NEW YORK (GenomeWeb) – In a ruling that has broad implications for high-tech manufacturers in biotech and beyond, the Supreme Court of the United States has found that a firm manufacturing one component of a forensic DNA test kit in the US does not make that company liable here for patent infringement abroad.
The court overturned an earlier federal court decision and unanimously ruled in favor of Life Technologies, now a subsidiary of Thermo Fisher Scientific, nullifying a $52 million judgment against it in a patent infringement case brought by Promega dating back to 2010.
"The question before us is whether the supply of a single component of a multicomponent invention is an infringing act," Justice Sonya Sotomayor wrote in the opinion. "We hold that it is not."
Had the court ruled the other way, it would have opened any company manufacturing components of inventions in the US to liability here for patent infringement that took place elsewhere.
Instead, the Supreme Court devised a quantitative test for similar cases, suggesting that one component out of several is never enough.
"The decision follows classic principles of statutory construction to reach a conclusion that many expected," John DiMatteo, a patent litigator at Holwell Shuster & Goldberg, said in an email.
The Life Technologies v. Promega case centered on a section of US law written in the 1980s to prevent companies from infringing on US patents by manufacturing components in the US but assembling the invention outside it.
Promega had exclusively licensed a patent on short tandem repeat DNA testing kits used in forensic identification and sublicensed it to Life Tech for certain applications in Europe. Life Tech's kits were manufactured in the UK, all except for the Applied Biosystems AmpliTaq Gold DNA polymerase, which was manufactured in the US.
Promega later sued Life Tech for selling the kits outside the fields stipulated in their agreement. Promega had argued that the critical polymerase constituted a "substantial portion of the components of a patented invention," as written in the law protecting US patent holders against foreign assembly.
To some, the case presented a threat to modern supply chains, where some components are manufactured in the US but assembled elsewhere for efficiency's sake.
Another firm in the life sciences tools sector with a global footprint, Agilent Technologies, went as far as to file a legal document in support of Life Tech.
"This case does not merely concern an arcane point of patent law," the Agilent brief said. "Rather, it involves a serious threat to US manufacturing operations reflecting a lack of understanding of modern manufacturing and supply chain management, global sourcing of components, and manufacturing constraints in regulated industries."
In its decision, the court pointed to the context of the words "substantial," and said the context pointed to a quantitative meaning, rather than qualitative.
Moreover, the court said Promega's suggestion for a qualitative, case-specific approach was too burdensome. "Having determined the phrase 'substantial portion' is ambiguous, our task is to resolve that ambiguity, not to compound it by tasking juries across the Nation with interpreting the meaning of the statute on an ad hoc basis," it wrote.
"The only interesting aside is that the court left open the question of how many components are required to be a 'substantial portion of the components,'" DiMatteo said. "Is two of five components substantial? What about three? That issue is left for another day."
Chief Justice John Roberts, a Thermo Fisher stockholder, recused himself following oral arguments upon learning that Life Tech was a subsidiary of the firm.