Martin Tate Attorneys Richard M. Carter and Adam J. Eckstein present at seminar sponsored by The Patent Subcommittee of the Standing Local Rules Committee for the Western District of Tennessee -- The Changing Landscape of Patent Law: Impact of Patent Cases from the 2016-2017 Supreme Court Term on Patent Litigation and Practice
by Richard M. Carter and Adam J. Eckstein
Life Technologies v. Promega: Defining the Reach of 35 U.S.C. § 271(f)(1)
Foreign sales generally fall outside the scope of the patent law. However, at § 271(f)(1), the Patent Act prohibits supplying from the U.S. “all or a substantial portion of the components of a patented invention.” The U.S. Supreme Court considered whether supplying a single, major component could implicate liability under § 271(f), and determined it could not.
The case arose from a licensing agreement between the parties. Promega Corporation alleged Life Technologies Corporation and its subsidiaries exceeded the scope of the license. On its way to the Supreme Court, the number of patents at issue narrowed from five to one. (See Procedural History). The sole patent at issue before the Supreme Court claims a toolkit for genetic testing.
The kit contains five components. Life Technologies manufactured one component in the U.S. and shipped it to the United Kingdom, where Life Technologies combined it with the other four components and offered the kits for sale mainly outside the United States. According to expert trial testimony, the part shipped from the U.S. is a “main” and “major” component of the kits. Based on this evidence and its construction of § 271(f), the Federal Circuit concluded Life Technologies’ U.S. actions triggered liability under
The U.S. Supreme Court rejected the Federal Circuit’s construction of § 271(f). The statute prohibits only the supply of “all or a substantial portion of the components of a patented invention.” The Court found no definition for “substantial” in the Patent Act and turned to its ordinary meaning. Taken in isolation, the Court said “substantial” might refer to an important or a large portion.
So the Court broadened its examination to the context in which “substantial” appears. First, “both ‘all’ and ‘portion’ convey a quantitative meaning.” No neighboring text conveys the qualitative meaning ascribed by the Federal Court. Second, “‘substantial portion’ is modified by ‘of the components of a patented invention.’” A qualitative meaning of “substantial” would render the words “of the components” unnecessary. The Court observed that a quantitative approach gives meaning to each provision and is therefore the favored interpretation.
The Court then turned to whether a single component can constitute a “substantial portion” and trigger liability under § 271(f)(1) and answered that it did not.
Section 271(f)(1) uses the plural “components” three times. Thus, “multiple components constitute the substantial portion.”
Further, § 271(f)(1)’s companion provision, § 271(f)(2), creates limitations on the supply of “any component,” singular. “Reading § 271(f)(1) to refer to more than one component allows the two provisions to work in tandem.” Reading § 271(f)(1) to cover any single component would undermine § 271(f)(2). The majority also found support for its conclusion in the legislative history of § 271(f).
The Court’s ruling is narrow: “We do not today define how close to ‘all’ of the components ‘a substantial portion’ must be.” In a two-paragraph concurrence, which Justice Thomas joined, Justice Alito wrote, “[T]oday’s opinion establishes that more than one component is necessary, but does not address how much more.”
Promega alleged Life Technologies exceeded the scope of its license and infringed the claims of five patents. The U.S. District Court for the Western District of Wisconsin concluded that Life Technologies sold kits that infringed one or more claims of the five patents at issue. A jury determined that Life Technologies violated §§ 271 (a) and (f)(1) and willfully infringed, and it awarded Promega more than $50 million in damages.
The District Court set aside the jury verdict. It held: (1) supplying a single component cannot trigger
§ 271(f)(1), (2) the “active inducement” requirement of § 271(f)(1) was not met, and (3) evidence did not support the jury verdict of direct infringement under § 271(a).
The Federal Circuit reversed the District Court and held four patents invalid for lack of enablement.
As to the remaining, five-component patent, the Federal Circuit held that supply of a single “major” component could trigger § 271(f)(1). It considered the ordinary meaning of “substantial” and “portion” to conclude that “a single important or essential component can be a ‘substantial portion of the components.’” The Federal Circuit also held that the “active inducement” requirement can be met without a shipment of the component to a third party.
Last, the Federal Circuit found evidence to support the jury verdict of direct infringement under § 271(a) and remanded the case for determination of damages.