• En Banc Federal Circuit Review of ITC Exclusion Order Based on Induced Infringement in Suprema v. International Trade Commission
  • June 26, 2015
  • Law Firm: Staas Halsey LLP - Washington Office
  • On May 13, 2015, the en banc United States Court of Appeals for the Federal Circuit (“Federal Circuit”) sat to determine whether the ITC can rely on 35 U.S.C. 271(b) to support an exclusion order. The technology at issue relates to biometrics, specifically fingerprint scanners. Cross Match (patentee) asserted in its ITC complaint that Suprema (Korean manufacturer) induced infringement by Mentalix (U.S. buyer of Suprema’s product). The ITC found that Suprema’s fingerprint scanner was incapable of directly infringing Cross Match’s patent when imported into the United States without any software. The ITC also found that Mentalix used Suprema’s product with its software in a way that directly infringed Cross Match’s patent. Further, the ITC found that Suprema was willfully blind to Cross Match’s patent and of Mentalix’s activities - the requisite intent for 271(b) culpability. Lastly, the ITC determined that it could exclude Suprema’s products from importation because of Suprema’s 271(b) culpability, even though the direct infringement occurred after the product entered the United States. The ITC then issued an exclusion order that would bar any further importation of Suprema’s products and it issued a cease and desist order to Mentalix from selling Suprema’s products with its software package.

    Suprema and Mentalix appealed to the Federal Circuit, and in late 2013 the Federal Circuit (sitting in the usual 3-member panel) reversed the ITC. That panel determined that the ITC cannot exercise its exclusion power under a theory of induced infringement without an article that directly infringes. The panel looked to the statute for the meaning of “articles that infringe.” The majority of the panel determined that it was unambiguous that Congress meant for the ITC to only have power to exclude articles under 271(a)’s direct infringement or 271(c)’s contributory infringement.

    Cross Match appealed to the whole Federal Circuit that, in turn, granted review en banc, vacated the panel decision, and led to this month’s oral arguments. The Federal Circuit judges split on what issues were worrisome:

    (1) Is the statute ambiguous?

    (2) If not - what is the meaning of articles that infringe?

    (3) If so - was the ITC rule reasonable under the Chevron doctrine?

    In either event, the judges could not agree on which interpretation was correct. Some judges were worried about creating an exception for products that almost practice the invention but would be able to circumvent ITC regulation at the border, while other judges were worried about blocking importation of literal non-infringing products.

    The Federal Circuit is expected to issue its en banc decision in 4-6 months.