The U.S. Court of Appeals for the Federal Circuit has ruled in favor of International Trade Commission (ITC) action against Comcast barring the import of its cable boxes. The ITC reached its decision after determining that the boxes infringed on a patent owned by Rovi Guides.
The underlying case originated when Rovi filed a complaint with ITC alleging that Comcast violated the Tariff Act and committed patent infringement via Comcast’s X1 set-top box. The patents covered an “interactive television program guide system for remote access to television programs.” Upon investigation, the ITC held that Comcast’s X1 boxes violate section 337 because they are imported items that violate a patent. ITC “issued a limited exclusion order and cease and desist orders” to Comcast. Under the order, Comcast is prohibited from “importing, selling, offering for sale, leasing, offering for lease, renting, offering for rent, marketing, advertising, distributing, transferring, and soliciting U.S. agents or distributors for, certain digital video receivers and hardware and software components” asserted and covered in the patent and in violation of the Tariff Act. Comcast appealed this order to the Federal Circuit, arguing its actions are “not actionable under Section 337 because Comcast’s inducing conduct ‘takes place entirely domestically, well after, and unrelated to, the article’s importation’ and also that Comcast does not itself import the articles.”
Comcast moved to dismiss the case because the underlying patents expired in September 2019 and July 2019, “the appeal has become moot, for after a patent expires ‘the ITC’s limited exclusionary order and cease and desist orders as to that patent have no further prospective effect.” They also wished to vacate the decision that they violated Section 337. ITC and Rovi opposed dismissal, stating that there are “continuing issues and actions to which these rulings are relevant” causing collateral consequences and additional relevant patents have not expired. The court determined that “there are sufficient collateral consequences to negate mootness. The motion for dismissal is denied.”
Comcast admitted that its customers directly infringe on the patents when using the boxes and that Comcast induces its customers to directly infringe. However, Comcast argued that it does not violate Section 337 because the admitted infringement only occurs after importation. The court disagreed, stating that “Section 337 applies to articles that infringe after importation.” Further, direct infringement occurs at multiple points, such as “when the imported X1 set-top boxes are fitted by or on behalf of Comcast and used with Comcast’s customers’ mobile devices.”
Comcast’s importers and codefendants, ARRIS and Technicolor, argued that the limited exclusion order is erroneously applied to them. The court found that because the exclusion only applies as it relates to items imported for Comcast it is correctly applied and within the ITC’s power.
Comcast is represented by Munger, Tolles & Olson; Winston & Strawn; and Davis Polk & Wardwell.
