FEDERAL CIRCUIT EN BANC HEARING ON ITC JURISDICTION

On February 5, 2015, the Federal Circuit sitting en banc heard oral arguments in Suprema, Inc. v. Int’l Trade Comm’n, Fed. Cir., No. 2012‐1170, regarding the ability of the USITC to issue exclusion orders under Section 337 based on a theory of induced patent infringement of method claims under 35 U.S.C. §271(b).  In this case, complainant Cross Match Technologies filed a complaint alleging that respondent Suprema's importation into the U.S. and the subsequent sale of its fingerprint scanners infringes its patent under the theory of inducement.  Here, Suprema manufactures the scanners in Korea that are imported into the U.S. and these scanners are then sold to Mentalix, who adds a software to the scanner which is then sold to the customers.  USITC found that scanner/software combination sold by Mentalix directly infringed the asserted method claims and that Suprema induced this infringement, and issued an exclusion order prohibiting the importation of the scanners.  On appeal, the Federal Circuit held that ITC cannot issue an exclusion order on a theory of induced infringement where direct infringement does not occur until after the importation of the product into the U.S.