March 10, 2009
The United States Court of Appeals for the Federal Circuit has granted en banc rehearing in Cardiac Pacemakers, Inc. et al. v. St. Jude Medical et al., a case with important ramifications for all companies that do business both in the United States and abroad. The question that the en banc Court has agreed to decide is "does 35 U.S.C. § 271(f) apply to method claims, as well as product claims."
The parties to this case are competitors in the market for implantable cardioverter defibrillators (ICDs). Cardiac Pacemakers, Inc. ("CPI") contends that St. Jude Medical’s devices infringe a single claim of U.S. Patent No. 4,407,288, which claims a method for cardioverting the heart. As relevant here, St. Jude asked the district court to limit any damages to devices sold within the United States, arguing that 35 U.S.C. § 271(f), which imposes liability for the supply from the United States of certain components of patented inventions for combination overseas, does not apply to method or process claims. The district court disagreed. On appeal, the panel affirmed on the basis of Union Carbide Chems. & Plastics Tech. Corp. v. Shell Oil Co., 425 F.3d 1366 (Fed. Cir. 2005), which had applied § 271(f) to method claims.
The statute at issue, 35 U.S.C. § 271(f), provides: "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, . . . 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." In Shell Oil, the Federal Circuit held that Section 271(f) applies to the supply of "every component of every form of invention," including a patented method, and held that Shell was liable for exporting a catalyst used for practicing a patented method in a foreign facility. 425 F.3d at 1379. In Microsoft Corp. v. AT&T Corp., 127 S. Ct. 1746 (2007), however, the Supreme Court undermined the premise on which Shell Oil was based by holding that Section 271(f) applies only to those components that are both capable of being combined so as to form the patented invention, and also capable of being supplied from the United States.
St. Jude petitioned for en banc review based on the conflict between the panel decision (and Shell Oil) and the text, structure, history and aims of Section 271, as well as the inconsistency with the Supreme Court’s interpretation of Section 271(f) in Microsoft v. AT&T. St. Jude also highlighted the conflict within the Federal Circuit’s own jurisprudence on this issue. Compare Shell Oil, 425 F.3d at 1379, with Standard Havens Prods., Inc. v. Gencor Indus., Inc., 953 F.2d 1360, 1374 (Fed. Cir. 1992) or NTP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282, 1321-23 (Fed. Cir. 2005).
The en banc process will be important for harmonizing and clarifying this area of patent law. As the Supreme Court’s decision in Microsoft v. AT&T indicates, the scope of liability for extraterritorial infringement under § 271(f) is a matter of significant national and international concern. This point was reinforced in this case by two amicus briefs—one for the Federal Circuit Bar Association and the American Intellectual Property Law Association, another for Cisco Systems, Inc., Intel Corporation, Apple Inc., Oracle Corporation, Microsoft Corporation, and Symantec Corporation—filed at the petition stage. En banc resolution of this important question will give all participants in the patent system—and the district court judges who must resolve most of these issues—clear guidance on whether overseas activities can result in infringement of process claims.
Gibson Dunn has represented St. Jude throughout the lengthy proceedings in the case, including several previous appeals. Gibson Dunn has extensive experience in patent appeals, including Section 271(f) issues. We successfully represented Microsoft in the Supreme Court’s Microsoft v. AT&T case, represented parties or amici in virtually every major patent case in the Supreme Court in the past decade, and we have handled numerous appeals in the Federal Circuit for a wide range of clients in many industries.
The Federal Circuit has set the following briefing schedule for briefing and argument: St. Jude’s brief is due on April 6, 2009; CPI’s response is due on April 27, 2009; St. Jude’s reply brief is due on May 6, 2009; and oral argument is set for June 1, 2009 at 2:00 PM.
The Court has specifically invited briefs from amici curiae, which need not obtain leave of court to file. Amicus briefs supporting St. Jude’s position will be due on April 15, 2009.
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