In the August 2016 issue of our Intellectual Property newsletter, we published a summary of the parties' arguments in Life Techs. Corp. v. Promega Corp., a case in which the Supreme Court was considering whether the Federal Circuit erred in holding that supplying from the United States a single commodity component of a multi-component invention is an infringing act under Section 271(f)(1), exposing the manufacturer to liability for all worldwide sales.

On February 22, 2017, the Supreme Court reversed the Federal Circuit's decision and remanded the case for further proceedings, holding that a single component does not constitute a substantial portion of the components that can give rise to liability under Section 271(f)(1).

The Court's opinion first looks to the text of the statute to determine whether the phrase "a substantial portion" is quantitative or qualitative in nature. Justice Sotomayor, writing for the Court, explains that the Patent Act provides no definition for the word "substantial," and that "the term is ambiguous and, taken in isolation, might refer to an important portion or a large portion."1 However, when read in the context of the statute—including in the context of the quantitative words "portion" and "all"—the word "substantial" is best interpreted as a quantitative measurement.2 Another contextual indicator is that the phrase "substantial portion" is modified by "of the components of a patented invention."3

It is the supply of all or a substantial portion "of the components" of a patented invention that triggers liability for infringement. But if "substantial" has a qualitative meaning, then the more natural way to write the opening clause of the provision would be to not reference "the components" at all. Instead, the opening clause of § 271(f)(1) could have triggered liability for the supply of "all or a substantial portion of . . . a patented invention, where [its] components are uncombined in whole or in part." A qualitative reading would render the phrase "of the components" unnecessary the first time it is used in § 271(f)(1). Whenever possible, however, we should favor an interpretation that gives meaning to each statutory provision . . . . Only the quantitative approach does so here. Thus, "substantial," in the context of § 271(f)(1), is most reasonably read to connote a quantitative measure.4

The Court rejects Promega's argument that a quantitative approach is too narrow, and that the Court should adopt a "casespecific approach," which would require a factfinder to decipher whether the components at issue are a "substantial portion" under either a qualitative or quantitative test. Justice Sotomayor explains that "[h]aving determined the phrase 'substantial portion' is ambiguous, our task is to resolve that ambiguity, not to compound it by tasking juries across the Nation with interpreting the meaning of the statute on an ad hoc basis."5

Second, the Court's opinion holds that, as a matter of law, a single component can never constitute a "substantial portion" so as to trigger liability under Section 271(f)(1). Justice Sotomayor reasons that both the use of the plural "components" and the structure of the statute reinforce this reading: "Reading § 271(f)(1) to refer to more than one component allows the two provisions to work in tandem. Whereas § 271(f)(1) refers to 'components,' plural, § 271(f)(2) refers to 'any component,' singular."6

Last, the Court's opinion reviews the history of Section 271(f), namely the enactment of Section 271(f) in response to the Court's opinion in Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518 (1972) and concludes that its history bolsters the Court's conclusions. The Court observes that "[i]n Deepsouth, the Court determined that, under patent law as it existed at the time, it was 'not an infringement to make or use a patented product outside of the United States.'"7 And, in response to this decision, Congress expanded the definition of infringement in Section 271(f) to include supplying from the United States a patented invention's components. "The effect of this provision was to fill a gap in the enforceability of patent rights by reaching components that are manufactured in the United States but assembled overseas and that were beyond the reach of the statute in its prior formulation."8

Justices Alito and Thomas concurred in the judgment and in all but Part II-C of the Court's opinion. They diverged from the majority because, in their view, Congress intended to go a little further than to simply fill the gap created by Deepsouth: "In other words, today's opinion establishes that more than one component is necessary, but does not address how much more."9

Footnotes

1 Life Techs. Corp. v. Promega Corp., No. 14–1538 (Feb. 22, 2017) (slip op., at 5).

2 Id. at 6.

3 Id.

4 Id.

5 Id. at 7.

6 Id. at 9.

7 Id. at 10.

8 Id. at 11.

9 Id. at 1 (Alito, J., concurring in part and concurring in the judgment) (emphasis in original).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.