United States: $50 Million Jury Verdict Over Turned Where Plaintiff Based Damage Theory On Worldwide Sales Of Accused Products But Only Established That "Some" Of Worldwide Sales Were Infringing

Last Updated: May 7 2013
Article by Stanley M. Gibson

$50 Million Jury Verdict Over Turned Where Plaintiff Based Damage Theory On Worldwide Sales Of Accused Products But Only Established That "Some" Of Worldwide Sales Were Infringing

Promega Corporation ("Promega") filed a patent infringement action against Life Technologies Corporation ("Life Technologies"), among others, over four patents pertaining to a type of DNA testing called "multiplex amplification of shorten tandem repeat loci." Prior to trial, the district court determined that two of the defendants sell testing kits that met limitations for one or more claims in patents that Promega owns. At trial, a question remained as to whether the defendants were engaging in acts prohibited by the Patent Act because many of the accused products were manufactured and sold in foreign countries.

At trial, Promega asserted that under Section 271 of the Patent Act the defendants foreign sales of infringing products violated the Patent Act because a substantial portion of the components of the accused products were supplied from the United States. Promega asked the jury to find that all of defendants' sales met the requirements of Section 271. The jury agreed with plaintiff and awarded more than $50 million in damages.

After the trial, Defendants filed a motion for judgment as a matter of law under Fed.R.Civ.P. 50, asserting that Promega had failed to prove its case under Section 271. The basis for the motion was that, although Promega had proven that some of the products fall within Section 271, "some" was not enough because Promega had used a damage theory of total worldwide sales. The district court agreed with the defendants and granted the motion for judgment as a matter of law.

In response to that order, Promega moved for relief from the order or, in the alternative, a new trial. The district court denied the motion because the testimony of the key defense witness did not establish that all worldwide sales of the accused products contained a substantial portion of components supplied from the United States. "This argument has two problems. First, the question was about "some" kits, so Shepherd's answer that "[t]hey" are shipped to the United States does not permit the drawing of any inference about all of the kits shipped since 2006. Second, although courts must draw all reasonable inferences in favor of the nonmoving party, this rule does not
permit courts to view pieces of evidence in isolation. Reeves v. Sanderson Plumbing Products, Inc., 530 U.S. 133, 150 (2000) ("[I]n entertaining a motion for judgment as a matter of law, the court should review all of the evidence in the record."). Because Shepherd's later testimony made it clear that she did not know where a kit ordered from Germany would come from, the jury could not draw a reasonable inference from her previous ambiguous statement that she knew that all of defendants' accused products were imported into the United States. Accordingly, I adhere to my conclusion that plaintiff failed as a matter of law to prove that all of defendants' sales of the accused products were made in the United States or imported here."

Section 271(f)(1) provides:

"[w]hoever 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."

Turning to the specifics of Section 271(f), the district court "concluded that plaintiff had failed as a matter of law to prove that all of the accused products satisfied two elements of this statute, first, that a "substantial portion of the components" was supplied from the United States and, second, that defendants "actively induce[d]" the combination of components."

Turning to the "substantial portion" of components, the district court "concluded that the statute requires that at least two components be supplied from the United States and that plaintiff had failed to show that all of the accused products from the relevant time period were made with two or more components supplied from the United States."

On the inducement prong, the district court "relied on several factors to conclude that the statute required the involvement of a third party and that plaintiff did not deny defendants' contention that defendants had done all the combining themselves. In its new motion, plaintiff challenges the court's conclusion on both elements. With respect to a "substantial portion," it argues in its opening brief that the evidence was sufficient to show that all of the accused products included Taq polymerase and allelic
ladders supplied from the United States, but it admits in its reply brief that the "documents show that not every STR kit throughout the damages period had allelic ladders that were supplied from the United States," dkt. #726 at 26, so this argument is moot. Although plaintiff says that it is challenging the court's conclusion that § 271(f)(1) requires that two components be supplied from the United States, it does not develop an argument on this point, so it has forfeited the point for the purpose of this motion."

On active inducement, the district court rejected Promega's theory based on Akamai Technologies, Inc. v. Limelight Networks, Inc., 692 F.3d 1301 (Fed. Cir. 2012). The district court found that "nothing in Akamai suggests that a party may "induce" itself under § 271(f), so it is not instructive. Plaintiff raises an alternative argument that defendants did not "induce" themselves, but their "foreign divisions, subsidiaries or employees." Plt.'s Br., dkt. #726, at 23. This is a new argument. Plaintiff points to a sentence in its brief in opposition to defendants' Rule 50 motion in which it stated that § 271(f)(1) "includes the situation where an offshore division of a company is supplied components," but this was in the context of a larger argument that "there is nothing in the statute that limits it to situations where only a third party creates the combination." Dkt. #616 at 8. Plaintiff never developed an argument until now that the entity or entities combining the components overseas could be considered distinct from defendants. Accordingly, that argument is forfeited as well."

Accordingly, the district court denied Promega's motion.

Promega Corporation v. Life Technologies Corporation, et al., Case No. 10-cv-281-bbc (W.D. Wisc. April 22, 2013)

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Stanley M. Gibson
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