We previously wrote about the ITC’s determination in Certain Semiconductor Devices, Semiconductor Device Packages, and Products Containing the Same, Inv. No. 337-TA-1010 that renting accused products after importation does not violate Section 337. This week the ITC issued Commissioner Kieff’s concurring additional views which cast doubt on the precedential value of the ITC’s determination.

The Case

The factual background of the ITC’s determination that Respondent Comcast’s renting of set top boxes to its customers does not violate Section 337 is provided in our previous post. In his additional views, Commissioner Kieff explains that his understanding of the Commission’s determination is not to adopt a policy-based position on the term “sale” in Section 337. In his view, the ALJ’s ruling should not be disturbed because the parties’ briefing did not address certain issues that he believes are “ripe for…consideration in some future case.” He then provides a litany of questions that he believes pertinent to the definition of “sale” in Section 337. He does not explicitly say so, but it appears that Commissioner Kieff is leaning towards the view that renting a product after importations is an activity that should be covered by Section 337.

Commissioner Kieff first asks “[w]hat role do the fields of sales law, commercial law, or private law play in informing the Commission’s understanding of the word ‘sale’ as it is used in the Commission’s organic statute within the field of trade law?” He then notes that the “fields of sales law, commercial law, and private law have generally long recognized that the term ‘sale’

encompasses a very broad category of transactions that accomplish a transfer of title and possession in exchange for some value, not merely those transactions that Article 2 of the Uniform Commercial Code (UCC) treats as the types of sales of goods that convey unencumbered title.”

Next the Commissioner queries “[w]hat is the role of patent law in informing the Commission’s understanding of the word “sale” as it is used in the Commission’s organic statute within the field of trade law as it relates to patents?” He explains that “[s]ome lines of case law suggest that as a matter of the patent statute’s on-sale bar under 102 and as a matter of its provision for direct infringement under 271(a), a lease may be treated the same as a sale.”

He then asks “[w]hat was the meaning of the term ‘sale’ in the field of trade law at the time the Commission’s organic trade statute was written” and inquires whether “the term “sale” within the field of trade law at the time the Commission’s organic trade statute was written a capacious or broad meaning applicable to transactions that included or resembled leases, bailments, and the like?”

Finally, Commissioner Kieff asks “[w]hat is the precedential effect of the Federal Circuit’s decision in Enercon GmbH v. Int’l Trade Comm’n, 151 F.3d 1376 (Fed. Cir. 1998)? With respect to that case, the Commissioner noted that the case does not necessarily limit the term sale in Section 337 to the transfer of title, but instead holds that the statute “includes” such transactions.

Takeaway

The Commission’s determination appeared to find that a violation of Section 337 cannot be based solely on the renting of infringing products after importation. But Commissioner Kieff’s position that it is not a policy-based decision casts doubt on its application in future cases. While allegations of a violation based on renting after importation remain on shaky ground, the concurring opinion, and the questions that it raises, provides a complainant some latitude to make such an argument.