Opinion ID: 2760666
Heading Depth: 3
Heading Rank: 1

Heading: “Actively induce the combination”

Text: We first address whether “to actively induce the combination” requires involvement of a third party or merely the specific intent to cause the combination of the components of a patented invention outside the United States. We conclude that no third party is required. To begin, we acknowledge that the word “induce” can suggest that one is influencing or persuading “another.” However, induce also encompasses the more broad concept of “to bring about, to cause.” See Promega II, slip op. at 16 (citing http://www.merriam–webster.com/dictionary/ induce); see also VII Oxford English Dictionary 888 (2d ed. 1989) (“[t]o bring about, bring on, produce, cause, give rise to”); Am. Heritage Coll. Dictionary 894 (4th ed. 2000) (“[t]o bring about or stimulate the occurrence of; cause”). The object of the transitive verb “induce” can either be a person or a thing, such as an activity or result. The statute is written such that an activity—“the combination”—is the object of “induce,” not a person. Had Congress wanted to limit “induce” to actions completed by two separate parties, it could easily have done so by assigning liability only where one party actively induced another “to combine the [patented] components.” Yet, “another” is absent from § 271(f)(1). 9 Instead, the focus of the statute 9 In this respect, § 271(f)(1) discusses inducement unlike other areas of the law, where statutes describe the inducement of “another person,” “any individual,” or a third party. See, e.g., statutes involving extortion (NY State Penal Law § 155.05(2)(e) (“A person obtains proper24 PROMEGA CORP v. LIFE TECHNOLOGIES CORP. is to induce “the combination of the components of the patented invention.” Nor does the concept of a third party appear in the legislative history for the § 271(f) amendment, which focuses on the would-be infringer’s action of supplying components overseas. The legislative history explains: “In order to be liable as an infringer under paragraph (f)(1), one must supply or cause to be supplied ‘all or a substantial portion’ of the components in a manner that would infringe the patent if such combination occurred within the United States.” Section-by-Section Analysis: Patent Law Amendments of 1984, 130 Cong. Rec. 28,069 (1984) as reprinted in 1984 U.S.C.C.A.N. 5827, 5828 (hereinafter, “Legislative History”). Congress enacted § 271(f) in response to a “loophole” brought to its attention by the Supreme Court’s decision in Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518 (1972). Legislative History, 1984 U.S.C.C.A.N. at 5828. In Deepsouth, the Fifth Circuit affirmed an injunction barring use of an infringing shrimp deveining machine ty by extortion when he compels or induces another person to deliver such property to himself or to a third person . . . .”) (emphasis added)); pandering (D.C. Code § 22-2705 (“(a) It is unlawful for any person, within the District of Columbia to: (1) Place or cause, induce, entice, procure, or compel the placing of any individual in the charge or custody of any other person, or in a house of prostitution, with intent that such individual shall engage in prostitution”) (emphasis added)); child delinquency (FL Act § 827.04 (“Contributing to the delinquency or dependency of a child; penalty.—(1) Any person who: (b) Induces or endeavors to induce, by act, threat, command, or persuasion, a child . . . .”) (emphasis added)). PROMEGA CORP v. LIFE TECH 25 within the United States. 406 U.S. at 519. The infringer subsequently began making the parts of its enjoined shrimp deveining machine in the United States, then exported those parts to its foreign buyers, who would ultimately assemble and use the completed machines abroad. Id. at 523–24. The Supreme Court found that the unassembled export of the elements of the infringing shrimp deveining machine did not infringe the patent, which required the completed combination of those elements. Id. at 528–29. The Court determined that without a “clear and certain signal from Congress,” it was not prepared to expand the rights of patent holders to include an “extraterritorial effect.” Id. at 531. Congress responded to Deepsouth by enacting § 271(f). Section 271(f) closed the Deepsouth “loophole” by expanding the reach of the patent statute to capture certain domestic precursors to extraterritorial activity not previously considered as infringing. In terms of its policy goals, § 271(f)(1) sought to “prevent copiers from avoiding United States patents by supplying components of a patented product in this Country so that the assembly of the components may be completed abroad.” Legislative History, 1984 U.S.C.C.A.N. at 5828. To achieve these goals, Congress chose language for § 271(f)(1) broader than