonable for Heraeus to consider potential loss of market share in deciding to refuse Zimmer’s
firm orders. 	JX-0363C (Rohn Dep.) at 120:1-9. 	Here, too, Zimmer does not explain how that
demonstrates tortious interference; indeed, it would seem to undermine Zimmer’s case. Zimmer
cites no other evidence connecting the alleged breach of the 2012 Agreement to any prospective
business relationships – no expert evidence, no internal Zimmer documents or communications,
and no customer statements or testimony.
No Proof of Injury
Zimmer argues that “Heraeus’ unjustified intentional actions caused Zimmer Biomet to
lose its prospective business advantage, because each of the actions decreased Zimmer Biomet’s
time to transition its customers to the ZB Cements.” CPB at 98. Specifically, Zimmer argues that
4 The 2012 Agreement specifies that the laws of Switzerland govern the contract. JX-0204C.0041.

88
“Heraeus’ refusal to supply PALACOS to Zimmer Biomet after July 2018 reduced the time agreed
in the 2012 Distribution Agreement that Zimmer Biomet had to introduce its own cements to
customers.” Id. (citing CX-1320C). But CX-1320C is an email between two Heraeus executives,
with no apparent discussion of any “agreed” time, and Zimmer fails to point to any clause in the
2012 Agreement that establishes such an understanding. And as both Heraeus and Staff point out,
Zimmer failed to provide an injury analysis for tortious interference separate from that of trade
secret misappropriation and false advertising. RPB at 48; SPB at 78; see also Tr. (Mulhern) at
709:14-710:3. 	Zimmer therefore fails to prove that Heraeus’ alleged tortious interference (which
Zimmer also failed to prove) was the proximate cause of any injury alleged by Zimmer Biomet.
On balance, therefore, Zimmer’s tortious interference claim is unproven.
X. 	DOMESTIC INDUSTRY
Where a product is manufactured outside the U.S., a domestic industry may be established
through activities having a close relationship to the products at issue. 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, but 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. 	And 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. Thus, the nature and significance of Zimmer’s business
activities in the United States that relate to its bone cement and accessories must be assessed to
determine whether there are sufficient qualifying activities to constitute an industry in the United
States, or whether its activities are those of a mere importer. Certain Bone Cements, Inv. 337-TA-
1153, Comm’n Opp’n at 21.

89
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”). With an important exception – the
accessories themselves – these types of activities are what Zimmer contends establishes its
domestic industry. 	Zimmer asserts that it has made investments in facilities, labor, and capital
related to its characterization testing, regulatory compliance, manufacturing, customer service,
technical support, and technical marketing activities for the bone cements and bone cement
accessories that are sold in the United States (Zimmer refers to these as “ZB Products”). Zimmer’s
specific domestic activities will thus be analyzed to determine whether they qualify as legitimate
“domestic industry expenses.”
A. 	Characterization Testing and Regulatory Compliance
The first activity that Zimmer alleges makes up its domestic industry is characterization
and regulatory compliance. Zimmer contends that its
CPB at 106-107 (citing JX-0346C
(Armstrong Dep.) at 567:12-568:8; Tr. (Armstrong) at 35:25-36:15, 41:14-23; CDX-0008C.0005).
Zimmer further states that its characterization tests are part of
Id.
Zimmer further contends that other activities related to regulatory compliance of the ZB
Products performed in the United States are part of its domestic industry. 	CPB at 107.

90
Specifically, Zimmer states that its United States personnel
CPB at 107 (citing JX-0346C (Armstrong Dep.) at 488:16-22; Tr.
(Armstrong) 38:16-25; CDX-0008C.0006). Zimmer further asserts that between April 2017 and
August 2019, it operated the
Id.
Tr.
(Armstrong) at 39:15-40:7.
Zimmer asserts that the expenses associated with facilities used for characterization testing
and regulatory compliance are approximately 	Tr. (Mulhern) at 649:20-650:2; CDX-
0001C.5. 	Zimmer’s expert, Ms. Mulhern, explained that this investment was calculated by
allocating a portion of the investments in office space used by the testing and compliance
employees as well as a portion of the investments in a number of specialized laboratories. 	Tr.
(Mulhern) at 650:3-19; CDX-0001C.5-6. 	Zimmer also claims that it invested approximately
in labor associated with its characterization testing and regulatory compliance activities.
Tr. (Mulhern) at 650:21-651:4; CDX-0001C.7. 	Ms. Mulhern calculated this investment by
adjusting the share of time employees allegedly spent on the bone cements and accessory products
at issue during the period of 2017 to August 2019 and also including the compensation of two
Regulatory Affairs Specialists, who allegedly spent 	of their time on regulatory and
compliance activities. 	Tr. (Mulhern) 650:20-651:4; CDX-0001C.7. 	Zimmer alleges that its

