The issue decided by the en banc court was whether Section 337, which referred to “articles that infringe” and which applies to “unfair trade acts,” permitted the ITC to issue an exclusion order barring the importation of goods, where the goods themselves do not infringe, but the person outside the U.S. (a “seller”) who imported the goods into the U.S. had induced the infringement of a U.S. Patent by a “buyer” in the U.S. who used the goods in an infringing manner. The court affirmed the ITC and held that Section 337 does apply in these circumstances: “the phrase ‘articles that infringe’ covers goods that were used by an importer to directly infringe post-importation as a result of the seller’s inducement.”
In this case, Suprema imported fingerprint scanning devices that it sold in the U.S. to Mentalix, who combined the scanners with software and then used and sold the scanners in the U.S. The sole patent claim at issue was a method claim directed to capturing and processing a fingerprint image. The ITC could only exclude the importation of Suprema’s fingerprint scanning devices if Section 337 were held to cover Suprema’s acts of inducing infringement, i.e., if the phrase “articles that infringe” of Section 337 was correctly interpreted by the ITC to include inducing and contributory infringement. The court analyzed the ITC’s interpretation under the framework of Chevron, USA, Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) and found that Congress has not spoken to the precise question at issue and that the ITC’s interpretation is based on a permissible construction of Section 337.
The dissent argued that Section 337 is unambiguous and provides no authority for the ITC to exclude to “bar the importation of articles of commerce that may or may not be later used by third parties to infringe a method patent, based only on the putative intent of the importer” even where “it is undisputed that the patented method cannot be practiced unless the imported article is used in combination with software neither embedded in the imported article nor sold by the importer.”
Suprema, Inc. v. International Trade Commission, Case No. 2012-1170 (August 10, 2015); En Banc Opinion by: Reyna, joined by Newman, Wallach, Taranto, Chen, and Hughes; Dyk, dissenting; O’Malley, dissenting, joined by Prost, Lourie, and Dyk; Appealed From: U.S. International Trade Commission Read the full opinion here.