the particular facts of Deepsouth. For example, although Deepsouth involved the supplying of patented components to unrelated third party customers, Congress did not limit the reach of § 271(f)(1) to “third parties” or “another.” In addition, although Deepsouth involved the supply of all the components of a patented invention, Congress chose to expand liability to the supply of “all or a substantial portion” of the components, discussed infra. Given Congress’ choice of broadening language—which focuses solely on the activity abroad (“the combination”) rather than the actor performing the combination—and acknowledgment of “the need for a legislative solution to close a loophole” identified in 26 PROMEGA CORP v. LIFE TECHNOLOGIES CORP. Deepsouth, Legislative History, 1984 U.S.C.C.A.N. at 5828, it is unlikely that Congress intended § 271(f)(1) to hold companies liable for shipping components overseas to third parties, but not for shipping those same components overseas to themselves or their foreign subsidiaries. 10 LifeTech argues that “to actively induce the combination” requires involvement of a third party based on its interpretation of the phrase “actively induces infringement” in the context of 35 U.S.C. § 271(b). See, e.g., Global-Tech Appliances, Inc. v. SEB SA, 131 S. Ct. 2060, 2065 (2011). In Global-Tech, the Supreme Court, in deciding a different issue, uses language that assumes the presence of a second person as a direct infringer where there was such a person. 11 That assumption is quite natural for induced infringement under § 271(b), since a single party who causes the infringement of a patent would already be strictly liable for infringement under § 271(a). However, because § 271(f)(1) lacks such a strict liability companion statute, comparisons to § 271(b) are of limited value. 2. “Substantial portion of the components of a patented invention” We next address whether infringement under § 271(f)(1) requires at least two components to be supplied from the United States. Section 271(f)(1) assigns in- 10 We are mindful of the fact that the Supreme Court has cautioned against the extraterritorial application of United States laws. See, e.g., Deepsouth, 406 U.S. at 531. But in this instance, Congress’ chosen language assigns liability to LifeTech’s conduct within the United States, based on its extraterritorial effect. 11 None of the cases cited by the dissent had to con- front the question of statutory construction we face here. PROMEGA CORP v. LIFE TECH 27 fringement to anyone who supplies or causes to be supplied “all or a substantial portion of the components of a patented invention.” We hold that there are circumstances in which a party may be liable under § 271(f)(1) for supplying or causing to be supplied a single component for combination outside the United States. And based on the facts of this particular case, we conclude that substantial evidence supports the jury’s verdict that LifeTech is liable for infringement under § 271(f)(1) for shipping the Taq polymerase component of its accused genetic testing kits to its United Kingdom facility. As with our analysis for “to actively induce the combination,” we begin by examining the ordinary meaning of the text of the statute. See FDIC v. Meyer, 510 U.S. 471, 476 (1994). The dictionary definition of “substantial” is “important” or “essential.” Webster’s Third New Int’l Dictionary 2280 (2002); XVII Oxford English Dictionary 67 (2d ed. 1989) (“essential; material”); see also Am. Heritage Coll. Dictionary 1727 (4th ed. 2000) (“considerable in importance . . .”). A “portion” is defined as a “section or quantity within a larger thing; a part of a whole.” Am. Heritage Coll. Dictionary 1066 (4th ed. 2000); XII Oxford English Dictionary 155 (2d ed. 1989) (“[a] part of any whole”). Nothing in the ordinary meaning of “portion” suggests that it necessarily requires a certain quantity or that a single component cannot be a “portion” of a multi-component invention. Rather, the ordinary meaning of “substantial portion” suggests that a single important or essential component can be a “substantial portion of the components” of a patented invention. None of LifeTech’s arguments persuade us otherwise. First, LifeTech contends that the reference to “components” in its plural form in the statute indicates that more than one “component” must be supplied outside the Unit28 PROMEGA CORP v. LIFE TECHNOLOGIES CORP. ed States for § 271(f)(1) to apply. 