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Supreme Court Considers When US Patent Violations Are 'Induced' Abroad (arstechnica.com)

The US Supreme Court today will take up a case that will determine how much help an overseas manufacturer can get from the U.S. without running afoul of US patent laws. From a report on ArsTechnica: The case originates in a dispute between two competitors in the field of genetic testing. Both Promega Corporation and Life Technologies (selling through its Applied Biosciences brand) make DNA testing kits that can be used in a variety of fields, including forensic identification, paternity testing, medical treatment, and research. Promega licensed several patents to Applied Biosystems that allowed its competitor to sell kits for use in "Forensics and Human Identity Applications." The license forbade sales for clinical or research uses. In 2010, Promega filed a lawsuit in federal court, saying that Life Technologies had "engaged in a concerted effort to sell its kits into unlicensed fields," thus infringing its patents. A Wisconsin federal jury found that Life Tech had willfully infringed and should pay $52 million in damages. But the district judge overseeing the case set aside that verdict after trial, ruling that since nearly all of the Life Tech product had been assembled and shipped from outside the US, the product wasn't subject to US patent laws.

31 comments

  1. Play stupid games, win stupid prizes by Anonymous Coward · · Score: 0

    Looks like a deliberate attempt to export patent-controlled technology for an end use that violated a patent license. I hope they get the book thrown at them for manipulating jurisdictions this way.

  2. Lawyer up by paiute · · Score: 1

    Next time, don't use legalzoom forms for your contract. Pay some shyster to insert "worldwide" after "The license forbade sales for clinical or research uses."

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    If Slashdot were chemistry it would look like this:Cadaverine
    1. Re:Lawyer up by Anonymous Coward · · Score: 1

      Next time, don't listen to non-lawyers such as the above on slashdot. Forbidding worldwide sales in geographic areas not covered by the patent(s) being licensed would almost certainly be seen as anticompetitive and invalidate the entire license.

  3. Samsung wants it money back from Apple... by Anonymous Coward · · Score: 0

    Based on this ruling, Samsung is not guilty of infringement, since the Apple devices and Samsung devices are both made overseas. ...And then this happened:

    Samsung case goes back lower court; Apple can't be granted all profits for a infringing device as damages.

    https://www.cnet.com/news/samsung-apple-scores-supreme-court-win-patent-design-infringement-case/

    1. Re:Samsung wants it money back from Apple... by Anonymous Coward · · Score: 2, Interesting

      Uh... a patent protects the market. It'd be fine for Samsung to make the devices overseas in a jurisdiction where the devices didn't infringe, as long as they didn't then import and sell them in the U.S.

      Duh.

  4. Common issue by voislav98 · · Score: 1

    This is a fairly common issue in biotech. US patent office tends to grant patents far too easily in biotech, resulting in a situation where a product is patent-protected in the US, but not abroad. The decision is absolutely right, Life Technologies licensed the product for the US market, but not the rest of the world, as there was no need for that. The patented parts of the product were not produced in the US, so there was no US-based transaction of the protected property. The analogous situation would be that Sony was suing a distributor for distributing a movie whose copyright is still in place in the US, but has expired abroad on the basis that the DVD's that the movie is distributed on were produced in the US.

    1. Re:Common issue by Anonymous Coward · · Score: 0

      I would have thought that if said distributor was selling to US customers then it would have been afoul of the agreement. If its being sold in the US, I would think it would qualify for patent protection in the country. Wouldn't the point of sale be more important than the point of production?

    2. Re:Common issue by SlaveToTheGrind · · Score: 2

      The patented parts of the product were not produced in the US

      Um, one of them actually was. Whether that's enough to constitute infringement of Promega's U.S. patent is the exact question the Supreme Court is taking up:

      Whether the Federal Circuit erred in holding that supplying a single, commodity component of a multi-component invention from the United States is an infringing act under 35 U.S.C. 271(f)(1), exposing the manufacturer to liability for all worldwide sales.

    3. Re:Common issue by Joe_Dragon · · Score: 1

      but they can say that jays small shop is willing to ship any where so they are being sold to US customers and you can't shut down jays shop it's in the only supermarket for 50 miles in the very rural area that it is in but gets a good amount of tourists in the area that want to send local stuff home (not movies).

