Producing “all or a substantial portion of the components of a patented invention” in the U.S. “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 the combination occurred in the U.S. constitutes patent infringement. 35 U.S.C. §271(f)(1).
In Life Technologies Corp. et al v. Promega Corp., the Supreme Court reversed the United States Court of Appeals for the Federal Circuit and held that “all or a substantial portion of the components” is a quantitative test and the threshold must be greater than one component. The Court thus held that production of a single component in the U.S. cannot infringe a multicomponent patent under §271(f)(1). Production and export of a single component may constitute infringement under §271(f)(2) if the component is “especially made or especially adapted for use” in the invention and is not a staple article or capable of substantial noninfringing use.
Promega, the exclusive licensee of the patent at issue in the case, sublicensed Life Technologies to manufacture and sell kits to licensed law enforcement worldwide. Life Technologies began selling the kits to industries outside of law enforcement, prompting the lawsuit.
The patent claimed a genetic testing kit that the parties stipulated had five components: “(1) a mixture of primers that mark the part of the DNA strand to be copied; (2) nucleotides for forming replicated strands of DNA; (3) an enzyme known as Taq polymerase; (4) a buffer solution for the amplification; and (5) control DNA.” Life Technologies produced the Taq polymerase in the U.S. and produced the remaining components in the United Kingdom.
The Supreme Court held that the phrase “substantial portion of the components” requires a plurality of components to infringe. The Court also held that “substantial portion” is a quantitative test, without defining “how close to ‘all’ of the components ‘a substantial portion’ must be.”
The Supreme Court also distinguished §271(f)(1) from §271(f)(2), noting that the application of (f)(2) to “any component” is singular. Thus, when the otherwise infringing activity occurs abroad, a theory similar to contributory infringement is still available for production of a single component in the U.S. under §271(f)(2).
The decision did not delve into how the claim elements in the patent aligned with the components of the invention. Nevertheless, patent prosecutors for inventions that may rely on international supply chains should consider how the components of the invention may be defined. Additional components that may not be part of the patentability of an invention should be excluded from an independent claim to ensure that infringing activity is based on as few components as possible, keeping in mind that the statute does not require that the exported components even be mentioned in the claims. Preferably, the most commercially important claim elements may be presented as a substantial portion of the components to guard against their manufacture in the U.S. and combination outside the U.S.
The decision also increases the importance of seeking patent protection in foreign jurisdictions to ensure liability without regard to how the supply chain is structured.
Patent licensors should consider how licensees may be able to structure their supply chain to avoid liability. License agreements, while taking care to comply with antitrust laws and the prohibition against patent misuse, should contain provisions discouraging activity that may seek to avoid liability based on this decision.
A copy of the full Life Technologies decision is attached here.