A Brief Synopsis Of The Issues Confronting The Federal Circuit In The En Banc Rehearing Of Suprema, Inc. v. ITC

On February 5, 2015 the en banc Federal Circuit will hear oral argument in the matter of Suprema, Inc. v. ITC.1 This rehearing reviews the controversial Federal Circuit opinion holding that "an exclusion order based on a violation of 19 U.S.C. § 1337(a)(1)(B)(i) may not be predicated on a theory of induced infringement where no direct infringement occurs until post-importation,"2 and thus precluding the International Trade Commission from finding induced infringement of method claims in most cases. The disposition of the en banc court will have significant repercussions for how litigants in the ITC frame future complaints of patent infringement, because it will largely determine the viability of claims of inducement of infringement at the ITC.

Below is a brief synopsis of the Federal Circuit panel's opinion, and the parties' en banc briefs. The en banc decision is likely to turn on (1) the interpretation of the phrase "articles that — infringe" in § 337(a)(1)(B)(i) and specifically whether that language refers to only the article itself or should be interpreted to include accompanying conduct, and (2) the importance of the ITC's longstanding tradition of exclusion under § 337 based on inducement by imported articles. We will provide additional updates summarizing oral argument and reporting on the en banc opinion once it issues.

Federal Circuit Panel Opinion

On May 11, 2010, Cross Match Technologies, Inc. filed a complaint at the ITC accusing Mentalix, a domestic importer of fingerprint scanners, of infringing claim 19 of its U.S. Patent No. 7,203,344 ("the '344 patent"), and accusing Suprema, the Korean developer of the imported scanners, of inducing Mentalix's infringement. Claim 19 of the '344 patent is directed to "[a] method for capturing and processing a fingerprint image." Mentalix imports Suprema fingerprint scanners and incorporates them with certain Mentalix developed software post-importation. Cross Match contended that method claim 19 is infringed when Suprema's scanners are used in combination with Mentalix software after importation into the United States.3 The Commission found that Mentalix's operation of its software on the scanners after importation directly infringes claim 19, and that Suprema induced Mentalix's direct infringement by actively encouraging incorporation of Mentalix's software with its scanners. Based on this finding, the Commission issued an exclusion order preventing importation of the accused scanners into the United States. Mentalix and Suprema appealed to the Federal Circuit the Commission decision finding them in violation of § 337 and the accompanying exclusion order.

On December 13...