In the recently decided case of Life Technologies Corp. v. Promega Corp., 580 U.S. __ (2017), the Supreme Court evaluated when a party that provides some part – but not all – of a patented invention can be liable for induced infringement. The Court ultimately reasoned that the phrase “substantial portion” found in 35 U.S.C. § 271(f) is quantitative (referring to the number of components), rather than qualitative (referring to the component’s importance to the overall invention). In short, a “substantial portion of the components” means that there must be “more than one component.”
Life Technologies involved litigation over U.S. Reissue Patent No. RE 37,984 (“the RE‘984 Patent”), which covered a five-component invention that, in combination, forms a toolkit used to copy DNA profiles. The RE‘984 Patent’s exclusive licensee was Promega Corp., who granted a sublicense to Life Technologies, allowing it to manufacture and sell the toolkits only to law enforcement entities worldwide. Life Technologies, however, breached the license agreement by selling the toolkits to the clinical and research markets – i.e., outside the law enforcement field. Promega responded by filing a patent infringement action against Life Technologies as it was not licensed to sell to this market.
As a general rule, United States patent law is territorially limited and extraterritorial activity will not establish infringement in the United States. Here, Life Technologies manufactured all but one of the toolkit’s components in the United Kingdom; with a single component being manufactured in the United States. Accordingly, Life Technologies argued that foreign conduct was not actionable under United States patent law. Section 271(f), however, provides an exception to the general principle, allowing patent-infringement liability where – as was argued here – a company:
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 State.
(emphasis added). In short, Section 271(f) allows patent-infringement liability to be imposed on a company that exports from the United States “all or a substantial portion of the components of a patented invention,” provided that (i) the exported components are combined overseas and (ii) the foreign combination would infringe the U.S. patent if that combination occurred in this country. In other words, Life Technologies’ liability hinged upon whether or not its single component, manufactured in the United States, constituted “a substantial portion” of the patented toolkit.
At trial, the jury found in favor of Promega but the district judge reversed, holding that “a substantial portion,” as used by Section 271(f), did not embrace the supply of a single component. On appeal, however, the Federal Circuit reversed the district court’s holding, reasoning that the word “substantial” is qualitative and that the component need only be “important or essential” to the multicomponent invention to satisfy Section 271(f).
Thereafter, the Supreme Court granted certiorari to determine the limited question of whether a party that supplies a single component of a multicomponent invention for manufacture abroad can be held liable for infringement under Section 271(f). Holding that it cannot, the Court focused on the statute’s text, noting that the phrase “substantial portion” modifies the phrase “of the components of a patented invention.” Had the Legislature intended “substantial” to describe quality and not quantity, there would be no reason for it to have included the phrase “of the components.” Instead, the Legislature would have written the statute to read “all or a substantial portion of . . . a patented invention. . .” It did not. Accordingly, the Court held that a single component cannot constitute a “substantial portion” pursuant to Section 271(f).
Despite its superficial simplicity, the Supreme Court’s decision leaves the vast majority of Section 271(f) infringement actions unresolved. While it is clear that the “opinion establishes that more than one component is necessary, [it] does not address how much more.” (J. Alito and J. Thomas concurring). Thus, the question of “how much more” remains inherently qualitative and will likely require further clarification from the Court. Presently, however, litigants may rest assured that manufacturing and exporting a single component of a five-component product does not constitute an infringing act under Section 271(f).
Please click here to read the opinion.
Franklin Smith and Brandon Debus are Associates in our Troy Office. Franklin may be contacted at 248-433-7393 and Brandon may be reached at 248-433-7674 .