Lead Opinion
Cardiac Pacemakers, Inc., Guidant Sales Corporation, Mirowski Family Ventures, LLC, and Anna Mirowski (collectively, “Cardiac” or “appellants”) appeal from the decision of the United States District Court for the Southern District of Indiana granting summary judgment of invalidity of claim 4 of U.S. Patent 4,407,288 (“the '288 patent”). See Cardiac Pacemakers, Inc. v. St. Jude Med., Inc.,
St. Jude Medical, Inc. and Pacesetter, Inc. (collectively, “StJude”) cross-appeal from the district court’s decision permitting damages under 35 U.S.C. § 271(f). See Id. at 1027-30. The en banc court reverses the district court’s determination that 35 U.S.C. § 271(f) applies to method claims and hence permits damages in this case on devices exported where the claimed method is carried out in countries other than the United States (see Section C.2 of this opinion).
BACKGROUND
This patent dispute concerning implantable cardioverter defibrillators (“ICDs”), has been before us on four previous occasions. See Cardiac Pacemakers, Inc. v. St.
ICDs are small devices that detect аnd correct abnormal heart rhythms that can be fatal if left untreated. The ICDs in this case work by administering electrical shocks to the heart, those shocks being calibrated to restore normal heart functioning. Implantable cardiac devices can be programmed to administer different types of electrical shocks, including pacing shocks (which are relatively low power shocks), defibrillation (relatively high power shocks), and cardioversion, the definition of which has been a source of dispute throughout the protracted litigation of this case.
Cardiac owns various patents relating to cardiac defibrillators, including the '288 patent. The '288 patent claims a method of heart stimulation using an implantable heart stimulator that is capable of detecting heart arrhythmias, or irregular heart rhythms, and of being programmed to treat the arrhythmia through either single or multimode operation. Multimode operation allows a heart stimulator to respond to arrhythmias by applying first one type of shock and then, if unsuccessful, administering a second type of shock. Claim 4 of the '288 patent, the only claim at issue on appeal, is dependent on claim 1:
1. A method of heart stimulation using an implantable heart stimulator capable of detecting a plurality of arrhythmias and capable of being programmed to undergo a single or multi-mode operation to treat a detected arrhythmia, corresponding to said mode of operation the method comprising:
(a) determining a heart condition of the heart from among a plurality of conditions of the heart;
(b) selecting at least one mode of operation of the implantable heart stimulator which operation includes a unique sequence of events corresponding to said determined condition;
(c) executing said at least one mode of operation of said implantable heart stimulator thereby to treat said determined heart condition.
4. The method of claim 1, wherein said at least one mode of operation of said implantable heart stimulator includes cardioversion.
The litigation history of this case is complicated and protracted, but for clarity’s sake we will recite the portion of that history that is relevant to this appeal. Cardiac brought an infringement action against St. Jude on November 26, 1996, accusing St. Jude of selling ICDs that infringed a number of Cardiac’s patents. In 2001 the case was tried before a jury. The jury returned a verdict awarding Cardiac $140 million in royalties for infringement of U.S. Patent 4,316,472 (“the '472 patent”). Cardiac Pacemakers, Inc. v. St. Jude Med., Inc., No. IP-96-1718-C,
Following the trial, the district court granted several post-verdict motions that overturned the jury verdict and conditionally granted a new trial on several issues that St. Judе had lost at trial. First, the court granted St. Jude judgment as a matter of law (“JMOL”) on invalidity and non-infringement of the '472 patent, thereby vacating the jury’s $140 million damage award. Id. at *100. Cardiac has not appealed any of the district court’s decisions regarding the '472 patent.
Regarding the '288 patent, which the jury found valid and not infringed, the district court granted St. Jude’s JMOL motions for invalidity due to obviousness and lack of best mode. Id. at *100-*133. The court denied St. Jude’s JMOL motion of unenforceability, in which St. Jude alleged that Cardiac had failed to pay proper maintenance fees. Id. at *133-*143. Finally, the court further denied Cardiac’s motion for a new trial on infringement. Id. at *195 — *196. The court granted a conditional new trial on the obviousness issue and the inequitable conduct issue in the event that the JMOL decision finding the '288 patent obvious was reversed on appeal. Id. at *114, *143.
