Source: https://patentlyo.com/patent/2015/09/suprema-expands-inducement.html
Timestamp: 2020-01-19 22:43:15
Document Index: 317074010

Matched Legal Cases: ['§ 298', '§ 1', '§ 1', '§ 271', '§ 1337', '§ 271', '§ 1498', '§ 271', '§ 271', '§ 1498', '§ 1498', '§ 154', '§ 271', '§ 1337', '§ 271', '§ 154', '§ 271', '§ 1498', '§ 154', '§ 298', '§ 298']

In Suprema v. ITC remand, Panel Expands on Inducement | Patently-O
In Suprema v. ITC remand, Panel Expands on Inducement
September 15, 2015 PatentFederal Circuit En BancDennis Crouch
Suprema v. ITC (Suprema III) (On remand from the en banc decision) (non-precedential)
In August, 2015, the Federal Circuit released an en banc decision in Suprema v. International Trade Commission holding that the USITC has power to stop infringing imports if those imports are being used to induce infringement of a patent method of use. That holding is a shift from the traditional notion that the USITC only has power over goods that are infringing at the point of importation. The holding is also interesting in that it was at least partially based upon deference given to the ITC’s interpretation of the scope of its statute – that type of deference is typically not given to the USPTO or district courts when making similar judgments.
The en banc opinion flipped Judge O’Malley’s original panel holding that the statutory “articles that infringe” limitation on ITC power did not extend to post-importation acts of infringement.
Following the en banc decision, original panel took-up the case again and has now affirmed the ITC’s findings of violation. This time, the panel walked through the challenged findings of infringement and held that the Commission’s findings were supported by ‘substantial evidence.’
Although the decision is non-precedential, it does include a few gems. Notably, the patentee had evidence that the accused-infringer had studied two of the patents-in-suit but not the third. In the appeal, the panel supported the notion that knowledge of the first two could be used to prove knowledge of the third:
Suprema also admitted to researching and identifying Cross Match’s patents, including the ’993 and ’562 patents. . . . Following its extensive research, Suprema successfully developed its scanners into the autocapture, image quality checking, and automatic segmentation processes that are covered by claim 19 of the ’344 patent. The Commission noted that, because the ’562 and ’344 patents have overlapping inventors and share the same assignee, Cross Match, “a word search likely would have identified both patents.” . . .
Suprema asserts that during its extensive market research it failed to check to see if the related patent application referenced in the ’562 patent proceeded to mature into an issued patent. The Commission discounted this testimony. The Commission found it notable that the ’344 patent issued in April 2007, six months prior to the October 2007 issue date of the ’562 patent. Thus, had Suprema checked for the issuance of the ’344 patent at the time it was reviewing the ’562 patent, Suprema would have undoubtedly discovered that the ’344 patent had issued.
Suprema and amicus Google, Inc. (“Google”) argue that a requirement to seek out every reference referred to in a competitor’s patent would place too high a burden on manufacturers to avoid a finding of willful blindness. We do not hold that such an exhaustive patent search is required in every instance. Nor do we find that the Commission predicated its willful blindness finding only upon such an obligation. Rather, given the similarities in content, inventorship, and ownership between the ’344 and ’562 patents, and the facts that Suprema studied the ’562 patent during its extensive market analysis, was aware of Cross Match’s activities in the scanner field, and specifically targeted the market Cross Match serviced when developing its own products, we find, based on the totality of the circumstances, that the Commission had adequate evidence upon which to conclude that Suprema’s actions constituted willful blindness.
The Federal Circuit also allowed evidence that the accused did not seek opinion-of-counsel to be used to prove willfulness. In the process, the court noted that the AIA altered the law so that “[t]he failure of an infringer to obtain the advice of counsel with respect to any allegedly infringed patent, or the failure of the infringer to present such advice to the court or jury, may not be used to prove that the accused infringer willfully infringed the patent or that the infringer intended to induce infringement of the patent.” 35 U.S.C. § 298. The AIA has a host of different effective dates. Because the advice-of-counsel section (AIA Sec. 17) did not include a particular effective date, it falls under the general effective date which states that the “Act shall take effect upon the expiration of the 1-year period beginning on the date of the enactment of this Act and shall apply to any patent issued on or after that effective date.” Here, because the patents-at-issue were issued prior to the 1-year date (Sept 2012), the court did not apply this new statute to the case at hand. [UPDATE] See comments for additional info on the statute of limitations.
