United States: ITC Modifies Limited Exclusion Orders To Cover Non-Infringing Components

On August 29, 2016, the International Trade Commission ("ITC") issued an Opinion in Certain Marine Sonar Imaging Devices, Including Downscan and Sidescan Devices, Products Containing Same, and Components Thereof, Inv. No. 337-TA-921, modifying the limited exclusion order previously entered in the investigation. In the original limited exclusion order, the Commission precluded importation of respondent Garmin's sonar imaging devices, which incorporated transducers—a component of sonar imaging devices—that together infringe the asserted patents. In the original opinion, the Commission specifically carved out from the exclusion order those individual transducers, which are not incorporated into sonar imaging devices at the time of importation. The Commission's rationale for this carve-out was that complainant Navico failed to prove contributory or induced infringement with respect to the stand-alone transducers. The Commission has now modified its order by clarifying that stand-alone transducers, which will be combined with sonar imaging devices after importation, are also subject to exclusion.

The Case

On December 1, 2015, the ITC issued a limited exclusion order against Garmin precluding the importation of marine sonar imaging devices that infringe complainant Navico's asserted patents. In an Opinion entered the same day, the Commission found that Navico had failed to prove that Garmin induces infringement of the asserted patents by importing stand-alone transducers, which are not incorporated into sonar imaging devices at the time of importation. The Commission also found that Garmin does not contributorily infringe the asserted patents by importing the stand-alone transducers. Accordingly, the ITC carved the stand-alone transducers out of the exclusion order.

On May 20, 2016, Navico filed a petition to modify the limited exclusion order to clarify the Commission's position with respect to the stand-alone transducers. The Commission granted Navico's petition and added the following language to the exclusion order:

Specifically, the provisions of this Order shall not apply to standalone products (for example, a standalone transducer product) that are, or will be, both imported as standalone products and sold after importation as standalone products. By contrast, the provisions of this Order shall apply to components (for example, a transducer component) of marine sonar images devices when such components are, or will be, imported or sold after importation as part of a marine sonar imaging system covered by one or more of the claims recited above in Paragraph 1.

Modified Exclusion Order at ¶4 (emphasis added). In its petition to modify the exclusion order, Navico presented evidence that Garmin did not begin importing stand-alone transducers to be combined with sonar imaging devices in the United States until after the remedial orders initially issued. The Commission explained that this change in Garmin's importation practices warranted modification of the exclusion order to cover the non-infringing transducer components.

Key Takeaways

The modified exclusion order precludes Garmin from selling sonar imaging devices in the United States that infringe the asserted patents even if the components of the device were imported separately and were not infringing at the time of importation. This is an important decision for a couple of reasons.

First, components may still be subject to an ITC exclusion order even where the ITC finds the complainant failed to prove that such components directly or indirectly infringe the asserted patents on the record.

Second, how the ITC can enforce the modified exclusion order without information regarding the future use of the components at the time of importation is yet to be determined. Stand-alone transducers are subject to exclusion only if they will be combined after importation with other components to create an infringing device. Thus, in order to exclude such transducers, U.S. Customs and Border Protection ("CBP")—who are tasked with enforcing the ITC's remedial orders—would have to know the future use of the transducers. But CBP most likely will not have access to that information. CBP could potentially use the certification provision of the modified exclusion order to obtain this information, but such information might be difficult to gather, especially where such components may have multiple applications or uses. Moreover, to the extent Navico has evidence that the exclusion order is being violated, it could always file an enforcement action at the ITC.

In any event, modification of the exclusion order to provide this post-importation relief appears at odds with its normal application.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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