Life Technologies Corp. v. Promega Corporation: What No One Is Telling the Supreme Court

By Jonathan Tropp
September 26, 2016

scotus-supreme-court-right-angleIn its upcoming term, the Supreme Court will once again consider the extraterritorial effect of U.S. patent law; specifically, whether “the Federal Circuit erred in holding that supplying a single, commodity component of a multi-component invention from the United States is an infringing act under 35 U.S.C. § 271(f)(1), exposing the manufacturer to liability for all worldwide sales.” Life Tech. Corp. v. Promega Corp., No. 14-1538. Petitioners (all subsidiaries of Thermo Fisher Scientific Inc., which I shall collectively call “Life”) urge the Court to hold the statute requires “all or a large percentage closely approximating all” of the components of the invention to have been made in the United States. Though Promega Corporation has yet to respond, the Court should decline Life’s invitation. This does not mean, however, that the decision of the Federal Circuit, Promega Corp. v. Life Tech. Corp., 773 F.3d 1338 (Fed. Cir. 2014), should be affirmed. Rather, though none of the briefs filed in the case have said so, the Supreme Court should reverse because the single, commodity component at issue cannot, as a matter of law, even under Promega’s interpretation of the statute, comprise a “substantial portion” of the components of the invention.

SECTION 271(f)

Section 271(f) provides:

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.

35 U.S.C. § 271(f)(1) (emphasis added). According to Life, and to the United States as amicus, the phrase “substantial portion” is quantitative, and not at all qualitative, as evidenced, especially, by its use in the disjunctive with “all … components,” which is asserted necessarily to be a quantitative term. Promega will argue, however, as it has throughout the case, as have amici the Intellectual Property Owners Association (IPO) and the American Intellectual Property Law Association (AIPLA), and as the Federal Circuit concluded, that the word “substantial” more naturally has a qualitative sense when used in the phrase “substantial portion.” Though the meaning of the underlined phrase has been essentially the entire focus of the briefing, resolution of this hotly-contested issue simply should not matter.

The Facts of Life

Let us consider the facts of Life. Life manufactures genetic testing kits. These kits contain at least five components: (1) a primer mix, (2) a nucleotide reaction mix, (3) a buffer solution, (4) control DNA, and (5) a polymerase. Together, these components may be used to amplify a quantity of DNA for analysis. All five are necessary for the kits to work, and at least three of the components, including the polymerase, were described by Life’s own expert at trial as “main” or “major” ingredients. The polymerase is nevertheless a commodity item. Though Life manufactures the first four components overseas, it manufactures the polymerase in the United States.  Life supplies the polymerase to a UK facility for combination with the other kit components.

Each of the five kit components corresponds to a respective element of a claim of the Promega patent. The Life kits would infringe the patent if sold in the United States. Indeed, Life sold many of the kits under license from Promega, and the infringement claim arises only because some of the kits were sold for unlicensed purposes.

The jury was asked to decide, among other things, “the total dollar amount of [Life’s kit sales] that were United States sales.” The jury was instructed: “‘United States sales’ include all kits made, used, offered for sale, sold within the United States or imported into the United States, as well as kits made outside the United States where a substantial portion of the components are supplied from the United States.” The jury concluded that all of Life’s kit sales were United States sales. After the verdict, the district court granted Life’s motion for judgment as a matter of law on this issue. The court concluded the language “all or a substantial portion of the components of the invention” requires, at minimum, more than one component to be supplied from the United States. In the alternative, the court concluded that one component of five was not a “substantial portion” of the components, at least in this case, notwithstanding testimony that the polymerase is a “major” kit component, absent any explanation of what that might mean.

On appeal, the Federal Circuit reversed this portion of the judgment and remanded. The court concluded, unanimously on this point, that “substantial” has a dictionary meaning of “important” or “essential,” that a single important or essential component therefore may be a “substantial portion” of a multi-component invention, and that none of Life’s arguments were sufficient to persuade it otherwise.

