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Federal Circuit Limits ITC's Indirect Patent Infringement Authority
On Dec. 13, 2013, the United States Court of Appeals for the Federal Circuit, in Suprema, Inc., et al. v. International Trade Commission, issued a landmark decision limiting the statutory authority of the International Trade Commission (ITC) to remedy indirect infringement, holding “that an exclusion order based on a violation of 19 U.S.C. '1337(a)(1)(B)(i) 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.” Suprema, Inc. v. Int'l Trade Comm'n, ___ F.3d ___ 2013 WL 6510929, *1 (Fed. Cir. Dec. 13, 2013) (emphasis in original). The Federal Circuit's holding effectively renders patent infringement claims based purely on alleged inducement of infringement beyond the authority of the ITC.
The ITC Investigation
In the underlying ITC Investigation (Certain Biometric Scanning Devices, Components Thereof, Associated Software, and Products Containing Same, U.S.I.T.C. Inv. No. 337-TA-720), the Complainant, Florida-based Cross Match Technologies, Inc. (Cross Match), alleged that biometric (fingerprint) scanners sold by Respondent Suprema, Inc. of South Korea (Suprema) infringed Cross Match's '344 patent related to fingerprint scanning technology when combined with software created by fellow Respondent Mentalix, Inc. of Plano, TX (Mentalix). Suprema sold its fingerprint scanners in the United States through distributors such as Texas-based Mentalix, which packaged the scanners with a general purpose computer and fingerprint scanning software for sale to end customers. Suprema did not provide executable end-user software, but did provide a Software Development Kit (SDK) that allowed its customers and distributors to create their own software to operate the scanner. Suprema's scanners, as well as its SDK ' the only “articles” that were actually imported ' were found not to infringe the '344 patent when combined with software developed by other customers. Hence, the ITC concluded these items had substantial non-infringing uses, and did not contributorily or directly infringe. After a hearing and post-hearing briefing, the ITC found infringement of the '344 patent as to Suprema, solely on the basis of inducement of infringement, where the claimed direct infringement took place only after importation into the U.S. Based on this finding, the ITC issued a limited exclusion order.
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