Digest of Suprema, Inc. v. Int’l Trade Comm’n., No. 2012-1170 (Fed. Cir. Aug. 10, 2015) (precedential). On appeal from ITC. Before Prost, Newman, Lourie, Dyk, O’Malley, Reyna, Wallach, Taranto, Chen, and Hughes. En banc.
Procedural Posture: The ITC imposed a limited exclusion order on scanners being imported into the United State by Suprema and found that Suprema induced third party infringement. A divided panel of CAFC partially vacated the ITC’s findings. A split CAFC vacated the panel decision and remanded for further proceedings.
- ITC- 337(a)(1)(B)(i)- Chevron Framework Part One: CAFC determined that Congress has not directly spoken to whether “articles that infringe” under § 1337 includes the imported goods used by the importer to infringe at the inducement of the goods’ seller. The court found that the text, “articles that infringe,” does not unambiguously exclude inducement. The court further found that “infringe” should be read to include all subsections of § 271, including indirect infringement, and that “articles” introduced textual uncertainty into the statute based on the disparity between infringement upon a person’s actions (§ 271) and infringement by an article (§ 1337).
- ITC- 337(a)(1)(B)(i)- Chevron Framework Part Two: CAFC determined that the ITC’s interpretation of “articles that infringe” was reasonable. To support its determination, CAFC indicated that § 1337’s text, which contemplates that infringement may occur after importation, confirms that the ITC can rely on post-importation activity to identify completion of infringement. CAFC further provided supporting evidence based on the legislative history involving the ITC and unfair trade, as well as previous CAFC affirmance of violation determinations under § 1337 involving induced infringement.
- ITC- Statutory Interpretation of 337(a)(1)(B)(i): Finding no unambiguous support in Part One of the Chevron Framework, CAFC deferred to the ITC’s reasonable interpretation of the statute in accordance with Part Two of the Chevron Framework. Accordingly, CAFC held that unfair trade acts covered by § 1337 include the importation of articles used to infringe by the importer at the inducement of the articles’ seller.
- Indirect Infringement- Inducement: CAFC determined that articles inducing infringement, for which the underlying direct infringement is of a method claim, are subject to appropriate enforcement action by the ITC upon importation of the article into the United States.
- ITC (337 Cases)- Public Interest: § 1337 is included in an enforcement statute enacted by Congress to stop at the border entry of goods involved in unfair trade practices. CAFC reasoned that failing to provide protection, such as exclusion orders, against articles inducing infringement of patents ignored the broad authority that has been granted by Congress to the ITC.
- ITC- Statutory Interpretation of 337(a)(1)(B)(i): Judge Dyk argued that the circumstances on appeal are distinguishable from prior § 1337 cases before the ITC and CAFC. Upon importation, the articles at issue (i.e., the scanners and associated SDKs) did not infringe or induce infringement of the asserted method claim. It is only after entry into the United States that these articles may or may not be used to infringe the asserted claim. Prior cases only addressed importation of articles accompanied by inducing instructions. Provided that the statute covers only “articles that infringe,” the ITC should not be permitted to enter exclusion orders directed to all of the subject articles.
- ITC (337 Cases)- Public Interest: The majority’s opinion was overly broad and provided the ITC with exclusion order discretion that could improperly limit the importation of articles, including those articles which may never be used to infringe a patent, into the United States.
O’Malley, Prost, Lourie, and Dyk, dissenting:
- ITC- 337(a)(1)(B)(i)- Chevron Framework Part One: Judge O’Malley stated that “Congress—not the panel decision in this case—explicitly chose to exclude liability under § 1337 for induced infringement of a method claim that is not directly infringed, if at all, until after importation.” Judge O’Malley argued that the actual language of § 1337 refers to “articles,” “importation into the United States,” and “sale for importation.” Provided that the statute text refers to physical objects and the point of importation as the “cornerstone of liability,” infringement should be tied to the physical object and to the date of the importation.
- ITC- 337(a)(1)(B)(i)- Chevron Framework Part Two: Judge O’Malley argued that the ITC lacked the power under § 1337(a)(1)(B)(i) to interpret the text because the text should instead be read according to its plain meaning.
- ITC- Statutory Interpretation of 337(a)(1)(B)(i): Judge O’Malley argued that a proper holding would provide that the ITC lacked the power under § 1337(a)(1)(B)(i) to enter an exclusion order on the basis of infringement of a method claim when the underlying direct infringement occurs post-importation.
- ITC (337 Cases)- Public Interest: CAFC is not the proper audience for policy concerns except to the extent that the court is charged with enforcing a Congress-supported statutory scheme. The patent assignee was nonetheless protected in this circumstance because an action in district court under 35 U.S.C. § 271(a) would have enabled the patent assignee to stop the only entity actually practicing its patented method.