February 23, 2017
Supreme Court Rules Supplier of Single Component of Multicomponent Product Assembled Abroad Does Not Infringe §271(f)(1)
Yesterday the Supreme Court held, in Life Technologies Corp v. Promega Corp., that it is not an act of infringement to supply a single component, from the United States, to be combined overseas with other parts into a multicomponent product that would read on the claims of a U.S. patent. This holding reverses a decision by the Federal Circuit, and substantially narrows the ability of Section 271(f)(1) of the Patent Act to reach actions outside of the U.S. that would be infringements if they were performed domestically.
Promega was the exclusive licensee of a patent directed to the manufacture of genetic testing kits. The parties agreed that the claimed kits required five components: (1) a mixture of DNA primers to mark the portion of DNA to be amplified; (2) nucleotides for replicating DNA; (3) a Taq polymerase enzyme for combining the DNA nucleotides into copies of the targeted DNA strand; (4) a buffer solution; and (5) control DNA.
Life Technologies sublicensed the patent in suit from Promega for use in creating kits for law enforcement applications. Life Technologies only sourced one component, the Taq polymerase, in the United States. All other components were acquired outside of the U.S. and the final product was manufactured in the United Kingdom. Promega sued for infringement under Section 271(f)(1) upon learning that Life Technologies was allegedly selling its kits outside the scope of its license to clinical and research clients.
Under Section 271(f)(1), an entity is an infringer if it:
“without authority supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention . . . in such a manner as to actively induce the combination of such components outside of the United States in a manner that would infringe the patent.”
A jury returned a verdict in favor of Promega. The Federal Circuit affirmed. The Supreme Court granted certiorari to determine whether a single component of a multicomponent invention was enough to trigger liability under this section of the Patent Act.
The case turned on whether the term “substantial” should be interpreted quantitatively or qualitatively in this context. There was no dispute that the term was ambiguous. Life Technologies and the federal government argued in favor of a quantitative reading, that it was intended to mean a large number but less than the whole. Promega, supported by the Federal Circuit’s decision, favored a qualitative approach, arguing that the term was intended to refer to any important or essential portion of the components.
Justice Sotomayor, speaking for the Court, ruled that the term was intended to be construed quantitatively. The surrounding statutory words, such as “all” and “portion,” convey quantitative meanings. The Court further found that if Congress had intended the phrase to have a qualitative meaning, there were more natural ways to write that section. Finally, the Court rejected Promega’s suggestions for a case-specific approach or an analytical framework that would account for both the qualitative and quantitative aspects of the components, finding such approaches to be poorly supported by the statute and likely to needlessly complicate cases.
Having determined that “substantial” should be construed to have a purely quantitative meaning, the Court proceeded to find that a single component could never constitute a “substantial portion” of the components to trigger liability under Section 271(f)(1). This conclusion was supported by companion Section 271(f)(2), which conferred liability on any person who supplied “any component” that is “especially made or especially adapted for use in the invention.” If Section 271(f)(1) could be read to encompass single components, there would be little reason to include the separate Section 271(f)(2).
Chief Justice Roberts took no part in the decision. Justice Alito and Justice Thomas concurred, but wrote separately to clarify that the Court’s interpretation is not intended to suggest that any number of components greater than one would be sufficient under the statute.
This decision gives international suppliers more freedom to source essential but common parts of products from the U.S. without fear of running afoul of a U.S. patent. However, the Court offered no firm guidance as to how many components, above one, are required to expose a supplier to potential liability. It is also unclear when or if the lower courts will provide that answer. Because there was no suggestion that Life Technologies sourced more than one component from the U.S., there is likely no need for the Federal Circuit to address that question on remand.
The full text of the decision is here.