Promega Corp. v. Life Technologies Corp.
773 F.3d 1338 (Fed. Cir. 2014)
Authored by Kevin Sipe
Statement of Facts: This case centers on Promega Corporation’s (“Promega”) ownership of five patents relating to the multiplex amplification of STR (short tandem repeats) loci. An STR locus occurs when a set of nucleotides (adenine, guanine, thymine, or cytosine) is repeated multiple times in a single region of a DNA strand. A string of two guanines followed by a thymine would be an STR locus if that exact strand were repeated. It may be useful to think of an STR locus as a randomly generated social security number—the more nucleotides that are studied in one strand, the more likely that the strand is utterly unique to that individual. Next, multiplex amplification is the process of making copies of a locus in order to create a detectable amount of DNA for further study. Notably, Promega owned four of the patents outright, while Promega exclusively licensed the fifth patent (“the Tautz patent”).
STR profiling is an important method of finding a DNA “fingerprint.” An individual may have a specific sequence of nucleotides that is unique to that person. This DNA “fingerprint” is thus useful for law enforcement agencies, as well as other scientific fields. Multiplex amplifications are generally better than monoplex amplifications, as multiple STR loci can be amplified simultaneously, quickly creating the required number of loci necessary for a sizeable sample. However, multiplex amplification is significantly more complicated because the loci have to be selected very carefully. If any locus overlaps with another locus, it can interfere with the entire process.
Life Technologies Corporation (“LifeTech”) manufactured DNA testing kits that law enforcement agencies use for forensic identification. Applied Biosystems (“Biosystems”) entered into a non-exclusive cross license agreement with Promega that allowed Biosystems to use the Promega patents to aid law enforcement in legal proceedings. Biosystems was a wholly owned subsidiary of LifeTech.
Procedural History: In 2010, Promega sued LifeTech and Biosystems in the Western District of Wisconsin for infringing on the Promega and Tautz patents, alleging that LifeTech had abridged the 2006 Cross License by selling STR testing kits in a manner that violated the agreement. Promega argued that the STR testing kits sold for research rather than law enforcement violated their patents. LifeTech responded that it was indeed licensed to sell STR testing kits for research and counterclaimed that Promega’s patent claims were invalid.
After both parties moved for summary judgment, the district court ruled that LifeTech’s sale of STR kits for purposes other than law enforcement infringed upon the patents, adopting a very narrow reading of the license that limited the use to forensic investigations conducted by police officers. Thus, any sale by LifeTech outside of this specific field constituted infringement.
The case went to a jury for an assessment of damages, and the jury awarded Promega $52 million in lost profits—10% of the gross sales of LifeTech that involved Promega’s patents. The instructions given to the jury were to find the total dollar amount of sales that were outside of the narrow scope of forensic investigations. The ultimate verdict was willful infringement upon the patents.
After the jury verdict, LifeTech moved for judgment as a matter of law (“JMOL”), claiming that Promega failed to adequately prove damages. The district court granted LifeTech’s JMOL and vacated the prior finding of infringement.
Both parties appealed the ruling. Promega’s appeal focused on the JMOL and the district court’s vacatur of the jury’s verdict and damage award. LifeTech appealed two aspects of the decision. First, LifeTech appealed the ruling that Promega’s patents were nonobvious and enabled. Second, they challenged the finding that it infringed upon the patents by selling testing kits to non-law enforcement entities.
Questions Presented: (1) Whether Promega’s four patents (not including the Tautz patent) are enabled and obvious. (2) Whether the district court’s finding that LifeTech is not licensed to use the Promega patents and the Tautz patent for practices other than law enforcement is valid.
Holding: (1) The Federal Circuit reversed the district court’s position, finding that Promega’s patents were not enabled and (2) upheld the district court’s judgment that the 2006 Cross License prohibited the use of the Tautz patent for practices other than law enforcement.