The court also added the following bone to Google who had filed an amicus brief:
In its amicus brief, Google argues that the Commission’s willful blindness ruling imposes too onerous a duty on innovators to ensure that its customers will not potentially infringe a patent. Google asserts that the Commission’s ruling upsets the balance struck in Global-Tech. It is nearly impossible, Google argues, for a technology company to identify “all patents that are potentially implicated” by customers’ potential infringement of patents. While we are not unmindful of these concerns, we do not find them sufficiently implicated in this present controversy to warrant a different outcome. We note, moreover, our deferential standard of review, which requires us to defer to the Commission’s factual findings if supported by substantial evidence. Our holding is limited to the facts in the case before us. None of the facts upon which the Commission relied, in isolation, would support a finding of willful blindness. Yet, while no single factor is dispositive here, we are satisfied that there is substantial evidence on this record to support the Commission’s findings.
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15 thoughts on “In Suprema v. ITC remand, Panel Expands on Inducement”
As to the inapplicability of sec 298, the panel made a slight error regarding the effective date of the provision in footnote 2 of the opinion. The error does not impact the panel’s overall conclusion that 298 did not apply here, but it does impact when the failure to obtain an opinion of counsel can be used for future litigations. The panel effectively instructed that 298 only applies to patents issued under the AIA, and thus a reader could assume that 298 does not apply to any non-AIA patent. When the AIA was first enacted that was the law. But Congress passed a technical amendment to the AIA that made 298 applicable to all patents, regardless of when issued, for any proceeding filed after Jan. 14, 2013. H.R. 6621, § 1(a) (“ADVICE OF COUNSEL.—Notwithstanding section 35 of the Leahy-Smith America Invents Act (35 U.S.C. 1 note), section 298 of title 35, United States Code, shall apply to any civil action commenced on or after the date of the enactment of this Act.”) § 1(n) (“EFFECTIVE DATE – Except as otherwise provided in this Act, the amendments made by this Act shall take effect on the date of enactment of this Act [January 14, 2013], and shall apply to proceedings commenced on or after such date of enactment.”). I note this in section 10:49 of the Annotated Patent Digest. The panel opinion does not address this technical amendment.
Nice pick up. You would have thought that at least one of the clerks for these Federal Circuit judges would have noted this technical faux pas. Errors like these don’t help give you confidence in court rulings.
In my view, this case will be taken up by the Supreme Court if the accused infringer petitions. There is no way that “articles that infringe” can be extended to include post-importation making or performance of a process unless the articles embody the essential elements of the invention. See, e.g., Zoltek Corp. v. US, 672 F.3d 1309 (Fed. Cir. 2012).
I don’t think that that is the rule. Are you conflating your exhaustion doctrines?
I think that the rule (on a gen eral basis) is bit more loose, and further, under the facts here, that the idea of substantial other uses was not credible (I could be off on this, so I am only offering it as a possibility, rather than as an affirmative fact).
It appears that once again you, anon, have not read the case I cited.
This time Ned (as I attempted to hint at with the lack of affirmative statement), I did not refresh myself with your citation (although you still may be conflating the concept of exhaustion).
Then again, I don’t think that you read – and understand – your own citations, given he number of times you run away from the counter points I provide from those same cases (Benson’s “we do not so hold” comes readily to mind).
Anon, in Zoltek, we had a process claim where the process was conducted partially outside United States and completed inside the United States. The partially completed product was imported and the question was whether that was an infringement. The court held it was in fact a direct infringement even though the last step had yet to be conducted. That last step was purely conventional. The imported partially completed product embodied all the essential features of the patented invention.
The court relied on Quanta and Univis Lens for its holding.
Of course, if the partially completed product were a component in a claimed apparatus, it would infringe, but as a contributory infringement.
Note the contrast between a method claim involving steps and an apparatus claim involved making. In both cases, it appears that a number of the steps in a process that produces an article and a number of steps in the process of making an article may be conducted outside United States. When a process is involved, the court held that there is direct infringement. And when an apparatus is involved, the court would seemingly hold that there is contributory infringement.
I think you are reading too much into any sense of difference in the statutory catogory, since each decision was a decision on the merits of that case, and simply did not explore the legal ramification that you want to leap to.
Given your history of “versions,” I would recommend that you not engage in this type of legal conjecture.
