The Supreme Court’s recent decision in Life Technologies Corp. v. Promega Corp. raises important issues regarding the extraterritorial effect of patent law on global supply chains. The primary issue in the case is whether the supply of a single component of a multicomponent invention for manufacture abroad gives rise to liability for patent infringement under § 271(f)(1) of the Patent Act, 35 U.S.C. § 271(f)(1). The general rule is that US patents are only domestically enforceable; however, § 271(f)(1) provides a cause of action in the United States for patent infringement for supplying “a substantial portion of the components of a patented invention” outside the United States. You can’t ship iPhone parts for manufacture in China and claim it’s not patent infringement because it is outside the US.
In Life Tech., the Supreme Court held that 35 U.S.C. § 271(f)(1) does not apply when only a single component of a patented invention is exported, no matter how critical the single component may be to the overall invention. The court was “persuaded…that when as in this case a product is made abroad and all components but a single commodity article are supplied from abroad,” that it does not give rise to patent infringement under § 271(f)(1). The takeaway for patentees is to look to other sources to recover any potential losses from suppliers or licensees exporting single components of otherwise infringing inventions, such as including a liquidated damages provision for overseas conduct.