The court thus turned to consider whether there was substantial evidence on which the jury could have reached its verdict, concluding that there was. Essentially its entire analysis of this issue is summed as follows: “Without [the] polymerase, the genetic testing kit recited in the [] patent would be inoperable…. [Life’s] own witness admitted that the [] polymerase is one of the ‘main’ and ‘major’ components of the accused kits.” Promega, 773 F.3d at 1356. Thus, according to the court, sufficient record evidence supported the jury’s finding that the polymerase is a “substantial portion” of the patented invention.


What Is To Be Done?

This brings us then to the question, what is to be done? Unlike others who have considered this question in other contexts, the answer here, I conclude, consistent with the notion of judicial restraint, is “as little as possible.” There is simply no need to decide whether § 271(f)(1) always requires multiple components, let alone “something close to all” components, as urged by Life and the Government. Rather, the Federal Circuit decision should be reversed on the considerably more modest basis that there was insufficient evidence to find that a “substantial portion” of the components of the invention were supplied from the United States, even under Promega’s construction of the statute.

Life and the amici have focused their analyses on efforts to persuade the courts that “all or a substantial portion of the components” either has a strict quantitative requirement, on the one hand, or both qualitative and quantitative elements, on the other.  Their analyses rely on all the tools of the trade:  citations to dictionaries, explication of the surrounding statutory language, comparisons between § 271(f)(1) and § 271(f)(2), invocation of policy, discussion of legislative history, and even discussion of the presumption against extraterritoriality.  What becomes clear from the use of all these tools, however, is not so much the precise meaning of the statute, as that the statute is just not precise.

According to the Government, which Life repeatedly cites approvingly, the Court should adopt a meaning for “‘all or a substantial portion of the components’ [that] refers to all or a large portion of the total number of components … closer to 100%” because giving the statute such narrow scope is “workable and measured.” (Br. of U.S. at 25.) It urges that “meaningful guidance” is required lest “domestic suppliers of staple components to foreign manufacturers cannot accurately assess their potential liability before exporting such goods.” (Id. at 24.) But the problem the Government seeks to cure was not caused by the Federal Circuit’s conclusion that qualitative factors may be considered; rather, it was caused by the way the Federal Circuit considered those factors in this case. Before adopting the narrow construction of the statute urged upon it, the Supreme Court should first consider the mischief that doing so might cause and whether doing so is necessary.

In fact, the proposed standard is not workable.  As the United States concedes, to apply this standard, “one must identify the invention’s ‘components.’” (Id. at 27.) Life itself “does not present any question concerning the proper approach for identifying ‘components,’ however, because it comes to the Court on the assumptions that [the] polymerase is a ‘component,’ that the kits are made from at least four additional components, and that petitioners are entitled to judgment as a matter of law unless the domestic supply of [the] polymerase alone is sufficient to trigger liability under Section 271(f)(1).” (Id.) Thus, the Government acknowledges asking the Court to decide a question of wide application without occasion to consider its full implications. Nevertheless, anticipating concern for how the statute might be applied in later cases, the Government offers this footnote:

The starting point for identifying “components” is to examine the elements of the relevant patent claim to identify constituent parts that are capable of being combined into the final product, as the court of appeals did here when it identified five components from five claim elements. … Parts that are included in the physical embodiment of an invention, but are not covered by any element of the patent claim, thus do not qualify.  [An infringer] thus could not evade liability by supplying the very same components, while omitting any screws, bolts, or rivets that hold the assembled invention together, and claiming that each screw or other fastener constitutes a distinct “component.”  Assuming that no element of the patent claim covers the screws, bolts, or rivets, they would be irrelevant to the infringement inquiry under Section 271(f)(1).

(Id. at 27-28 n.7 (citation omitted).) This test would, as a practical matter, often be difficult to apply and frequently be easily evaded.

For example, consider the  following hypothetical claim suggested by AIPLA, modeled after the claim at issue in the case Congress enacted § 271(f) to abrogate:

A machine comprising: (a) an inclined trough; (b) a blade inclined along a path down the trough; and (c) an attachment mechanism containing upper, middle, and lower fasteners for attaching the blade to the trough.

