Supreme Court Declines Comcast’s Challenge to the ITC’s Jurisdiction, Thus Confirming the Broad Reach of Section 337 - Global Trade Magazine
  June 30th, 2020 | Written by

Supreme Court Declines Comcast’s Challenge to the ITC’s Jurisdiction, Thus Confirming the Broad Reach of Section 337

[shareaholic app="share_buttons" id="13106399"]

Entering October Term 2019, the U.S. Supreme Court had never reviewed a Section 337 investigation. However, some court-watchers thought that Comcast Corporation v. International Trade Commission might have the right ingredients to break that 90-year streak: a former U.S. Solicitor General representing the petitioners; allegations that Chevron deference had led to regulatory overreach; and a handful of sophisticated amici curiae supporting cert. But the Court denied the petition without even a relist, leaving intact the U.S. International Trade Commission’s assertion of broad authority over patent infringement that occurs wholly within the United States after importation.

Comcast’s cert petition arose out of ITC Investigation No. 337-TA-1001. The complainant, Rovi, argued that certain set-top boxes (“STBs”) used in Comcast’s cable-television system infringed two patents involving “an interactive television program guide system for remote access to television programs.” The Commission found that when Comcast customers use the STBs in a particular way, in conjunction with Comcast’s system, those customers infringe the asserted patents. The Commission further found that Comcast induced that infringement by instructing customers how to use the system. Thus, the Commission found that the STBs constitute infringing articles under Section 337 and issued a limited exclusion order and cease and desist order.

Before the Federal Circuit and in its cert petition, Comcast argued that the Commission had overstepped its jurisdiction. Comcast explained that all of the infringing conduct—both the customers’ direct infringement using the STBs, and also Comcast’s inducement by providing instructions to its customers—occurred within the United States. In Comcast’s view, then, the STBs were not “articles that . . . infringe” a patent at the time of importation and thus fall outside the scope of Section 337.

Siding with the Commission, the unanimous Federal Circuit panel rejected this argument. The court noted that Section 337 expressly defines unfair trade practices to include “sale within the United States after importation” of infringing articles. The court concluded that so long as the articles are imported and they infringe a patent, they fall within the scope of Section 337, regardless of whether the articles were infringing at the time they entered the United States.

The denial of cert in Comcast solidifies the Commission’s broad assertion of authority over all infringement by imported products, regardless of the nature of that infringement and regardless of when it occurs. Even before this development, the Commission had become a preferred forum for many patent holders given its powerful remedies, fast pace, and patent-savvy personnel. This trend is likely to accelerate now that the courts have passed on the opportunity to curtail the Commission’s broad view of its jurisdiction.

______________________________________________________________

Beau Jackson is a Kansas City-based partner with the law firm Husch Blackwell LLP. He leads the firm’s Section 337 practice.

Michael Martinich-Sauter is an attorney in Husch Blackwell LLP’s St. Louis office.