The Supreme Court Limits Overseas Patent Infringement
On Wednesday, the Supreme Court ruled that the Federal Circuit got it wrong on the reach of overseas patent infringement, and opined that providing one commodity from the United States for incorporation into a multi-component product is not enough for a finding of overseas-based patent infringement. Life Technologies Corp. v. Promega Corp., No. 14-1538 (2017). The ruling deals with 35 U.S.C. § 271(f) which states:
(1) Whoever 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, 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.
(Emphasis added.) The purpose of § 271(f) was to prevent companies from shipping all of the components of a patented invention outside the United States and reassembling those products offshore in an effort to avoid infringement of U.S. patents.
The Supreme Court opinion stems from a lawsuit in which Promega accused Life Technologies of selling infringing products overseas that were not covered by the patent license agreement between the parties. The license agreement provided Life Technologies the right to sell a genetic testing kit which included a primer mix, a polymerase, nucleotides, buffer for amplification and control DNA. Life Technologies produced the allegedly infringing kits in the United Kingdom, and the components of the kits were also produced in the United Kingdom, except for the polymerase, which was produced in the United States, and sent to the United Kingdom to be incorporated in the kit. Promega asserted that by supplying the polymerase from the United States, Life Technologies was infringing the licensed patent under 35 U.S.C. § 271(f).
The District Court disagreed, Promega appealed, and the Federal Circuit reversed the District Court, which led the Supreme Court to grant certiorari to determine whether a party that supplies, from the United States, a single component of a multicomponent invention for manufacture abroad can be held liable for infringement under § 271(f)(1).
In rejecting the Federal Circuit’s reasoning that a single component is enough for a finding of infringement if it is a sufficiently important component of the invention, the Supreme Court ruled that the language “all or a substantial portion of the components” must be more than one component when such as here, all the other parts of the single commodity are supplied from abroad. The Supreme Court also stated that the term “substantial” in the statute “has a quantitative, not a qualitative, meaning.”
While the Supreme Court’s ruling addresses the supply of “one component” of a multi-component product, it does not go deeper than that. Thus, the required number of components to reach a finding of patent infringement of a multi-component product is still unknown, and will be left to the lower courts and juries to determine, which may prove to be difficult. Judge and juries will need to determine how many components in relation to total number of components in the product are enough for a finding of infringement.