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Supreme Court Rules No § 271(f)(1) Liability for Supplying Single Component From the United States2월 22, 2017
Life Technologies v. Promega
In a unanimous decision, the Supreme Court ruled today that supplying a single component of a multi-component invention for manufacture abroad does not give rise to liability for patent infringement under 35 U.S.C. § 271(f)(1). Life Technologies Corp. v. Promega Corp (14-1538). Under 35 U.S.C. § 271(f)(1), a party is liable for patent infringement if it supplies “from the United States all or a substantial portion of the components of a patented invention” that is assembled and sold overseas. In today’s ruling, the Court reversed the Federal Circuit’s decision Promega Corp. v. Life Technologies Corp., 773 F.3d 1338 (Fed. Cir. 2014), which held that a single component can be a “substantial portion of the components” of an invention if the component is important to the overall invention. The Court held that the determination of a “substantial portion” within the meaning of the § 271(f)(1) is a quantitative one and that a single component cannot be a “substantial portion” under that quantitative measure, regardless of its importance.
The Patent and Case History
The patent at issue claimed a DNA testing kit containing five components: (1) a mixture of primers; (2) nucleotides for forming replicated strands of DNA; (3) an enzyme called Taq polymerase; (4) a buffer solution for amplification; and (5) control DNA. Life Technologies manufactured one of the components, the Taq polymerase, in the United States, and shipped it to its UK facilities. Life Technologies manufactured the remaining four components in the UK, and combined the five components in the UK to create the kit.
Promega sued Life Technologies for patent infringement in the Western District of Wisconsin, alleging that Life Technologies’ supply of the Taq polymerase from the US to its UK facilities triggered liability under § 271(f)(1). The jury returned a verdict of infringement. The district court granted Life Technologies’ motion for judgment as a matter of law on the basis that § 271(f)(1) does not apply to cases where a single component is supplied from the United States, reasoning that § 271(f)(1) uses the phrase “all or a substantial portion of the components” instead of “any component” as used in § 271(f)(2).
On appeal, the Federal Circuit reversed and reinstated the jury’s verdict, holding that “a party may be liable under § 271(f)(1) for supplying or causing to be supplied a single component for combination outside the United States.” Promega Corp. v. Life Technologies Corp., 773 F.3d 1338 (Fed. Cir. 2014). Relying in part on expert testimony that the Taq polymerase is a “main” and “major” component of the kits, the Federal Circuit held that a single important component can be a “substantial portion of the components” of a patented invention.
The Supreme Court Holding
The Supreme Court granted certiorari to address the question of whether the supply of a single component of a multi-component invention is an infringing act under 35 U.S.C. § 271(f)(1). The Court held that it is not.
1. “A substantial portion” is a quantitative determination
The Court made a threshold determination that “a substantial portion” of the components of a patented invention refers to a quantitative, rather than a qualitative, measurement. In doing so, the Court first looked to the text of the statute. The Court noted that the neighboring terms “all” and “portion” convey a quantitative meaning, and that “substantial portion” is modified by “of the components of a patented invention,” where a qualitative reading would render the phrase “of the components” unnecessary. The Court stated that considering the qualitative and relative importance of a component would be challenging to the factfinder, the courts, and market participants.
2. A single component cannot be “a substantial portion”
Next, the Court held that a single component can never constitute a “substantial portion” so as to trigger liability under § 271(f)(1). The Court reasoned that the text of the statute, which refers to “components” in plural, supports this interpretation. The Court further stated that § 271(f)(2), which is the companion provision to § 271(f)(1), reinforces this reading because § 271(f)(2) refers to “any component,” singular, “especially made or especially adapted for use in the invention.”
Thus, the Court concluded that one component does not constitute “all or a substantial portion” of a multi-component invention under § 271(f)(1).
Implications and Practice Pointers
It is important to note the issues not decided by the Court in this opinion:
- The case leaves open the question of what are “components” of the invention: “[W]e do not consider how to identify the ‘components’ of a patent or whether and how that inquiry relates to the elements of a patent claim.” Without guidance on how a “component” is identified, parties will likely advance different arguments on what constitutes a “component” of the products or patents at issue.
- The case leaves open the question of how many more than one component would give rise to liability: “We do not today define how close to ‘all’ of the components ‘a substantial portion’ must be. We hold only that one component does not constitute ‘all or a substantial portion’ of a multi-component invention under § 271(f)(1).” Although it is now clear that one component is not enough, how many more would amount to “substantial” remains uncertain.
With that in mind, the Supreme Court’s ruling in Life Technologies has the following implications:
- Manufacturers that make one component and ship it abroad to be assembled with other components will not be held liable under § 271(f)(1). Note, however, that what constitutes a “component” may not be clear, as discussed above, and that there may still be infringement liability under other subsections of § 271.
- The test for “substantial portion of the components” is a quantitative test, not a qualitative test for how significant is the component to the invention. Thus, manufacturers’ noninfringement arguments may be more successful if they focus on the small number of components that are shipped abroad rather than the characteristics of the components.
- The importance of any one or more components is irrelevant. If a patent owner seeks to argue that a single component supplied from the United States is sufficiently important to create infringement, it should argue that the component is “especially made or especially adapted for use in the invention and not a staple article or commodity” so as to trigger liability under § 271(f)(2).
- Manufacturers may supply any one component from the US, no matter how significant that component is to the overall invention, as long as the component does not satisfy § 271(f)(2) and the finished product is sold overseas. (There may still be infringement liability under induced or contributory infringement theory if the products are imported back to the US.)
- Companies that are paying license royalties and that supply just one component from the US may reconsider whether payment is still required in view of this ruling.
- Companies that license patents may consider seeking a covenant that the licensed component is especially made or especially adapted for use in the invention and not a staple article or commodity of commerce. With such a covenant, the licensor would have a better chance of asserting infringement under § 271(f)(2) in the event the licensee later terminates the license or claims that none is needed.
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