Latham Successful in Intellectual Property En Banc Federal Circuit Appeal for Crossmatch

Ruling overturns the panel's statutory interpretation, reaffirming that the International Trade Commission has the authority to issue an exclusion order based on induced infringement.

August 14, 2015

Latham obtained a major appellate victory for Crossmatch, a developer of biometric security solutions, in an important case before the en banc Federal Circuit on the International Trade Commission’s statutory authority to exclude articles under 19 U.S.C. § 1337 (“Section 337”). The court held that the ITC reasonably interpreted the statute to permit the ITC to remedy violations where an importer actively induced infringement of a patented invention using its imported articles but where the direct infringement only occurred post-importation.

In 2010, Crossmatch filed a complaint in the ITC alleging that two competitors (Suprema and Mentalix) infringed Crossmatch’s fingerprint scanning technology patents. Latham lawyers successfully urged the ITC to find Suprema and Mentalix liable for infringement under Section 337 and issue exclusion and cease and desist orders, thereby protecting a $140 million per year market for Crossmatch. The ITC held that Suprema induced infringement by importing scanners to Mentalix and assisting Mentalix in infringing Crossmatch’s patent stateside. However, in 2013, a divided Federal Circuit panel (2-1) vacated the ITC’s remedial order in part. The majority held that the ITC has no statutory authority to find a Section 337 violation where an importer induces direct infringement that occurs post-importation. Judge Reyna dissented.

Crossmatch and the ITC sought (and received) en banc rehearing and the court vacated the panel’s opinion. En banc hearings are very rare, with only 2-4 typically granted per year. By a 6-4 vote, with Judge Reyna writing the majority opinion, the Federal Circuit found that the ITC does have authority to find a Section 337 violation in these circumstances. Applying the Chevron doctrine, the court held that the ITC’s longstanding interpretation of its statutory authority is reasonable and entitled to deference. The decision is a significant pronouncement on the ITC’s ability to protect domestic patent-holders and stop infringement at the border.

In addition to Washington, D.C. partner Max Grant, who argued the appeal before the Federal Circuit panel and the en banc court, New York partner Clement Naples and Washington, D.C. partner Bert Reiser and Washington, D.C. counsel Gabriel Bell also advised on the matter which has received widespread media coverage in Law360, The Recorder and others.

 
 
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