The Law At Odds: Looking for Harmony Between 337 and the '271(g) Exception

According to U.S. patent law, the answer should be 'yes.' 35 U.S.C. '271(g) specifically allows importation of a product made by a patented process in a foreign country as long as the product is materially changed prior to entry in the United States. However, in Kinik Co. v. ITC, 362 F.3d 1359 (Fed. Cir. 2004), the Federal Circuit upheld an International Trade Commission ('ITC') ruling that the defenses established in '271(g) are not available in so-called 337 actions brought before the ITC under 19 U.S.C. '1337. Thus, even though it is permissible under U.S. patent law to import a product made employing a U.S. patented process somewhere upstream, the possibility remains that the ITC could enjoin the importation of that product anyway pursuant to its own finding of infringement under the administrative laws.

This inconsistency suggests that there is a need for Congress to harmonize the patent and administrative laws, such as by amending 19 U.S.C. '1337 to include the defenses of 35 U.S.C. '271(g). Cases litigated under '271(g) are relatively rare and Kinik has not been used for the premise that '271(g) defenses are not available in 337 actions. However, the inconsistency in the laws places a burden on a practitioner's ability to give a client reliable guidance. Absent congressional or court intervention, attorneys providing legal counsel to those importing products into the United States can take some solace in the ITC's 'EPROM' method of determining remedies in importation cases. See Certain Erasable Programmable Read-Only Memories, Components Thereof, Products Containing Such Memories, and Processes for Making Such Memories, Inv. No. 337-TA-276, USITC Pub. 2196, Comm'n. Op. at 124-26 (May 1989)('EPROM'), aff'd sub nom. Hyundai Elec. Indus. Co. v. ITC, 899 F.2d 1204 (Fed. Cir. 1990). In EPROM, the Commission determined that it had authority to issue an exclusion order that covers 'downstream products,' which are products that incorporate the infringing articles as components. In making such a determination, the Commission identified certain factors, reproduced in Table 1 on page 4, that should be considered. In applying the so-called EPROM test, the ITC should refrain from enjoining importation under '1337 where facts establish non-infringement under '271(g).