ALJ Rodgers Finds Lincoln's Pre-filing Investigation and Post-Filing Conduct Objective Reasonable and Denies Atlantic's Request for Sanctions
Respondent Atlantic China Welding Consumables, Inc. (“Atlantic”) moved for sanctions against Complainants Lincoln Electric Company and Lincoln Global, Inc (“Lincoln”) for failure to comply with Commission Rule 210.4(c). Atlantic based its motion on Lincoln’s alleged failure to conduct a reasonable pre-filing investigation and continued maintenance of the investigation against Atlantic. It was undisputed that the accused “Atlantic product” was not made by, or manufactured for, Atlantic.
ALJ Rodgers found that Lincoln conducted an objectively reasonable pre-filing investigation by ordering the accused product and relying on a trusted vendor’s representation that the product was an Atlantic product. As received, the product did not have a label and the Material Safety Data Sheet indicated that the manufacturer/supplier was a third party known to manufacture for Atlantic. Atlantic argued that Lincoln should have known that the product was not made by Atlantic because of the retainer ring design of the accused product. However, nothing in the record indicated that Lincoln knew or should have know of the differences in the retainer ring structures offered by Atlantic and others. Lincoln’s failure to search the ISO certification number on the product was not unreasonable given the testimony that ISO certification is not commonly used in the industry to identify product origin.
ALJ Rodger’s also found Lincoln’s activities after institution of the investigation were objectively reasonable. Atlantic’s counsel informally represented that Atlantic did not make the accused products, but never provided a signed declaration. Lincoln properly sought discovery from the alleged manufacturer identified by Atlantic. After receiving the needed discovery, Lincoln timely moved to terminate the investigation against Atlantic. (PDF)
