Supreme Court Limits Exporting Liability Under the Patent Act for Component Suppliers

Authors: Scott Lydon and Justin Durelli.

On February 22, 2017, the Supreme Court issued its opinion in Life Technologies Corporation, et al. v. Promega Corporation, 137 S. Ct. 734 (2017), holding that exporting a single component of a multicomponent invention from the United States does not trigger patent infringement liability under 35 U.S.C. § 271(f)(1). § 271(f)(1) of the Patent Act creates liability for infringement for whoever “supplies or causes to be supplied in or from the United States all or a substantial portion of components of a patented invention” and actively induces the combination of those components outside the United States such that the combination would infringe the patent if it were combined within the United States.

Promega was the exclusive licensee of U.S. Reissue Patent No. 37,984 (“the Tautz patent”), which covers a kit including five components for testing DNA, and sublicensed the Tautz patent to Life Technologies for law enforcement fields only. Life Technologies manufactured one of the five components of the Tautz patent, the Taq polymerase, in the United States and then exported the single component to its manufacturing facility in the United Kingdom where it was combined with the remaining four components for assembly.

After learning that Life Technologies was selling the patented DNA testing kits in fields not authorized under the license agreement, Promega sued Life Technologies for infringement of the Tautz patent under § 271(f)(1). Although the jury returned a verdict for Promega, the district court granted Life Technologies’s motion for judgement as a matter of law on the basis that infringement cannot be had under § 271(f)(1) when only one component of the asserted patent is supplied from the United States. The district court ruled that § 271(f)(1)’s language of “a substantial portion of components” does not extend to a single component.

On appeal, the Federal Circuit reversed the district court’s ruling. The Federal Circuit reasoned that the term “substantial” in § 271(f)(1) may include qualitative meanings such as “important” or “essential.” Thus, the Federal Circuit held that § 271(f)(1) could impose liability on suppliers of even a single component in or out of the United States if the component was an important component of the patented invention.

However, the Federal Circuit’s interpretation of § 271(f)(1) was short-lived as the Supreme Court heard the case and reversed the Federal Circuit decision. The Supreme Court agreed with the Federal Circuit that the term “substantial” in isolation could have a quantitative or qualitative meaning, but decided that the term “substantial” has a quantitative meaning in the context of statute. The Supreme Court also held that the supplying of a single component of a multicomponent invention can never be a substantial portion of components within the meaning of § 271(f)(1).

The takeaway from the Court’s decision is that suppliers of only a single component of patented inventions into and out of the United States may continue to operate without fear of being held liable for infringement under § 271(f)(1). Suppliers of more than a single component will need to remain cautious that the quantity of supplied components does not amount to a substantial portion of components of patented inventions. Conversely, patent applicants may want to consider changing their prosecution strategy to remove any non-essential components from their claims so that it may be easier to show that components supplied by suppliers constitute a substantial portion of components of the claimed invention.