Reasoning: The district court read the four Promega patents (not including the Tautz patent) broadly, finding that even if the patented locus was merely a single link in a long DNA chain, the patent was still enabled. The enablement requirement is defined in 35 U.S.C. § 112, which states the written description must be clear enough as to “enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same.”
A. The Skilled Artisan
While the Federal Circuit admits that the DNA industry is unpredictable, it found that an STR locus in a long DNA strain was merely a singular component of the strain, rather than such a comprehensive element as to cover the entire strain. Thus, the Promega patent did not enable a skilled artisan to “practice the full breadth of this claim scope without undue experimentation.” Promega Corp. v. Life Technologies Corp., 773 F.3d 1338, 1350 (Fed. Cir. 2014). The Federal Circuit relied on a bevy of precedent to reach this point.
In Magsil Corp. v. Hitachi Global Storage Techs Inc., 687 F.3d 1377 (Fed. Cir. 2012), the Federal Circuit held that there needed to be at least a significant change of resistance in computer hard drive disks in order to evade potential patent liability. Without such a standard, patent claimants would assert their rights even if the change in resistance was very significant. The Federal Circuit mirrored this precedent by not drawing a brightline as to where exactly Promega’s claims are enabled. Instead, the court found that it was sufficient to generally conclude that a skilled artisan could not identify the sets of STR loci due to their large size and complexity.
In Wyeth & Cordis Corp. v. Abbott Labs., 720 F.3d 1380 (Fed. Cir. 2013), the patent-in-question was for a drug compound with very specific properties and structures. However, the patentee attempted to claim thousands of others compounds not disclosed by the patent. The Federal Circuit found that a skilled artisan would not be able to determine whether any given drug compound produced the desired effects without an incredibly intensive testing process. Therefore, the patent did not include all of the claimed compounds within the scope. The court used the precedent here by claiming that the cases are very similar. Promega was attempting to expand its patent to a wide swath of particular DNA combinations. However, it would require a skilled artisan to use incredibly difficult tests to determine if the DNA combinations would produce anything useful to identification.
Certainly, a small amount of experimentation would still lead to a patent extending to previously unspecified areas. But it is the unique aspects of the experimentation that concern the Federal Circuit. In Johns Hopkins Univ. v. CellPro, Inc., the Federal Circuit found that even a large amount of experimentation was reasonable, so long as it is “merely routine” or the patent “provides a reasonable amount of guidance” regarding the direction of experimentation. 152 F.3d 1342, 1360-61 (Fed. Cir. 1998). The Federal Circuit determined here that significant experimentation would be necessary to enable the full scope of coverage—experimentation that did not have sufficient guidance from the patent itself.
The four Promega patents were considered invalid for lack of enablement. The patents did not enable a skilled artisan to practice without undue experimentation. The denial of LifeTech’s motion for summary judgment was reversed. Because the four Promega patents were considered invalid for lack of enablement, the district court needed to only consider the Tautz patent for infringement.
A party can infringe upon a patent based on activity that does not occur within the United States. 35 U.S.C. § 271(f)(1) states, “[w]hoever [actively induces] 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.” This is known as “inducement.”
The inducement question comes down to whether or not the “actively induce the combination” prong required only the intent to cause the patent to be infringed outside the United States or the involvement of a particular third party. The Federal Circuit held that no third party was required.
First, the court relied on definitions of the word “induce” to prove that the word “induce” alone is not sufficient to imply a third party. If the drafters of the law wanted third parties to be included, they could have used a phrase like “induce another.”
Second, the third party requirement did not show up in the legislative history of the amendment. “In order to be liable as an infringer under paragraph (f)(1), one must supply or cause to be supplied ‘all or a substantial portion’ of the components in a manner that would infringe the patent if such combination occurred within the United States.” Section-by-Section Analysis: Patent Law Amendments of 1984, 130 Cong. Rec. 28,069 (1984).
