Life Technologies Corp. v. Promega Corp. and the Absent Presumption Against Extraterritoriality

Guest Post by Tim Holbrook, Professor of Law at Emory University School of Law.  Professor Holbrook has written extensively on the extraterritorial application of U.S. patent law. – DC

The Supreme Court’s decision in Life Technologies Corp. v. Promega Corp. is fairly straightforward.  The Court held that 35 U.S.C. § 271(f)(1) does not apply when only a single component of a patented invention is exported.  Instead, more than one component is required to constitute a “substantial portion” of the patented invention.  While what the Court said is important, in some ways, what is more interesting is what it didn’t say and omitted.

In particular, most viewed this case as one of a series of cases in which the Court was elaborating on the presumption against extraterritoriality.  At oral argument, the questions from the justices suggested that likely was the case as well.  The term was used over twelve times in the argument, with the Chief Justice engaging in a colloquy with Carter Phillips about whether this case truly involved extraterritoriality.  Although the Chief Justice eventually recused himself from the case, his questions suggested that he was attempting to apply the Court’s recent extraterritoriality decision in RJR Nabisco, Inc. v. European Community.  Indeed, in my amici brief before the Court, I criticized the Federal Circuit for giving short shrift to the issue.

Yet, neither the term “extraterritoriality” nor any discussion of the presumption against extraterritoriality appears in the final decision.  Instead, in the first line of the decision, Justice Sotomayor describes the case as “concern[ing] the intersection of international supply chains and federal patent law.”

Interestingly, the petitioners did not frame the case in this fashion. The petitioners’ brief never discusses supply chains expressly.  Instead, this framing of the issue apparently came from the amicus briefs.  Although the brief by Bundesverband der Deutschen Industrie E.V.  addressed the issue, Agilent Technologies’ brief is the one that seemed to catch the Court’s attention. That brief had a lengthy discussion of the modern way that supply chains work, and the commensurate potential exposure to patent liability under the Federal Circuit’s interpretation.  Justice Kennedy even referenced it during oral argument, bringing the issue of supply chains to the fore.

This concern with these chains – and the risk that some parts of the chain could be exposed to patent infringement liability – may underlie some of the Court’s reasoning.  For example, in interpreting the phrase “substantial portion of the components of a patented invention,” the Court adopted a quantitative approach as opposed to one that considered both the quantity of components supplied and their relative importance.  The Court seemed concerned with the ability of such actors ability to discern when liability may arise.  The Court asked, “How are courts—or, for that matter, market participants attempting  to  avoid  liability—to  determine the relative importance of the components of an invention?”

To those who follow the Court’s patent jurisprudence, this sudden concern for public notice and audience seems a bit ironic given the Court’s penchant for eliminating the Federal Circuit’s more predictable, formalistic rules.  But it does show the importance of amicus briefs that can bring real-world concerns to the Court.

The Courts silence as to the presumption against extraterritoriality, though, may be more important than it seems.  The presumption had been central to § 271(f).  Congress adopted § 271(f) to overrule Deepsouth Packing Co., Inc. v. Laitram Corp., which held, in part based on the presumption against extraterritoriality, that manufacturing and exportation of all of the invention’s components for recombination abroad did not constitute patent infringement.  The Supreme Court’s first interpretation of this provision in Microsoft Corp. v. AT&T Corp., the Court also relied on the presumption to afford the provision a narrower interpretation. Yet, here….silence.

That silence may reflect a significant shift in the Court’s extraterritoriality jurisprudence.  In a decision from its October 2015 term, RJR Nabisco, Inc. v. European Community, the Court provided a two-step analysis for assessing whether the presumption applies.  First, a court should assess “whether the presumption against extraterritoriality has been rebutted—that is, whether the statute gives a clear, affirmative indication that it applies extraterritorially.”  If the presumption has been rebutted, then the statute is afforded extraterritorial reach.  If after step one, however, a court concludes “the statute is not extraterritorial,” then the statute may yet afford protection.  Step two is to “determine whether the case involves a domestic application of the statute … by looking to the statute’s ‘focus.’” If the acts involving the statute’s focus occur in the United States, then the statute applies.

Applying this methodology to § 271(f) would appear to end at step one: the statute clearly contemplates extraterritorial application of U.S. law with the hook of domestic manufacture of the components.  The silence in Life Technologies may reflect this shift, and a departure from the use of the presumption as a basic statutory interpretation tool.

The Chief Justice’s comments at oral argument suggested that he believed the presumption had no role in this case.  He noted:

I’m not sure I agree with your understanding of the extraterritorial principle. I don’t – I mean, do you really take that down into the minutiae of every little clause? It seems to me its once the law applies, then you apply normal principles of statutory interpretation. I think we have cases about that in other – in other areas, which is sort of what is the reach, I think, may be the presumption against infringement in sovereign immunity, is – a case I can’t recall right away that said, well, once you get over it, you know, its over, and then you apply normal principles.

