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U.S. Supreme Court Limits Patent Law’s Reach over Extraterritorial Infringement Liability

Today, in Life Technologies Corp. v. Promega Corp.,1 the U.S. Supreme Court unanimously held that supply of a single component of a multicomponent invention for manufacture abroad does not give rise to liability under 35 U.S.C. § 271(f)(1). Chief Justice Roberts did not take part in the decision. Justice Alito, joined by Justice Thomas, filed a concurring opinion.

General Background

The Court’s opinion arises from respondent Promega Corporation’s suit alleging infringement by petitioner Life Technologies Corporation of a patent that claims a toolkit for genetic testing. The toolkit requires five components. Life Technologies manufactured one of the components in the United States and shipped it to the United Kingdom, where it manufactured the remaining four components and where all five components were combined to produce a toolkit.

A jury returned a verdict of infringement for Promega, but the district court granted Life Technologies’ motion for judgment as a matter of law, holding that Section 271(f)(1)’s phrase “all or a substantial portion” cannot encompass supply of a single component of a multicomponent invention. The Federal Circuit reversed, concluding that “there are circumstances in which a party may be liable under §271(f)(1) for supplying or causing to be supplied a single component for combination outside the United States.”

The Court’s Analysis

The Supreme Court engaged in statutory construction to reverse the Federal Circuit, first focusing on the statute’s text.2 Because the Patent Act does not define the term “substantial,” the Court turned to dictionary definitions to divine its ordinary meaning, but found that the term is still ambiguous as to whether the statute requires a quantitative or qualitative measurement. Instead, the Court found the term’s context informative. First, the words “all” and “portion” convey a quantitative meaning without referring to relative importance. Second, the phrase “of the components of a patented invention” modifies the phrase “substantial portion,” such that “substantial” must require a quantitative measurement. Otherwise, Congress would have drafted the statute differently to convey a qualitative approach—e.g., “all or a substantial portion of . . . a patented invention, where [its] components are uncombined in whole or in part.”

Having determined that “substantial portion” refers to a quantitative measurement, the Court next found that a single component cannot meet the statutory language because Section 271(f) consistently refers to a plurality of “components.” Further, reading Section 271(f)(1) to require only one component would render superfluous Section 271(f)(2), which expressly refers to infringement by “any component” in the singular.3

The Court rejected Promega’s “case-specific approach,” which would require inquiry into whether accused components are a “substantial portion” under either a quantitative or qualitative approach, because such an approach would compound ambiguity, would fail to comport with the statutory language, and would be difficult to administer. The Court also rejected Promega’s reliance on other statutes such as the Tax Code, which refers to “a substantial portion of a return” (as opposed to “a substantial portion of the entries of a return”) as failing to be relevant to the statute at issue. It further rejected Promega’s distinction between Section 271(f)(1), which requires a showing of specific intent for active inducement, unlike Section 271(f)(2), as reading out the “substantial portion” language.

Five of eight justices also concluded that the statutory history supports the Court’s conclusion because Congress enacted Section 271(f) in response to Deepsouth Packing Co. v. Laitram Corp.4 In Deepsouth, the Court determined that it is not infringement to make or use a patented product outside of the United States. As a result, Congress enacted Section 271(f) to fill in the resulting gap in enforceability of patent rights by reaching components that are manufactured in the United States but assembled overseas. In a concurring opinion, Justices Alito and Thomas disagreed, stating that while it is clear that Congress intended to fill the gap created by Deepsouth where all components are manufactured in the United States, it also intended “to go at least further,” and explain that today’s opinion does not address “how much more,” aside from establishing that more than one component is necessary to find infringement.

Takeaways

Although the Court’s opinion clarifies that extraterritorial supply of a single component cannot result in Section 271(f)(1) liability, it leaves open just how many components are required. The Court also did not address how to determine what comprises the components in a claimed invention. As a result, there may be further litigation as to the precise scope of Section 271(f)(1), though patentees can continue to rely on Section 271(f)(2) to reach singular components if they can demonstrate the statute’s other requirements. The justices’ opinions also appear to hint that, just as Congress enacted Section 271(f) in response to Deepsouth, Congress could again revise the statute to address any new gap in the Patent Act’s coverage caused by Life Technologies Corp.

For more information about the Court’s decision or any related matter, please contact a member of Wilson Sonsini Goodrich & Rosati’s patent litigation practice

Compliments of Wilson Sonsini Goodrich & Rosati – a member of the EACCNY