August 21, 2009Client Alert

Federal Circuit Holds that Supplying from the U.S. a Component of a Process Patented in the U.S. But Practiced Abroad No Longer Constitutes Infringement

The U.S. Court of Appeals for the Federal Circuit has ruled en banc in Cardiac Pacemakers, Inc. et al. v. St. Jude Medical, Inc. et al. that a method claim of a U.S. patent cannot be infringed by conduct proscribed in 35 U.S.C. § 271(f). That law makes a person liable for patent infringement if the person “supplies or causes to be supplied in or from the United States . . . components of a patented invention” for combination abroad. In reversing the district court’s application of § 271(f) to method claims, the Federal Circuit held that St. Jude’s shipment overseas of implantable defibrillators capable of being programmed to infringe Cardiac Pacemakers’ method claim could not result in a violation of § 271(f). This en banc decision overrules the Federal Circuit’s 2005 decision in Union Carbide Chemicals & Plastics Technology Corp. v. Shell Oil Co., 425 F.3d 1366 (Fed. Cir. 2005), in which it explicitly held that § 271(f) applied to method claims and concluded that the exportation of a catalyst necessary to perform a patented method could result in liability under the statute.

“Component” of Method Cannot Be “Supplied”
In reaching its decision, the court first addressed the language of § 271(f). The court focused on the statute’s use of the term “components” in the context of a patented invention that is a method. Given the ordinary meanings of “component”—“a constituent part,” “element” or “ingredient”—the court reasoned that the “components” of a patented method are the steps that comprise the method.

Acknowledging that methods do have components, the court pointed out the statute also requires that those components be “supplied.” The court then looked to the ordinary meanings of “supply,” which imply the transfer of a physical object, and determined that the “supplied” requirement eliminates method patents from § 271(f)’s reach. The court remarked that “because one cannot supply the step of a method, Section 271(f) cannot apply to method or process patents.” The court rejected assertions that “components” are the physical components used in performing the method or, importantly, the results of individual process steps. Thus, carrying out part of a patented process in the U.S. and part abroad would not constitute infringement under this provision.

Intent Behind § 271(f)
In further analyzing the reach of § 271(f), the court looked to the statute’s legislative history and found it to be consistent with its holding that § 271(f) does not apply to method claims. The court noted that in enacting this section, Congress intended to close a loophole for infringers left by the Supreme Court’s decision in Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518 (1972), in which the Supreme Court held that Deepsouth was not liable for infringement of a patent claiming a shrimp deveining machine where it sold the parts of its machine to foreign buyers for assembly and use abroad. Relying on statements in the legislative history related to the objective of preventing copiers from avoiding infringement liability by shipping overseas the components of a patented “product” for assembly abroad, the Federal Circuit determined that Congress had made clear that it was focused on patented “products,” not methods.

Practical Considerations
It remains to be seen if the Supreme Court will review this case. But in view of the limited reach of § 271(f) articulated in this decision, patent applicants should as a practical matter ensure they have sufficient coverage for their inventions via product claims, apparatus claims or system claims, and not just rely upon process or method claims. Patent holders cannot rely on § 271(f) to enforce their process or method patent rights against infringers who are practicing portions of a patented method outside of the United States.

Cardiac Pacemakers, Inc. et al. v. St. Jude Medical, Inc. et al., No. 2007-1296, -1347 (Fed. Cir. Aug. 19, 2009).

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