91
investment in contract labor and supplies for the 	that are allocable to the bone
cement accessories is approximately 	Tr. (Mulhern) at 651:8-652:9.
The Staff and Respondents dispute these allegations, primarily because Zimmer failed to
accurately allocate expenses to the relevant activities that make up the domestic industry. 	See,
e.g., SPB at 88; RPB at 109. Staff argues that Zimmer’s calculations “appear inflated based on
the inclusion of activities that were not related” to Zimmer’s domestic bone cement products, such
as the 	which includes “activities wholly unrelated to the development of the
domestic industry bone cements.” SPB at 88 (citing Tr. (Armstrong) at 40:8-41:13). Respondents
argue that characterization testing done by Zimmer was “performed for the benefit of the entire
Cement Business Unit” and not just its bone cement products. RPB at 108. Thus, Heraeus also
argues that Zimmer’s allocation is inflated. 	Heraeus further points out that the characterization
testing was used in Zimmer’s marketing, because the data generated through the characterization
testing was included in Zimmer’s product brochures. 	Id. 	Accordingly, Heraeus submits that
Zimmer’s claimed expenditures for characterization testing should be rejected. Id. at 109.
B. 	Manufacturing Accessories
Zimmer further claims investments in the domestic manufacturing of certain accessory
products in the United States as part of its domestic industry. Zimmer states that it manufactures
some of its accessory products, such as Allen Plugs, mixing bowls, mixing systems, centralizers,
poly plugs, restrictor plugs, medullary plugs, bone prep kits, curettes, spacer molds, and cement
restrictors, in facilities in 	CPB at 111 (citing JX-0346C
(Armstrong Dep.) at 486:2-13; Tr. (Armstrong) at 43:6-44:6; CDX-0008C.0008). The evidence
shows that Zimmer manufactures Allen Plugs, centralizers, poly plugs, and cement restrictors in
the 	JX-0346C (Armstrong Dep.) at 485:7-490:2. Injection molding

92
also is done there, in a 	sq. ft. area of the facility. Id. Zimmer alleges that this area “is entirely
dedicated to the manufacturing of the accessory products.” CPB at 111 (citing CX-2436C; CDX-
0008C.0008; Tr. (Armstrong) at 43:5-21). 	Zimmer claims an average annual expenditure of
per sq. ft. for its Indiana Warsaw facilities. 	CX-2428C; Tr. (Armstrong) at 43:19-44:1.
Zimmer further claims that it “invested approximately 	for rent, maintenance, overhead,
and utilities” for Warsaw Building 5 for the period from January 2017 to August 19, 2019. 	Id.
(citing CX-3011C; CDX-0001C.0011; Tr. (Mulhern) at 653:12-654:2).
Zimmer further alleges that it manufactures mixing bowls, spatulas, mixing systems, quick
use curettes, bone prep kits, cartridge kits, and plugs and inserters in 	JX-0346C
(Armstrong Dep.) at 485:7-490:2; CDX-0008C.0008; Tr. (Armstrong) at 24:6-9; 44:2-6.
CDX-0008C.0008;
CDX-0001C.0011; Tr. (Armstrong) at 44:7-17. Zimmer states that the bone cement accessories
comprise 	of the value of production at the Dover facility; and by allocating the net book value
of the Dover facility (alleged to be 	) to the manufacturing space (based on the square
footage), and then allocating the manufacturing space to the accessory (by share of value of the
production), Zimmer invested 	in its accessory products. CBP at 111-112 (citing CDX-
0008C.0008; CDX-0001C.0011; Tr. (Armstrong) at 44:7-17; CX-3012C; CDX-0001C.11; Tr.
(Mulhern) at 654:3-19).
Zimmer also claims labor costs of 	associated with the accessory products
manufactured in 	per unit sold
in the United States from 2017 to August 2019. Tr. (Mulhern) at 654:22-655:6; CDX- 0001C.12.
The labor costs associated with the employees at the Dover, Ohio facility are alleged to be
approximately 	based on the average hourly rate of the manufacturing activities,

including molding, extrusion, and assembly activities, at that facility. Tr. (Mulhem) at 655:7-14;
CDX-0001C.12.