“Claims 1-22 and 33-38 relate to methods of manufacturing carbon fiber sheets with controlled surface electrical resistivity; claims 23-32 and 39-40 are product-by-process claims for the partially carbonized fiber sheets. Zoltek is presently asserting only the method claims, which generally contain two steps: partially carbonizing the fiber starting material and then processing those fibers into sheet products. The carbon fiber products at issue were used in the F-22, a fighter jet, which Lockheed designed and built pursuant to a contract with the Government. The F-22 contains two types of carbon fiber products: silicon carbide fiber mats (“Tyranno fibers”), which are fibrous reinforcing material, and prepregs (“Nicalon fibers”), which are pre-impregnated material typically used in the manufacture of high performance composites.”
Title 35 U.S.C. section 271(a) does not protect against the importation of products made by a patented process, but § 271(g) states that “[w]hoever without authority imports into the United States or offers to sell, sells, or uses within the United States a product which is made by a process patented in the United States shall be liable as an infringer.” Because § 1337 unambiguously asserts Congress’s intent to give process patent owners a remedy for importation of products made using their process, it would be incorrect to maintain Zoltek III’s holding that § 271(a) infringement is a predicate to United States liability under § 1498.
Under § 271(g), Lockheed allegedly infringed Zoltek’s patents when it used in the United States, or imported into the United States, the product made using the patented process. 35 U.S.C. § 271(g).
As explained above, we have defined “without lawful right” for purposes of § 1498(a) as use of an invention that, if done by a private party, would directly infringe the patent. The liability of the United States under § 1498 is thus linked to the scope of the patent holder’s rights as granted by the patent grant in title 35 U.S.C. section 154(a)(1).
If a private party had used Zoltek’s patented process to create the resulting product, there would be liability for infringing Zoltek’s patent right under § 154(a)(1) and § 271(g). We hold that the Government is subject to the same liability in this case, and that precedent and legislative intent dictate that result.
Although the process itself was partially practiced outside the United States in this case, the product resulting from the practice, which embodies the patented process, was imported into, or used in, the United States. Therefore the process has been “used” without a license or lawful right. A contrary result would similarly avoid infringement by the United States. Additionally, contractors could practice the processes overseas whereby the resulting product would be immunized from exclusion from importation under § 1337.
To allow such a result is contrary to the PPAA’s legislative history, which reflects the understanding that to protect process patents is to protect the products resulting from the process. Although “use” of the invention “without lawful right” does not use the exact same terms as § 271(g), we can look to Judge Learned Hand for guidance. He notes that, “Courts have not stood helpless in such situations; the decisions are legion in which they have refused to be bound by the letter, when it frustrates the patent purpose of the whole statute.”
In 1988, the patent grant under § 154(a)(1) was expanded to state “if the invention is a process,” the patent shall contain a grant to the patentee, his heirs or assigns, “of the right to exclude others from using or selling throughout the United States, or importing into the United States, products made by that process.”
Had Lockheed practiced the process overseas without bringing the resulting products back to the United States, there would be no direct infringement of Zoltek’s patent rights under § 271(a) or (g). … [A]s long as the products made by the patented process overseas are not imported into, or used within, the United States, Lockheed has the lawful right to use the patented process under § 1498(a) because the “within the United States” requirements of §§ 154(a)(1), 271(a), and 271(g) are not met….
When it imported the resulting products into the United States, or used them within the United States, Lockheed used Zoltek’s patented invention ….because it is the act of importation or use in the United States of the products made by the patented process that constitutes improper use of a patented invention. As explained, the products themselves embody the patented invention.
Accordingly, we hold that for the purposes of section 1498, the use or importation “within the United States [of] a product which is made by a process patented in the United States” constitutes use of the invention without lawful right because the products embody the invention itself. We add that nothing in this opinion should be construed to affect our Title 35 jurisprudence.”
Despite that last bit, I think one can rely on Zoltek for excluding from importation, or for finding the sale within the US an infringement, of a partially completed product of a patented process, where that partially completed product embodies essential features of the patented invention.
There is a further effective date provision for § 298 beyond the one mentioned. The effective date provision in the technical corrections act makes § 298 applicable to any action filed after January 14, 2013. It is also not applicable to the Suprema v. ITC action.
Your admin law fellow would be disappointed with the lost teaching moment in regards to:
“that type of deference is typically not given to the USPTO or district courts when making similar judgments.”
(Think administrative agency charter)
Thanks Anon – Happy to have you explain this point.
Different levels of Chevron deference are due to an agency based on that agency’s charter.
Think of the differences between what the EPA and what the Patent Office can promulgate, for example.
I am sure that someone at your university teaches administrative law, Prof. Maybe they can write a nice guest article (is the anniversary of Tafas coming up…)