In Life Technologies Corp. v. Promega Corp., the Supreme Court ruled that, as a matter of law, “the supply of a single component of a multicomponent invention” from the United States does not trigger liability under Section 271(f)(1) of the Patent Act. And, the test to determine whether “all or a substantial portion of the components of a patented invention” are supplied from the United States is a quantitative test, not a qualitative test.
Thus, contrary to Promega’s allegations, Life Technologies did not infringe the asserted patent when it supplied one of five components of the patented invention from the United States to the United Kingdom, and the remaining components were produced, and the final product assembled and sold, outside of the United States.
Although not technically relevant to the Section 271(f)(1) analysis, Life Technologies was a licensee under the asserted patent, and the allegedly infringing sales were outside of the scope of its license grant. Although Promega did not assert breach of contract claims against Life Technologies, both potential licensors and licensees should consider potential implications of this opinion. For example, a licensor may want to require a licensee, as a condition to a license grant, to contractually agree not to commit acts outside of the United States that would be infringing if committed inside the United States. Alternatively, a licensee may want to ensure that it is not contractually precluded from conducting certain activities outside of the United States.
The Supreme Court declined to provide guidance on “how to identify the ‘components’ of a patent or whether and how that inquiry relates to the elements of a patent claim.” This potentially important aspect of applying a quantitative test to Section 271(f)(1) remains unaddressed by the Supreme Court, and the implications, if any, of this opinion on claim drafting are not yet clear.
Section 271(f)(1) of the Patent Act states:
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.
Promega, the asserted patent’s exclusive licensee, alleged Life Technologies was an infringer under that Section by supplying a single component – an enzyme – for a genetic testing kit from the United States to the United Kingdom. The remaining kit components were manufactured, and the kit assembled, outside of the United States.
The parties’ positions turned on how to interpret the statutory phrase “substantial portion.” Life Technologies advocated for a purely quantitative approach, while Promega promoted an approach that included a qualitative analysis. The Federal Circuit, reversing the District Court’s ruling in Life Technologies’ favor on a motion for judgement as a matter of law: (i) applied a qualitative approach, (ii) concluded that, because the enzyme was a “major” component of the kits, it was also a “substantial portion” under Section 271(f)(1) and (iii) reinstated the jury’s verdict in favor of Promega. Promega Corp. v. Life Technologies Corp., 773 F.3d 1338, 1356 (Fed. Cir. 2014).
In reversing the Federal Circuit, the Supreme Court found the term “substantial portion” ambiguous. It then considered the context of that phrase within Section 271(f)(1) (e.g., preceding “of the components”) and the interplay between Section 271(f)(1) and Section 271(f)(2) (which clearly considers a single component), and ruled that “substantial portion” must be interpreted under a quantitative test applied to the components of an invention. However, the Supreme Court expressly did not “consider how to identify the ‘components’ of a patent or whether and how that inquiry relates to the elements of a patent claim”, because, in this case, the parties specifically agreed that the invention had five components.
After adopting its quantitative approach, the Supreme Court continued to conclude that, “as a matter of law, a single component can [never] constitute a ‘substantial portion’ so as to trigger liability under §271(f)(1).” The Supreme Court declined to go further, and did not “define how close to ‘all’ of the components ‘a substantial portion’ must be.”
Thus, courts, practitioners and businesses are left to consider several questions when applying this quantitative approach, including, for example, whether the Supreme Court’s decision may mean that a substantial portion must be more than half of an invention’s “components.”