United States: Television Sets: Commission Clarifies Knowledge Requirement For Contributory Infringement

On October 30, 2015, the Commission clarified whether or not service of the complaint meets the knowledge requirement for contributory infringement in Certain Television Sets, Television Receivers, Television Tuners, and Components Thereof (Inv. No. 337-TA-910) ("Certain Television Sets").  Conceding that its precedent had been unclear on this point, the Commission held that service of the complaint alone, without any showing of pre-suit knowledge, meets the requirement.

In the ITC and elsewhere, a finding of contributory infringement requires showing that the accused infringer knew of the patent during the alleged infringement.  Global-Tech Appliances, Inc. v. SEB SA, 131 S. Ct. 2060, 2068 (2011) ("Global Tech").  In her initial determination (ID) in Certain Television Sets, the Administrative Law Judge Dee Lord held that this requirement was met by mere service of the complaint.  ID at 69, 82, 90, 97.  To justify that result, Judge Lord cited to the Commission's opinion in Certain Inkjet Cartridges with Printheads & Components Thereof, Inv. No. 337-TA-723, Comm'n Op. at 8, 18-19 (Dec. 1, 2001) ("Certain Inkjet Cartridges") (reversing an ID by finding that mere service of the complaint met the knowledge requirement, despite failure to show any pre-suit knowledge).

The Office of Unfair Import Investigations (OUII) petitioned for review, in part, because Commission opinions have been inconsistent concerning whether pre-complaint knowledge of the patent is required to assert contributory infringement.  In particular, OUII pointed to two opinions where mere service of the complaint was found to be an insufficient showing of the knowledge requirement.  In In Certain Video Game Systems and Wireless Controllers and Components Thereof ("Video Game Controllers"), Inv. No. 337-TA-770 Comm'n Op. at 31-32, the Commission expressly found that, where "the only evidence [cited] for [the accused infringer's] alleged knowledge . . . [is] the complaint filed," the evidence was insufficient.  In Certain Mobile Devices, Associated Software, and Components Thereof ("Certain Mobile Devices"), Inv. No. 337-TA-744, Comm'n Op. at 18-19 (June 5, 2012), the Commission expressly rejected the argument that "where the complainant provides the defendant with detailed infringement contentions as part of the complaint, an inference of inducement should apply to the defendant's post-filing activities."  In its response to the petition, complainant argued that both of these cases were irrelevant because, since "both sought relief based on pre-complaint acts," neither analyzed whether the complaint could provide notice with regard to "post-suit acts" of infringement.  Complainant's Response to Petition for Review at 47.

Upon granting review, the Commission acknowledged the need to "clarify any inconsistency in our precedent with regard to knowledge of the patent."  Comm'n Op. at 41.  Without addressing the details of either complainant's or the OUII's arguments, the Commission held that "service of a Section 337 complaint can be adequate to provide knowledge of the asserted patents."  Id.  As justification, the Commission explained that patent knowledge could be inferred from ITC complaints because the Commission's rules of practice necessitate that the complaints include "highly detailed information concerning the asserted patents."  Id. at 41.  The Commission further clarified that, even if Video Game Controllers can be read in a way that is inconsistent with that decision, "this Opinion governs."  Id. at 43.

Noting the lack of Federal Circuit precedent on the issue of whether pre-suite notice is required, the Commission cited Rembrandt Social Media, LP v. Facebook, Inc., 950 F. Supp. 2d 876, 881 (E.D. Va. 2013) as reflecting that district courts are spilt, with a "minority" holding that service of the complaint is insufficient.  Id.  The Commission explained its divergence from the minority view because, unlike in district courts, "remedies under Section 337 are wholly prospective."  Id. at 42.  Therefore, pre-complaint knowledge is not as important to the Commission as may be to district courts faced with contributory infringement allegations.  Id.  The Commission further distinguished the facts in the Supreme Court's decision in Global Tech, where inducement "was alleged to occur before the filing of the complaint, and damages were assessed for that infringement."  Id.

Interestingly, the Commission recently issued notice in another case requiring briefing on the impact of the decision in Certain Television Sets.  More specifically, the Commission's notice issued in Certain Beverage Brewing Capsules, Components Thereof, and Products Containing the Same (Inv. No. 337-TA-929) required briefing on only one issue, how the Certain Television Sets determination "that the 'knowledge of the patent' element for contributory infringement can be satisfied through service of a Section 337 complaint" could impact the investigation.  80 Fed. Reg. 70,834 (Nov. 16, 2015).

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

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