The Federal Circuit had the opportunity to interpret the extent to which the provisions of 35 U.S.C. § 271(g) require the practice of the patented method that produces a product whose importation imposes infringement liability under the statute to be practiced by a single entity (it does not) in rendering its decision recently in Syngenta Crop Protection, LLC v. Willowood, LLC.
The case involved accused infringement of U.S. Patent Nos. 5,602,076 (expired February 11, 2014); 5,633,256 (expired February 11, 2014); 5,847,138 (expired December 8, 2015); and 8,124,761 (will not expire until April 15, 2029), directed to fungicides, pesticides, plant growth regulators, comprising pyrimidinyloxy-phenyl acrylates and derivatives, and in particular azoxystrobin. The '076 and '256 patents are directed to compounds, while the '138 and '761 patents are directed to methods for producing these compounds.
Syngenta brought suit for patent infringement and copyright infringement against the Willowood defendants for importation of fungicide formulations comprising azoxystrobin; the copyright infringement assertions were made with regard to Syngenta's label related to "directions for use, storage, and disposal, as well as first-aid instructions and environmental, physical, and chemical hazard warnings." Importantly for the issues in this case, one defendant, Willowood China, produced the accused infringing fungicide in Hong Kong and sold it to Willowood USA, its American affiliate. Willowood USA and another defendant, Willowood LLC then contracted to have third parties formulate the azoxystrobin fungicide and thereafter marketed and sold the product in the U.S. Syngenta alleged infringement of claims 1–4 and 12–14 of the '076 patent, claims 1–3, 5, and 7 of the '256 patent, claims 6 and 12–14 of the '138 patent, and claims 1, 3–5, and 9–10 of the '761 patent. Both parties filed summary judgment motions, upon which the District Court ruled as follows. First, the District Court granted Syngenta's summary judgment motion that Willowood literally infringed claims of the '076 and '256 patents, and that Willowood induced infringement by the LLC affiliate. The District Court denied Syngenta's summary judgment motion that Willowood China literally infringed the '076 and '256 patents, based on the existence of a genuine issues of material fact regarding whether sale occurred in the U.S. or China. The District Court also denied summary judgment of the '138 patent, on the grounds that infringement under 35 U.S.C. § 271(g) required that all steps of a claimed process must be performed by a single infringer (facts regarding this were in dispute). Finally, the District Court denied Syngenta's summary judgment motion regarding infringement of the '761 patent, due to disputed facts on the details of the synthetic methods used by Willowood China. But the District Court granted Syngenta's motion shifting the burden of proof on this issue to Willowood under 35 U.S.C. § 295.
Willowood's summary judgment motion involved Syngenta's copyright claims. The District Court granted this motion based on the provisions of the Federal Insecticide, Fungicide, and Rodenticide Act ("FIFRA"), which precludes label copyright, inter alia, because "much of its labels' text comprises instructions and warnings mandated by FIFRA and EPA regulations, and only limited means of expressing such information exist, extending copyright protection to Syngenta's labels 'would make subsequent labeling practically impossible,'" citing SmithKline Beecham Consumer Healthcare, L.P. v. Watson Pharm. Inc., 211 F.3d 21, 23 (2d Cir. 2000). The United States filed a "statement of interest" supporting Willowood's position.
At trial, the jury entered a verdict that Syngenta did not establish that Willowood China had imported or sold azoxystrobin into the U.S. The jury awarded damages ($76,000) for infringing activity prior to expiration of the '076 and '256 patents by Willowood USA and Willowood LLC. The jury also entered a specific verdict of non-infringement of the '138 patent, based on its determination that Syngenta did not prove that Willowood China performed both steps of the claimed process. Finally, the jury entered a verdict that, under the burden-shifting provisions of the District Court's decision regarding the '761 patent, Willowood had not shown that it did did not synthesize azoxystrobin according to the claimed method and awarded damages ($900,000) for this infringement. This appeal followed, by Willowood on the jury's infringement verdicts and Syngenta on the District Court's grant of summary judgment on its copyright claims.