12 Promega II, slip op. at 10. LifeTech ignores, however, that the statute assigns infringement liability when a party supplies “all or a substantial portion of the components of a patented invention”—not merely the “components of a patented invention.” Subsequent references within the statute to “such components” are clearly references to “the components of a patented invention,” not to what must be “supplied” by the alleged infringer. To illustrate, the statute assigns liability to a party who “actively induce[s] 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.” The term “such components” must refer to the components “of a patented invention,” and not to what is “supplied,” as only the combination of all “components of a patented invention” results in infringement. In order to reference what must be “supplied” by the alleged infringer within the natural grammatical structure of the statute, Congress would have had to reference “such all or a substantial portion,” not “such components.” In short, LifeTech’s reading of “such components” is inconsistent with the grammatical structure of the statute. LifeTech next compares § 271(f)(1) with § 271(f)(2), arguing that Congress used the plural “components” in subsection (f)(1) and the singular “component” in subsection (f)(2) for a reason. 13 However, these two subsections 12 We note that LifeTech’s interpretation ignores the Dictionary Act, which instructs that “words importing the plural [can] include the singular.” 1 U.S.C. § 1. 13 Section 271(f)(2) recites: “Whoever without authority supplies or causes to be supplied in or from the United States any component of a patented invention that is especially made or especially adapted for use in the PROMEGA CORP v. LIFE TECH 29 employ the terms in different contexts, and thus the use of “component” in § 271(f)(2) does not control the meaning of “components” in § 271(f)(1). The focus of the infringement inquiry under § 271(f)(1) is whether one or more components supplied by a party constitutes “all or a substantial portion of the components of a patented invention” and if so, whether the alleged infringer “actively induce[d] the combination” of those components. On the other hand, the focus of the infringement inquiry under § 271(f)(2) is whether a party has supplied any component “especially made or especially adapted for use in [a patented] invention” that is not a “staple article or commodity of commerce suitable for substantial noninfringing use.” 14 LifeTech also contends that Microsoft v. AT&T Corp., 550 U.S. 437 (2007), supports its interpretation of § 271(f)(1). In Microsoft, an alleged infringer exported the “master version” of its accused operating system software overseas with the intent that the software would be copied by and installed on foreign manufacturers’ computers, computers that were eventually sold to foreign customers. 550 U.S. at 445–46. This operating system invention and not a staple article or commodity of commerce suitable for substantial noninfringing use, where such component is uncombined in whole or in part, knowing that such component is so made or adapted and intending that such component will be combined 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” (emphasis added). 14 Promega does not assert infringement under § 271(f)(2) because Taq polymerase is “a staple article or commodity of commerce suitable for substantial noninfringing use.” See J.A. 6289. 30 PROMEGA CORP v. LIFE TECHNOLOGIES CORP. software incorporated a speech processing function that allegedly infringed the patentee’s claims. Id. at 441. On the facts before it, the Supreme Court addressed two specific questions: (1) “when, or in what form, does software qualify as a ‘component’ under § 271(f)”; and (2) whether “components” of the foreign-made computers were “supplie[d]” from the United States. Id. at 447. The Supreme Court held that abstract software code “detached from an activating medium” such as a CD-ROM was not a “component” that could trigger infringement liability under § 271(f) because it was merely an “idea without physical embodiment.” Id. at 449. The Court also held that the copies of the accused software made by foreign manufacturers outside the United States were not “supplied” from the United States for purposes of § 271(f). Id. at 453–54. LifeTech points to two footnotes of the Supreme Court’s opinion comparing the language of § 271(f)(1) with § 271(f)(2). First, the Court observed that the two subsections “differ, among other things, on the quantity of components that must be ‘supplie[d] . . . from the United States’ in order for liability to attach.” Microsoft, 550 U.S. at 454 n.16. LifeTech ignores the next two sentences of the Court’s opinion, however, which state: “Paragraph (2), like (1), covers only a ‘component’ amenable to ‘combination’” and “Paragraph (2), like (1), encompasses only the ‘suppl[y] . . . from the United States’ of ‘such [a] component’ as will itself ‘be combined outside of the United States.’” Id. (emphases added). This language tends to support the conclusion that § 271(f)(1) may apply when a single “component” is involved. Second, the Supreme Court observed that “§ 