Docket No. 2012-1170
En banc opinion (REYNA), DYK(d), O’MALLEY/PROST/LOURIE/DYK (d)
August 10, 2015
Revised Sept. 14, 2015: affirmed ITC findings of no infringement of US 7,277,562, infringement of US 5,900,993, and that Appellants failed to prove invalidity of the ‘993 patent.
Brief Summary: Prior FC holding that ITC interpretation of Section 337 to “cover importation of goods that, after importation, are used by the importer to directly infringe at the inducement of the goods’ seller” was incorrect reversed en banc.
Summary: This en banc decision results from a final determination by the ITC that 19 USC § 1337 (“Section 337”) “cover[s] importation of goods that, after importation, are used by the importer to directly infringe at the inducement of the goods’ seller.” The FC disagreed in a 2013 opinion (Suprema, FC 2013), “effectively eliminat[ing] trade relief under Section 337 for induced infringement and potentially for all types of infringement of method claims” (according to this opinion). Cross Match Technologies, Inc. (CMT) owns patents including US 7,203,344 directed to methods for capturing and processing fingerprint images. CMT filed a complaint with the ITC that scanners were manufactured by Suprema abroad and imported into the US by Suprema and Mentalix, which were then combined with software and sold in the US by Mentalix. After the 2013 FC decision, CMT and ITC petitioned for re-hearing en banc which was granted. This opinion frames the question to be answered as “whether goods qualify as ‘articles that inringe’ when the Commission has found that such goods were used, after importation, to directly infringe by the importer at the inducement of the goods’ seller…does the importation of such goods qualify as an unfair trade act under Section 337?” It first considered whether the FC owes any deference to the ITC decision under Chevron (US 1984), which was answered in the affirmative because: 1) “articles that infringe” in Section 337 “does not unambiguously exclude inducement of post-importation infringement” (“articles that infringe” not shown to have “a clearly established usage limited to product claims” and § 271 (referred to in Section 337) includes “infringement by importation that induces direct infringement of a method claim…we cannot conclude Congress unambiguously excluded such induced infringement on the basis of the [ITC’s] reasoning”); and, 2) the ITC’s interpretation of Section 337 is reasonable (ITC “interpretation prevails if it is a reasonable construction of the statute, whether or not it is the only possible interpretation or even the one a court might think best” (Holder, US 2012); “Section 337 contemplates that infringement may occur after importation.”) Thus, the FC held “the Commission’s interpretation that 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 is reasonable” and remanded the appeal to the original FC panel. Judge Dyk’s dissent argued against the decision because the exclusion order is “directed to all of the subject matter, even those that ultimately may never be used to infringe, on the theory that some of the articles may be used in an infringing manner after importation.” The second dissent argued against the decision because it is “based only on the putative intent of the importer” and “in circumstances in which 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.”