Following the district court’s post-trial decisions, Cardiac appealed the district court’s grant of St. Jude’s motion for JMOL of invalidity of the '288 patent as well as the court’s rejection of Cardiac’s motion for JMOL of infringement of claim 4 of the '288 patent. On appeal, we reversed on both issues. 200k Opinion,
Regarding infringement, we reversed the court’s claim construction and therefore vacated the jury’s finding of noninfringement. We held that the district court had erred in finding that the “determining” step of claim 4 was a “step-plus-function” limitation under 35 U.S.C. § 112 ¶ 6 and remanded the case to the district court to modify its claim construction of the “determining” step in accordance with our opinion. Id. at 1382. Lastly, we agreed with St. Jude that our reversal of the district court’s claim construction entitled St. Jude to a “jury determination on the question of infringement.” Id. at 1383. We summarized our holding as follows:
We affirm in part and modify in part the district court’s claim construction, reinstate the jury verdict of validity, and remand for a new trial on infringement and reassessment of damages.
Id. at 1374.
On remand, the case was returned to Judge Hamilton. Cardiac challenged that assignment, claiming that Seventh Circuit Rule 36 required automatic reassignment of a case remanded for a new trial to a new judge. Judge Hamilton ultimately agreed with Cardiac to reassign the case to another judge. He then certified the issue for an interlocutory appeal. St. Jude
With that background in mind, we now turn to the decisions of the district court that are at issue on appeal. After that remand, both sides submitted to the district court proposed claim cоnstructions for the disputed “determining” limitation in claim 4 of the '288 patent, and the district court adopted Cardiac’s definition of “determining” with one minor change (which is not challenged on appeal). Damages Decision,
The district court also rejected Cardiac’s motion for summary judgment on St. Jude’s affirmative defense of inequitable conduct. The court found that “all of St. Jude’s arguments concerning unenforceability” could be asserted on remand. Id. The district court found that this court’s mandate “did not even suggest, let alone require,” that the issue of inequitable conduct be precluded from adjudication on remand. Id. at 1034.
Finally, the district court granted in part and denied in part St. Jude’s motion for summary judgment limiting damages. The court granted St. Jude’s motion to limit damages to ICDs that actually performed the claimed steps. Id. at 1040. The court held that because claim 4 is a method claim, only those devices that “can be shown to have executed” the claimed method were to be used in the damages calculation. Id. at 1042. However, the court rejected St. Jude’s motion to limit damages to U.S. sales of ICDs. The court held that, according to Federal Circuit case law regarding 35 U.S.C. § 271(f), Cardiac’s potential damages included the sale of infringing devices supplied from the United States to other countries. Id. at 1042-44.
Following the district court’s rulings on claim construction and the various summary judgment motions, Cardiac petitioned this court for a writ of mandamus
[W]e repeat that we “remand[ed] for a new trial of infringement and reassessment of damages,” including re-construction by the district court of the “determining” provision in light of our ruling that sеction 112 ¶ 6 did not apply. We also recognized that a new claim construction may raise directly related new issues, “such as whether the now-asserted scope of the claims is supported by the specification.”
All of the other issues on remand were finally decided, and are not subject to reopening on remand.
2006 Writ Order,
On March 26, 2007, the district court granted Cardiac’s motion for summary judgment of infringement, while also granting St. Jude’s motion for summary judgment of anticipation. Invalidity Decision,
Cardiac timely appealed and we have jurisdiction pursuant to 28 U.S.C. § 1295(a)(1).
DISCUSSION
We review the district court’s grant of summary judgment de novo, “applying the same criteria used by the district court in the first instance.” Rothe Dev. Corp. v. Dep’t of Defense,
A. Invalidity
On appeal, Cardiac argues that the district court erred in granting summary judgment of invalidity. Preliminarily, Cardiac argues that invalidity wаs not at issue on remand because the mandate rule precluded St. Jude’s anticipation defense. Alternatively, Cardiac argues that if we find that anticipation was still at issue on remand, then we should also find that the district court erred in finding that no genuine issues of material fact existed as to whether Duggan and Denniston were anticipating references, particularly with respect to whether Duggan teaches cardioversion and whether Denniston teaches programming.
In response, St. Jude argues that while our 2001 Opinion and the mandate rule bar consideration of obviousness on remand, St. Jude is permitted to bring an anticipation defense. According to St. Jude, our reversal of the “determining” construction in the 2001 Opinion created new validity defenses due to the changed claim scope. St. Jude also claims that the
We agree with Cardiac that anticipation was not properly before the district court on remand. In the 2004 Opinion, we clearly stated that the purpose of the remand was “for a new trial of infringement and reassessment of damages.” 2004 Opinion,
Of course, as St. Jude rightly notes throughout its brief, our 2004 Opinion altered the district court’s claim construction, and in the 2006 Writ Order we left open the possibility that a new claim construction ruling “may raise directly related new issues.” 2006 Writ Order,
Thus, the question before us now is whether anticipation is a “directly related new issue” in this case, or whether our reinstatement of the jury’s validity verdict precludes raising anticipation on remand. The jury found the claims of the '288 patent nonobvious in light of numerous prior art references, including both Duggan and Denniston. In overturning the jury’s validity verdict, the district court permitted St. Jude to raise anticipation arguments on remand that St. Jude did not raise at trial. The court based its decision on the fact that “St. Jude may have chosen not to pursue some invalidity defenses, including anticipation, at trial,” due to the erroneous claim construction of “determining” used at trial. Damages Decision,
While it is true that a changed claim construction may permit new anticipation arguments, that cannot be the case here because the “determining” limitation never served as a basis for distinguishing the prior art from the '288 patent and is therefore not a “directly related new issue.”
