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ITC cannot address inducement where the underlying direct infringement occurs post-importation

December 16, 2013

ITC cannot address inducement where the underlying direct infringement occurs post-importation

December 16, 2013

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The Federal Circuit vacates an exclusion order on one patent, affirms an exclusion order on a second patent that was infringed and non-obvious, and affirms non-infringement on a third patent. 

Suprema, Inc. v. Int‘l Trade Comm’n, __F.3d__ (Fed. Cir. Dec. 13, 2013) (Prost, O’MALLEY, Reyna (dissenting in part)) (ITC) (4 of 5 stars)

ITC’s Authority to Prevent Inducement:  Addressing the first patent, the Federal Circuit held that the ITC cannot address induced infringement where the only underlying act of direct infringement occurs post-importation.  The ITC’s authority to exclude infringing articles under 19 U.S.C. § 1337(a)(1)(B)(i)  and § 1337(d)) focuses “on the infringing nature of the articles at the time of importation, not on the intent of the parties with respect to the imported goods.”  Slip op. at 16.  Determining whether imports are “articles that . . . infringe,” as that term is used in § 1337(a)(1)(B)(i), requires examining the provisions of 35 U.S.C. § 271.  Unlike the provisions for direct and contributory infringement, § 271(b) “makes unlawful certain conduct (inducing infringement) that becomes tied to an article only through the underlying direct infringement.”  Id. at 20-21.  So the ITC had not authority to prevent Appellant’s importation of scanners for use with a patented method of capturing fingerprints because direct infringement can only occur after importation when the method claim is practiced.  No prior precedent required a different result—the Federal Circuit had never squarely addressed this issue, and contrary decisions from the ITC were non-binding.  Id. at 21-26.

Claim Construction (No Disavowal):  Addressing the second patent, the Federal Circuit held that the claimed optical system for fingerprint imaging was not limited to systems without “non-lens elements” between three claimed lenses.  Even if the specification’s criticism of prior art which used costly distortion-correcting equipment between the lenses met the “high burden” for disavowal (an issue the Fed Cir did not reach), any disavowal would not extend to the infringer’s system, which had non-distortion-correcting mirrors between the lenses.  Slip op. at 31.

Obviousness:  The Federal Circuit also affirmed a non-obviousness finding on the second patent because the infringer “adduced insufficient evidence of a motivation to substitute” a camera lens from one prior art reference for the scanner lens in a second reference.  Slip op. at 35.  Expert testimony that the skilled artisan “could very well” do it was insufficient because there was no evidence why the skilled artisan would “specifically seek out the unique lens” found in that prior art reference.  Id.  Moreover, there was “no indication” the first lens “would be suitable” in place of the second.  Id.

Claim Construction (Order of Method Steps):  On the third patent, the Federal Circuit limited method claims for reliably capturing a fingerprint image to the recited order of steps.  Slip op. at 36-41.  The claim language required this limitation because the last step required a determination that was “based on” information from the previous steps, and the specification was consistent.  Id. at 40-41.  The Federal Circuit was also skeptical of the patentee’s arguments because it was challenging the very construction it convinced the ITC to adopt and seemed “to be asking for something directly at odds with that original construction,” but did not reach whether this was a waiver.  Id. at 39.

Dissent:  Judge Reyna dissented from the ruling on induced infringement, citing the ITC’s long practice of adjudicating such claims and Congress’s intent to enact a broad remedy to stop unfair foreign competition.  He believed the statutory text is silent on the “moment on which infringement liability must be ‘completed’ for purpose of the Commission’s authority to remedy violations of Section 337,” and that “as long as the inducing acts include sale for importation, importation or sale after importation of articles involved in direct infringement in the United States, the inducing conduct is tied to “articles – that infringe.”  Dissent at 10-11.

The opinions expressed are those of the authors on the date noted above and do not necessarily reflect the views of Fish & Richardson P.C., any other of its lawyers, its clients, or any of its or their respective affiliates. This post is for general information purposes only and is not intended to be and should not be taken as legal advice. No attorney-client relationship is formed.

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