Indirect Infringement At The ITC Post-Suprema

Law360, New York (January 03, 2014, 12:08 PM ET) -- In a potentially far-reaching decision, the Court of Appeals for the Federal Circuit in Suprema Inc. and Mentalix Inc. v. U.S. International Trade Commission vacated an ITC determination based on induced infringement, holding that the commission has no authority under Section 337 to find a violation in an inducement case involving method claims where the articles do not directly infringe at the time of importation.1

At first glance, the opinion appeared to destabilize decades of established ITC law, under which indirect infringement could form the basis of a Section 337 violation, even where the final act of direct infringement took place in the United States after importation. A closer reading of the decision in Suprema make clear, however, that the court deliberately sought to narrow the scope of its decision to cases involving induced infringement under § 271(b) of the Patent Act — thereby maintaining the viability of contributory infringement cases at the ITC involving method claims under 271(c).

Section 337 of the Tariff Act of 1930 authorizes the ITC to find unlawful:

The importation into the United States, the sale for importation, or the sale within the United States after importation by the owner, importer, or consignee of articles that ... [i]nfringe a valid and enforceable United States patent.

On the basis of such a determination, the ITC is authorized to order the exclusion of such "articles."

In recent years, the commission has adjudicated numerous cases involving method claims, in which software loaded onto hardware — such as the operating system running on a smartphone — is alleged to infringe method claims.2 Because claims of indirect infringement necessarily involve proof that an act of direct infringement occurred — and because patent law is territorial — ITC complainants in software cases have sought to establish direct infringement based on the infringing use of the imported article in the United States. Suprema appears to call into question the viability of ITC cases involving inducement of infringement of method claims, where the act of direct infringement occurs in the United States.

In relevant part, the Suprema case involved the importation of fingerprint scanners into the United States by Suprema, a Korean company, and Mentalix, a Texas-based integrator. In Texas, Mentalix loaded software onto the noninfringing scanners and then sold them to clients in the United States. The complainant, CrossMatch, alleged that the scanners, once the software was loaded onto the machines in Texas and the machines were operated, infringed the asserted method claims.

The complainant alleged...