At trial, Cardiac did not dispute that the “determining” step was in the prior art and did not raise that step as a distinguishing feature between the '288 patent and Duggan or Denniston. See Reply Br. of Plaintiffs-Appellants at 12-14, 2004 Opinion (arguing that Duggan and Denniston do not teach cardioversion); Br. of Plaintiffs-Appellants at 21-24, 2004 Opinion (arguing that the jury heard evidence that the prior art did not teach “cardioversion,” “multi-mode operation,” and “programmability”); cf. id. at 22 (noting evidence that the Baker reference does not perform, among other things, the determining step). The evidence of obviousness during the trial primarily focused on whether the prior art taught multi-mode with cardioversion. See Br. for Defendants-Cross Appellants at 7-8, 2004 Opinion (stating that with regard to obviousness, the only disputed limitations were the claimed invention’s ability to perform multimode operation and the use of cardioversion). Duggan and Denniston were
The initial, erroneous construction of “determining” was appealed by Cardiac in order to challenge the jury’s verdict of noninfringement. While a change in claim construction often may affect a jury’s validity determination, in this case it does not. Therefore, St. Jude cannot now be allowed to claim that its anticipation arguments involving Duggan and Denniston are “directly related” to the change in the construction of “determining,” because the jury’s validity determination, which we reinstated, did not depend upon that erroneous definition. Thus, in light of the jury’s verdict and our previous mandates unique to this case, we reverse the district court’s summary judgment of invalidity and reinstate the jury’s verdict that the '288 patent has not been shown to be invalid.
B. Inequitable Conduct
Cardiac asks this court to instruct the district court that enforceability defenses are precluded from any remand order. According to Cardiac, the mandate rule requires such a determination. St. Jude counters that inequitable conduct is still at issue on remand because of the district court’s explicit ruling that “in the event of a new trial ... the inequitable conduct defense shall be part of the trial.” Cardiac Pacemakers,
The district court characterized St. Jude’s inequitable conduct arguments as falling into three broad categories. The first category involved misrepresentations made before the PTO. Damages Decision,
We conclude that St. Jude has waived the first two categories of inequitable conduct arguments. St. Jude either failed to pursue those arguments at trial, thereby waiving the arguments, or failed to appeal the arguments to this court. Id. St. Jude cannot now be heard to raise those arguments again on remand.
A third category of inequitable conduct arguments relates to misrepresentations made by Cardiac’s expert, Dr. Bourland. The jury rejected many of St. Jude’s inequitable conduct arguments based on Dr. Bourland’s conduct, and the district court declined to reverse the jury’s decision. However, due to revelations that came to light after trial, the court found that Dr. Bourland’s conduct entitled St. Jude to a new trial. Cardiac Pacemakers,
With the stipulation removing Dr. Bourland’s conduct as a basis for an inequitable conduct defense, St. Jude cannot now be heard to raise inequitable conduct on remand. Any language from the district court’s opinion indicating otherwise would be an abuse of the court’s discretion to grant a new trial. We therefore reinstate the jury’s verdict of enforceability of the '288 patent and hold that enforceability should not form part of any new trial on remand.
C. Damages
Cardiac argues that the district court erred by limiting damages to those ICDs that аctually performed cardioversion during the infringement period. According to Cardiac, St. Jude waived its damages argument by not raising it at trial. Furthermore, Cardiac argues, Stryker Corp. v. Intermedics Orthopedics, Inc.,
St. Jude responds that it is not precluded from arguing for limited damages because the remanded damages assessment was significantly altered from the assessment that occurred at trial. Because Cardiac is now asserting only a method claim, St. Jude contends, any damages claim must be limited accordingly. Furthermore, in a cross-appeal, St. Jude argues that the district court erred in concluding that Cardiac could recover damages for overseas sales of St. Jude’s ICDs under 35 U.S.C. § 271(f).
