Suprema, Inc. v. International Trade Commission, 796 F.3d 1338

Background

Cross Match sued Suprema and Mentalix at the ITC under 19 U.S.C. § 1337 alleging infringement of a fingerprint-scanner method patent (the '344 patent, claim 19).
Suprema (Korean) manufactured scanners and shipped them with an SDK; Mentalix (U.S.) imported the scanners, wrote and bundled software (FedSubmit) that, when used with the SDK, practiced claim 19.
The ALJ found direct infringement (when used with Mentalix’s software) and the Commission found Mentalix directly infringed and Suprema induced that infringement; the Commission issued a limited exclusion order banning Suprema/Mentalix scanners.
A Federal Circuit panel vacated the Commission’s rulings, holding Section 337 reaches only articles that infringe at importation and thus cannot be based on inducement of post-importation method infringement (Suprema, 742 F.3d 1350).
The court granted en banc review, and the majority reversed the panel: it held the ITC’s interpretation that Section 337 covers importation of articles that are used post-importation to directly infringe as a result of seller inducement is reasonable and entitled to Chevron deference.
The court remanded for further proceedings; two dissents argued Section 337 unambiguously does not authorize exclusion based solely on inducement of post-importation method infringement and warned of overbroad enforcement and separation-of-powers concerns.

Issues

Issue	Plaintiff's Argument (Cross Match/ITC)	Defendant's Argument (Suprema/Mentalix)	Held
Whether "articles that infringe" in § 1337 includes importation of goods that, after importation, are used by the importer to directly infringe at the seller's inducement	§ 337 is ambiguous as to timing; the ITC may treat inducement-based uses (when direct infringement later occurs) as "articles that infringe" and may exclude future imports to prevent unfair trade	The phrase requires infringement at the time of importation; inducement of post-importation method infringement is not covered by § 1337 because infringement occurs later	The statute is ambiguous on this point; Commission’s interpretation is reasonable and entitled to Chevron deference — § 337 can reach such inducement-based imports
Whether Chevron deference applies to the ITC’s construction of § 1337	Agency adjudication under § 337 is sufficiently formal; Mead and precedent support Chevron deference to ITC	Chevron inapplicable only if Congress spoke unambiguously; defendants argue statute is clear	Chevron applies; the court proceeds to evaluate the reasonableness of the ITC’s construction
Whether the Commission’s interpretation is consistent with § 337’s text and purpose	Interpreting § 337 to reach inducement furthers Congress’s long-standing border-protection purpose and fits § 337’s in-rem enforcement role	Such an interpretation stretches the text beyond its plain meaning and conflicts with § 337’s importation-focused language and with separation-of-powers/administrative limits	The court found the ITC’s interpretation consistent with the statute’s text, policy, structure, and legislative history; reasonable under Chevron step two
Remedy scope: whether exclusion orders may block staple goods that may or may not be later used infringingly	Exclusion orders are prospective and intended to prevent future unfair trade; excluding future imports of articles that have been used to induce infringement serves § 337’s protective purpose	Excluding all imports of staple goods based on potential future uses and importer intent is overbroad and impractical (Customs enforcement issues); Congress did not grant this power	Court affirms ITC authority in principle to exclude under inducement theory; dissents strongly disagree and stress limits and practical enforcement concerns

Key Cases Cited

Chevron v. Natural Resources Defense Council, 467 U.S. 837 (1984) (establishes two-step review for agency statutory interpretations)
United States v. Mead Corp., 533 U.S. 218 (2001) (formal adjudication can warrant Chevron deference)
Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754 (2011) (willful blindness standard for knowledge in inducement)
Limelight Networks, Inc. v. Akamai Technologies, Inc., 134 S.Ct. 2111 (2014) (inducement requires underlying direct infringement)
Aro Mfg. Co. v. Convertible Top Replacement Co., 365 U.S. 336 (1961) (indirect infringement liability traces to inducing acts when direct infringement later occurs)
Suprema, Inc. v. Int’l Trade Comm’n, 742 F.3d 1350 (Fed. Cir. 2013) (panel decision vacating ITC exclusion order; held § 337 required infringement at time of importation)