Third, the adoption of § 271(f) was to avoid this very loophole. In Deepsouth Packing Co. v. Laitram Corp., the Supreme Court was faced with a similar fact pattern in the field of shrimp deveining. The Court found that because a shrimp deveining machine was exported with the elements unassembled, it did not count as infringement if a foreign party then assembled the elements together. § 271(f) was passed to close this exact loophole.
LifeTech argued that Global-Tech Appliances, Inc. v. SEB SA required a third party based on the Supreme Court’s interpretation of the phrase “actively induces infringement.” 35 U.S.C. § 271(b). The Federal Circuit distinguished Global-Tech due to § 271(b)’s lack of strict liability.
C. Substantial Portion of the Components
The difference between the Promega patents and the Tautz patent was small, but significant. The Tautz patent included a claim for Taq polymerase, an enzyme that enables a critical function of DNA testing. Without the Taq polymerase, a DNA testing kit would be next to useless.
The district court held that a single component of an invention could never satisfy the “substantial portion of the components test” propagated in 35 U.S.C. § 271(f)(1). LifeTech argued that the reference to components in the plural indicated that multiple components must be offered outside of the United States. The Federal Circuit rejected this argument.
First, the Federal Circuit replied with the Dictionary Act, which states, “words importing the plural [can] include the singular.” 1 U.S.C. § 1. Second, the Federal Circuit used grammatical structure. If Congress wished to make clear that a singular component was insufficient, they could have used a phrase like “all or a substantial portion of the components.” Third, the Federal Circuit moves to the very next subsection, arguing that § 271(f)(2) is designed for cases where a singular component is all that is necessary to violate the patent structure and is thus distinguished from § 271(f)(1). Fourth, the Supreme Court had already answered this question in Microsoft v. AT&T Corp., where the Court held that § 271(f) could apply to the export of a single component.
In this case, the component was the Taq polymerase covered by the Tautz patent. LifeTech constructed components of DNA testing kits in the United States, including the Taq polymerase. After assembly in the United Kingdom, LifeTech subsequently sold those DNA testing kits to industries other than law enforcement. The Federal Circuit held that this was in violation of the Tautz patent. The court found the Taq polymerase to be the compelling factor. Because the kit would be useless without the Taq polymerase, the Taq polymerase was such a significant component that the Tautz patent extended to cover those kits.
LifeTech argued that the research, education, and training clause from the patent meant that it could also be sold to universities. The Federal Circuit disregarded this argument, holding that this clause was clearly meant to apply specifically to the research, education and training as it applied to police officers.
The kits were ultimately assembled in the United Kingdom, which may have helped LifeTech escape liability. However, the Federal Circuit found compelling evidence that LifeTech induced its subsidiary in the United Kingdom to produce the kits in violation of U.S. patent law. The court thus found that there was sufficient evidence to support the jury’s finding that LifeTech was liable for patent infringement.
Dissenting Opinion: Chief Judge Prost’s dissented only to Section II(c) of the majority decision (regarding inducement). The dissent argued that, because the U.K. subsidiary was wholly owned, it was impossible for LifeTech to induce itself to manufacture DNA testing kits. First, the Supreme Court had held in the past that “induce” implicitly meant “induce another” in Global-Tech Appliances Inc. v. SEB SA. Second, the dissent joined with the concurrence in doubting the veracity of the legislative history. While it is possible that Congress intended the result in this case, it was impossible to know for sure. Third, the dissent argued that the majority’s reading of Deepsouth Packing Co. v. Laitram Corp. was too broad, as the justices in that case were very careful to issue a narrow decision. Fourth, the dissent believed that Microsoft Corp. v. AT&T Corp. admitted that while Congress could not possibly address all permutations and loopholes, judicial reservation was key in the field of extraterritorial liability.
Additionally, while the majority believed that it would be illogical to allow a company to do overseas what it cannot do in the United States, the dissent claimed that the statutory language on that specific section is ambiguous enough to make Congressional intent opaque.