WIPR survey: Federal Circuit correct on ITC inducement ruling, say readers

The US Court of Appeals for the Federal Circuit correctly ruled that the International Trade Commission (ITC) can halt imported goods that it believes may induce patent infringement, WIPR readers have said.

Earlier this month, the federal circuit ruled in a 6-4 decision that the ITC can interpret section 337 of the Tariff Act to cover goods which, after importation, “are used by the importer to directly infringe at the inducement of [the] goods’ seller”.

The federal circuit was assessing a dispute en banc after ruling in 2013 that the ITC had overstepped its mark in interpreting section 337 to issue an exclusion order “predicated on induced infringement”.

In its August 10 decision the federal circuit’s full panel of judges reversed that ruling, and 66% of respondents said it was the right decision.

The case centred on a 2010 ITC complaint filed by technology business Cross Match Technologies (CMT) against Korean-based biometrics company Suprema.

CMT complained that fingerprint scanning devices manufactured by Suprema infringed its US patent number 7,203,344, which covers a method of generating a fingerprint image on a device.

Suprema manufactured its own scanning devices abroad and sold them to a US-based distributor called Mentalix.

In June 2011, the ITC determined that Mentalix was liable for direct infringement for distributing the products within US borders and that Suprema was liable for induced infringement by enabling Mentalix to sell them.

Both Suprema and Mentalix appealed against the decision at the federal circuit.

After the federal circuit said that the ITC could not issue an exclusion order for goods it believed to be inducing infringement, CMT requested an en banc hearing.

Following the court’s reversal of that ruling, the case will now return to the original three-judge panel to enter a verdict consistent with the en banc opinion.

Despite most people backing the decision, 34% of respondents disagreed with the federal circuit’s ruling.

One respondent said: “If upheld, the ITC can now prevent companies importing staple goods on the basis that the importer ‘may’ use them to induce infringement. This is far too much of a judgement call for the ITC to make.”

For this week’s survey, WIPR asks: Last week the US Patent and Trademark Office  published draft proposals for how to improve trial proceedings at the Patent Trial and Appeal Board. Do you think the proposals will have the intended effect?