271(f)(2) applies to the export of even a single component if it 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.’” Microsoft, 550 U.S. at 454 n.18. LifeTech appears to argue PROMEGA CORP v. LIFE TECH 31 that the Court’s use of the phrase “single component” in § 271(f)(2) by implication means that § 271(f)(1) applies only to multiple components. But LifeTech ignores the preceding sentence of the opinion, in which the Supreme Court observes that, in contrast, “§ 271(f)(1) applies to the supply abroad of ‘all or a substantial portion of’ a patented invention’s components.” Id. Again, this footnote does not suggest that § 271(f)(1) differs from § 271(f)(2) in that it necessarily requires the export of more than one component. Moreover, LifeTech’s interpretation of these two footnotes is undermined by the very facts of Microsoft. In Microsoft, the patented invention involved the combination of at least two components: operating system software and a computer. 550 U.S. at 441–42. The alleged infringing activity under § 271(f) was a party’s export of a single component of this two-component invention—either a “master disk” or an “electronic transmission” containing the accused operating system software. Id. at 446. The patentee did not specify which subsection of § 271(f) was triggered by the alleged infringer’s activity, and for “clarity’s sake,” the Supreme Court focused its analysis on the text of § 271(f)(1). Id. at 447 n.7. Although the “electronic transmission” was determined not to be a “component,” neither party argued—and the Supreme Court never suggested—that liability under § 271(f)(1) did not attach merely because the single component of a master disk or electronic transmission could not be a “substantial portion” of the components of the patented invention. In short, the Supreme Court in Microsoft could have decided the patentee’s challenge by finding, or at least instructing, that liability under § 271(f)(1) requires the export of more than one component of a patented invention. It did not. In the absence of express guidance by the Supreme Court, we will not contravene the ordinary reading of the statute and categorically exclude the “supply” of a single component of a patented invention from the scope of § 271(f)(1). 32 PROMEGA CORP v. LIFE TECHNOLOGIES CORP. Our determination that liability under § 271(f)(1) may attach for export of a single component does not end the inquiry, however. According to the statute, this component must be “a substantial portion” of the components of the patented invention. Here, we find substantial evidence to support the jury’s conclusion that the Taq polymerase supplied by LifeTech from the United States to its foreign facility is a “substantial portion” of the components of the LifeTech’s accused genetic testing kits. Claim 42 of the Tautz patent recites five components: a primer mix, a polymerizing enzyme (such as Taq polymerase), nucleotides, a buffer solution, and control DNA. Tautz patent, 16:43–61. LifeTech’s domestic arm supplies 15 the Taq polymerase to its facility in the United Kingdom, which both manufactures the remaining four components and assembles all the components into the accused STR kits. J.A. 2265–67, 6288. Taq polymerase is an enzyme used to amplify the DNA sequences in order to obtain enough replicated sample for testing. J.A. 6281. Without Taq polymerase, the genetic testing kit recited in the Tautz patent would be inoperable because no PCR could occur. LifeTech’s own witness admitted that the Taq polymerase is one of the “main” and “major” components of the accused kits. J.A. 6290–91. In short, there is evidence in the record to support the jury’s finding that a polymerase such as Taq is a “substantial portion” of the patented invention. In sum, we disagree with the district court that a single component supplied from the United States, no matter how important or central to the invention, can never constitute “a substantial portion of the components of a 15 LifeTech either purchases Taq polymerase from a third-party in the United States or produces Taq polymerase itself in an Austin, Texas facility. J.A. 6281–83. PROMEGA CORP v. LIFE TECH 33 patented invention.” The evidence demonstrates that LifeTech supplied a substantial portion of the patented invention—the polymerase—to its overseas facility as a component of its accused genetic testing kits. Further, whether LifeTech exhibited the necessary knowledge and intent to combine the Taq polymerase with the remaining components of its genetic testing kit “in a manner that would infringe” the Tautz patent if that combination occurred within the United States is not contested and is presumed. There is substantial evidence in the record to support the jury’s finding that LifeTech is liable for infringement under 35 U.S.C. § 271(f)(1).