United States: USITC Declines To Institute Investigation Of Induced Patent Infringement As Unfair Method Of Competition Or Unfair Acts

In a recent decision, the International Trade Commission rejected a petitioner's attempt to use allegations of unfair competition and unfair acts as a possible way of working around the Federal Circuit's bar on claims of induced infringement.

The Commission issued its Notice of Investigation in Certain Audio Processing Hardware and Software and Products Containing Same, ITC Inv. No. 337-TA-949 on March 12, 2015. The complaint filed by Andrea Electronics Corporation alleges that Respondents Acer, ASUSTek, Dell, Hewlett Packard, Lenovo, Toshiba, and Realtek Semiconductor unlawfully import into the United States and sell to end users certain microphone products, audio codecs, audio processing software, and personal computers (including laptops, desktops, notebooks, and tablets) that induce infringement of Andrea's patents. Certain Audio Processing Hardware and Software and Products Containing Same, ITC Inv. No. 337-TA-949, Complaint (Feb. 9, 2015).

In Suprema, Inc. v. ITC, the Federal Circuit held that claims under § 337 could not be based on the induced infringement of a patent, "where the attendant direct infringement of the claimed method does not occur until post-importation." 742 F.3d 1350, 1353 (Fed. Cir. 2013). This decision was vacated to rehear the appeal en banc, seemingly reviving claims of induced patent infringement, at least temporarily. Suprema, Inc. v. ITC, 2014 U.S. App. LEXIS 10124 (Fed. Cir. May 13, 2014) (For more on the Suprema decision, see A Brief Synopsis of the Issues Confronting the Federal Circuit in the En Banc Rehearing of Suprema, Inc. v. ITC.)

In its complaint, Andrea alleged that the Respondents induced infringement of the asserted patents. In addition to the allegations of importing articles that infringe a U.S. patent, Andrea alleged that the Respondents had violated 19 U.S.C. § 1337(a)(1)(A), which prohibits unfair methods of competition and unfair acts in the importation of articles, by importing products which induced infringement of the asserted patents. In particular, Andrea alleged that "Respondents' unfair methods of competition and unfair acts include their importation and sale of articles used by end users to practice one or more claims of Andrea's Asserted Patents in the United States." Certain Audio Processing Hardware and Software and Products Containing Same, ITC Inv. No. 337-TA-949, Complaint (Feb. 9, 2015), at ¶ 436. A violation under § 1337(a)(1)(A) requires additional proof of a substantial injury or threat of substantial injury, which is not required for a violation under 19 U.S.C. § 1337(a)(1)(B).

Commentators on the Suprema case had mentioned the possibility of using allegations of unfair competition and unfair acts as a possible way of working around the Suprema decision's bar on claims of induced infringement.  Andrea's complaint was the first attempt by a party to test whether such an allegation would be successful. Although Andrea alleged violations of both § 1337(a)(1)(A) and § 1337(a)(1)(B), the Commission's Notice of Investigation only instituted the investigation under § 1337(a)(1)(B). Certain Audio Processing Hardware and Software and Products Containing Same, ITC Inv. No. 337-TA-949, Notice of Investigation (March 12, 2015) at 2.

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