Section 271(f)(1) of the Patent Act provides that a party infringes a patent claim when it "supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention ... 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." On February 22, 2017, in Life Technologies Corporation v. Promega Corporation, a "case concern[ing] the intersection of international supply chains and federal patent law," the U.S. Supreme Court held that the phrase "a substantial portion of the components of a patented invention" requires more than one such component: "[A] single component does not constitute a substantial portion of the components that can give rise to liability under §271(f )(1)."
Life Technologies involved toolkits for genetic testing "used by law enforcement agencies ... and by clinical and research institutions." The patent's claimed toolkits comprise "five components," only one of which was supplied from the United States (and then shipped to the United Kingdom, where Life Technologies assembled the toolkits from the one U.S.-supplied component and four U.K.-generated ones). A federal jury found Life Technologies liable for infringement, but the district court overturned the verdict and held that supplying a single component does not satisfy the "substantial portion of the components" requirement of Section 271(f)(1).
On appeal, the Federal Circuit reinstated the jury verdict, explaining that "there are circumstances in which a party may be liable under §271(f)(1) for supplying or causing to be a supplied a single component for combination outside the United States." To support its holding, the Federal Circuit cited to various dictionary definitions of the word "substantial" and credited expert testimony that the single component that the defendant supplied from the United States was the "main" and "major" component of the patent claims.
The Supreme Court reversed. It identified the "threshold determination" as whether the phrase "a substantial portion" in Section 271 "refers to a quantitative or qualitative measurement." While the Court viewed the term "substantial," in isolation, as ambiguous on that score, it looked to the statutory context—in particular the words "all" and "a ... portion"—and concluded that the term "a substantial portion" meant a quantitatively substantial portion. Had the meaning of "substantial" been intended as a qualitative one, the Court reasoned, the statute would have been written differently: "[I]f '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." Thus, a "qualitative reading would render the phrase 'of the components' unnecessary the first time it is used in §271(f)(1)." Such a reading is contrary to the established rule that "[w]henever possible [] we should favor an interpretation that gives meaning to each statutory provision," and "[o]nly the quantitative approach does so here."
The Court declined the plaintiff's invitation to "adopt a different analytical framework entirely—one that accounts for both quantitative and qualitative aspects of the components," because doing so would "easily complicate the factfinder's review." As the Court saw it, "[s]urely a great many components of an invention (if not every component) are important. Few inventions, including the one at issue here, would function at all without any one of their components.... How are courts—or, for that matter, market participants attempting to avoid liability—to determine the relative importance of the components of an invention?" Such a case-specific approach, the Court concluded, would be unhelpful to courts and litigants attempting to apply the statute: "[O]ur 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."
Having concluded that the term "substantial" in Section 271(f)(1) "connote[s] a quantitative measure," the Court then addressed whether supplying a single component can trigger liability under that section. Turning again to the statutory text, the Court reasoned that Section 271(f)(1) "consistently refers to 'components' in the plural" and "specifying a substantial portion of 'components,' plural, indicates that multiple components constitute the substantial portion." The Court observed that its holding draws further strength from the statutory language of Section 271(f)(2), which predicates liability based on "any component of patented invention that is especially made or especially adapted for use in the invention." Viewing the two sections together, the Court explained: "Whereas §271(f)(1) refers to 'components,' plural, §271(f)(2) refers to 'any component,' singular. And, whereas §271(f)(1) speaks to whether the components supplied by a party constitute a substantial portion of the components, §271(f)(2) speaks to whether a party has supplied 'any' noncommodity component."
Accordingly, the Court held that the "text, context, and structure" of Section 271(f), as well as the legislative history, "leave us to conclude that when Congress said 'components,' plural, it meant plural, and when it said 'component,' singular, it meant singular." But the Court was quick to add that its decision does not "define how close to 'all' of the components 'a substantial portion' must be," and it "hold[s] only that one component does not constitute 'all or a substantial portion' of a multicomponent invention under §271(f)(1)."
In a brief concurrence, Justice Alito (joined by Justice Thomas) expressed the view that the majority opinion should not be read "to suggest that any number greater than one is sufficient" for liability under Section 271(f)(1). "In other words, today's opinion establishes that more than one component is necessary but does not address how much more."
With the Supreme Court's guidance from the majority and concurring opinions, the patent bar, district courts, and the Federal Circuit are left with further defining the contours of Section 271(f)(1)'s requirement that infringement liability attaches only when a party supplies "a substantial portion of the components of a patented invention."
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