In Cisco Systems, Inc. v. ITC, No. 16-2563 (Fed. Cir. Sept. 28, 2017), the Federal Circuit affirmed the Commission’s exclusion order entered in Certain Network Devices, Related Software and Components Thereof (I), Inv. No. 337-TA-944.
In the 944 investigation, Cisco filed a complaint asserting that Arista infringed five of its patents. ALJ Shaw found that Arista infringed three of the five patents at issue, and the Commission affirmed. Both parties appealed, and the Federal Circuit affirmed the ITC’s determination. The Court agreed with the Commission’s claim construction and concluded that it had made the necessary findings.
An interesting discussion in the opinion relates to Arista’s accused products. Arista argued that the Commission did not sufficiently find that the imported components of its products induce infringement. The Court disagreed. The Commission had explicitly found that Arista’s “switch hardware” is designed to run infringing software and therefore induces infringement. Although, the Commission never defined “switch hardware” in its opinion, the Court nevertheless concluded that the phrase was sufficiently defined in the ALJ’s final initial determination. In that ID, the ALJ concluded that the importation of switch hardware was sufficient to find both induced and contributory infringement where 1) the switch hardware was covered by certain asserted claim limitations, 2) the switch hardware was specifically designed to be combined with software the combination resulting in a device that directly infringes the asserted claims, and 3) Arista’s documents and manuals showed an intent that the hardware and software be combined into an infringing device. Because the Commission expressly “adopt[ed] the ID’s findings consistent with [its] opinion,” the Court held that it was not required to separately define “switch hardware.”
The Federal Circuit’s holding further confirms that indirect infringement is an unfair act covered by Section 337. When an asserted patent covers a combination of hardware and software, the ITC can enter an exclusion order against hardware components imported by a respondent that are specifically designed to be combined with software in the United States.