I’m really quite disturbed by a recent Federal Circuit decision which held that method claims can be infringed if the method is performed abroad, so long as “components of the method” are exported from the US. See Union Carbide v. Shell Oil Co. (Fed. Cir. 2005). This case is so wrong that I don’t know where to begin. The problem is that until it is overruled (not unless, until), it is going to create mayhem in patent law and business planning.

The authority, of course, for patent infringement comes solely from statute. There is no federal common law of patent infringement or unfair competition. The statute at issue provides:

(f)(1) Whoever without authority supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce 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, shall be liable as an infringer.

Congress enacted what is now Section 271(f)(1), as you know, in response to the Supreme Court’s decision in Deepsouth, which held that it was not infringement to assemble abroad a product even where the unassembled parts were shipped from the United States. It is clear that 271(f) was designed to, and seems largely to have, made it so that the owner of a patent on a product can prevent someone in the US from exporting most or all of the components with the intent that they be assembled abroad. That was its purpose, and it seems to have done the job.

Does 271(f) do more than make it an infringement to export components of a patented product for assembly abroad? The Union Carbide court said so. It held that 271(f)(1) permits the owner of a patent on a method to prevent the exportation of components that will be used abroad to practice the claimed method.

I just wrote a book on statutory interpretation and so maybe the errors are obvious to me. But let’s see.

Remember that method claims cover only use of the method. You’re supposed to construe statutes with ordinary meaning. Let’s try. How do I export a step in a method? It’s not enough to export instructions: instructions are not the doing of the method. Is there a “component” of a “method”? I’ve never heard anyone refer to a step in process as a component. “Have you performed all the components in the process?” Now, “have you used all of the components specified in the method claim” makes sense, but notice that it is not the component that is an element in the method: it is the step of using that component. I can export a component that can be used in a method claim, but what is covered by the method claim is the use of the component, not the component.

Suppose you think I’m wrong. One core principle of statutory construction is that you have to construe a statute as a whole. Is the word “component” used somewhere else in 271? You bet. Check this out:

(

c) Whoever offers to sell or sells within the United States or imports into the United States a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer….

Notice that Congress used two words: components describe what are parts of patented products; “material or apparatus” are “for use in practicing a patented process.” Thus, Congress used distinct phrases — components are what go into products, materials or apparatus are what are used to practice method claims — in this section. Thus, under this section, if someone sells in the US a material or apparatus used to infringe (and it’s not a stapel article, etc), then they infringe.

Now look back at 271(f): it says people who export components that are assembled abroad infringe; it says nothing about materials an apparatuses (apparati?) used for practicing a patented product.

So, where we are is the ordinary language of the statute doesn’t apply, and the phrase “component” is used in the same statute to apply only to product claims.

How did the Federal Circuit miss this? I don’t know. I do know, however, that the case is already the subject of discussion among CLE programs I’ve attended. “How do you draft a method claim to insure it includes components” was one question I heard asked.

It can’t because they won’t. But we won’t get this fixed for a while.

Tell me why I’m wrong, and yes I get mad about this sort of decision.

David Hricik
Mercer Law School

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