Suprema Inc. v. ITC  and ClearCorrect Operating v. ITC Top the List of the Most Important Federal Circuit Decisions from 2015

In a pair of 2015 cases, the Federal Circuit reached different conclusions on the ITC’s authority over patent cases. In August, in Suprema Inc. v. ITC, No. 12-1170 (Fed. Cir. Aug. 10, 2015)—a case involving fingerprint scanners—a split en banc Court held that the ITC can prevent importation of goods based on induced infringement.  Several months later, in ClearCorrect Operating v. ITC, No. 14-1527 (Fed. Cir. Nov. 10, 2015)—a case involving 3D digital models for teeth aligners—a split panel held that the ITC cannot prevent importation of digital data.  These represent two of the most important Federal Circuit decisions from 2015 because they define the scope of ITC’s authority to bar importation in an increasingly global and digital world where cross-border collaborations abound and the distinction between tangible products and digital representations has blurred.

In these cases, the Federal Circuit sent mixed messages:  expanding the ITC’s authority beyond direct infringement in Suprema while limiting its authority to cases involving “articles” in ClearCorrect. Under Suprema, the ITC can adjudicate indirect infringement of method claims.  Meanwhile, under ClearCorrect, the ITC is powerless to exclude digital transmission of patented software because it is not a “material” thing.  The same software stored on a disk, however, would constitute an “article” subject to ITC jurisdiction. Although the Court may address the tension in an en banc review, it might defer to Congress to clarify or change the law.

These decisions have far-reaching implications, particularly in the rapidly growing markets of e-commerce, 3D printing, and digital technology.  Although Suprema closed the loophole for articles that were induced by foreign sellers to infringe after importation, ClearCorrect leaves open the possibility of avoiding the reach of the ITC through digital transmissions.  Thus, these cases will shape how business is conducted, how products are designed and implemented, and how articles are sold internationally.  Relatedly, ClearCorrect would also affect the ITC’s jurisdiction under U.S. copyrights, especially against digital importers of streamed data.

The story perhaps does not stop here, for more chapters will likely be written either by the courts or by Congress or perhaps both.