Staff and Heraeus argue that Zimmer is not entitled to include its manufacture of
accessories as part of its domestic industry. Heraeus asserts that under § 1337(a)(1)(A) the proper
scope of a complainant’s domestic industry “is defined in terms of ‘the target of the unfair acts
and practices.’” RPB at 104 (citing Rubber Resins, ID, 2013 WL 4495127, at *216 (“[19 U.S.C.
§ 1337(a)(1)(A)] requires that a complainant prove that a domestic industry exists that is subject
to imjury as a result of unfair acts, 1.e., the target of the unfair acts and practices.”)). And, Heraeus
argues, Zimmer’s accessory products are not the target of the alleged unfair acts.

Cc. Customer Service and Technical Support

Zimmer claims P| of investments in customer service and support activities as
domestic industry investments. Tr. (Mulhern) at 658:8-13 (CDX-0001C.17 provides summary of
calculations for the customer service). Zimmer’s expert, Ms. Mulhern, calculated this amount
because approximately fill in facilities expenses (located in Warsaw, Indiana, Building 4) and
| in labor costs (one director wh {iii
a: are attributable to customer service and technical support functions associated
with both the bone cements and the accessories. See Tr. (Mulhern) at 656:14-658:13; CDX-
0001C.15-.17. Ms. Mulhern used an allocation factor of || percent, which is a “sales-based
allocation that takes into account the share of total sales associated with the Zimmer Biomet bone

cements and accessories at issue.” Tr. (Mulhern) at 656:24-657:8, 657:24-658:7.

JX-0244C; CX-3272C.0016-17; Tr. (Armstrong) at 45:1-23.
93

94
Heraeus and Staff assert that these activities are not part of the domestic industry because
they include activities directed to products that are not the domestic industry products. However,
as discussed below, accessory products are properly included in assessing Zimmer’s domestic
industry. 	Heraeus further argues that the customer service and technical support are sales and
marketing expenditures, and “[a]t least a portion of Zimmer Biomet’s ‘411 Product Services’
team’s activities are sales and marketing.” RPB at 109-110. But although customer service and
technical support can certainly be used for marketing, overall they are more akin to repair services,
which qualify as domestic industry. See Case-Iron Stoves, Comm’n Op. at 11 (finding domestic
industry based in part on repair activities). So this category, with expenditures of approximately
counts toward Zimmer’s domestic industry.
D. 	Technical Marketing
Finally, Zimmer asserts that approximately 	in investments in “technical
marketing” activities are qualifying domestic industry expenses. Tr. (Mulhern) at 659:13-660:25;
CDX-0001C.18-.22. Included in this are
Tr. (Mulhern) at 659:13-20. 	Zimmer claims these marketing
activities are “technical,” but Zimmer itself defines these teams as primarily marketing.
CPB at 115.

95
Id.
See, e.g., Tr. (Armstrong) at 82:18-23
83:8-84:2 ( 	).
E. 	Analysis
Zimmer has the burden to show that its U.S. activities are more than those performed by a
mere importer. The record is unclear, however, as to whether Zimmer’s Characterization Testing
and Regulatory Compliance Practice engages in activities distinguishable from activities that a
mere importer would perform. The Commission has credited investments to obtain FDA approval
as part of the domestic industry in the past, but only after robust analysis of detailed evidence. For
example, in Certain Salinomycin Biomass and Preparations Containing Same, Inv. No. 337-TA-
370, USITC Pub. 2978 (July 1996), Initial Determination at 128 (not reviewed), a domestic
industry was found in part based on findings that (1) many employees of the patent owner’s
licensee spent time on “regulatory activities” (id. at 128); (2) the licensee had an FDA-approved
plant for making the chemical (id. at 299); (3) the complainant had “a consultant in the United
States that it uses in connection with FDA matters related to” the chemical (id. at 296), and (4) the
licensee had “plans to submit elements of the package seeking FDA approval” for use of the
chemical in animals (id. at 301). Similarly, in Certain Diltiazem Hydrocholoride and Diltiazem
Preparations Containing Same, Inv. No. 337-TA-348, USITC Pub. 2902 (June 1995), Initial
Determination at 120-28 (unreviewed in relevant part), a domestic industry was found in part based
on findings that the complainant (1) “conducts research and development . . . in order to comply
with FDA requirements” (ID at 142, 323, see also id. at 144); (2) maintains processes and

