Supreme Court Interprets Patent Law on Invention’s Components
The U.S. Supreme Court’s opinion in Life Technologies Corp. v. Promega Corp., No. 14-1538, (February 22, 2017), interpreted 35 U.S.C. § 271(f)(1), which creates liability for supplying components of multi-component patented inventions for assembly outside the United States. The opinion is narrow in scope but offers important guidance for licensors.
35 U.S.C. § 271(f) provides as follows:
(1) Whoever 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) Whoever without authority supplies or causes to be supplied in or from the United States any component of a patented invention that is especially made or especially adapted for use in the invention and not a staple article or commodity of commerce suitable for substantial noninfringing use, where such component is uncombined in whole or in part, knowing that such component is so made or adapted and intending that such component will be combined 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.
The case was decided in the context of a motion for judgment as a matter of law and the Court set out to determine if one component of a multi-component invention, produced in the United States and exported to a foreign country for assembly into the complete invention, could ever constitute infringement under § 271(f)(1). The Court first determined that the phrase “substantial portion” as used in the provision should be construed as having a quantitative meaning based on the number of components supplied rather than a qualitative meaning based on the importance of the component or components to the fully assembled invention. Based on the text of § 271(f)(1), the content of § 271(f)(2) and the legislative history, the Court determined that the phrase refers to the number of components supplied. Reading § 271(f)(1) in the context of § 271(f)(2) is critical to the Court’s reasoning.
The Court interpreted the two sub-sections working in tandem, where § 271(f)(1) requires the supply of more than one component and § 271(f)(2) may apply to the supply of a single component but requires that that component be “made or especially adapted for use in the invention” before liability may attach.
Having so decided, the Court held that, as a matter of law, § 271(f)(1) may never cover the supply of a single component invention of a multi-component invention. However, both in the opinion and the concurrence, the Court was very clear that this is a narrow holding that does not define how many components are necessary under § 271(f)(1), only that one may never be enough.
In the final sentence of the opinion, the Court held:
“We are persuaded, however, that when as in this case a product is made abroad and all components but a single commodity article are supplied from abroad, this activity [providing a single commodity article from the United States] is outside the scope of the statute.”
Despite the narrow scope of the opinion, there are a few lessons licensors may draw from this case. The first is the licensor must carefully assess the limitations of a kit claim, especially where none of the isolated components is novel or highly specialized; i.e., where the components are staple articles or commodities of commerce suitable for substantial noninfringing use. In this situation, the opinion underscores the importance of obtaining protection in multiple jurisdictions based not only on the markets in which the invention will be exploited but also in jurisdictions in which a competitor may wish to produce a competing product.
If one of the components is novel or highly specialized, one possible claim strategy to address § 271(f)(1) might be to somehow inextricably link one or more of the non-novel/non-specialized components to the novel/specialized component (e.g., the non-novel/non-specialized component is necessary for preservation, operability, etc. of the novel/specialized component) so that it would be likely that both components are sold together. This would be a challenge.
Finally, based less on the content of the opinion and more on the circumstances that led to the filing of the suit, a licensor should be aware that where it has granted permission to a licensee to commercialize the invention in certain fields only, the licensee will have developed the infrastructure necessary to commercialize the product in all fields and the licensee’s natural tendency would be to expand its commercial opportunities to other fields of use in any way it can to avoid liability for infringement.
For more information on how this ruling may affect your business, please contact the authors or the attorney at the firm with whom you are regularly in contact.