Chapter §13.02 U.S. International Trade Commission

• Jurisdiction: United States

§13.02 U.S. International Trade Commission

The International Trade Commission (ITC) is a forum of rapidly growing importance to patent owners in a global economy.⁴¹³ The ITC has jurisdiction over patent-related matters involving imports under Section 337 of the Tariff Act of 1930, as amended.⁴¹⁴ Section 337 makes it unlawful to import into the United States articles that "infringe a valid and enforceable United States patent" or that "are made, produced, processed, or mined under, or by means of, a process covered by the claims of a valid and enforceable United States patent."⁴¹⁵

The ITC investigates alleged violations of Section 337, typically at the urging of U.S patent owners.⁴¹⁶ ITC investigations include trial proceedings conducted before an ITC administrative law judge whose Initial Decision on the merits is reviewed by the Commission.⁴¹⁷ If it finds patent infringement, the ITC will typically enter an order excluding the infringing articles from entry into the United States;⁴¹⁸ however, the ITC does not award damages for infringement.

Patent litigation conducted before the ITC is resolved much more rapidly than infringement cases in the federal district courts, historically within less than fifteen months.⁴¹⁹ For this and other reasons, enforcement at the ITC has become an increasing attractive option for patent owners.⁴²⁰ However, the ITC's Section 337 decisions do not bind the federal district courts, and many parties bring actions in both fora.⁴²¹

In 2015 the Federal Circuit considered en banc whether the ITC could properly issue an exclusion order, based on a theory of inducing infringement liability, to bar the importation of articles (i.e., scanners) which, after their importation, were (in some but not all cases) combined with domestically developed software and used by purchasers to directly infringe a patent drawn to a fingerprint scanning method.⁴²² Suprema, a Korean company, manufactured the scanners and sold them to Mentalix, Inc., a U.S. company that imported the scanners into the United States, bundled the scanners with Mentalix's custom software, and resold the bundles to end users in the United States.⁴²³ By a 6-4 majority, the en banc court answered the question affirmatively and approved the ITC's exclusion order in Suprema, Inc. v. International Trade Comm'n.⁴²⁴ In an opinion authored by Judge Reyna, the Suprema en banc majority rejected the "plain language" rationale of the Circuit panel that in 2013 had decided to the contrary.⁴²⁵

Section 337 of the Tariff Act of 1930 (i.e., 19 U.S.C. §1337) declares unlawful the importing of "articles that . . . infringe a valid and enforceable United States patent." In an opinion authored by Judge O'Malley, the Circuit panel in 2013 had interpreted the statutory phrase "articles that . . . infringe" to require infringement at the time of importation. In other words, the panel read "articles that . . . infringe" as having a temporal (i.e., present tense) limitation. In Suprema, there was no direct infringement until after importation, when Mentalix combined the imported scanners with its custom software and sold the combination in the United States to end users who practiced the patented method of scanning and classifying fingerprint images. Hence, the 2013 panel held, there was no basis for an exclusion order to bar the scanners under a theory that they induced infringement because the predicate act of direct infringement had not yet occurred at the time of importation.

The Suprema en banc majority disagreed. In the majority's view, the statutory phrase "articles that . . . infringe" in section 337 was ambiguous.⁴²⁶ Thus the ITC's interpretation of the statutory language as permitting exclusion of the scanners for inducing infringement was to be judged pursuant to Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.⁴²⁷ The en banc majority found the Commission's interpretation reasonable because it was consistent with the statutory text, policy, and legislative history of Section 337.⁴²⁸ The...