96
equipment in accordance with “FDA requirements” (id. at 143, 323); (3) spent an amount on the
order of at least $1 million “on research and development including FDA approval, clinical trials,
formulation research,” and other activities (id. at 324); (4) employed personnel “responsible for
the 	research 	and 	development 	activities 	relating 	to 	FDA-required 	clinical 	testing 	from
development phase 1 through phase 3” (id. at 325-26); and (5) employed other personnel
responsible for research on “products for which FDA approval is pending (phase 3B) and for those
products which have already been approved” (id. at 326).
In the present case, however, Zimmer has not shown, for example, that its Characterization
Testing and Regulatory Compliance Practice involves these 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. See CPB at 106-07. Zimmer states that it has specialized
laboratories, but it does not assert that these laboratories actually are used and maintained in
accordance with FDA requirements. See id. And Zimmer does not allege that any type of research
and development takes place in the U.S. Instead, Zimmer’s identified activities are seemingly no
more specialized than those of any mere importer seeking FDA compliance. The same is true of
the 	expenditures. See CPB at 107.
Zimmer’s accessory manufacturing costs, however, are part of its domestic industry,
because Heraeus’ acts were directed to both cements and accessories. As Zimmer points out, TS
15 includes sales data on Zimmer’s accessory products (CX-2622C; JX-0309C) and Trade Secrets
10 and 28 include data on Zimmer customers who purchased both cements and accessories. CRB
at 51 (citing CX-2172C; CX-2499C). Moreover, the scope of the investigation, as defined in the
Notice of Investigation, is for both bone cements and accessories. 84 Fed. Reg. 49764 (Sept. 23,
2019); see, e.g., Certain Wireless Comm’cn Devices, Components Thereof, and Prods. Containing

97
the Same, Inv. No. 337-TA-583, Order No. 6 at 3 (Dec. 15, 2006) (“[N]otice of investigation
determines the scope of the investigation”). 	Accordingly, Zimmer’s investments in the
manufacture of its accessory products in the United States is properly part of its domestic industry
Investments for customer service and technical support and technical marketing are
primarily sales and marketing activities, which are not cognizable as domestic industry activities.
However, as Heraeus recognizes, “[a]t least a portion of the ‘411 Product Services’ are sales and
marketing,” and thus, another portion may be technical. RPB at 110. Zimmer’s expert realized
that and allocated only 	of the investments as going to the domestic industry. This is reasonable
in light of the evidence that at least some activity is not sales-related, but is, in fact, technical
assistance. The remainder of Zimmer’s claimed activities of technical marketing “are not of the
nature of activities that qualify toward establishing an industry.” Certain Bone Cements, Inv. 337-
TA-1152, Commission Op. at 29. 	They are largely marketing activities that a mere importer
conducts.
Thus, Zimmer’s activities and expenditures that make up its domestic industry are its
investments in accessory manufacturing (a combined 	for facilities and 	for labor
at two sites), and a portion 	of its customer service and technical support. Unsurprisingly,
the more important of these is the accessory manufacturing, because an investment of almost
although not automatically or even presumptively sufficient, certainly merits close
attention, and because the investment is in domestic manufacturing. That is, Zimmer may well be
a mere importer with respect to its bone cements (and discounting accessory manufacture, a
domestic industry investment of only 	in customer service and technical support likely
would be insufficient), but it is not an importer with respect to a portion of its accessory
manufacturing.

98
To be sure, Zimmer’s domestic accessory manufacturing is
As Dr. Vander Veen, Heraeus’ expert, notes, the number of full-time
equivalent employees who Ms. Mulhern attributes to Zimmer’s domestic industry is
See Tr. (Vander Veen) at 1328:4-13; RDX-0003C.29. But Zimmer’s
domestic accessory manufacturing business overall is nonetheless significant. Between January
2017 and August 2019, Zimmer’s U.S. employees spent over 	performing
at its two U.S.
sites. 	CPB at 112; Tr. (Mulhern) at 655:7-14; CX-3015C. 	Between 2017 and April 2020, this
domestic manufacturing accounted for 	of Zimmer worldwide accessory sales on a unit
basis. See CX-3028C. And it is seemingly highly profitable: again including the period ending
in April 2020, its U.S. accessory manufacturing resulted in over 	in net sales revenue,
which was 	of worldwide accessory net sales revenue, compared to labor costs of less than
. Id; CX-3015C. Lastly, although Dr. Vander Veen criticizes Zimmer’s analysis of its
accessories 	business, 	the 	record 	readily 	permits 	a 	specific 	identification 	of 	accessory
manufacturing labor and facilities costs, unit sales, and net revenues, and it is clear that the
accessories business is significant. Compare, e.g., CX-3028C (breaking down sales and revenues
by year and region) with Tr. (Vander Veen) at 1326:14-1327:10 (criticizing Ms. Mulhern’s
analysis for lack of “context”).
Therefore, Zimmer has demonstrated the existence of a domestic industry under section
337(a)(1)(A)(i).
F. 	Substantial Injury To Domestic Industry
In addition to proving that a domestic industry exists, Zimmer must “demonstrate . . . that
there [is] actual substantial injury or the threat of substantial injury” to it. 	See Rubber Resins,