1. Damages Limited to Devices Performing Claimed Method
We agree with St. Jude that the district court correctly limited damages to those devices that were shown to infringe the '288 patent. As a preliminary matter, we find that St. Jude has not waived its argument to limit damages. The jury was presented with a damages decision regarding two claims of the '288 patent: an apparatus claim that has since been abandoned by Cardiac and the method claim (claim 4) that is at issue on appeal. While both patent claims were at issue during trial, St. Jude would not have benefited if it had moved to limit damages because the damages on the apparatus claims would have covered any sale of an apparatus that could execute the elеments of the claims. However, now only a method claim is at issue; thus, St. Jude stands to benefit from limiting damages to devices that actually practice the method. As the district court noted, the purpose of the waiver rule is to prevent a party from arguing on remand what it should have argued at trial or on appeal. Damages Decision,
The district court was also correct in limiting damages to sales of ICDs that performed the steps of the claimed method. Cardiac disputes the district court’s ruling by pointing this court to Stryker, in which we affirmed a district court’s decision awarding damages on sales of an infringing prosthesis, even in cases in which a distal sleeve, a required element of the claim, was not included. See Stryker,
In the present case, however, Cardiac is not seeking lost profits on an apparatus and thereforе cannot rely on the reasoning in Stryker. Here, Cardiac seeks royalties on its patented method. “A method claim is directly infringed only by one practicing the patented method.” Joy Tech. v. Flakt, Inc.,
In Stryker, the court found that because the entire patented apparatus was “supplied” during surgery, the patent was infringed by any sale of the device. Stryker,
2. Section 271(f)
The court hears this section C(2) en banc. The district court, following our decision in Union Carbide Chemicals & Plastics Technology Corp. v. Shell Oil Co.,
a. Background on 35 U.S.C. § 271(f)
Before analyzing the merits of St. Jude’s cross-appeal, some background on Section 271(f) is in order. In Deepsouth Packing Co. v. Laitram Corp.,
Section 271(f) provides in full as follows:
(1) Whoever without authority supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce 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.
(2) Whoever without authority supplies or causes to be supplied in or from the United States any component of a patented invention that is especially made or especially adapted for use in the invеntion and not a staple article or commodity of commerce suitable for substantial noninfringing use, where such component is so made or adapted and intending that such component will be combined 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.
35 U.S.C. § 271(f).
This court first dealt with Section 271(f) in Standard Havens Products, Inc. v. Gencor Industries, Inc.,
We more fully addressed Section 271(f) in Eolas Technologies, Inc. v. Microsoft Corp.,
Shortly after Eolas issued, we decided a similar issue in AT & T Corp. v. Microsoft Corp.,
In the same year that we decided Eolas and AT&T I, we decided a third case dealing with the scope of Section 271(f). Our discussion of Section 271(f) in NTP, Inc. v. Research in Motion, Ltd. was limited to the question whether infringement liability was somehow proper under Section 271(f) where RIM supplied BlaekBerry handheld devices to customers in the United States, and use of those devices (in concert with a relay of the Blackberry network located in Canada) would infringe NTP’s patented method if all steps were performed in the United States.
In 2006, a panel of this court explicitly held that Section 271(f) applied to method claims. In Union Carbide, the court was presented with a case in which a catalyst, which was necessary to perform a patented method for producing ethylene oxide, was exported from the United States.
The Supreme Court subsequently examined Section 271(f) when it granted certiorari and reversed our decision in AT&T I. AT&T II,
b. Analysis
In construing the terms of Section 271(f), we do so “in accordance with [their] ordinary or natural meaning.” Id. at 449,
Cardiac argues that the use of the term “patented invention” in 271(f) indicates Congress’s intent to include all classes of invention within that statute’s reach. Cardiac rightly notes that “invention” is defined in the U.S. Code to include “any new and useful process, machine, manufacture or composition of matter,” 35 U.S.C. § 101, and thus is broad enough to include method patents. However, examination of the statute before us is not quite so simple. While the isolated “patented invention” language in Section 271(f) by itself might seem to extend to all inventions within the definition of “invention,” we cannot disregard all the other language of that section, which, as we shall demonstrate, makes it clear that it does not extend to method patents. We also cannot ignore the context of the statute and its legislative history, which lead us to the same conclusion, which is that Section 271(f) does not encompass method patents.
In interpreting the terms of Section 271(f), it is critical to recall what a “patented invention” consists of when method patents are at issue. We have noted “the distinction between a claim to a product, device, or apparatus, all of which are tangible items, and a claim to a process, which consists of a series of acts or steps.” In re Kollar,
Cardiac relies on the Supreme Court’s language in Quanta Computer, Inc. v. LG Electronics, Inc., — U.S.-,
Our precedents draw a clear distinction between method and apparatus claims for purposes of infringement liability, which is what Section 271 is directed to. See, e.g., Joy Tech.,
Cardiac disagrees that a component of a patented method is a step of that method. Instead, Cardiac urges us to adopt a definition of “component” that would encompass “the apparatus that performed the process.” Appellants’ Br. 15. That position is clearly contrary to the text of Section 271(f). It is not even supported by the lone amicus brief we have received in favor of including method patents within Section 271(f)’s reach. Br. for Ormco Corp. as Amicus Curiae Supporting Application of Section 271© to Method Claims, No. 07-1296,-1347 at 11 (Fed.Cir. Apr. 13, 2009) (“Ormco Br.”) (“[T]he components of a method are the steps or acts that comprise the method.”).