(AIPLA Br. at 8.)  Under the proposed standard, an accused infringer surely would export uninclined (indeed, unattached) troughs and blades, and so argue that it had supplied zero “components” according to the Government’s counting mechanism. This gambit concededly might be met by invoking the Doctrine of Equivalents, but that would still leave doubts whether exporting fewer than 67% of  the components of an invention (which the patentee of course would frame as “all but one”) infringed.

More troublingly, it is easy to imagine circumstances in which the exported components would comprise an identical (or greater) portion of the machine, but clearly fail the test. For example, the invention above could instead have been claimed as:

A machine comprising: (a) a trough with an attachment mechanism for attaching the trough on an incline to a frame; and (b) a blade with a second attachment mechanism containing upper, middle, and lower fasteners for attaching the blade to the trough inclined along a path down the trough.

Now, under the Government’s counting method, one exporting the same troughs and blades (even with frames) for combination overseas using attachment mechanisms made elsewhere would not supply any “components” from the United States, let alone multiple components. The problem is that, unlike § 271(a), which simply considers the final product, § 271(f)(1) considers only a portion of the apparatus in an uncombined state. Adoption of a bright-line counting test would thus permit manipulation and mischief, as would-be infringers will structure their manufacturing operations to avoid neat correspondence between physical components and claim components.

There is simply no need to invite these difficulties.  The problem with the Federal Circuit’s ruling is not that it permits qualitative considerations, but its analysis of those considerations in this case. The Federal Circuit concluded that substantial evidence supported the verdict even though Life supplied only a single commodity component of a multi-component invention from the United States. It’s reasoning included a facile reflection that the kits would be inoperable without the polymerase.  However, the kits, like many inventions, are inoperable without any of the claimed components. Being required for operability is simply not a useful measure of qualitative importance. The only other basis stated for the court’s conclusion, however, was testimony that a majority of components, including the polymerase, were “main” or “major” components. Because the real world is not Lake Woebegone, a majority of the components cannot each be a “substantial portion” of the components of the invention. This unelaborated testimony therefore also falls short of demonstrating that the polymerase alone was such a “substantial portion.”

Unfortunately, this argument has not been developed before the Supreme Court.  The amicus briefs of AIPLA, in particular, and IPO, attempt to demonstrate that the narrow statutory construction pressed by Life and the Government should not be accepted. However, because both amici limit their arguments to the statutory construction question (neither organization taking a position on the outcome of the case), neither explains that the construction question need not be resolved (or reached). All other amici support Life.

The Supreme Court should reverse, reinstating the district court’s judgment on the narrow, alternative basis stated in that court’s opinion, that as a matter of law a single commodity component is not a “substantial portion of the components” of a multi-component invention, at least without meaningful proof that the component particularly plays a substantial role in the invention.

The Author

Jonathan Tropp

Jonathan Tropp is a partner with Day Pitney LLP. Jon has a complex commercial litigation practice that includes patent, trademark, copyright, and trade secret litigation. Jon has represented both plaintiffs and defendants ranging from international corporations in nine-figure cases to closely held businesses. In addition to intellectual property cases, Jon has defended, among others, antitrust, insurance coverage, and shareholder litigation matters, including class actions. Jon is a registered patent attorney. For more information, or to contact Jon, please visit his firm profile page.

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Discuss this

There are currently 3 Comments comments.

  1. Anon September 26, 2016 9:45 am

    I find your argument unappealing.

    You assume the point to be proven, ignore how “substantially” has been treated in other IP contexts – and show no support in the present context for a purely quantitative treatment, and further ignore construction cannons dealing with the aspect of singular/plural terms.

    Your “matter of law” is not.

  2. Paul F. Morgan September 27, 2016 8:35 am

    Mr. Tropp, is not your argument here also supported by the case law fact situations that led to the enactment of this statute?

  3. Anon September 27, 2016 9:28 am

    I do not see any such support Mr. Morgan.

    Can you fill in the details?