Intellectual Property for Life Sciences, Chemistry and Biotechnology
On February 22, 2017, the Supreme Court reversed the Federal Circuit’s decision in Promega Corp. v. Life Technologies Corp. holding that supplying a single component of a multi-component invention for an assembly outside the United States is an act of infringement under 35 U.S.C. § 271(f)(1). In its reversal, the Supreme Court held that the supply of a single component of a multi-component invention does not constitute infringement.
Background of the case
Promega Corp. (“Promega”) is the exclusive licensee of the Tautz patent (U.S. Reissue Patent No. 37984), which it sublicensed to Life Technologies Corp. [Life Technologies] for the manufacture and sale of the toolkits for genetic testing.
The Tautz patent claims a kit for testing at least one short tandem repeat (STR) locus that contains: (1) a mixture of primers; (2) a polymerizing enzyme such as Taq polymerase; (3) nucleotides for forming replicated strands of DNA; (4) a buffer solution for the amplification; and (5) control DNA. The license agreement between Promega and Life Technologies allowed Life to conduct genetic testing only in a limited field of use for live forensic investigations conducted by police officers.
Life Technologies assembles kits covered by the Tautz patent in its manufacturing facility in the United Kingdom. However, one component of its kits, the Taq polymerase, is manufactured in the United States and then shipped to the United Kingdom to be assembled with other components. Relevant to the case, Life Technologies’ STR kits were used not only by law enforcement agencies for forensic identification, but also by other users, for example, by clinical and research institutions for analyzing cancer cells.
In 2010, Promega sued Life Technologies for infringement of several patents, including the Tautz patent, alleging that Life Technologies sold STR testing kits to users not covered by the license. Both parties moved for summary judgment on infringement and invalidity. Life Technologies relied on its license as a defense to direct infringement. However, the district court rejected this defense, and ruled that the license was limited to use in live forensic investigations conducted by police officers, and thus, Life Technologies sales were outside the scope of the license’s field of use. The case proceeded to a jury trial on willfulness and damages.
Following trial, the jury returned a verdict of willful infringement. After the entry of judgment, Life Technologies moved for judgment as a matter of law (“JMOL”) on the ground that Promega “failed to prove the applicable damages for patent infringement.”
The district court granted Life Technologies JMOL, finding that Promega failed to present sufficient evidence to sustain a jury verdict and vacated the prior finding of infringement. Both parties appealed.
On appeal, the Federal Circuit reversed the district court’s grant of JMOL of non-infringement as to the Tautz patent. In particular, the court considered the requirements of the statute for finding an infringement, which provides:
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. 35 U.S.C. § 271(f).
Regarding the statute’s requirement for supplying of “all or a substantial portion of the components of a patented invention,” the Federal Circuit held that there are circumstances in which a party infringes by supplying a single component for combination outside the United States.
The Federal Circuit concluded that substantial evidence supports the jury’s verdict that Life Technologies is liable for infringement for shipping the Taq polymerase component of its genetic testing kits to its United Kingdom facilities.
Decision of the Supreme Court
The Supreme Court granted certiorari and took up the question of whether the export of one component of a multi-component kit can legally be a “substantial portion” within the scope of § 271(f), and the Court ruled that it is not.
According to the Court, the plain meaning of the term “substantial” is ambiguous as it may refer “either to qualitative importance or to qualitatively large size.” The Court reasoned that the context in which “substantial” appears in the statute points to a quantitative rather than qualitative meaning. According to the Court, the more precise meaning may be construed from the neighboring words with which it is associated, i.e., “all” and “portion.” In the Court’s opinion, these words convey a quantitative meaning.
Promega contended that a quantitative approach is too narrow and requested that the Court adopt a “case-specific approach.” However, the Court declined Promega’s request on the ground that this would require a factfinder to decipher whether the components at issue are a “substantial portion” under either a qualitative or quantitative test, which may further complicate the review. The Court stated:
How are courts – or for that matter, market participants attempting to avoid liability – to determine the relative importance of the components of an invention? Neither Promega nor the Federal Circuit offers an easy way to make this decision. Accordingly, we conclude that a quantitative interpretation hews most closely to the context of the statute and provides an administrable construction.
Next, the Court turned to the question of whether, as a matter of law, a single component can ever constitute a “substantial portion” so as to trigger liability under the statute, and answered that it cannot. The court explained that the text of the statute specifying a substantial portion of “components,” in the plural, indicates that multiple components constitute the substantial portion. A supplier may be liable under the statute for supplying from the United States all or substantial portion of the components (plural) of the invention, even if the components are combined abroad. However, when, as in this case, a product is made abroad and all components but a single article are supplied from abroad, this activity is outside the scope of the statute, which does not cover the supply of a single component of multi-component invention.
The Court ruled the phrase “substantial portion” in 35 U.S.C. § 271(f) has a quantitative, not qualitative meaning, and reversed the Federal Circuit’s decision and remanded it for further proceedings consistent with the Court’s ruling.
For additional information about this decision in this case, contact the attorneys at Volpe and Koenig, P.C.