Tuesday, August 11, 2015

Chevron deference invoked by CAFC in Suprema v. ITC

From the decision:

Section 337 of the Tariff Act of 1930, codified at 19
U.S.C. § 1337 (“Section 337”), declares certain acts unlawful.
Among them is importing “articles that . . . infringe a
valid and enforceable United States patent.” 19 U.S.C.
§ 1337(a)(1)(B)(i). The International Trade Commission
(“Commission”) interpreted this provision to cover importation
of goods that, after importation, are used by the
importer to directly infringe at the inducement of the
goods’ seller. A majority panel of this court disagreed,
reasoning that there are no “articles that infringe” at the
time of importation when direct infringement does not
occur until after importation. Suprema, Inc. v. Int’l Trade
Comm’n, 742 F.3d 1350, 1352 (Fed. Cir. 2013). In doing
so, the panel effectively eliminated trade relief under
Section 337 for induced infringement and potentially for
all types of infringement of method claims.

We granted en banc rehearing and vacated the panel
decision, 2014 WL 3036241, and we now uphold the
Commission’s position. We conclude that because Section
337 does not answer the question before us, the Commission’s
interpretation of Section 337 is entitled to Chevron
We hold that the Commission’s interpretation
is reasonable because it is consistent with Section 337 and
Congress’ mandate to the Commission to safeguard United
States commercial interests at the border. Accordingly,
we return the case to the panel for further proceedings
consistent with this opinion

As to the issue

We are asked to decide whether goods qualify as “articles
that infringe” when the Commission has found that
such goods were used, after importation, to directly infringe
by the importer at the inducement of the goods’
seller. In other words, does the importation of such goods
qualify as an unfair trade act under Section 337? If the
answer is yes, the Commission has authority under
§ 1337(d)(1) to issue an exclusion order to prevent this act
from occurring in the future.

As to Chevron

The Chevron framework is well-established. City of
Arlington, Tex. v. FCC, 133 S. Ct. 1863, 1868 (2013)
(explaining Chevron’s “now-canonical formulation”).
Chevron requires a court reviewing an agency’s construction
of a statute which it administers to answer two
questions. Chevron, 467 U.S. at 842. The first is “whether
Congress has directly spoken to the precise question at
issue.” Id. If the answer is yes, then the inquiry ends,
and we must give effect to Congress’ unambiguous intent.
Id. at 842–43. If the answer is no, the second question is
“whether the agency’s answer [to the precise question at
issue] is based on a permissible construction of the statute.”
Id. at 843. The agency’s “interpretation governs in
the absence of unambiguous statutory language to the
contrary or unreasonable resolution of language that is
ambiguous.” United States v. Eurodif S.A., 555 U.S. 305,
316 (2009) (citing Mead, 533 U.S. at 229–30).

Verb tense arises:

Citing the present-tense use of the verb “infringe” in
the phrase “articles that infringe,” the panel suggested
that Section 337 must exclude inducement of postimportation
infringement because the acts that complete
infringement have not all taken place at the time of
importation. Suprema, 742 F.3d at 1358. It is true that
the direct infringement required for inducement, see
Limelight Networks, Inc. v. Akamai Techs., Inc., 134 S. Ct.
2111, 2117 & n.3 (2014), will typically not have taken
place at the time of the importation that induces it. Yet
we cannot conclude that Congress unambiguously excluded
such induced infringement on the basis of the panel’s

Of willful blindness (blind eye) to patents:

The Commission also found that Suprema deliberately
avoided acquiring knowledge of the ’344 patent.3
Among other things, the Commission found that Suprema
failed to obtain opinion of counsel, through which the ’344
patent would have been uncovered since it was owned by
Cross Match, and the search would have included an
analysis of whether Suprema infringed Cross Match
patents. J.A. 224. Accordingly, the Commission found
that Suprema had willfully blinded itself to the existence
of the ’344 patent and “deliberately shielded itself from
the nature of the infringing activities it actively encouraged
and facilitated Mentalix to make.” J.A. 225.

link: http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/12-1170.Opinion.8-6-2015.1.PDF


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