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Supreme Court Narrows Scope of Extraterritorial Patent Infringement, Holds that Supplying a Single Component for Combination Outside the U.S. Cannot be Infringement

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Today, the Supreme Court issued its much anticipated decision in Life Techs. Corp. v. Promega Corp., No. 14-1538, 580 U.S. ____ (2017). In a unanimous decision authored by Justice Sotomayor, the Court reversed the Federal Circuit and held that supplying a single component of a multi-component invention from the U.S. for assembly abroad cannot be inducement of infringement under § 271(f)(1). Rather, the Court determined that the appropriate statute for determining patent infringement arising from such supply is § 271(f)(2).

Although § 271(f)(1) provides for infringement for suppliers of “all or a substantial portion of the components of a patented invention,” the Court concluded that “substantial” conveys a quantitative requirement and that a single component can never be considered “a substantial portion.” While acknowledging that the word “substantial” is ambiguous, the Court determined that the surrounding language (including words like “all” and “portion”) conveys a quantitative threshold. Slip op. at 5–6. The Court then looked to the text of the statute and legislative history to determine that this quantitative threshold required more than a single component.

First, the Court considered the text of § 271(f)(1), which it said “consistently refers to ‘components’ in the plural.” Id. at 8. Second, the Court further analyzed the context provided by § 271(f)(2), which creates liability for a person who supplies “any component of a patented invention that is especially made or especially adapted for use in the invention and not a staple article or commodity of commerce suitable for substantial noninfringing use....” The Court determined that subsections (1) and (2) work in tandem, but not in parallel. That is, while § 271(f)(2) applies to the supply of “‘any component,’ singular,” § 271(f)(1) applies to the supply of “‘components,’ plural.” Id. at 9. Third, the Court considered the history of § 271(f)(1), which was enacted after Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 508 (1972) held that shipment of all components of an infringing machine in unassembled form for assembly abroad was not direct infringement. According to the Court, § 271(f)(1) was designed to cover the shipment of multiple components, supporting the conclusion that infringement under § 271(f)(1) has a quantitative minimum of at least two components. Id. at 10–11.

The Court explicitly left open the question of “how close to ‘all’ of the components ‘a substantial portion’ must be.” Id. at 10. However, the Court decided with certainty that when “a product is made abroad and all components but a single commodity article are supplied from abroad, this activity is outside the scope of the statute.” Id. at 11.

Baker Botts will continue to monitor this important area of the law, and will provide future reports as that law continues to develop.

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