99
Comm’n Op., 2014 WL 7497801, *5. In addition, “[w]hen the complainant alleges actual injury,
there must be a causal nexus between the unfair acts of the respondents and the injury.” Id. at *30.
Zimmer fails to provide sufficient evidence that any actions by Heraeus caused or
threatened substantial injury to its domestic industry. Instead, the majority of Zimmer’s arguments
and evidence of injury relate to its sales of bone cement. This is not Zimmer’s domestic industry,
and thus, this evidence is not relevant to the analysis. 	Nonetheless, the following analysis will
address the various theories of injury.
Lost sales, Lost Market Share, and Price Erosion of
Bone Cements and Accessories
Zimmer asserts that Heraeus’ misappropriation of trade secrets enabled it to undercut
Zimmer Biomet’s historic pricing for PALACOS with those customers. No misappropriation has
been proven; however, should misappropriation of Zimmer’s purported trade secrets be found,
Zimmer fails to show that the misappropriation resulted in injury to Zimmer’s domestic industry.
In brief, Zimmer asserts that the alleged misappropriation of TS 10 and alleged wrongful disclosure
to 	injured Zimmer because Heraeus relied on the data and advice 	provided to guide its
development of its operations in 2017 and market entry in 2018, giving Heraeus a head start to
unfairly compete with Zimmer Biomet. However, the evidence shows that Heraeus’ engagement
of 	See Tr. (Petermann) at 770:17-20; JX-0334C
(Petermann Dep.) at 161:2-16. Zimmer did not provide any evidence that such limited interactions
with 	resulted in a loss of customers or other harm in 2018. Similarly, Zimmer fails to provide
evidence showing that the alleged disclosure to 	caused any injury. In fact, Heraeus
Germany ultimately did not engage 	Tr.
(Petermann) at 777:16-778:4. Accordingly, Zimmer cannot link Heraeus’ preliminary discussions
with 	to the loss of any customers or other harm in 2018. Finally, Zimmer alleges

100
that the sharing of trade secrets with 	injured Zimmer because 	used the
information to guide HMUS’ marketing strategy and execute targeting of Zimmer’s customers.
JX-0325C (Wilemon Dep.) at 32:9-33:4; 69:9-70:2. 	However, Zimmer presented no evidence
connecting the alleged early and limited disclosures to 	to any customer loss or other
harm.
Similarly, Zimmer failed to provide any evidence that Mr. Burns’ creation and taking of
the “For Peterson” file resulted in any injury to Zimmer. No evidence was provided to show that
Mr. Burns or anyone at Heraeus ever used the data within the file. 	See, e.g., Tr. (Vaughn) at
370:24-371:2; CDX-0006C.6 (finding only a single instance in which the USB drive with the
“For Peterson” file was connected to Mr. Burns’ Heraeus work computer).
Nonetheless, Zimmer presents evidence purportedly showing that Heraeus’ actions caused
lost sales of bone cement and accessory products. 	For example, Zimmer claims that in
CX-3036C. 	Id.; Tr.
(Mulhern) at 666:7-20; CDX-0001C.27. 	According to Zimmer, its bone cement sales totaled
units. CX-3022C; CX-3064C; Tr. (Mulhern) at 667:3-21; CDX-0001C.30. But by 2019,
Zimmer Biomet’s annual sales of bone cements
Id. Zimmer further argues this loss occurred while the bone cement
market was growing. 	CX-3000C. 	On a revenue basis, Zimmer argues that its sales decline is
even greater. In 2017, Zimmer Biomet’s bone cement revenues totaled 	and
in 2019, which amounts to a 	CX-3023C; Tr. (Mulhern) at 667:21-
668:7; CDX-0001C.20.

Zimmer’s figures are misleading, however, because they include Zimmer’s historic sales
of PALACOS, which of course would decrease because of the termination of the 2012
Distribution Agreement. See RPB at 122. As Staff poimts out, Heraeus made sales of
approximately P| of the accused PALACOS bone cement products in 2018 and
approximately in sales in 2019. SPB at 95-96 (citing CX- 3030C). Zimmer made
sales of approximately ian in U.S. sales from its own BBCR and RBCR products in 2018
and in 2019. CX- 3023. These numbers illustrate that Zimmer did not suffer injury
in its sales of its own bone cement products, even assuming they are part of its domestic industry.

With respect to Zimmer’s sales of bone cement accessories, which actually is part of its
domestic industry, Zimmer fails to present evidence that it lost sales due to Heraeus’ actions.
Zimmer often does not focus on these alleged lost sales in detail, but instead generally lumps the
accessory sales together with bone cement sales. See., e.g., CPB at 126 (“Zimmer Biomet’s
cement sales and accessory sales toi members have each declined since 2018. Tr. (Smith) at
133:24-134:4”).

