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August 28, 2009

Federal Circuit Eliminates Infringement Liability for Overseas Supply of Process "Components"

Sitting en banc, the Federal Circuit recently decided in Cardiac Pacemakers, Inc. v. St. Jude Medical, Inc., ___ F.3d ___, 2009 WL 2516346 (Fed. Cir. 2009), that the patent law provision permitting patent owners to enforce their patents against infringers who sell the components of a patented invention in the United States for assembly abroad does not apply to patent claims covering methods or processes. In rendering its decision, the Court drew a sharp distinction between product or apparatus claims on the one hand, and method or process claims on the other. In making this delineation, the Federal Circuit suggests that method and process claims are subject to less robust protection than their more tangible counterparts.

Title 35 U.S.C. § 271(f) of the federal patent statute permits patent owners to enforce their intellectual property rights against those who supply from the United States all or a substantial portion of the components of a patented invention even though those components are uncombined, where the supplier actively induces their combination. For example, under Section 271(f), the owner of a patent for a lawn mower could enforce that patent against a company that sold the parts of that lawn mower from the United States to a buyer in another country even though the parts were sold unassembled.

Prior to its decision in Cardiac Pacemakers, the Federal Circuit allowed patent owners to use Section 271(f) to enforce their method and process claims in addition to product in apparatus claims. For example, in Union Carbide Chemicals & Plastics Technology Corp. v. Shell Oil Co., 425 F.3d 1366 (Fed. Cir. 2005), the Federal Circuit found that a company that exported a catalyst for use in a patented method abroad could serve as a basis for patent infringement liability under Section 271(f).

The Court's decision in Cardiac Pacemakers explicitly overrules Union Carbide, holding that Section 271(f) does not apply to method or process claims. In particular, the Court determined that the components of method and process claims are "intangible steps," and that supplying an intangible step is a "physical impossibility."

As a practical matter, this decision underscores the importance of claiming inventions as diversely as possible, and including both product or apparatus claims as well as method or process claims. Indeed, in its recent decisions addressing business method and software patents, the Federal Circuit has evidenced a distaste for method or process claims, making it more important than ever for intellectual property developers to find creative, tangible ways to claim their inventions.

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