Two different avenues exist for patent owner to enforce their intellectual property rights in their patented processes against foreign manufacturers. Under 35 U.S.C. § 271(g),1 a patent owner can collect damages and enjoin infringers from importing into the United States products made by a patented process, as long as such products are “not materially changed by subsequent processes” or have become “a trivial and nonessential component of another product.” Section 271(g) authorizes Federal district courts to adjudicate and impose liability for infringement based on the foreign use of a patented process upon importation of the products of that process. As an alternative to the district court avenue, a patent owner can initiate an exclusion action pursuant to 19 U.S.C. § 1337(a)(1)(B)(ii),2 formerly section 1337(a) of the Tariff Act of 1930 as amended (previously known as section 337(a)), through the U.S. International Trade Commission (ITC). Section 1337(a)(1)(B)(ii) prohibits the importation of products produced by patented processes and empowers the ITC, either of its own accord or on behalf of an interested party, to exclude such products.

On March 25, 2004, the Federal Circuit emphasized the distinctness of these two avenues of process patent protection in Kinik Co. v. International Trade Commission, 362 F.3d 1359 (Fed. Cir. 2004). Minnesota Mining and Manufacturing Co. and Ultimate Abrasive Systems LLC (hereinafter “3M”) brought an exclusion action pursuant to 19 U.S.C. § 1337(a)(1)(B)(ii). The ITC found that the process claimed in 3M’s U.S. Patent No. 5,620,489 (“the ‘489 patent”) was being used in Taiwan to produce abrasive articles, which were later imported into the United States by Kinik. Kinik claimed that even if its manufacturing process included the steps of the patented process, the products were “materially changed by subsequent processes,” and therefore were exempt under section 271(g)(1). In sustaining the exclusion, the ITC held that the defenses to infringement under 35 U.S.C. § 271(g) do not apply to exclusion actions before the ITC. Kinik appealed to the Federal Circuit, arguing that 19 U.S.C. § 1337(c) states that “[a]ll legal and equitable defenses may be presented in all cases.”

The Federal Circuit affirmed this aspect of the case, agreeing with the ITC that the statutory defenses available under 35 U.S.C. § 271(g) were not available in an exclusion action brought before the ITC. The Federal Circuit noted that the Process Patent Amendments Act of 1988 (“the Act”), which added section 271(g) to title 35 U.S.C., stated that “[t]he amendments made by this subtitle shall not deprive a patent owner of any remedies available …under section 337 of the Tariff Act of 1930, or under any other provision of law.” The Court held that this statement in the Act prevents the section 271(g) defenses from being used in an ITC action, as they would deprive the patent owner of a remedy available under the Tariff Act.

The Federal Circuit also noted that the ITC’s interpretation of the Tariff Act was supported by precedent. First, as the agency charged with administration of section 1337(a)(1)(B)(ii), or its predecessor section 337(a), the ITC’s view of any uncertainty or ambiguity in the interpretation of the statute must be given deference. Second, the ITC’s interpretation was consistent with the Federal Circuit’s previous observation that only cosmetic changes were made in the text of section 1337(a)(1)(B)(ii) as reenacted in 1998, despite the concurrent enactment of section 271(g).

Thus, the Federal Circuit found that the text of the statutes at issue, the legislative history, and precedent supported the ITC’s holding that the defenses to infringement under section 271(g) do not apply to ITC exclusion actions.

For more information contact:

Richard Berman
berman.richard@arentfox.com
202.857.6232

Amy Schoenhard
schoenhard.amy@arentfox.com
202.857.6397

1. Whoever without authority imports into the United States or offers to sell, sells, or uses within the United States a product which is made by a process patented in the United States shall be liable as an infringer, if the importation, offer to sell, sale, or use of the product occurs during the term of such process patent. In an action for infringement of a process patent, no remedy may be granted for infringement on account of the noncommercial use or retail sale of a product unless there is no adequate remedy under this title for infringement on account of the importation or other use, offer to sell, or sale of that product. A product which is made by a patented process, will for purposes of this title, not be considered to be so made after –
   (1) it is materially changed by subsequent processes; or
   (2) it becomes a trivial and nonessential component of another product.
   35 U.S.C. § 271(g).
2. (a) Unlawful activities; covered industries; definitions
   (1) Subject to paragraph (2), the following are unlawful, and when found by the Commission to exist shall be dealt with, in addition to any other provision of law, as provided in this section: …
   (B) 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 - …
   (ii) are made, produced, processed, or mined under, or by means of, a process covered by the claims of a valid and enforceable United States patent.
   19 U.S.C. § 1337(a)(1)(B)(ii).