    4. Re:Common issue by voislav98 · · Score: 1

      It's more complicated than that. Patent was for a process, not any individual components. The component produced in the US (the enzyme) is not patent protected, it's a commonly used commodity. So the issue was, since the process is dependent on the commodity (it will not work without it), is this a substantive component of the device? Promega argued that any of the components is substantive, since it its absence invalidates the process. Courts view was that, since this component was a commodity that is not unique to this process, it is not a substantive component. The DVD analogy works pretty well, this particular enzyme is used for a bunch of things and it's not the "secret sauce" of this process.

    5. Re:Common issue by dknj · · Score: 1

      dude... do you even grammar?

    6. Re:Common issue by Anonymous Coward · · Score: 0

      he did. from a phone. where millenials know what he said. because they read twooter and fecesb00k.

    7. Re:Common issue by SlaveToTheGrind · · Score: 2

      Patent was for a process, not any individual components.

      Sorry, but that's just flat wrong. The asserted claim that gave rise to the appeal (claim 42 of U.S. Patent No. RE 37,984) is not on a process at all, but on a kit with five individual components:

      • 42. A kit for analyzing polymorphism in at least one locus in an DNA sample, comprising:
      • a) at least one vessel containing a mixture of primers constituting between 1 and 50 of said primer pairs;
      • b) a vessel containing a polymerizing enzyme suitable for performing a primer-directed polymerase chain reaction;
      • c) a vessel containing the deoxynucleotide triphosphates adenosine, guanine, cytosine and thymidine;
      • d) a vessel containing a buffer solution for performing a polymerase chain reaction;
      • e) a vessel containing a template DNA comprising i) a simple or cryptically simple nucleotide sequence having a repeat motif length of 3 to 10 nucleotides and ii) nucleotide sequences flanking said simple or cryptically simple nucleotide sequence that are effective for annealing at least one pair of said primers, for assaying positive performance of the method.

      The component produced in the US (the enzyme) is not patent protected, it's a commonly used commodity.

      That indeed is Life Tech's argument, which is not exactly a slam dunk given the fact that Section 271(f)(2) specifically requires a non-commodity component to find infringement, while Section 271(f)(1) does not. This argument also presumes that someone could never take a set of commodity components and combine them in a patentably distinct way.

      Courts view was that, since this component was a commodity that is not unique to this process, it is not a substantive component.

      You must mean the district court, which is irrelevant at this point. The Court of Appeals for the Federal Circuit held exactly the opposite -- that the commodity Taq polymerase is indeed "a substantial portion of the components of a patented invention" -- and that's the holding the Supreme Court is currently considering.

  5. Flipside by Anonymous Coward · · Score: 0

    This is an interesting issue, sure, but it really just comes down to whether the meaning of "substantial portion of the components" can really include the (apparent) one-of-five components originating in the U.S.

    Much more interesting to me is the underlying assumption that the Supreme Court was asked, but declined, to consider: whether you can "induce" yourself to infringe a patent. The pertinent part of the statute reads: "whoever... supplies or causes to be supplied... a substantial portion of the components of a patented invention... in such manner as to actively induce the combination of such components... in a manner that would infringe the patent."

    It's probably true that Congress intended to stop any overseas infringement with U.S. parts, but I don't think that's what they actually said.

  6. china makes cheap knockoffs and there rules by Joe_Dragon · · Score: 1

    china makes cheap knockoffs and there rules make so they can get away with it / the JV rule where the ownership usually is 51%-49% with the foreign firm owning the majority.

  7. Re:Trump's job just got easier by Anonymous Coward · · Score: 0

    Donald Trump says racist and bigoted stuff, and advocates racist and bigoted policies, but I'm dehumanizing.

    I'm sorry that your side of the country is so fucking stupid.. There is that better?

    As far as Trump's alleged victory whose votes he doesn't want to count...

    Imagine that - the Republican state government gave the black side of town defective voting machines, and now is refusing to count their votes, because of discrepancies caused by defective voting machines.

    Sounds like Donald Trump and the KKK / GOP don't have to make America hate again, because America already discards black votes.

    Isn't an inconsistency in votes a prime reason to perform recount, not a reason to block one?

    Not in the black part of town. Not when the KKK / GOP are in charge.

  8. Patents? by fustakrakich · · Score: 1

    Isn't this a simple contractual dispute? Probably there is no such thing as a simple contractual dispute. It just doesn't seem to be about patents as it is about licensing. Look up "Apple"? Yeah yeah, trademarks, but the idea is there.

