IP update: New clarity in patent infringement for imported articles

Introduction

In the context of patent infringement by importation, a recent Federal Circuit case, Comcast Corp. v. ITC and Rovi Corp., has broadened the scope of importation infringement in two significant respects.¹ "Importing articles that infringe" can include articles that do not infringe at the time of importation, but infringe later.² An entity controlling importation can also be considered an "importer," even if the entity does not directly import the articles that infringe.³

Background

Rovi Corporation and Rovi Guides, Inc. ("Rovi"), filed a complaint with the United States International Trade Commission (ITC) requesting a Section 337 investigation for the unlawful importation, sale for importation, and sale within the United States after importation of Comcast Corporation's X1 set-top boxes.⁴ Rovi asserted that Comcast induces customers to infringe several of Rovi's patents, including U.S. Patent Nos. 8,006,263 (the '263 patent) and 8,578,413 (the '413 patent), by importing, selling, and offering for sale X1 set-top boxes.⁵ Rovi further asserted that although Comcast does not physically import the X1 set-top boxes itself, Comcast controlled importation via hiring ARRIS and Technicolor to bring the X1 set-top boxes into the United States.⁶

Administrative Law Judge David Shaw found that the X1 set-top boxes imported by ARRIS and Technicolor in service of Comcast violate Section 337 for the '263 and '413 patents.⁷ The ITC Commission affirmed this Final Initial Determination finding that Comcast violated Section 337 related to the '263 and '413 patents by importing the X1 set-top boxes.⁸ Comcast appealed to the Federal Circuit.⁹

Importing "articles that infringe"

Comcast argued "the imported X1 set-top boxes are incapable of infringement until the X1 set-top boxes are combined with Comcast's domestic services and its customers' mobile devices."¹⁰ It contended that "its conduct is not actionable under Section 337 because Comcast's inducing conduct 'takes place entirely domestically, well after, and unrelated to, the article's importation.'"¹¹ Comcast argued that "the Commission's authority under Section 337 is limited to excluding articles that infringe at the time of importation," citing Suprema, Inc. v. U.S. Int'l Trade Comm'n, a 2015 en banc Federal Circuit decision.¹² In Comcast's view, "Suprema should be limited to its facts, whereby the inducement liability must be attached to the imported article at the time of the article's importation."¹³

The Federal Circuit disagreed. The Federal Circuit stated that Suprema considered Section 337 to apply to articles that infringe after importation and that the ITC correctly interpreted the Suprema opinion in its determination.¹⁴ The Federal Circuit determined that the type of infringement did not change the definition of "articles that infringe." "[A]rticles that infringe" may include goods that infringe after importation and goods that infringe via inducement infringement as well as direct infringement.

Importation by third party

Comcast also argued that "it is not an importer of the X1 set-top boxes, in that the importer of record is ARRIS or Technicolor."¹⁵ Comcast asserted that because "it does not physically bring the boxes into the United States and it does not exercise any control over the process of importation," Comcast could not be considered an "importer" under the statute's definition.¹⁶

The ITC determined that the definition of an importer under Section 337 is an entity that causes the articles that infringe to enter the United States.¹⁷ In applying the definition to the Comcast X1 set-top boxes, the ITC found that Comcast was an importer because Comcast has complete control over the importation and specifications of the X1 set-top boxes.¹⁸ Comcast controlled the specifications of the products, which were "designed only for Comcast," and ARRIS and Technicolor required Comcast's permission to sell the goods to others.¹⁹ Therefore, the ITC held, Comcast acted as importers under Section 337.

The Federal Circuit agreed. The definition of importer may extend beyond physical importation into the United States, to include entities that control importation, even if they do not themselves perform importation into the US.

Conclusion

With this case, the Federal Circuit has significantly clarified the current state of patent law and rights surrounding importation into the United States. Patent owners now arguably have stronger, more well-defined rights to exclude others from importing relevant goods into the United States. Articles that do not infringe upon importation, but do infringe after importation are still articles that infringe, and an entity does not have to physically import a good into the United States to be considered an importer if the entity controls the process. These clarifications may be critical to matters concerning importation of potentially infringing products.