Federal Circuit Validates U.S. International Trade Commission's Ability to Resolve Disputes Over Induced Infringement
Yesterday, the Federal Circuit, in an en banc review, held that the U.S. International Trade Commission’s interpretation of its authority regarding induced patent infringement was reasonable. Based on this ruling, the Commission will be able to continue to adjudicate patent infringement cases that are based on a theory of induced infringement where the articles do not infringe at the time of importation, and where the asserted patent is a method patent.
The decision was issued in Suprema, Inc. v. ITC (available here). Suprema is a Korean company that manufactures and sells scanners for scanning fingerprints. Mentalix is an American company that purchases Suprema’s scanners and imports them into the United States to be bundled with Mentalix’s software. The ITC found that Mentalix directly infringed a method claim of a patent when Mentalix imported Suprema’s scanners and combined them with its own software. The ITC also found that Suprema (1) was willfully blind to the patent, (2) studied and emulated the patentee’s products before willfully blinding itself to the infringing nature of Mentalix’s activities, and (3) actively encouraged those activities. Therefore, the ITC found that Suprema had induced infringement of the patented method under 35 U.S.C. § 271(b), and that this inducement formed the basis for a Section 337 violation. Accordingly, the ITC issued a limited exclusion order and a cease and desist order relating to Suprema’s scanners.
Following the ITC’s decision, a controversy arose regarding whether the ITC could base its orders on induced infringement after importation, rather than only direct infringement that existed at the time of importation. In Suprema, Inc. v. ITC, the Federal Circuit settled this controversy in favor of the ITC. In particular, the Court found that the ITC’s interpretation of Section 337 was entitled to deference, because the ITC’s interpretation was reasonable and consistent with Section 337. Going forward, therefore, the ITC will continue to consider induced infringement as a basis for its exclusion orders, even when the products at issue do not directly infringe at the time of importation into the U.S.
If you have any questions or wish to discuss how these decisions impact your business, please contact one of our International Trade Commission (ITC) Attorneys.