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Supreme Court: Some Patent Infringement Is a Quantitative, Not Qualitative, Assessment

February 23, 2017

On Wednesday, the Supreme Court found in favor of the accused infringer in Life Technologies Corp. v. Promega Corp. (No. 14-1538), and held that the shipment from the U.S. of only one component of a multicomponent product cannot constitute patent infringement under 35 U.S.C. § 271(f)(1), even if that one component is the single most important component of the infringing product. Generally, Section 271(f)(1) allows for infringement liability where a party supplies from the U.S. “all or a substantial portion of the components of a patented invention” in a way that “actively induce[s] the combination of such components outside of the U.S. in a manner that would infringe the patent” had the components been assembled inside the U.S. Under this Section, re-importation of the finished product into the U.S. is not required for infringement liability. The Supreme Court’s decision makes clear that the phrase “substantial portion of the components” is a purely quantitative analysis, and not a qualitative one as applied by the Federal Circuit. This decision is the most recent example of the Supreme Court’s interest in patent cases, and the unique appellate structure where all patent-related appeals go to the United States Court of Appeals for the Federal Circuit.

In the case, Life Technologies sold genetic testing kits outside of the United States and manufactured four out of five components of its kits in the United Kingdom. The fifth component, an enzyme called Taq polymerase, or Taq, was manufactured in the U.S. Taq was described at trial by expert witnesses as a “main” and “major” component of the genetic testing kits. Promega sued Life Technologies for patent infringement under 35 U.S.C. § 271(f)(1), and the trial court ruled for Life Technologies, finding that infringement under Section 271 was not met. The Federal Circuit reversed, finding that a single important component was sufficient to satisfy the “substantial portion” language of Section 271(f)(1) and that Life Technologies infringed by supplying Taq alone.

The Supreme Court disagreed with the Federal Circuit’s analysis, noting that “one component does not constitute ‘all or a substantial portion’ of a multicomponent invention under § 271(f)(1).” The Supreme Court, however, did not go so far as to define how quantitatively close to “all” of the components “a substantial portion” must be, leaving the door open to future challenges where, for example, a party supplies two of three components, or five of ten components. However, by virtue of its decision, the Court inherently decided the issue for two-component products: if one component cannot be a “substantial portion,” the only way to induce infringement of a two-component product overseas is to supply both (i.e., all) components. Interestingly, it appears that this consequence was not part of the parties’ or the Court’s analysis in briefing or oral argument.

The Court’s decision has a number of practical consequences. First, an infringement analysis under Section 271(f)(1) must now presume that all components of a multicomponent invention are created equal. Whether or not a particular component provided a patentable distinction during prosecution, whether or not a particular component is the most important factor in practicing an invention, or any other qualitative assessment, is now irrelevant for infringement purposes. Second, the decision raises new considerations for companies in the biotechnology space and beyond. For example, patent applicants and litigants may now wish to consider:

  • Whether a claim will be deemed to recite a multicomponent invention.
  • Whether characterization as a multicomponent invention is favorable or unfavorable.
  • Whether a single key component can (or should be) designed in multiple pieces.
  • Whether key components are (or should be) claimed individually.

Some or all of these considerations may be new for many individuals and companies. For further information on these considerations and how they may apply in specific situations, please contact the authors of this alert.

For more information, please contact the professional(s) listed below, or your regular Crowell & Moring contact.

Vincent J. Galluzzo
Partner – Washington, D.C.
Phone: +1.202.624.2781
Terry Rea
Partner – Washington, D.C.
Phone: +1.202.624.2620