Supreme Court Reverses § 271(f)(1) Ruling in Biotech Case

Patterson Belknap Webb & Tyler LLP

In Life Technologies Corp. v. Promega, the Supreme Court reversed the Federal Circuit’s interpretation of 35 U.S.C. § 271(f)(1), and held that a single component does not constitute a “substantial portion of the components of a patented invention” under the statute. The Court, however, declined to address how many components are needed to trigger liability under the statute.

The patent at issue claimed a genetic testing kit with five components. Life Technologies, a manufacturer of genetic testing kits, made only one of those components, an enzyme called Taq polymerase, in the United States. It then shipped this component to its facility in the United Kingdom, where it was combined with the remaining four components. Promega sued Life Technologies for infringement, arguing that the supply of the Taq polymerase from the United States for combination abroad triggered liability under § 271(f)(1).

Section 271(f)(1) prohibits the supply from the United States of “all or a substantial portion of the components of a patented invention” for combination abroad. It holds infringers liable for their intentional, domestic conduct even when final assembly occurs overseas. The jury returned a verdict for Promega, finding that Life Technologies had willfully infringed the patent. The district court, however, vacated the jury verdict and granted Life Technologies’ motion for judgment as a matter of law, concluding that the supply of a single component could not constitute “all or a substantial portion” of a patented invention.

The Federal Circuit reversed the district court and reinstated the jury verdict, holding that a single component could, in some circumstances, constitute a “substantial portion of the components of a patented invention.” The court noted that the ordinary meaning of “substantial” is “important” or “essential,” and the jury heard evidence that the Taq polymerase was a “main” and “major” component of the kit.

Justice Sotomayor, writing for a unanimous court (though Justice Roberts had recused himself from the case) reversed the Federal Circuit, holding that a single component does not constitute a “substantial portion of the components.” The Court noted that the threshold question was whether “substantial” referred to a quantitative measurement (as the district court had concluded) or a qualitative measurement (as the Federal Circuit had concluded). The Court examined the statutory text and determined that the context in which “substantial” appears points to a quantitative meaning.

The Court considered, and rejected, Promega’s argument that the Court should adopt a case-specific inquiry as to whether the components at issue are a “substantial portion” under either a quantitative or qualitative test. The Court concluded that such an approach was not supported by the text of the statute, and would complicate the factfinder’s task. The Court noted, as Life Technologies had argued, that almost all components of an invention are “important” in the sense that the invention could not function without them. Without any guidance, courts, as well as companies attempting to avoid liability, would have no easy way to determine which components are “important” enough to be a “substantial portion.”

After holding that “substantial” has a solely quantitative meaning, the Court concluded that a single component could never trigger liability under § 271(f)(1). The Court discussed the overall structure of § 271(f), and contrasted the use of the plural “components” in § 271(f)(1) with the use of the singular “component” in § 271(f)(2). According to the Court, requiring more than a single component for liability under § 271(f)(1) “allows the two provisions to work in tandem.” While recognizing that the two provisions have two different roles, the Court concluded that if § 271(f)(1) allowed for liability for a single component, this would undermine § 271(f)(2)’s imposition of liability for the supply of a single component “especially made or especially adapted for use in the invention.”

Finally, the Court noted that while a single component could not constitute a “substantial portion,” it did not define how close to “all” of the components a “substantial portion” must be. Justice Alito, concurring in the opinion, wrote separately to note that “today’s opinion establishes that more than one component is necessary, but does not address how much more.”

As Justice Alito’s concurrence points out, this opinion, while providing a bright line rule that one component can never constitute a substantial portion, provides little guidance regarding what portion of components would be “substantial.” Life Technologies, as well as several amici curiae, had argued for various percentages and tests that could be used. The Court, however, did not adopt or even discuss these tests, preferring only to provide a narrow holding consistent with the facts of this particular case. The question of how much more than one component is necessary to trigger liability under § 271(f)(1) remains unresolved.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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