And even when Zimmer does disaggregate accessories from bone cements, its evidence

does not establish a nexus with Heraeus’ actions. For instance:

In 2018, Zimmer Biomet’s sales of products competitive with HMUS’ accessory
products totaled units accounting io in revenue. CX-3025C;
CX-3026C. In 2019, Zimmer Biomet’s sales of these same products
units P ad in revenue .

Tr. (Mulhern) at 672:15-673:13; CDX-0001C.36-37; CX-3025C; CX-3026C. This
includes a decline in revenue from the sales of accessories to
. (Smith) at 133:24-134:4, 135:10-16. While the absolute percentage of

and is expected to continue growing, thus showing injury. TT.
(Mulhern) at673:4-13; CX-3001C; CX-3002C.

CPB at 135. Such trends are not necessarily attributable to Heraeus’ unfair acts; certainly the

evidence cited does not clearly point to that conclusion. As another example, Zimmer asserts that

101

102
it lost sales of accessories because “Heraeus’ unfair acts also led customers to turn to third-parties,
such as Stryker or DePuy, who can supply a full line of products.” Id. (citing Tr. (Mulhern) at
687:17-689:12). However, Zimmer offers no more evidence of the injury beyond this statement.
By contrast, Staff presents a chart that Zimmer’s expert offered, that shows Zimmer’s market share
of “Cement Delivery and Mixing Systems” in 2016 was 	and in 2019 it was 	and at the
same time Stryker’s market share 	while “other” entities’ share
, and Heraeus showed no market share at all in 2019. SRB at 48. Such evidence
undermines Zimmer’s case.
The only reference to Zimmer’s alleged injury to its accessory domestic industry due to
price erosion relates to a contract negotiation it had with 	According to Zimmer,
the “evidence demonstrates that 	leveraged Heraeus’ low proposed prices in
negotiations with Zimmer Biomet.” 	CPB at 139. 	In fact, the evidence actually shows that
issued a Request for Proposal to multiple companies, and Heraeus ultimately lost
the bid after submitting a second response at the request of 	to lower its prices. Tr.
(Smith) at 134:12-135:3; CX-2043C.0005. This is insufficient to prove that Zimmer suffered price
erosion due to actions by Heraeus.
Reputational Harm and Injury to Goodwill
Zimmer also asserts that it suffered injury in the form of “harm to reputation and brand” as
a result of Heraeus’s alleged violations. 	Tr. (Mulhern) at 680:2-22; CDX-0001C.45. 	Zimmer
fails to provide evidence to support this, however. As Staff and Heraeus argue, Zimmer’s expert
Dr. DiGioia agreed that Zimmer has “a very good national reputation as a medical device
company” and has held this reputation “consistently from late 2017 to the present.” Tr. (DiGioia)
at 516:8-14, 510:8-10 (testifying that Zimmer’s reputation for safety and quality is very high);

103
see also Tr. (Shapiro) at 1242:17-20 (opining that “if any injury was caused, I think that in terms
of reputation that Zimmer hurt their own reputation”). In other words, Zimmer’s reputation has
not suffered as a result of Heraeus’ actions. Moreover, Complainants’ experts have not provided
any analysis of injury specific to loss of goodwill or reputation, or to show a nexus between these
allegations and the domestic industry.
Testing, Customer Service and Technical Support/Marketing
Zimmer states that its
CRB at 70. However, Zimmer
fails to link these changes to Heraeus’ alleged misappropriations of trade secrets, tortious
interference, or false advertising, as opposed to lost sales of PALACOS. Moreover, these changes
in Zimmer’s personnel and business structure are a natural progression of the nature of the
business. As Heraeus points out, Zimmer’s bone cements were approved by the FDA, and thus,
Zimmer no longer needs employees dedicated to seeking regulatory approval, and Zimmer has
identified no other types of regulatory expenditures that it had or lost due to Heraeus’ alleged
violations. 	RRB at 72-73 (citing Tr. (Vander Veen), 1321:6-10 (“Now, that [regulatory affairs
team] would for the [510(k)] submissions occurred in 2016 and 2017. And after the time it was
submitted, I don’t see evidence of what post-submission work was occurring.”)). Zimmer admits
that “the majority of the characterization testing of the DI Bone Cement Products occurred in
which were filed in 2016 and 2017. CX-3270.0009;
Tr. 	(Spiegelberg), 	556:22-557:1 	(“A 	lot 	of 	the 	regulatory 	submissions 	involve 	510(k)
submissions.”); CX-0559C (Apr. 27, 2016 FDA 510(k) for Refobacin Bone Cement R); CX-
2935C (May 23, 2017, Zimmer's 510(k) for Refobacin Bone Cement R); JX-0301C (510(k) for
Biomet Bone Cement R from Aug. 1, 2017).

