On August 19, 2009, in an 11-1 en banc decision, the United States Court of Appeals for the Federal Circuit ruled that 35 U.S.C. § 271(f), which prohibits exporting patented products, does not apply to method patents. The ruling in Cardiac Pacemakers Inc. v. St. Jude Medical Inc. makes it clear that US manufacturers who ship products overseas cannot be held liable for the infringement of method claims that occur abroad. The Court's ruling will impact all companies that do business both in the United States and abroad.
The decision in Cardiac Pacemakers overruled the Federal Circuit's 2005 decision in Union Carbide Chems. & Plastics Tech. Corp. v. Shell Oil Co., which permitted the application of 271(f) to method claims.1 In Union Carbide, the Federal Circuit found Shell liable for infringement of a method patent under §271(f) for exporting a catalyst that was a necessary "component" for performing the patented method. The Cardiac Pacemakers decision is consistent with the United States Supreme Court's recent decision in Microsoft Corp. v AT&T Corp.2 In Microsoft, the Supreme Court held that Microsoft did not supply combinable components of a patented invention when it shipped golden masters of its Windows operating system abroad. Since foreign-made copies of Windows were installed on computers supplied from places outside the United States, the Supreme Court concluded that Microsoft did not supply "components" from the United States. In that case, the Supreme Court reserved judgment on whether "an intangible method or process...qualifies as a 'patented invention' under § 271(f)."
In this case, Cardiac Pacemakers brought a patent infringement suit against St. Jude for its implantable cardioverter defibrillators that allegedly practice Cardiac's patent on "a method of heart stimulation using an implantable heart stimulator." In rendering its en banc decision, the Federal Circuit considered whether Cardiac Pacemaker was entitled to damages from sales of the defibrillators supplied from the United States for use in foreign countries. The Federal Circuit emphasized the distinction between components of tangible products and those which are simply components or a step in a method or process. The Federal Circuit rejected Cardiac's argument that the definition of "component" should encompass "the apparatus that performed the process" rather than just the step of that patent method. The Court reasoned that "Congress clearly believed that 'component' was separate and distinct from a 'material or apparatus for use in practicing a patented process.' Thus, a material or apparatus for use in practicing a patent process in not a component of that process. The components of the process are the steps of that process."
In finding that St. Jude was not liable for infringement under §271(f) for defibrillators that are exported for use abroad, the Federal Circuit concluded that method patents do not include physical "components of a patented invention." Since one cannot supply the step of a method, §271(f) does not apply to method claims. As a result, §271(f) does not encompass products that may be used to practice a patented method in a foreign country.
Manufacturers involved in pending patent litigation cases in which patentees are asserting method claims for products sold for use abroad should consider whether the holding in Cardiac Pacemaker could be used to defend against claims of patent infringement.