ITC Lacks Authority To Issue Exclusion Orders Based On Theory Of Induced Infringement Where Underlying Direct Infringement Occurs Postimportation

In Suprema, Inc. v. International Trade Commission, Nos. 12-1170, -1026, -1124 (Fed. Cir. Dec. 13, 2013), the Federal Circuit vacated a cease and desist order, vacated a limited exclusion order barring importation of optical scanning devices in part, and remanded so that the ITC's order could be revised to bar only a subset of the scanners-at-issue that infringed at the time of importation. The Court affirmed a separate ITC order refusing to find a violation of § 337 with respect to some of the same optical scanners.

Cross Match Technologies, Inc. ("Cross Match") filed a complaint in the ITC asserting that Suprema, Inc. ("Suprema") and Mentalix, Inc. ("Mentalix") violated 19 U.S.C. § 1337(a)(1)(B)(i) by importing articles infringing U.S. Patent Nos. 7,203,344 ("the '344 patent"); 7,277,562 ("the '562 patent"); and 5,900,993 ("the '993 patent"), which are directed to an optical scanning system for fingerprint image capturing and processing. Specifically, Cross Match alleged that Suprema, a Korean company, marketed and imported scanners and software development kits, which Mentalix, a domestic company, imported into the United States and then integrated with its own software. The ITC concluded that Suprema's scanners, when combined with Mentalix's software, directly infringed one of the method claims of the '344 patent and that Suprema induced that infringement. The ITC further found that some of Suprema's scanners directly infringed certain claims of the '993 patent. The ITC, however, found no infringement of the '562 patent. Further, the ITC determined that the '993 patent was not invalid as obvious over the prior art. Based upon these findings, the ITC issued an exclusion order identifying Suprema's induced infringement as a basis for the § 337 violation, which was directed to both Suprema and Mentalix, and also issued a cease and desist order directed only to Mentalix.

Suprema appealed the ITC's findings that it violated § 337 by infringement of the '344 patent and that certain products imported by Suprema infringed the '993 patent. Cross Match cross-appealed the ITC's determination that certain claims of the '562 patent were not infringed by either Suprema's scanners or the use of those scanners with Mentalix's software.

"[A]n 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 under 35 U.S.C. § 271(b) where direct infringement does not occur until after...