104
Zimmer further explains that its
and this caused injury to its alleged domestic industry. However,
Zimmer fails to show that the elimination of these positions is the result of any of the unfair acts.
Heraeus notes that in its interrogatory responses, Zimmer stated that it “engages in the sale and
distribution of BBCR and RBCR through its vast network of direct territories and independent
distributors, including nearly 	sales representatives[.]” RRB at 74 (citing CX-3272C.0025-
0026). The 	members of Zimmer’s 	role always had been to
assist other employees in making sales. 	Id. (citing CX-3272C.0026
No further evidence was presented related to
the elimination of these positions. 	Thus, Zimmer fails to show that Heraeus’ alleged acts are
related at all to Zimmer’s testing, customer service, and technical support and marketing.
Therefore, Zimmer has failed to prove injury or threat of substantial injury to its domestic
industry.
XI. 	CONCLUSIONS OF LAW
1. 	The Commission has jurisdiction to conduct this Investigation.
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.
3. 	Zimmer owns the asserted Trade Secrets.
4. 	TS 10 is a protectable trade secret.
5. 	TS 11 is not a protectable trade secret.

105
6. 	TS 15/28 are protectable trade secrets.
7. 	Respondents did not misappropriate any Trade Secret.
8. 	Respondents did not engage in false advertising.
9. 	Respondents did not tortiously interfere with Zimmer Biomet’s contracts or prospective
business relationships.
10. 	Zimmer has established a domestic industry.
11. 	There is not and has not been a substantial injury or threat of injury to Zimmer’s domestic
industry by Heraeus’ actions.
12. 	There is no violation of Section 337 on any asserted basis.
XII. 	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’s 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
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

106
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,
Inv. No. 337-TA-1074, Comm’n Op. at 13 (Apr. 23, 2019) (“Automation Systems”) (public
version) (citation omitted).

107
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. 49764
(September 23, 2019).
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. For
the accused PALACOS bone cements, these entities include Respondents Heraeus Medical GmbH
and Heraeus Medical LLC. In addition, any affiliated companies, parties, subsidiaries, and others,
including certification provisions, are included.
“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.”). With respect to a violation involving asserted trade secrets 10, 15, and/or 28, Zimmer’s
corporate witness Mr. Armstrong testified that the typical development time is approximately
and the development time for asserted trade secret 11 would take no more than
to develop. Tr. (Armstrong) at 26:9-11, 28:14-16, 29:14-30:1, 30:22-24. Zimmer’s expert
Ms. Mulhern agreed with these time frames. Tr. (Mulhern) at 690:15-25 and CDX-0001C.56.

108
On the other hand, Heraeus’ expert Mr. Senn testified that the asserted trade secrets would
have taken no more than two weeks to independently develop. Tr. (Senn) at 1048:1-14 (explaining
that the 	of development for asserted TS 10 proposed by Zimmer Biomet reflects the
normal course of sales efforts, not development of the asserted trade secret); RDX-0006C. 	Dr.
Vander Veen further testified that “as of January of 2019 . . . Heraeus [was] permitted to make use
of the trade secrets” to sell PALACOS, and any exclusion order that goes into effect in 2020 or
later risks restricting legitimate competition. 	Tr. (Vander Veen) at 1356:24-1357:6; RDX-
0003C.073.
Zimmer 	seeks 	to 	exclude 	Heraeus’ 	bone 	cement 	and 	accessories, 	which 	are 	not
manufactured or tested using any of the asserted trade secrets. Thus, I agree with Staff that the
appropriate measure of duration for an exclusion order is the time advantage in marketing that
Heraeus allegedly gained as a result of the alleged misappropriation. SPB at 102. Heraeus did not
have use of the data in the Trade Secrets asserted TS 10 and TS 11 (and, thus, most of TS 15/28 to
the extent of overlap) from the time Heraeus gave notice of its mutual election of non-exclusivity
until the 2012 Agreement terminated at the end of 2018, i.e., roughly a year. JX-0204C.0015.
With respect to false advertising, Commission remedial orders simply prohibit the
respondent from importing falsely advertised products, so no time limitation is warranted. 	See,
e.g., Woven Textile Fabrics, General Exclusion Order, ¶ 1 (EDIS Doc. ID 605891). With respect
to tortious interference, Zimmer’s allegations are based in large part on the same arguments as its
claims of trade secret misappropriation and false advertising and should be subject to the same
limitations. Inasmuch as Zimmer’s tortious interference allegations are based on failure to supply
PALACOS according to the 2012 Agreement, Biomet’s right to distribute PALACOS has

