The Supreme Court issued a unanimous decision in Life Technologies v. Promega regarding the interpretation of "substantial portion" under 35 USC §271(f)(1). The Court held that (1) "substantial portion" refers to a quantitative, not qualitative, measure and (2) exporting a single component is insufficient to create liability without being tailored for infringement under §271(f)(2). However, the Court did not specify how many components would need to be exported to be considered a "substantial portion."

1. [Pick the date] | Pop quiz cont | 2
Taking Notes
Global Portfolio Management Strategies in view of
Life Technologies v. Promega
Contents
Life Tech v. Promega 1-3
Pop Quiz 3
Selected IP Precedent 4
As expected another patent decision came down last
month from the US Supreme Court. Life Technologies v.
Promega, Case No.: 14-1538 (Feb. 22, 2017). This case
involves the question of “substantiality” with respect to
inducing infringement by manufacturing some portion of a
device’s components in the United States for what would be
an infringing configuration abroad, had the configuration
been assembled domestically. 35 USC §271(f)(1). Global
portfolio managers will want to take notes, this question can
be an important one for domestic patent holders that sell
their products globally. One does not want a competitor to
benefit from the manufacture or sale of all or a “substantial
portion” of a patented invention locally and compete with
their products abroad without obtaining a license.
The Court was unanimous as to its holdings that: (1) the
“substantial portion” limitation in the statute was strictly a
quantitative measure (not qualitative) and (2) a singular
March 2017
Page-1

2. component of the patented invention is
insufficient to create liability under §271(f)(1),
without being tailored for infringement under
§271(f)(2).
Justice Sotomayor, writing for the Court,
started by answering the first question –
whether “a substantial portion of the
components of a patented invention” in
§271(f)(1) regards a quantitative measure?
Finding in the affirmative, the Opinion first
looked at the plain and ordinary meaning of the
word “substantial.” Though, the Court
conceded that “‘[s]ubstantial,’ as it is commonly
understood, may refer either to qualitative
importance or quantitatively large size.”
(emphasis added). Not finding a disposition of
the issue in the plain and ordinary meaning of
the term “substantial,” the Court next looked to
its neighboring text: “[b]oth ‘all’ and ‘portion’
convey a quantitative meaning.” Nothing in the
neighboring text gives clues as to intent for a
qualitative meaning. From there the court
employed a common canon of statutory
construction to construe the statute in a
manner as to give meaning to all terminology in
the code. “A qualitative reading would render
the phrase ‘of the components’ unnecessary
the first time it is used in §271(f)(1).” The Court
found it impractical to task fact-finders,
specifically jurors, with determining what a
“substantial portion” means from a qualitative
standpoint on a case-by-case basis.
(Interestingly enough, the “black box” in this
case found in favor of inducement based upon
Page-2
the manufacture of a single component; was
this boundary-pushing verdict reached by
interpreting “substantial portion” to have a
purely quantitative or quasi-qualitative
meaning? In any event, something about the
case caused them to rise to the occasion at the
district court level and find for liability.).
The Court’s Opinion to this point begs the
question: well, if quantitative is the measure of
substantiality, how much is enough? Leaving
us panting, the Court dodged that bullet, only
telling us that a single component in a
multicomponent invention is not enough. In
arriving at this conclusion, the Court looked to
the plain and ordinary meaning of the word
“components” in §271(f)(1). Seeing that it is
written in the plural sense the Court reasoned
that Congress must have intended for more
than one component to be exported in order
to trigger liability. The Court also found
guidance in the neighboring statute §271(f)(2)
indicating that it works in tandem with §(f)(1),
which defines the only circumstance where the
exportation of a single component could create
liability for inducement in a multicomponent
device. I.e., that is where the component is
“especially made or especially adapted for use
in the invention.” The Court reinforced the
presumption against the extraterritorial effect
of domestic laws, citing Microsoft v. AT&T.
Justice Alito and Justice Thomas signed
onto the Opinion in large part, concurring in
the judgment. They wrote separately,
however, to taunt the notion that Deepsouth
Life Technologies v. Promega cont.

3. Packaging (a case involving the exportation of all patented
components, which served as the impetus for this legislation)
provided any competent instruction as to the interpretation of
the term “substantial portion.” The overall Opinion granted
some substantial peace of mind to global manufacturers as
many answers were provided.
IP stakeholders now know that the extraterritorial effect
of §271(f) is more limited than before. Practically speaking,
however, we still don’t know how much of a multicomponent
invention (above a single component) need be shipped abroad
to create liability and licensing obligations. Certainly, with the
probability of being heard at the US Supreme Court in the low
1% range these days, one could reasonably rely on the Federal
Circuit’s more liberal bent on the matter to revise ones
portfolio-management strategy. Remember, the hippie CAFC
thought one component was enough, which suggests that two
components of ten might also be sufficient to impose liability.
Undoubtedly, the term substantial – whether quantitative
or qualitative in measure – is a comparative term. This
meaning that whatever subcomponents are shipped, their
“substantiality” will be compared to the completed invention.
Did the Supreme Court also rule that one fifth or 20% of the
invention is insubstantial?... I guess we will find out.
Until then, a reasonable portfolio-management strategy
considering Life Technologies would be to continue enforcing
licensing obligations for the manufacture or sale of
components greater than one. It can be expected, still, that
an optimistically reasonable manufacturer might now
challenge licenses for subcomponent manufacturing in any
quantity less than… “all” or something proximate to the same.
Pop Quiz
These two inventors each
celebrated their birthdays
in March, one on the 3rd
and the other on the 14th.
Their contributions are in
the areas of
communications and
physics, can you guess
who they are?
Answer to the last quiz:
February is National
Library Lover’s Month!!!
Page-3
Life Technologies v. Promega cont.
cont.

4. Authored by
Kristy J. Downing, Esq.
Send comments to
kristyjdowning@gmail.com
Page-4
 Secure Axcess, LLC v. PNC Bank National Association, et al.,
Case No.: 2016-1353 (Fed. Cir. Feb. 21, 2017)(reversing the
PTAB’s finding of unpatentability under §103 in a CBMPR
because the patent did not meet the definition of a “financial
product or service” as claimed. Examples of “financial
products” were found in several prior cases cited: Versata at
1312-13, 1325-26, Blue Calypso at 1339-40 and SightSound
at 1315-16.)(J. Lourie dissented as to the determination of
“financial” or non- “financial” as claimed because the
specification made “clear that the invention is to be used in
the management of a financial service.”).
 PersonalWeb Technologies, LLC v. Apple, Inc., Case No.: 2016-
1174 (Fed. Cir. Feb. 14, 2017)(the Patent Trial and Appeal Board’s
inter partes review findings of unpatentability under §103 were
reversed for lack of adequate support for the findings:
The Board did not sufficiently explain and support the
conclusions that (1) [the prior art] disclose[d] all of the
elements recited in the challenged claims of the ‘310 patent
and (2) a relevant skilled artisan would have been motivated to
combine [the prior art references] in the way the ‘310 patent
claims and [then] reasonably expect[] success.
).
Selected IP Precedent