Another subsection of Sectiоn 271 further undercuts Cardiac’s proposed definition of “component.” It is a “fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme.” Davis v. Mich. Dept, of Treasury,
Although such patented methods do have components, as indicated, Section 271(f) further requires that those components be “supplied.” That requirement eliminates method patents from Section 271(f)’s reach. The ordinary meaning of “supply” is to “provide that which is required,” or “to furnish with ... supplies, provisions, or equipment.” Webster’s Third New International Dictionary of the English Language 2297 (1981). These meanings imply the transfer of a physical object. Supplying an intangible step is thus a physical impossibility, a position that not even Cardiac seems to dispute. See Appellants’ Br. 15 (arguing that steps of a patented process, “which conceptually could not be supplied from the United States,” were not the components of the process). As we have noted before, “it is difficult to conceive how one might supply or cause to be supplied all or a substantial portion of the steps in a patented method in the sense contemplated by” Section 271(f). NTP,
One amicus curiae brief has argued that one might supply a physical object that is the result of one of the steps of a patented process and combine that object with the remaining steps abroad. Ormco Br. at 12-14. That argument, however, confuses the result of a method step with the step itself. See id. (arguing that one who “supplies the results of” patented steps meets the requirements of Section 271(f)) (emphasis added). Section 271(f) does not forbid the supplying of products that are the result of steps of the patented method; rather it forbids the supply of the components themselves. 35 U.S.C. § 271(f) (imposing liability on one who “supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention”). Thus, because one cannot supply the step of a method, Section 271(f) cannot apply to method or process patents.
Our holding today is fully consistent with the legislative history of Section 271(f). As discussed above, in enacting Section 271(f), Congress intended to overturn the holding in Deepsouth. AT&T II,
Cardiac argues that a single statement by former Commissioner of Patents, Donald Banner, indicates that Congress under
Any ambiguity as to Congress’s intent in enacting Section 271(f) is further resolved by the presumption against extraterritoriality. The Supreme Court took a narrow view of Section 271© by stating that the presumption against extraterritoriality still applies to Section 271©, even though that section specifically extends the reach of U.S. patent law in a limited manner. AT&T II,
In sum, the language of Section 271®, its legislative history, and the provision’s place in the overall statutory scheme all support the conclusion that Section 271© does not apply to method patents. We therefore overrule, to the extent that it conflicts with our holding today, our decision in Union Carbide Chemicals & Plastics Technology Corp. v. Shell Oil Co.,
We now turn to the facts of this case. Cardiac alleges that St. Jude violates Section 271© when it ships its ICDs outside of the United States. We disagree. Claim 4 of the '288 patent is comprised of the steps of determining a heart condition, selecting cardioversion as the appropriate therapy, and executing a cardioverting shock. Cardiac does not allege that all of those steps are carried out in the United States with respect to certain of the ICDs. Moreover, it cannot allege that the steps óf the method are supplied, a contradiction in terms. Rather, Cardiac alleges that St. Jude’s shipment of a device that is capable of performing the method is sufficient to fall within the scope of Section 271(f). Although the ICD that St. Jude produces can be used to perform the steps of the method, as we have demonstrated, Section 271® does not apply to method or
D. Reassignment
Finally, Cardiac urges us to reassign this case to a different judge on remand. However, there is no evidence of, and Cardiac does not appear to allege, that Judge Hamilton has been partial or biased in any way during the proceedings. We therefore decline to designate a judge to preside over the remand. We see no reason to interfere with the internal operations of the Seventh Circuit, and we leave the determination of assignment on remand to that circuit’s internal rules and procedures.
CONCLUSION
For the foregoing reasons, we reverse the district court’s grant of summary judgment of invalidity of the '288 patent and reinstate the jury verdict that the patent has not been shown to be invalid. We also reinstate the jury’s verdict that the '288 patent is not unenforceable for inequitable conduct and reverse the district court’s grant of a conditional new trial on that issue. We remand to the district court for a determination of damages. We affirm the district court’s rulings limiting damages to instances in which the patented method has been performed. Finally, we reverse the court’s decision that 35 U.S.C. § 271(f) is applicable to this case and hold that St. Jude’s ICDs that practice the method of сlaim 4 outside the United States do not infringe that claim under Section 271(f).
