United States Court of Appeals for the Federal Circuit, Comcast Corp. v. United States International Trade Commission, Docket No. 18-1450

 

Import

Software

Customs

ITC

Section 337 of the Tariff Act of 1930

Patent Infringement

Infringement May Occur After Importation

Exclusion Order

Blocking Imports

Cease and Desist Order

 

Appeals from the United States International Trade Commission in Investigation No. 337-TA-1001.

 

Rovi Corporation and Rovi Guides, Inc. (collectively “Rovi”) filed a complaint with the ITC alleging violation of Section 337 of the Tariff Act of 1930. Rovi asserted, inter alia, infringement of claims 1, 2, 14, and 17 of United States Patent No. 8,006,263 (“the ’263 patent”) and claims 1, 3, 5, 9, 10, 14, and 18 of United States Patent No. 8,578,413 (“the ’413 patent”). Rovi stated, and the Commission found, that Comcast’s customers directly infringe the ’263 and ’413 patents by using Comcast’s X1 system. The Commission found that Comcast is in violation of Section 337 by importing the X1 set-top boxes that are used in the infringing system.

 

(…) The administrative law judge (“ALJ”) conducted an investigation and trial, and found violation of Section 337. The ALJ found that the X1 set-top boxes are imported by ARRIS and Technicolor, and that “Comcast is sufficiently involved with the design, manufacture, and importation of the accused products, such that it is an importer for purposes of Section 337.” Final ID at *11. The full Commission affirmed “the Final ID’s findings and conclusion that Comcast imports the X1 STBs into the United States.” Comm. Op. at *7.

 

The full Commission affirmed “the Final ID’s conclusion that the X1 systems meet all of the limitations of the asserted claims” and “Comcast’s customers directly infringed the ’263 and ’413 patents through their use of the X1 systems in the United States.” Id. at *10–11. The Commission stated that “the Final ID’s unreviewed findings also conclude that Comcast induced that infringement,” and that “Comcast also instructs, directs, or advises its customers on how to carry out direct infringement of the asserted claims of the ’263 and ’413 patents with the X1 STBs.” Id. The Commission affirmed that Comcast violated Section 337.

 

The Commission issued a limited exclusion order and cease and desist orders directed to the Comcast respondents. The limited exclusion order excludes importation of the X1 set-top boxes by Comcast (…).

 

Section 337 contemplates that infringement may occur after importation. The statute defines as unlawful “the sale within the United States after importation . . . of articles that—(i) infringe . . . .” The statute thus distinguishes the unfair trade act of importation from infringement by defining as unfair the importation of an article that will infringe, i.e., be sold, “after importation.” Section 337(a)(1)(B)’s “sale . . . after importation” language confirms that the Commission is permitted to focus on post-importation activity to identify the completion of infringement.

 

(…) Wing Shing Pdts. (BVI), Ltd. v. Simatelex Manufactory Co., 479 F.Supp.2d 388, 409–11 (S.D.N.Y. 2007) (“Numerous courts have held that, in contrast to §§ 271 (a) and (c), § 271 (b) applies to extraterritorial conduct.”)

 

(…) Comcast’s inducing activity took place overseas, prior to importation; it took place at importation; and it took place in the United States, after importation.

 

Comcast argues that it is not an importer of the X1 set-top boxes, in that the importer of record is ARRIS or Technicolor. Comcast states that it does not physically bring the boxes into the United States and it does not exercise any control over the process of importation. The Commission and Rovi respond that Comcast is an importer in terms of Section 337 because Comcast causes the X1 set-top boxes to enter the United States.

 

The Final ID found that the X1 set-top boxes “are so tailored to Comcast’s system and requirements that they would not function within another cable operator’s system.” Final ID at *11. “Further, the software at issue in the heart of this investigation is attributable squarely to Comcast.” Id. The Final ID concluded that “the evidence shows that Comcast is sufficiently involved with the design, manufacture, and importation of the accused products, such that it is an importer for purposes of Section 337.” Id.

 

The Final ID also found that Comcast “requires ARRIS and Technicolor to handle importation formalities, such as fees, documentation, licenses, and regulatory approvals.” Id. The Final ID concluded that “Comcast is sufficiently involved in the importation of the accused products that it satisfies the importation requirement, under 19 U.S.C. § 1337(A)(1)(B).” Final ID at *405.

 

The full Commission concluded that Comcast is an importer of the X1 set-top boxes. The Commission stated that “Section 337, as applied to Comcast’s relevant conduct here, requires importation of articles, proof of direct infringement, and proof of inducement, all of which have been established by the record.

 

The Commission has discretion in selecting a remedy that has a reasonable relation to the unlawful trade practice. See Cisco Systems, Inc. v. U.S. Int’l Trade Comm’n, 873 F.3d 1354, 1363 (Fed. Cir. 2017) (“Blocking imports of articles that induce patent infringement has a reasonable relationship to stopping unlawful trade acts.”).

 

 

(United States Court of Appeals for the Federal Circuit, March 2, 2020, Comcast Corp. v. United States International Trade Commission, Docket No. 18-1450 (18-1653, 18-1667), Circuit Judge Newman)