The Federal Circuit affirmed-in-part, reversed-in-part, vacated-in-part, and remanded, in an opinion by Judge Reyna, joined by Judges Taranto and Stoll. The panel vacated the District Court's grant of summary judgment regarding Syngenta's copyright claims, finding that the District Court had not properly determined whether the provisions of FIFRA conflicted with the Copyright Act, because FIFRA "does not, on its face, require a me-too registrant to copy the label of a registered product" and a conflict will exist only to the extent that Syngenta's label is protected by copyright and is necessary for "expedited approval of Willowood's generic pesticide product." Because the District Court did not reach the merits of Syngenta's copyright claims, the Federal Circuit remanded for the District Court to make this determination. Nevertheless, the Court provided guidance regarding how the purportedly competing goals of FIFRA and the Copyright Act should be resolved:
On remand, the district court should first discern whether the Copyright Act, as interpreted under existing copyright doctrines, would prohibit Willowood's use of any portion of Syngenta's label. The district court should, for instance, consider whether the fair-use doctrine or limits on copyrightable subject matter, such as the merger doctrine, would eliminate infringement. Only if the district court concludes that the Copyright Act would in fact prohibit Willowood's conduct in a manner in- consistent with the purposes of FIFRA should it revisit the question of whether and to what extent FIFRA precludes Syngenta's copyright claims for any part of its pesticide labels.
The opinion then turned to the requirements for showing infringement under § 271(g). In what the opinion characterized as an issue of first impression, the Federal Circuit reversed the District Court's finding that infringement required that "all steps of a patented process be performed by or at the direction or control of a single entity." Agreeing with Syngenta and several amici, the panel held that this requirement was not mandated by the plain meaning of the statutory language. Specifically, the Court stated:
The resolution of this issue turns on the nature of the infringing acts covered by § 271(g). Section 271(g) provides in relevant part that "[w]hoever without authority imports into the United States or offers to sell, sells, or uses within the United States a product which is made by a process patented in the United States shall be liable as an infringer." 35 U.S.C. § 271(g) (2012). This language makes clear that the acts that give rise to liability under § 271(g) are the importation, offer for sale, sale, or use within this country of a product that was made by a process patented in the United States. Id. Nothing in this statutory language suggests that liability arises from practicing the patented process abroad. Rather, the focus is only on acts with respect to products resulting from the patented process. Thus, because the statutory language as a whole is clear that practicing a patented process abroad cannot create liability under § 271(g), whether that process is practiced by a single entity is immaterial to the infringement analysis under that section.
The panel found support for this conclusion by comparison with the language of 35 U.S.C. § 271(a), where the "whoever, without authority" language has been interpreted to impose the single-entity requirement, citing Limelight Networks, Inc. v. Akamai Techs., Inc., 572 U.S. 915, 921–22 (2014). The opinion also relied on the statutory language of § 271(f), where the statutory language includes the requirement that what is induced is combination of components of a claimed article "in a manner that would infringe the patent if such combination occurred within the United States" (emphasis added). The panel stated that "[i]f Congress intended to limit liability under § 271(g) to instances where the patented process was practiced in a manner that would infringe the patent if such practice occurred within the United States—such as it did by requiring a single entity to perform the entire process under § 271(a)—it "kn[ew] precisely how to do so" (which, with regard to § 271(g) Congress clearly did not. And the timing of enactment of the two statutes (§ 271(g) being enacted after § 271(f)) was also significant for the panel's opinion:
"Where Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion," citing Rodriguez v. United States, 480 U.S. 522, 525 (1987) (quoting Russello v. United States, 464 U.S. 16, 23 (1983)).
The panel also relied for its reasoning that the infringing act implicated in § 271(g) was not practice of the claimed method abroad but importation of the product of the patented process. The opinion also found support for its interpretation in the legislative history. Finally, the opinion cited the increased evidentiary burden Willowood's interpretation of the statute would impose on patentees, where manufacture occurs abroad.
Accordingly, the Federal Circuit reversed the District Court's judgment that Willowood USA (whose importation of the accused infringing azoxystrobin was undisputed) did not infringe the '138 patent under § 271(g) and vacated (as not being considered by the District Court) Willowood LLC's infringement liability and remanded. Otherwise, the panel affirmed the District Court in all other respects.
Syngenta Crop Protection, LLC v. Willowood, LLC (Fed. Cir. 2019)
Panel: Circuit Judges Reyna, Taranto, and Stoll
Opinion by Circuit Judge Reyna