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED
Notes
. The jury also rejected St. Jude's argument that the '288 patent failed to comply with the best mode requirement of 35 U.S.C. § 112 ¶ 1. St. Jude has not appealed any decisions relating to 35 U.S.C. § 112.
. The court has received a number of briefs amicus curiae on the Section 271(f) issue that we are reviewing en banc. The court is appreciative of these contributions.
. Our analysis here focuses on 271(f)(1), but is equally applicable to 271(f)(2). While the two paragraphs differ in some respects, neither party argues that the differences are relevant in this case. Indeed, both paragraphs require the "supply” of "components” that are capable of being "combined outside of the United States.” Compare 35 U.S.C. § 271(f)(1) & (2); see also AT&T II,
. Aside from Ormco’s brief, all other amicus briefs we have received support our conclusion that Section 271(f) does not apply to method patents.
Concurrence Opinion
concurring in parts A, B, C.l, and D, dissenting from part C.2.
I concur in the court’s opinion except for the en banc ruling in part C.2.I respectfully dissent from the court’s interpretation of 35 U.S.C. § 271(f) as excluding all process inventions. The statutory term “patented invention” in § 271(f) has the same meaning in this subsection as in every other part of Title 35: it is the general term embracing all of the statutory classes of patentable invention. The court’s interpretation of § 271(f) to exclude all process inventions is contrary to the text of the statute, ignores the legislative history, is without support in precedent, and defeats the statutory purpose.
35 U.S.C. § 271(f) was enacted to provide remedy to patentees for certain activity conducted outside of the United States, when that activity would be infringing if conducted within the nation’s borders. Section 271(f) specifically concerns offshore activity where practice of a patented invention is “actively induced” by the supply of defined components from the United States, in which situation the supplier is deemed an infringer under § 271(f). The statute is aimed at evasion of United States patents, and is not limited to any particular class of patentable subject matter. The court now holds, sitting en banc for the purpose, that the statutory term “patented invention” excludes process inventions in § 271(f). That ruling, placing a different definition on “patented invention” in § 271(f) than in any other provision of Title 35, is incorrect.
The statute is unambiguous
Section 271(f) contains two subsections. The court today holds that both parts exclude all process inventions from the “patented invention” of the statutory text, without discrimination or exception; the court imposes this reading despite the
§ 271(f)(1) Whoever without authority supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce 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.
§ 271(f)(2) Whoever without authority supplies or causes to be supplied in or from the United States any component of a patented invention that is especially made or especially adapted for use in the invention and not a staple article or commodity of commerce suitable for substantial noninfringing use, where such component is uncombined in whole or in part, knowing that such component is so made or adapted and intending that such component will be combined 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.
Title 35 defines “inventions patentable” as including all patent-eligible subject matter, including processes:
§ 101. Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirement of this title.
Many sections of Title 35 use “invention” or “patented invention” or “patentable invention” when referring to all of the statutory classes of invention set forth in § 101. E. g., §§ 102, 103, 104, 105, 181, 201, 286, etc.
The Supreme Court has stressed that “in interpreting a statute a court should always turn first to one, cardinal canon before all others. We have stated time and again that courts must presume that a legislature says in a statute what it means and means in a statute what it says there.” Connecticut Nat’l Bank v. Germain,
The Supreme Court has previously so held. In Eli Lilly & Co. v. Medtronic, Inc.,
My colleagues reach the opposite conclusion today, without mentioning the use of the identical words “patented invention” by the same Congress that enacted § 271(e) and soon thereafter enacted § 271(f). It is not reasonable now to rule that the same words used in two adjacent subsections of the same statute, enacted by the same Congress in close temporal proximity, were intended to diverge radically from the statutory definition of “patented invention” and from each other.
The context of § 271(f)
The statutory meaning of “patented invention” is reinforced upon observation of those sections of the Patent Act that are directed to particular categories of invention, as illustrated in § 271 itself. The relationships and balance of the several provisions in subsections of this section demonstrate the statutory use of “patented invention” as the umbrella term for the forms of invention subject to the Patent Act, with narrower terminology used in those provisions that have narrower application. The § 271 subsections deal with the various legislative remedies for various forms of infringement, as Congress acted to plug the loopholes that had arisen or were foreseen.
Reviewing the context of § 271, we start with § 271(a), the general infringement statute, directed to “any patented invention.” Section 271(b) is directed to inducement of infringement of “a patent.” All agree that subsections (a) and (b) apply to all statutory subject matter. Section 271(c) recites contributory infringement by a “component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process”; Congress thus specified how contributory infringement occurs for the statutory categories. Section 271(d) relates to misuse of “a patent,” citing specific commercial practices. Section 271(e) concerns “a patented invention” and although the statute refers to the drug regulatory context, the court in Eli Lilly, supra, explained that this term incorporates the entire subject matter of § 101. Section 271(f) concerns the supply of components of “a patented invention” for use outside of the United States, again incorporating the subject matter of § 101. Section 271(g), in contrast, is specific to the importation or sale of “a product which is made by a process patented in the United States.” Each subsection is directed to different circumstances of infringement, and each recites its subject matter with generality or specificity, as appropriate.
