Vedder Price

Vedder Thinking | Articles 35 U.S.C. §271 (f)(1) Substantial Component: Quantity over Quality

Newsletter/Bulletin

On February 22, 2017, in Life Technologies Corporation v. Promega Corporation, the United States Supreme Court, in a 7-0 decision (with Chief Justice Roberts not participating) reversed the decision of the Federal Circuit, holding that the supply of a single component of a multi-component invention for manufacture abroad does not give rise to § 271(f)(1) liability. Because only a single component of the patented invention at issue here was supplied from the United States, the case was reversed and remanded to the Federal Circuit.

Promega Corporation (“Promega”) was the exclusive licensee of the Tautz patent, which claims a toolkit for genetic testing primarily used by law enforcement agencies for forensic identification and other clinical and research institutions. Life Technologies Corporation (“LifeTech”) manufactures genetic testing kits. In 2006, Promega sub-licensed the Tautz patent to LifeTech for the manufacture and sale of the kits in limited licensed law enforcement fields worldwide. LifeTech’s genetic kits consist of five (5) components. One of the kit’s five components, an enzyme known as the Taq polymerase, was manufactured by LifeTech in the United States and then shipped to the United Kingdom, where it was combined with the other four components of the kit. In 2010, Promega sued LifeTech under 35 U.S.C. § 271(f)(1), for selling the kits outside of its licensed fields of use. Promega alleged that LifeTech’s activity of supplying the Taq polymerase from the United States to its United Kingdom manufacturing facilities triggered patent infringement under § 271(f)(1) which prohibits the supply from the United States of “all or a substantial portion of the components of a patented invention” for combination abroad.

In the district court, the jury returned an infringement verdict of $52 million in favor of Promega, but the court granted LifeTech’s motion for judgment as a matter of law, holding that § 271(f)(1)’s phrase “all or a substantial portion” did not encompass the supply of a single component of a multi-component invention.

The Court of Appeals of the Federal Circuit reversed and reinstated the jury’s verdict holding that a single important component could constitute a “substantial portion” of the components of an invention under § 271(f)(1) and found the Taq polymerase to be such a component. The Federal Circuit concluded that one dictionary definition of “substantial” is “important” or “essential,” which it read to suggest that a single important component can be a “‘substantial portion of the components’” of a patented invention.

The Supreme Court granted LifeTech’s petition for writ of certiorari.

The Court’s Reasoning

The Court looked first to the text of the statute. Section 271(f)(1) of the Patent Act prohibits the supply from the United States of “all or a substantial portion of the components of the patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce the combination of such components outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.” 35 U.S.C. § 271(f)(1). Congress had passed the law in the 1980s to prevent manufacturers from infringing on U.S. patents by building components in the U.S. but assembling the complete patented invention outside the country.

The Court held that the phrase “substantial portion” is modified by “of the components of the patented invention.” It is the supply of all or a substantial portion “of the components” of a patented invention that triggers liability since the word “substantial” connotes a quantitative measure. The next question was, whether as a matter of law, a single component can ever constitute a “substantial portion” to trigger liability under § 271(f)(1). The Court noted that the text specifying a substantial portion used the plural word “components” indicating that a “substantial portion” must always be more than one component. Further, according to the Court, the structure of the § 271(f)(2) reinforces this reading, which expressly refers to a single component “especially made or especially adapted for use in the invention.” 35 U.S.C. § 271(f)(2). Therefore, supply of a single component of a multi-component invention does not trigger infringement liability under § 271(f)(1).

The Court also determined that Congress intended this reading because the statute was meant to fill a gap in patent law that prevented enforcement of patent rights on collections of components produced in the United States and sent overseas. Therefore, Lifetech was not liable because it only produced one of the five components required for the kits.

Justice Alito, Jr., with whom Justice Thomas joined, concurring in part and concurring in the judgment, noted in his opinion that the majority opinion failed to identify what number of components constituted a “substantial portion.” Rather, the opinion only identified that one component is not sufficient.

It appears that a manufacturer who supplies only one component, even if it is the critical component, does not run afoul of 35 U.S.C. § 271(f)(1).



Professionals



Sudip K. Mitra

Associate



Robert S. Rigg

Shareholder