    --
    “He’s not deformed, he’s just drunk!”
  9. Re:Trump's job just got easier by drew_kime · · Score: 0

    OK, couple things:

    Imagine that - more votes counted than ballots cast in DEMOCRAT-controlled areas of Michigan.

    Nowhere in the article does it say which number was higher: votes or ballots.

    But let's suppose your assumption is correct. Is there any possible explanation given in the article?

    "He blamed the discrepancies on the city’s decade-old voting machines, saying 87 optical scanners broke on Election Day. Many jammed when voters fed ballots into scanners, which can result in erroneous vote counts if ballots are inserted multiple times. Poll workers are supposed to adjust counters to reflect a single vote but in many cases failed to do so, causing the discrepancies, Baxter said."

    So shitty old hardware in the poor neighborhoods doesn't work well. And your solution isn't to fix or replace the shitty old hardware, it's to throw the votes out.

    I think there's a term for that, and it might rhyme with "voter suppression".

    --
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  10. Re:Trump's job just got easier by ShanghaiBill · · Score: 2

    No patent protection on tech manufactured overseas?

    Different things are patentable in different countries. For instance, America allows patents on software, and DNA sequences. Many other countries do not. There are also issues of jurisdiction. In this case the infringing product was sold in the UK, so maybe it should be resolved in British courts.

  11. Re: Trump's job just got easier by Anonymous Coward · · Score: 0

    calm down drew

  12. Just to clarify... by Theaetetus · · Score: 4, Interesting

    A Wisconsin federal jury found that Life Tech had willfully infringed and should pay $52 million in damages. But the district judge overseeing the case set aside that verdict after trial, ruling that since nearly all of the Life Tech product had been assembled and shipped from outside the US, the product wasn't subject to US patent laws.

    It's infringement under US Patent law to make, use, or sell a patented invention in the US. However, it's also infringement to import a patented invention, made elsewhere, into the US. So you can't, for example, escape liability by saying "oh, we don't manufacture in the US. We manufacture in Mexico and then heave them over Trump's wall to waiting buyers." So, something had been assembled and shipped from outside the US would still be subject to US patent laws if it was being shipped to the US.

    In this case, LifeTech manufactures their kits in the UK and sells them in Europe (and elsewhere). One component of the kit is manufactured in the US and shipped from the US to the UK, and the question is whether that component brings those sales under US patent law.

    So, just to clarify, the summary should be "since nearly all of the Life Tech product had been assembled and shipped from outside the US to locations outside the US, the product wasn't subject to US patent laws."

    1. Re:Just to clarify... by whoever57 · · Score: 2

      IMHO, this is one of the most idiotic part of US patent law. US companies should be free to manufacture and ship any product to another country, irrespective of US patents.

      The patents that should be applied are those in the other country at the time of import, using that country's laws.

      There is no gain to the US in preventing US exports of products that are in violation of US patents. The result of this crazy law is what happened here: the products will be manufactured elsewhere and shipped to the end market country with much less revenue to US-based manufacturers (including the patent holders)

      --
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    2. Re:Just to clarify... by packrat0x · · Score: 1

      It's not about the patent , it's about possibly wasting the court's time over a matter that
      was outside of US jurisdiction.

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      227-3517
    3. Re:Just to clarify... by Anonymous Coward · · Score: 0

      What is this outside US jurisdiction of which you speak? You know they have the most guns and money, and now with extra Trump !

  13. Re: Trump's job just got easier by Anonymous Coward · · Score: 0

    Move along Annytamy

  14. Re:Trump's job just got easier by dcw3 · · Score: 1

    "I think there's a term for that, and it might rhyme with "voter suppression"."

    By who? The city has been Democrat controlled since I lived there in the 60s. Did the Republicans come in and take over the election?

    --
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  15. Re:Trump's job just got easier by drew_kime · · Score: 1

    The Michigan state house and senate are both Republican controlled. Who do you think approves the budget for new voting machines?

    Michigan's aging voting machines a 'catastrophe waiting to happen'

    They knew about this in advance.

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    Nope, no sig
  16. Re:Trump's job just got easier by dcw3 · · Score: 1

    The Michigan state house and senate are both Republican controlled. Who do you think approves the budget for new voting machines?

    Michigan's aging voting machines a 'catastrophe waiting to happen'

    They knew about this in advance.

    Oh, and I suppose they collude to only put the good machines outside of the city. Seriously, wtf does that have to do with voter suppression? Tin foil hat much, or do you have actual evidence you can link to?

    --
    Just another day in Paradise