Background
Rovi Corporation (later acquired by TiVo) held patents claiming interactive television program guide systems that allowed users to remotely access and schedule recordings on a cable set-top box using a separate device such as a smartphone. Rovi filed a complaint before the U.S. International Trade Commission (ITC) under Section 337 of the Tariff Act of 1930, which prohibits the importation of articles that infringe U.S. patents.
Comcast, along with its equipment suppliers Arris and Technicolor, imported the X1 set-top boxes at issue. A key wrinkle: Comcast’s set-top boxes, standing alone, did not infringe Rovi’s patents. Infringement only occurred when a customer used a smartphone app (provided and promoted by Comcast) in conjunction with the set-top box to schedule remote recordings. The ITC nonetheless found a violation of Section 337 and issued a limited exclusion order barring Comcast from importing the infringing set-top boxes. Comcast appealed, arguing that because infringement only occurred after importation, through domestic customer use, the ITC lacked jurisdiction over the articles.
The Court’s Holding
The Federal Circuit affirmed the exclusion order. The court held that the ITC’s authority under Section 337 is not limited to articles that infringe at the moment of importation. Instead, articles that become articles “that infringe” through post-importation infringement — including where the importer induces customers to use the imported articles in infringing ways — fall within the ITC’s jurisdiction. Comcast had actively instructed its customers how to use the smartphone app with the set-top boxes, providing detailed on-screen tutorials and promotional materials, thereby inducing the customers’ direct infringement.
The court rejected Comcast’s argument that its inducing conduct was entirely domestic and temporally removed from importation, finding this irrelevant under the statute. The key was that the set-top boxes were imported and then used in infringing ways due to Comcast’s inducement. The court also affirmed the ITC’s domestic industry finding: Rovi had sufficiently exploited the patents in the United States through substantial investment in licensing and related activities, satisfying the economic prong of the domestic industry requirement.
Key Takeaways
- The ITC’s Section 337 jurisdiction covers imported articles that infringe U.S. patents through post-importation use, including situations where the importer induces domestic user infringement after importation.
- An importer cannot escape Section 337 liability by designing its product so that infringement only occurs when customers use it in a promoted manner — that induced infringement is still attributable to the importer.
- Patent owners can use ITC proceedings even where infringement only materializes through consumer use of imported products, expanding the ITC’s reach as a forum for complex, multi-step infringement scenarios.
- The decision was significant for the cable, consumer electronics, and smart-home industries, where products often require post-import configuration or use to practice a patent.
Why It Matters
The ITC has long been an attractive forum for patent owners because exclusion orders are swift and powerful — there are no damages caps, and stopping imports at the border is often more disruptive to an infringer than a damages award. But the scope of the ITC’s authority has been contested: can it reach conduct that is essentially domestic, even if the products themselves were imported?
Comcast v. ITC resolved one dimension of that question by confirming that induced infringement — where the importer instructs domestic users to infringe — is enough to place the imported articles within Section 337’s scope. This holding has significant implications for IoT products, smart-home devices, and connected hardware, where the imported hardware and the domestically operated software often work together to practice a patent. Patent owners in these industries can now credibly threaten ITC proceedings even when the device alone does not infringe, as long as the importer actively enables and promotes the infringing use.