On June 12, 2017, the Commission issued an Opinion in Certain Automated Teller Machines, ATM Modules, Components Thereof, And Products Containing The Same, Inv. No. 337-TA-972 upholding the ALJ’s final ID finding a violation of Section 337 with respect to the infringement of asserted claims of the ‘616 and ‘631 patents, and issuing a limited exclusion order and cease and desist order with respect to the Respondents’ accused automated teller machines, ATM modules, components thereof, and products containing the same.
The Limited Exclusion Order (“LEO”) issued by the Commission included a carve-out for “service or repair articles imported for use in servicing or repairing automated teller machines, ATM modules, components thereof, and products containing the same, for identical articles that were imported as of the date of this Order.” The Commission noted that this exception “does not permit the importation of automated teller machines to replace such articles that were previously imported.” The Commission held that its determination to issue an LEO with such a carve-out was “consistent with past practice” and based on Respondents’ submission of “numerous” customer letters “citing the harm that would be caused to them if they could not obtain parts to service ATMs” and that “certain customers cannot afford to replace the ATMs rather than have them repaired.” Opinion at 25-26. Based on the same reasons, the Commission tailored the Cease and Desist Order to include the same carve-out. Id. at 28-29.
Commissioner Kieff submitted Views Dissenting from the Determination to Include a Public Interest Carve-Out for Replacement Parts for Service or Repair. Commissioner Kieff emphasized that “as the Federal Circuit explained at some length in Spansion, Inc. v. ITC, 629 F.3d 1331, 1359-60 (Fed. Cir. 2010), the 1988 amendments to our statute were designed to strengthen patent enforcement against the backdrop of having recognized what essentially are only narrow categories of public interest carve-outs … all of which focused on ‘inadequate supply within the United States – by both the patentee and domestic licensees [which] meant that an exclusion order would deprive the public of products necessary for some important … need.’”
In Commissioner Kieff’s opinion, the fact that the “product in question is of a type that may require repair in the future and at the same time subject the purchasers to a risk of higher priced repairs or subject the public to deprivation from a few particular points of convenient access to cash withdrawal” cuts against the 1988 amendments as reminded by the Federal Circuit in Spansion. Commissioner Kieff cited to the implied warranty against infringement in the Uniform Commercial Code’s Section 2-312 designed to give consumers contract claims against their sellers for indemnification against “any unexpected costs associated with infringement, such as having to now purchase a license from the patentee” as addressing exactly this type of plight of consumers.