In Suprema, Inc. v. International Trade Commission, Appeal No. 2012-1170, the Federal Circuit vacated a panel decision interpreting 19 U.S.C. § 1337 (“section 337”) as not covering importation of goods that were non-infringing at the time of importation, but that were later used by the importer to directly infringe at the inducement of the goods’ seller. The majority instead gave Chevron deference to the ITC’s interpretation of the statute, and remanded for further proceedings.
Suprema is a Korean manufacturer of fingerprint scanning hardware that can only be used in conjunction with a computer running specialized software. Suprema imported its scanners and sold them to Mentalix, which bundled them with Mentalix software and sold them. Cross Match filed an ITC complaint alleging that the hardware-software bundle infringed Cross Match’s patents. The ITC ruled that the bundle infringed, the elements of induced infringement had been met with regard to Suprema, and appropriate relief included an exclusion order. Suprema appealed, and a divided Federal Circuit panel vacated the ITC’s findings, reasoning that section 337’s “articles that infringe” language includes a temporal requirement that infringement must be measured at the time of importation.
The en banc panel vacated the decision. After determining that it should review the ITC’s ruling pursuant toChevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), the Federal Circuit held that, under Chevron step 1, “we cannot conclude that Congress unambiguously excluded such induced infringement on the basis of the panel’s reasoning,” and, under Step 2, the ITC’s interpretation of the statute was reasonable.
Four members of the panel dissented, arguing that the language of the statute was unambiguous, and that the ITC thus lacked authority to enter an exclusion order on the basis of infringement of a method claim when the underlying direct infringement occurs post-importation.