Federal Circuit reaffirms ITC's broad enforcement authority under Section 337 to remedy post-importation infringement

Section 337 of the Tariff Act of 1930 codified at 19 U.S.C. §1337 declares certain acts unlawful.  Among them is importing “articles that … infringe a valid and enforceable United States patent.”Section 337(a)(1)(B)(i).  The Commission’s broad jurisdiction under Section 337 over unfair trade practices that involve imported articles was confirmed in Comcast Corp. v. Int’l Trade Commission, 951 F.3d 1301 (Fed. Cir. 2020), where the Federal Circuit affirmed the Commission’s determination to exclude imported articles that result in infringement occurring after importation. This was the holding of the earlier en banc Federal Circuit decision in Suprema Inc. v. U.S. Int’l Trade Comm’n, 796 F.3d 1338 (Fed. Cir. 2015).

In Suprema, the en banc Federal Circuit addressed a divided panel opinion by the court that there are no “articles that infringe” under Section 337 at the time of importation when direct infringement does not occur until after importation.  In doing so, the panel effectively eliminated trade relief under Section 337 for inducing infringement and potentially for all types of infringement of method claims.

Circuit Judge Jimmie V. Reyna authored the en banc opinion for the court and rejected the divided panel’s temporal limitation requirement for infringement.  Judge Reyna emphasized that Section 337 was established by Congress as a “distinct legal regime aimed at curbing unfair trade practices that involve the entry of goods in the U.S. market via importation.”  He further found that “[t]he legislative history consistently evidences Congressional intent to vest the Commission with broad enforcement authority to remedy unfair trade acts.”  Unfair methods of competition have included dumping, subsidies, safeguards, anticompetitive practices, and violations of intellectual property rights, all involving the cross-border movement of goods − ie, articles.

The en banc Federal Circuit affirmed the Commission’s determination that respondent Suprema induces infringement of complainant Cross Match’s asserted patent directed to a method for capturing and processing fingerprint images because Suprema manufactures and imports scanners that, when combined with respondent Mentalix’s software and used by consumers, directly infringe Cross Match’s patent.  The Commission issued a limited exclusion order barring Suprema’s infringing scanner from importation and a cease-and-desist order preventing Mentalix from distributing the infringing scanners.

On March 2, 2020, in a unanimous panel opinion authored by Circuit Judge Pauline Newman (including Circuit Judges Reyna and Todd M. Hughes), the Federal Circuit affirmed the Commission’s determination that respondent Comcast induces infringement of complainant Rovi’s patents directed to an interactive television program guide system for remote access to television programs that require a remote program guide access device, such as a set-top box, that is connected to an interactive television guide system over a remote access link by importing X1 set-top boxes used by consumers who directly infringe the system.  The Commission issued a limited exclusion order and cease-and-desist order directed to the Comcast respondents.

The Commission, affirmed by the Federal Circuit, rejected the argument that Comcast’s inducing conduct “takes place entirely domestically well after, and unrelated to, the article’s importation.”  The Federal Circuit found, citing Suprema, that “[t]he Commission correctly held that Section 337 applies to articles that infringe after importation.”  In this case, it was undisputed that direct infringement of the asserted patents occurs when the imported X1 set top boxes are fitted by or on behalf of Comcast and used by Comcast’s customer’s mobile devices.