Background
Cross Match Technologies filed a Section 337 complaint at the International Trade Commission against Suprema Inc. and Mentalix Inc. alleging infringement of patents on fingerprint scanning methods. Suprema, a Korean company, manufactured optical fingerprint scanners (hardware) that it imported into the United States. Once in the U.S., Mentalix operated software on those scanners that, according to Cross Match, directly infringed Cross Match’s method patents. Suprema was accused not of directly infringing those methods itself, but of inducing Mentalix’s direct infringement by actively encouraging Mentalix to incorporate Mentalix’s software with Suprema’s hardware to perform the patented methods.
The critical legal issue: Section 337 of the Tariff Act covers the importation of “articles that infringe” patents. Suprema’s scanners, as imported, did not directly infringe any patent — the method claims were only infringed later, when Mentalix ran its software on them in the United States. A previous Federal Circuit panel had held that the ITC lacks jurisdiction over such situations because the articles (scanners) did not infringe at the time of importation — there is no “article that infringes” at the border. The ITC petitioned for en banc rehearing.
The Court’s Holding
The en banc majority, in an opinion by Judge Reyna, reversed the panel and held that the ITC does have jurisdiction. The court applied the Chevron framework and found that Section 337’s phrase “articles that infringe” is ambiguous as applied to induced infringement scenarios. Given the ambiguity, the ITC’s interpretation — that goods qualify as “articles that infringe” when they are imported with the intent to induce direct infringement that occurs after importation — was a reasonable construction entitled to deference. The majority reasoned that allowing importers to escape ITC scrutiny simply by delaying the direct infringing act until after customs clearance would create a loophole that could gut ITC enforcement of method patents.
Chief Judge Prost’s dissent (joined by three other judges) argued that the statutory text is unambiguous: an article either infringes at importation or it does not, and future post-importation acts cannot retroactively transform a non-infringing article into an infringing one. The dissent worried that extending ITC jurisdiction to induced infringement would allow patent holders to exclude goods that, at the time of crossing the border, have not yet infringed anyone’s patent.
Key Takeaways
- The ITC has jurisdiction to issue exclusion orders covering imported articles when the importer induces post-importation direct infringement — goods need not literally infringe a patent at the moment of importation for the ITC to act.
- The ruling significantly expanded the practical scope of ITC proceedings to include method patent claims, which are particularly common in software and technology patents where the infringing act (running software, performing a process) necessarily occurs after the hardware is imported.
- The decision relied on Chevron deference to the ITC’s statutory interpretation, meaning it depends on the ITC’s continuing position that induced post-importation infringement is covered — and could be revisited if Chevron doctrine changes. (Note: The Supreme Court overruled Chevron in Loper Bright Enterprises v. Raimondo in 2024, which may affect the continuing force of this reasoning.)
- For importers of technology hardware designed to run third-party software, the case creates potential ITC exposure whenever the combined hardware-software system practices a patented method, even if the hardware alone does not infringe at the border.
Why It Matters
Suprema v. ITC resolved one of the most practically important questions in ITC practice: whether the commission can reach induced infringement of method patents. The answer — yes — has profound implications for the technology sector. Many modern patents cover methods performed by combinations of hardware and software, where the hardware (a chip, scanner, wireless module, or camera) is manufactured abroad and imported, while the infringing use occurs when domestic software runs on that hardware. Under Suprema, a patent holder can seek ITC exclusion of the hardware component even if the hardware itself is non-infringing, as long as the importer induces the direct infringement that occurs after importation.
This expansion of ITC jurisdiction has made ITC proceedings more attractive for software and technology patent holders who assert method claims. It also increased risk for device importers — companies that import hardware components used by customers or third parties to perform patented methods may face ITC exclusion orders based on induced infringement theories, even if the article at the border does nothing infringing on its own. Patent practitioners advising clients on ITC strategy need to account for the induced infringement hook enabled by Suprema when assessing both offensive and defensive ITC postures.