109
unquestionably expired at this point, so any remedy on that basis would be inappropriate. 	See
Electric Fireplaces, Comm’n Op. at 9 (vacating finding of violation based on expired contract).
Accordingly, to the extent trade secret misappropriation or tortious interference based on
such misappropriation is found, a limited exclusion order of one year is appropriate. To the extent
false advertising or tortious interference based on such false advertising is found, a limited
exclusion order with no time limit is appropriate. Zimmer does not seek a general exclusion order,
nor does the record support imposing one. See CPB at 147.
B. 	Cease and Desist Order
If a violation of Section 337 is found, a cease and desist order is appropriate because
Heraeus maintains a significant inventory of PALACOS bone cement and accessories in domestic
inventory. See Tr. (Mulhern) at 691:1-16; CDX-0001C.57
CX-1734C; CX-1735C.
Heraeus seemingly does not dispute that it maintains a substantial inventory. 	See RPB at 150.
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,
the affected articles are entitled to entry or sale under bond during the 60-day Presidential review
period. The Commission often sets the bond based on price differential or on a reasonable royalty.
See, e.g., Certain Microsphere Adhesives, Processes for Making Same, and Products Containing
Same, Including Self-Stick Repositionable Notes, Inv. No. 337-TA-366, Comm’n Op. at 24, USITC
Pub. 2949 (Jan. 1996) (“the Commission typically has considered the differential in sales price

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between the patented product made by the domestic industry and the lower price of the infringing
imported product, and has set a bond amount sufficient to eliminate that difference”); Certain
Plastic Encapsulated Integrated Circuits, Inv. No. 337-TA-315, USITC Pub. 2574, Comm’n Op.
at 45 (Nov. 1992) (setting the bond based on a reasonable royalty).
Zimmer’s expert testified that calculation of a price differential is “impractical in this
investigation” because the bone cement products and accessories are sold at varying prices, often
separately negotiated with individual customers. 	Tr. (Mulhern) at 691:25-692:4. 	Instead, she
asserted that industry royalty rates can be used to set an appropriate bond rate. Tr. (Mulhern) at
692:5-8 and CDX-0001C.58 (noting industry royalty rates in the medical and health products
industry range from 2.5 percent to 7.0 percent, with an average of 6.0 percent and a median of 4.5
percent, while bone cement royalty rates range from 2.5 percent to 10 percent, with a median of 5
percent); see also, e.g., CX-2834; CX-2816. Accordingly, Zimmer’s expert stated that a bond of
6% is reasonable. Tr. (Mulhern) at 692:5-8; CDX-0001C.58.
On the other hand, Heraeus’ expert Dr. Vander Veen testified that bond should be set at no
more than 5%, which is the amount the Administrative Law Judge found to be economically
reasonable in the 1153 Investigation. 	Tr. (Vander Veen) at 1358:4-10 (explaining that as Ms.
Mulhern’s opinions appear to be consistent with those presented in the 1153 investigation, and
lacking any reason to otherwise distinguish this investigation from the previous investigation, there
is “no reason to increase the bond beyond the 5 percent” established by the ALJ in the 1153
investigation); RDX-0003C.075. 	Both experts’ positions are reasonable; the record supports a
bond that is halfway between them, or 5.5%.

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XIII. 	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 	bone 	cement 	accessories. 	Respondents 	did 	not 	engage 	in 	trade 	secret
misappropriation, 	false 	advertising, 	or 	tortious 	interference 	with 	prospective 	business
relationships. A domestic industry in the United States exists, but was not injured or subject to
threat of injury by virtue of any violations.
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
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

112
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 CEMENTS AND BONE CEMENT
ACCESSORIES
Inv. No. 337-TA-1175
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, Megan Wantland, Esq., and the
following parties as indicated, on February 23, 2021.
Lisa R. Barton, Secretary
U.S. International Trade Commission
500 E Street, SW, Room 112
Washington, DC 20436
On Behalf of Complainants Zimmer, Inc., and Zimmer US,
Inc.:
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 for Download
On Behalf of Respondents Heraeus Medical GmbH and
Heraeus Medical LLC:
David A. Caine, Esq.
ARNOLD & PORTER KAYE SCHOLER LLP
3000 El Camino Real, Suite 500
Palo Alto, CA 94306
Email: david.caine@arnoldporter.com
☐ Via Hand Delivery
☐ Via Express Delivery
☐ Via First Class Mail
☒ Other: Email Notification
of Availability for Download