Source: http://www.jdsupra.com/legalnews/federal-circuit-update-suprema-inc-v-09042/
Timestamp: 2014-08-28 12:23:35
Document Index: 416505944

Matched Legal Cases: ['§ 1337', '§ 271', '§ 271', '§ 1337', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271']

Federal Circuit Update: Suprema, Inc. v. ITC | Baker Botts - JDSupra
Tina Yang | Baker Botts
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In a recent and controversial decision, the U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”) introduced a temporal requirement to the theory of induced infringement under the Tariff Act of 1934 (19 U.S.C. § 1337(a)(1)(B)(ii)) (“Section 337”). Specifically, on December 13, 2013, the Federal Circuit in Suprema, Inc. and Mentalix, Inc. v. ITC and Cross Match Technologies, Inc., No. 2012-1170, vacated a decision by the U.S. International Trade Commission (“ITC”) finding induced infringement of a method claim in a situation where direct infringement only occurs when the accused product is combined with domestically developed software. The Federal Circuit concluded that an exclusion order based on a violation of Section 337 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 importation of the articles the exclusion order would bar.
In May 2010, Cross Match Technologies, Inc. (“Cross Match”) filed a complaint with the ITC asserting that Suprema, Inc. (“Suprema”) and Mentalix, Inc. (“Mentalix”) infringed Cross Match’s patent directed to a method for capturing and processing a fingerprint image. Suprema, a Korean company, imported scanners designed for scanning fingerprints to a number of U.S. customers, including Mentalix. Once imported, Mentalix loaded their own software onto Suprema’s scanners. The ITC found that Mentalix directly infringed Cross Match’s patented method when it combined Suprema’s products with its own software, and that Suprema had induced infringement of the patented method under 35 U.S.C. § 271(b), which formed the basis for a Section 337 violation.1 Based on these findings, the ITC issued a limited exclusion order, in addition to a related cease and desist order, directed to certain scanning devices imported by or on behalf of Suprema and Mentalix.
19 U.S.C. § 1337(a) (emphasis added). To determine whether the imported goods are “articles that ... infringe,” the Federal Circuit turned to 35 U.S.C. § 271, and specifically to the language of § 271(b) defining induced patent infringement.2 In addition, reasoning that “[t]o prevail on inducement, ‘the patentee must show, first that there has been direct infringement,’”3 the Federal Circuit panel concluded that inducement is not completed under § 271(b) until there has been a direct infringement. Thus, emphasizing that Suprema’s fingerprint scanners were found to be infringing only after importation into the U.S. and after being combined with Mentalix’s scanning software, the Federal Circuit held that the statutory grant of authority in Section 337 does not extend to the conduct proscribed in § 271(b) where the acts of underlying direct infringement occur post-importation. Accordingly, the Federal Circuit vacated the exclusion order.
In view of this decision, the Federal Circuit appears to be limiting the phrase “articles that ... infringe” of Section 337 as referencing the status of the articles at the time of importation. However, we believe that the ITC will seek en banc review of this decision, and thus further review of this ruling is likely in the near future. In the meanwhile, patent practitioners litigating method patents in the ITC would be well advised to consider the Federal Circuit’s Suprema, Inc. v. ITC decision when determining the viability of ITC litigation on a theory of induced infringement where the direct infringement does not occur until after the infringing articles are imported.
1See Certain Biometric Scanning Devices, Components Thereof, Associated Software, and Products Containing the Same, USITC Inv. No. 337-TA-720 (Oct. 2011).
2“Whoever actively induces infringement of a patent shall be liable as an infringer.” 35 U.S.C. § 271(b).
3Kyocera Wireless Corp. v. Int’l Trade Comm’n, 545 F.3d 1340, 1353-54 (Fed. Cir. 2008) (quoting Minn. Mining & Mfg. Co. v. Chemque, Inc., 303 F.3d 1294, 1304-05 (Fed. Cir. 2002)).
4In support of this position, Judge Reyna cited a total of fourteen (14) ITC cases decided between 1980 2013.
5In support of this position, Judge Reyna cited: Vizio, Inc. v. Int’l Trade Comm’n, 605 F.3d 1330 (Fed. Cir. 2010); Emcore Corp. v. Int’l Trade Comm’n, 449 F. App’x 918 (Fed. Cir. 2011) (nonprecedential); Young Eng’rs, Inc. v. Int’l Trade Comm’n 721 F.2d 1305 (Fed. Cir. 1983); ERBE Elektromedizin GmbH v. Int’l TradeComm’n, 566 F.3d 1028 (Fed. Cir. 2009); Kyocera, 545 F.3d 1340; Alloc, Inc. v. Int’l TradeComm’n, 342 F.3d 1361 (Fed. Cir. 2003).
6The ITC has previously refused to investigate complaints premised on allegations of direct infringement of method claims under § 271(a) because patented methods are not infringed until “use” in the U.S. occurs. See In the Matter of Certain Electronic Devices, Inv. No. 337-TA-724 (Dec. 2011). In view of this decision, the only viable option under Section 337 for some method claims may be a contributory infringement theory under § 271(c) for “especially made or especially adapted” infringing articles. See 35 U.S.C. § 271(c).
Topics: Induced Infringement, Infringement, ITC, Patent Infringement, Patent Litigation, Patents, Suprema, Tariff Act of 1930