Some amici curiae in this appeal suggested that since § 271(g) specifically mentions practice of a patented process, then “patented invention” in § 271(f) must exclude processes. That thesis is devoid of support. Subsections (g) and (f) are di
Section 271(c) is relied upon by the court as somehow requiring that § 271(f) excludes processes. Section 271(c) defines as “contributory infringement” acts that include the sale or importation into the United States of a non-staple articlе of commerce that is a “component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process,” where the non-staple article constitutes a “material part of the invention” and is known to be made or adapted for the purpose of infringing, within the United States, a patented product or process. The text of § 271(c) illuminates the text of § 271(f), for § 271(c) mentions the statutory classes in terms of how “contributory infringement” works, whereas § 271(f)(1) is directed to inducement, and in the usage “patented invention” in both subparts, § 271(f) states its independent scope. This is not an inadvertent distinction, in view of these heavily scrutinized provisions and their years of legislative consideration. My colleagues appear to have misinterpreted these distinct usages, for the different subsections reinforce that the legislators carefully structured each for a distinct purpose. See Russello v. United States,
The various subsections of § 271 reflect the considered legislative approach to plug loopholes in the infringement statute, in the interest of United States patentees and in support of United States innovation. The close relationship among these and all sections of the Patent Act “prеsents a classic case for application of the normal rule of statutory construction that identical words used in different parts of the same act are intended to have the same meaning.” Sullivan v. Stroop,
The new loophole here created under § 271(f) will outshine the simple evasion that led Congress and the innovation community to the carefully written texts of sections 271(c), (e), (f), and (g). These texts show that when legislation specific to one or another class of invention was intended, it was explicitly stated in those subsections of § 271. “ ‘It is not uncommon to refer to other, related legislative enactments when interpreting specialized statutory terms,’ since Congress is presumed to have ‘legislated with reference to’ those terms.” Reno v. Koray,
Legislative history and congressional intent
This congressional intent is confirmed by the legislative history. Various propos
(f) Whoever, without authority, makes or sells, within the United States, all of the components of a patented machine, manufacture, or composition of matter, uncombined, intending that such components will be combined outside the United States to constitute the patented subject matter, knowing that if such components were combined within the United States, the combination would be an infringement of the patent, shall be liable as an infringer.
S. 2504, 93d Cong., 2d Sess. (comm, print dated May 8, 1974); see also S. 473, 94th Cong., 1st Sess., § 271(e) (1975) (same text); S. 23, 94th Cong., 1st Sess., § 271(f) (1975) (same text); S. 2255, 94th Cong., 1st Sess., § 271(f) (1975) (same text). Reprinted in Hearings Before the Subcomm. of Courts, Civil Liberties, and the Administration of Justice of the H.R. Comm, on the Judiciary, 98th Cong. 2859-69 (1984) (“Hearing Review ”). It is seen that these early bills did not include processes, but were specific to “a patented machine, manufacture, or composition of matter.”
Subsequent bills, including S.1535, 98th Cong., 1st Sess. (1983), replaced this specific text with the encompassing term “patented invention.” The published record in the Hearing Review shows the understanding that the effect of this change is to cover processes as well as the other statutory categories. Contrary to the majority’s suggestion, the legislative history is not limited to an ambiguous private statement by an “interested party,” see maj. op. at 1365, for the Hearing Review demonstrates that the executive branch considered it important that the statute cover process inventions. The Hearing Review contains a report prepared by the Patent and Trademark Office for the Justice Department, observing that the Deepsouth holding had been applied to process patents in John Mohr & Sons v. Vacudyne Corp.,
The ensuing change in legislative language, embodied in S.1535, demonstrates the purposeful action to include processes in § 271(f), instead of the more limited scope of earlier versions of the legislation. “Where Congress includes limiting language in an earlier version of a bill but deletes it prior to enactment, it may be presumed that the limitation was not intended.” Russello,
Plain language and contemporary context
It is a canon of statutory construction that the statute must be understood in its contemporary context. The Court stated in Cannon v. University of Chicago,
Despite the multiple manifestations of legislative intent, in the plain language, the statutory context, and the evolution of § 271(f), my colleagues now rule that in one and only one subsection of Title 35, “patented invention” excludes process inventions. My colleagues state that they agree that the plain meaning of “patented invention” is fixed by § 101, yet they decide that Congress cannot have meant what it said, and that this plain meaning is defeated by hidden meaning in § 271(f). The Court has cautioned that such a statutory interpretation can arise only in “rare and exceptional circumstances,” Crooks v. Harrelson,
