Federal Circuit No. 2012-1170

The Federal Circuit has recently sided with the U.S. International Trade Commission (the "ITC") as to whether 19 U.S.C.§ 1337 gives the ITC authority to exclude goods from being imported into the United States that are subsequently used in an infringing method.

The Tariff Act of 1930 prohibits the importation, sale for importation, and sale within the U.S. after importation of "articles that…infringe a valid and enforceable United States patent[.]" 19 USC § 1337(a)(1)(B)(i).  Petitioner Cross Match Technologies, Inc. alleged that finger print scanners imported by Korean based Suprema, Inc. infringed its patent directed to methods for processing a fingerprint image once U.S. based Mentalix, Inc. purchased the scanners and integrated them with their own software.  The ITC agreed, finding that Suprema induced infringement of the Cross Match patent under the willful blindness standard set forth in Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060 (2011).

Following a panel decision holding to the contrary, the Federal Circuit, sitting en banc, upheld the Commission's authority to exclude goods that are used in an infringing method after importation at the inducement of the seller.  Citing Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), the court held that the ITC's interpretation of 1337(a)(1)(B)(i) was entitled to deference because the statutory language was sufficiently ambiguous and the ITC's interpretation was reasonable.

In a strong dissent, the minority argued that the phrase "articles that…infringe" lacked ambiguity, and that the exclusion authority under Section 337 is limited to articles that infringe at the time of importation.  The minority asserted that the holding will cause significant enforcement problems, for instance forcing customs agents to discern the intent of the seller during inspection.

Regardless, the en banc court's decision should be warmly received by owners of method claims that wish to bring inducement actions in front of the ITC.  The court's decision suggests that even goods with substantial non-infringing uses may be excluded if they are intended for an infringing use.