Federal Circuit Limits ITC Power over Induced Infringement

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On December 13, 2013, the Court of Appeals for the Federal Circuit released an opinion in Suprema v. International Trade Commission that significantly restricts the scope of the International Trade Commission (“ITC”)’s power over imported articles that induce infringement of—but do not yet directly infringe—a United States patent. This decision is important because it may create a loophole that allows importers to avoid ITC exclusion orders and may significantly limit the usefulness of ITC litigation for method patent holders.

In Suprema, the Federal Circuit held that the ITC lacked the authority to issue an exclusion order against fingerprint scanners manufactured by Korean company Suprema because their scanners were only infringing after importation into the United States and only after being combined with software made by United States company Mentalix. According to the panel majority, because 19 U.S.C. § 1337 (“Section 337”) is violated by “articles that . . . infringe a valid and enforceable United States patent,” the ITC may only exercise its power against articles that are “already in an infringing state at the time of importation,” not those that may infringe post-importation under 35 U.S.C. § 271(b). In other words, inducement of infringement under Section 271(b) is not “completed” until there has been both inducement to infringe and direct infringement, and thus the ITC has no power over imports that induce infringement but do not yet directly infringe.

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