News & Insights


February 3, 2016

ITC Section 337 Update – February 3, 2016

Commission and Align Technology Petition for Rehearing En Banc in ClearCorrect - On January 27, 2016, the U.S. International Trade Commission (“Commission”) and Align Technology, Inc. petitioned for rehearing en banc in ClearCorrect Operating LLC v. ITC, Investigation No. 337-TA-833.  As previously reported in the Update, this case stems from a Commission decision upholding an ALJ Initial Determination that the articles accused of infringement, digital models used in constructing dental appliances, are “articles” under Section 337 and “materials” used in practicing a patented process under 35 U.S.C. § 271(c).  The Federal Circuit issued a 2-1 panel opinion reversing the Commission decision.  The majority found that the Commission improperly “expand[ed] the scope of its jurisdiction to include electronic transmissions of digital data[.]”  The Commission, it reasoned, was not entitled to deference under step one of the Supreme Court’s Chevron analysis because “it is clear that ‘articles’ means ‘material things,’ whether when looking to the literal text or when read in context ‘with a view to [the term’s] place in the overall statutory scheme.’”

The Commission and Align Technology now have petitioned for rehearing en banc of the panel decision.  The Commission asserts that this appeal “presents a precedent-setting question of exceptional importance” as to whether Section 337 may only apply to physical products.  The panel’s narrow interpretation of “articles,” the Commission argues, “is inconsistent with the broad remedial purpose of section 337[.]”  The Commission asserts that the panel erred in finding that there was no ambiguity in the statute, and in subsequently denying the Commission deference under the Chevron analysis.  Align Technology adds that by relying on selective dictionary definitions, the Federal Circuit panel “improperly discount[ed] canons of interpretation of generic language, Supreme Court jurisprudence on the scope of articles of commerce, and principles of agency deference” in determining that “articles” can only apply to tangible items.  This decision, Align Technology argues, “renders the Commission powerless to combat the threats of electronic piracy of copyrighted materials and infringing 3-D printing[.]”  

The Court has set February 11, 2016 as the deadline for Appellants and amici curiae parties to respond to the petitions.  Additional parties are expected to submit amicus curiae briefs in support of the Commission.  Therefore, Appellants ClearCorrect Operating LLC and ClearCorrect Pakistan (Pvt.) have requested an extension of time to respond to February 29, 2016.  

DeLorme Publishing Company Seeks Rehearing En Banc Of Decision Affirming Civil Penalty Order - On December 28, 2015, DeLorme Publishing Company, Inc. and DeLorme inReach LLC (“Delorme”) filed a petition for rehearing en banc of the Federal Circuit’s decision affirming a civil penalty order of the U.S. International Trade Commission.  The case is DeLorme Publishing Co. v. ITC, Investigation No. 337-TA-854, Case No. 14-1572.  In 2012, BriarTek IP, LLC filed a complaint with the Commission alleging that DeLorme’s imported “devices, systems, and components” infringed its patent.  DeLorme proposed to terminate the investigation through a consent order because it was moving the manufacturing of its alleged infringing inReach device to Maine.  After the Consent Order was approved, BriarTek filed a complaint alleging DeLorme had violated the Order, and shortly after the Commission began the enforcement proceeding, DeLorme filed a declaratory judgment action in federal court challenging validity and infringement of the patent.  While the district court action was pending, the Commission issued a decision in the enforcement proceeding finding that DeLorme violated the Consent Order and imposing a civil penalty of $6,242,500.  The district court later found that the asserted patent claims were invalid.

In its petition, DeLorme argues that the Federal Circuit panel should not have affirmed the Commission because the district court’s finding of invalidity was a complete defense to BriarTek’s infringement claim.  DeLorme also argues in its petition that the panel improperly expanded the Commission’s jurisdiction to include domestic patent infringement where an allegedly infringing product manufactured in the United States includes an imported and non-infringing part.  Because, as DeLorme claims, none of the imported components of the inReach device, alone or in combination, infringes the patent directly or indirectly, the panel’s decision runs afoul of the Federal Circuit’s holding in Suprema, Inc. v. ITC, 796 F.3d 1338 (Fed. Cir. 2015), which held that the Commission’s jurisdiction under Section 337 is limited to “the ‘importation’ of ‘articles’ that ‘infringe’ a valid patent.”  DeLorme asserts that by “eliminating the requirement that the imported articles infringe the asserted patent, either before or after importation, the panel has detached the Commission’s authority from its jurisdictional mooring.”

Several companies have been granted leave file an amicus curiae brief in support of the petition, and the court has invited the Commission to file a response to the petition, which is due by February 26, 2016.