United States: Supreme Court To Consider Reach Of U.S. Patent Laws To Exported Goods

Last Updated: July 6 2016
Article by Matthew D'Amore

In an important case for manufacturers and life sciences companies that supply their products from the United States to overseas markets, the United States Supreme Court announced on June 27, 2016, that it will consider whether the shipment of a single non-infringing article from the United States could make the supplier liable for worldwide damages under the U.S. patent laws if that article is used in an infringing composition outside the United States.

EXECUTIVE SUMMARY

On June 27, 2016, the Supreme Court, at the urging of Petitioner Life Technologies Corporation ("LifeTech") and the Solicitor General, the Supreme Court granted certiorari of the following question:

"Whether the Federal Circuit erred in holding that supplying a single, commodity component of a multi-component invention from the United States is an infringing act under 35 U.S.C. § 271(f)(1), exposing the manufacturer to liability for all worldwide sales."

The Supreme Court will thus decide whether the manufacture of a product outside the United States, and the sale of that product outside the United States, could give rise to worldwide liability in the U.S. if that product would infringe a U.S. patent and if it contains a single component or ingredient supplied from the U.S. A decision in the case is expected by the end of June 2017.

BACKGROUND

LifeTech made or procured Taq polymerase, an enzyme used for amplifying DNA for analysis, in the United States and supplied that enzyme to a manufacturing center in the United Kingdom. There, the enzyme is packaged into a genetic testing kit to be sold worldwide, including in the U.S. Promega sued for patent infringement, contending, among other things, that the genetic testing kit manufactured in the UK would infringe a U.S. patent. It argued not only that the sales of that kit into the U.S. infringe its patents under 35 U.S.C. § 271(a), but also that LifeTech's shipment from the U.S. of the kit's Taq enzyme made LifeTech liable for damages based on sales of the kit worldwide, under 35 U.S.C. § 271(f)(1).1

The jury found for Promega, and awarded lost profits based on the worldwide sales of LifeTech's kits. The district court overturned that verdict, holding that because §271(f)(1) refers to the supply of "all or a substantial portion of the components of a patented invention," it could not apply to the export of a single component from the U.S.

In Promega Corp. v. Life Technologies Corp., 773 F.3d 1338 (Fed. Cir. 2014), the Federal Circuit reversed. Focusing on whether the polymerase represented a "substantial portion" of the kit, the court observed that "[w]ithout Taq polymerase, the genetic testing kit recited in the [Promega] patent would be inoperable" and that "LifeTech's own witness admitted that the Taq polymerase is one of the 'main' and 'major' components of the accused kits." Id. at 1356. The appellate court thus found that § 271(f)(1) was satisfied by the supply of a single component: "The evidence demonstrates that LifeTech supplied a substantial portion of the patented invention — the polymerase — to its overseas facility as a component of its accused genetic testing kits." Id.

LifeTech petitioned for certiorari, and the Supreme Court asked for the views of the Solicitor General. After the SG filed a brief supporting LifeTech's position, the Supreme Court granted certiorari to consider LifeTech's liability.2

IMPORTANCE OF THE DECISION

Under the Federal Circuit's decision, U.S. manufacturers, including chemical companies, pharmaceutical manufacturers, and component manufacturers, could be liable for patent infringement for the shipment of a single non-infringing component or ingredient from the U.S. to another country — if that component or ingredient represented a "substantial portion" of the patented product made outside the United States, and if the manufacturers actively induced the combination or assembly of that patented product. The Federal Circuit's decision has created substantial ambiguity, because it forces U.S. producers to guess at whether their single component is itself a "substantial portion" of combinations assembled outside the U.S. The appellate court's decision also expands the extra territorial reach of the U.S. patent laws. The Supreme Court's decision may clarify these questions and provide increased certainty to U.S. exporters.

Footnotes

1 35 U.S.C. § 271(f)(1) provides that "[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."

2 The Supreme Court did not grant review of another question presented by LifeTech – whether 35 U.S.C. §271(f)(1) required the inducement of a third party. The Federal Circuit held that it did not – that the combination is what must be induced, not a separate actor. The SG argued against certiorari on that question, contending that the Federal Circuit's decision was correct and also that the question need not be reached because it appeared that separate but affiliated companies were involved in LifeTech's conduct.

Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Matthew D'Amore
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.