My colleagues seek support in the statutory words “components” and “supply.” The en banc court concedes that processes have “components,” but argues that process components cannot be “supplied” from the United States to a foreign operation, because the steps of a process are intangible. However, process information, as well as the results of process steps, are readily supplied from one entity to another. The Court recently noted, in a case under § 271(f) involving products, that “[i]f an intangible method or process ... qualifies as a ‘patented invention’ under § 271(f) (a question as to which we express no opinion) the combinable components of that invention might be intangible as well.” Microsoft Corp. v. AT & T Corp.,
It appears that the heart stimulator is supplied from the United States and combined with process steps that are taught from the United States and performed abroad. Although both product and process aspects are involved, the court presents no findings concerning the nature of the components supplied from the United States. It may also be relevant that in Quanta Computer, Inc. v. LG Electronics, Inc., — U.S. -,
It is well recognized that a process has parts, or “components”; this is a general term applicable to all inventions. In Microsoft,
Each step of a process is a component thereof, which, when combined with the other steps, performs the process. In BMC Resources, Inc. v. Paymentech, L.P.,
On the established understanding of how processes are performed, it cannot be ruled that the words “component” and “supply” in § 271(f)(1) impart a unique meaning that defeats the plain text of the statute. It cannot be ruled that Congress, along with all of the contributors to this legislation, who understood and intended the use of general terms to embrace all forms of patented invention in Title 35, nonetheless silently eliminated patented processes from “patented invention” in § 271(f).
Sovereignty Issues
I share every court’s concern about legislatively impinging upon sovereign foreign rights. In this case, however, the statutory purpose is to reach the evasion of United States rights by actions that are taken within the United States by entities subject to United States law. The practice in foreign countries of United States-origin technology without any contribution of components from the United States is untouched by § 271(f), whether of process or product. Liability under § 271(f) is based on domestic conduct and intent.
Although protection in foreign countries can sometimes be had by obtaining and enforcing foreign patents, as mentioned in Microsoft,
St. Jude and several amici curiae observe that some countries do not permit patenting of medical procedures, and cite this as a reason for refusing all remedy under § 271(f) for any practice abroad of any infringing process in any aspect of technology. This reasoning is insupportable in the broad thesis proposed by the amici. And as to the specific patent in suit, as Cardiac points out, a medical device such as a defibrillator and its method of use are generally viewed as patentable in most countries.
Concerns of amici curiae
Several amicus curiae briefs expressed concern that a broad construction of § 271(f) could lead to unfair liability for United States providers of computer-based systems. Thus these amici proposed that
The simple purpose of § 271(f) is that, for patented inventions, a United States patent cannot be avoided by providing substantial components from the United States while performing some aspect offshore to avoid a technical act of infringement under § 271(a). Section 271(f) draws no distinction between process and product inventions, and such distinction is unrelated to the legislative purpose. As Judge Learned Hand reminds us, “statutes always have some purpose or object to accomplish:”
“[I]t is true that the words used, even in their literal sense, are the primary, and ordinarily the most reliable, source of interpreting the meaning of any writing: be it a statute, a contract, or anything else. But it is one of the surest indexes of a mature and developed jurisprudence not to make a fortress out of the dictionary; but to remember that statutes always have some purpose or object to accomplish, whose sympathetic and imaginative discovery is the surest guide to their meaning.”
Cabell v. Markham,
The court’s ruling reopens, for process inventions, the loophole that was plugged by § 271(f) for all patented inventions. The extensive legislative record shows consideration of equity, economics, innovation incentive, and international concerns, in the evolution of the text of § 271(f). The en banc court makes no mention of any of these concerns, and does not discuss the consequences of today’s holding in negating the legislative purpose. I respectfully dissent from the court’s statutory interpretation and the decision based thereon.
. E.g., § 102 (use of the term "invention” to refer to statutory subject matter); § 103(a) (use of “invention” as synonymous with "subject matter sought to be patented”); § 104 (describing rights in an "invention made abroad”); § 105 ("invention made, used or sold in outer space”); § 181(d) (defining "invention” as “any invention or discovery which is or may be patentable or otherwise protectable under this title or any novel variety of plant which is or may be protectable under the Plant Variety Protection Act”); § 286 (time limit on damages for infringement of a "patented invention”).
. The court invited briefing limited to the question “Does 35 U.S.C. § 271(f) apply to method claims, as well as product claims?” Cardiac Pacemakers, Inc. v. St. Jude Medical, Inc., No. 07-1296 (order granting rehearing en banc) (Fed.Cir. March 6, 2009).