The Chief Justice appears to be referencing the RJR Nabisco approach.  Although he ultimately recused himself from the case, perhaps his comments cast a long shadow over the decision.  The silence on extraterritoriality, therefore, may be speaking volumes.  It may reflect a shift away from the use of the presumption in interpreting particular provisions within a particular statute once the extraterritorial reach of that provision already has been confirmed.


10 thoughts on “Life Technologies Corp. v. Promega Corp. and the Absent Presumption Against Extraterritoriality

  1. 3

    Prof. Holbrook has an interesting post here, contrasting oral arguements to the decision. Clearly the statute in question is a specific exception to the normal non-extraterritoriality of national patent coverage.

    I wonder if he has any further extraterritorial thoughts on Sup. Ct. challenges to shooting someone on the other side of a border fence or to [anti-Jazz Photo] foreign sales of a product as exhaustion of a U.S. patent?

  2. 1

    On a sister thread, I took Prof. Duffy to task for his own “treatment” of the sovereignty issue (albeit, only one of several shortcomings).

    link to

    Repeated here for convenience:

    Night Writer,

    I did take another read at what Prof. Duffy did in his work, and if he were my student, he indeed would receive an “F” (or perhaps if I were in a generous mood, a “D”).

    Whet he neglected to do in looking at 271(f)(1), was the very thing that Malcolm glommed onto here (and that I suggested previously, but that Malcolm refused to even acknowledge back then): there is more than just the “pieces” parts of 271(f)(1). This leads to his faulty and incomplete “extra-territorial” analysis. This if by itself is not damming, just incredibly sloppy.

    What Prof. Duffy also plainly got wrong (mirroring the Court, by the way), is that “substantial” in other IP laws – most immediately, copyright law, which comes from the same Constitutional mooring – clearly uses both the quantitative and the qualitative meanings of the word – WITHOUT any hint of “ambiguity.”

    So even though he does recognize that Congress reacted against the DeepSouth loophole, with MORE than just the strict item within DeepSouth, he lets his sloppiness from the first error above cascade into a deeper error with (as you put it, his approval):

    “If only a small portion of components counted as a “substantial portion,” then U.S. patent law would have broader effects on what is largely foreign economic activity.

    The Supreme Court’s ruling – that a single component never qualifies as a substantial portion of the components – tends to curb the extraterritorial effects of Section 271(f), and that result is sensible given that the baseline rule of U.S. patent law is still a principle of territoriality.”

    He is simply wrong on the “curbing” portion, and is further wrong in NOT pointing out that it is simply NOT UP TO THE COURT to decide to “read” the statute to reach the End that the Court wanted to reach.

    There is no “ambiguity” in a word that reflects – as in other sections of IP law – a desire for both quantitative as well as qualitative protection.

    Breadth is not ambiguity.

    Also, “portion” – the subject of the clause in question; and being a singular noun – would lead to a better structural argument, which Prof. Duffy did not see in his “drinking the Kool Aid” of the Supreme Court nose of wax treatment.

    He also allows himself to be confused and conflated with 271(f)(2), which is a separate section, with a separate intent.

    Lastly, as far as his last comment of “rigid rule versus flexible standard,” he too misses the obvious connection as to exactly when the Court has chosen one or the other: that underlying animus is when the patent holder is less well off.

    As far as people not wanting to think that the Supreme Court could (dare?) have such an animus, one only has to look back to the 1930’3 and 1940’s when the (self) characterization of “the only valid patent is one that has not yet appeared before us” took shape.

    To “flesh out” the sovereignty angle a bit more here: there remains a direct tie to actions here int he States, as well as the animus is concerned with an end result – if done here in the states.

    The combination takes care of the principal question of the case – and would STILL apply even the subject of the clause (“portion” – a singular noun) were properly structurally treated by the Court.

    1. 1.2

      Speaking of grades, what law school rewards students for insisting that their personal opinions are worth more than unanimous decisions of the Supreme Court? What insurance company awards attorneys for giving clients advice on that basis?

      1. 1.2.2

        Interesting too – curmudgeon has the exact icon as Paul F. Morgan…

        First time ever that i have seen that with the new icons.


          …and somewhat telling (at least in the perception creating sense) that not a whisper about this from “curmudgeon,” “Paul F. Morgan,” or the good professor….

          (hush, and let this “oddity” be buried…)

          Or perhaps it is time for the servers to “go done” and incriminating statements to disappear…


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