“The Court agreed with the Commission’s finding that “Comcast is sufficiently involved with the design, manufacture, and importation of the accused products, such that it is an importer for purposes of Section 337.”
The U.S. Court of Appeals for the Federal Circuit has upheld an International Trade Commission (ITC) ruling granting a limited exclusion order that bars importation of X1 set-top boxes by Comcast, including importation by ARRIS and Technicolor on behalf of Comcast. Although the patents at issue have both expired, the Court refused Comcast’s motion to dismiss, finding that there were “sufficient collateral consequences to negate mootness.”
Rovi Corporation (a subsidiary of TiVo Corp.) and Rovi Guides, Inc. (Rovi) filed a complaint against Comcast and more than a dozen other entities with the ITC in 2017. Rovi asserted infringement of claims 1, 2, 14, and 17 of its U.S. Patent No. 8,006,263 (the ‘263 patent) and claims 1, 3, 5, 9, 10, 14, and 18 of its U.S. Patent No. 8,578,413 (the ’413 patent). Both patents cover “an interactive television program guide system for remote access to television programs.”
Rovi said that the X1 set-top boxes (pictured above) imported by ARRIS and Technicolor infringed; that Comcast’s customers directly infringe the ’263 and ’413 patents by using Comcast’s X1 system”; and that Comcast is an importer for purposes of Section 337 of the Tariff Act of 1930, which prohibits the “importation into the United States, the sale for importation, or the sale within the United States after importation by the owner, importer, or consignee, of articles that” infringe a valid patent.
The ITC Administrative Law Judge (ALJ) found violation of Section 337, and the full Commission affirmed the ALJ’s Final Initial Determination (Final ID) that the X1 set-top boxes meet “all of the limitations of the asserted claims,” that use by comcast’s customers on the X1 system was infringing, and that Comcast induced that infringement. With respect to ARRIS and Technicolor, the full Commission agreed with the Final ID that they did not directly infringe “because they do not provide a ‘remote access device’ as required by the claims” and that they did not contributorily infringe “because the set-top boxes have substantial non-infringing uses.” However, the full Commission issued a limited exclusion order “excluding importation of the X1 set-top boxes by Comcast, including importation by ARRIS and Technicolor on behalf of Comcast.” The Commission also issued cease and desist orders directed to the Comcast respondents.
Expired Patents Do Not Automatically Kill an Appeal
In its review of the Commission’s findings, the Federal Circuit first addressed the fact that the ’263 patent expired on September 18, 2019 and the ’413 patent expired on July 16, 2019. Comcast et. al. argued that the appeal should therefore be dismissed, as “after a patent expires ‘the ITC’s limited exclusionary order and cease and desist orders as to that patent have no further prospective effect.’ Hyosung TNS Inc. v. U.S. Int’l Trade Comm’n, 926 F.3d 1353, 1357 (Fed. Cir. 2019).”
But the Court agreed with the Commission and Rovi that it is undisputed that the appeal would have ongoing effects on two pending ITC investigations on unexpired Rovi patents, and that, as per Hyosung, “a case may remain alive based on collateral consequences, which may be found in the prospect that a judgment will affect future litigation or administrative action.”
Articles Can Infringe After Importation
The Court next dismissed Comcast’s arguments that since the boxes do not infringe at the time of importation into the United States, they could not violate Section 337, and that Comcast is not technically the importer of the boxes, as they are imported by ARRIS and Technicolor, after which title is transferred to Comcast once the boxes are already in the United States.
Citing Suprema, Inc. v. U.S. Int’l Trade Comm’n, the Federal Circuit said that “the Commission correctly held that Section 337 applies to articles that infringe after importation.” In Suprema, the Federal Circuit said:
Section 337 contemplates that infringement may occur after importation. The statute defines as unlawful “the sale within the United States after importation . . . of articles that—(i) infringe . . . .” The statute thus distinguishes the unfair trade act of importation from infringement by defining as unfair the importation of an article that will infringe, i.e., be sold, “after importation.” Section 337(a)(1)(B)’s “sale. . . after importation” language confirms that the Commission is permitted to focus on post-importation activity to identify the completion of infringement.
As for Comcast’s argument that it was not technically an importer of the boxes, the Court agreed with the Commission’s finding that “Comcast is sufficiently involved with the design, manufacture, and importation of the accused products, such that it is an importer for purposes of Section 337,” in part because “the X1 set-top boxes ‘are so tailored to Comcast’s system and requirements that they would not function within another cable operator’s system.’”
The extensive control and knowledge of the importation process ultimately left the Federal Circuit convinced that the ITC’s determination was correct and in line with statute and precedent.
Exclusion Orders Can Apply to Non-Infringers
ARRIS and Technicolor’s argument that they should not be subject to the exclusion order as they were found not to have directly or contributorily infringed also failed. The Court agreed with the ITC’s remedy, as it is “limited to importations on behalf of Comcast, of articles whose intended use is to infringe the patents at issue.”
Rovi/ TiVo Corp was represented by McKool Smith Principals Doug Cawley, Joshua Budwin, Rod Dorman, and Joel Thollander. Jeffrey Lamken of MoloLamken LLP argued for Rovi.