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Tag Archives: patent

Supreme Court agrees to hear case that may put limits on the foreign reach of US patents

Recently, the Supreme Court agreed to hear a case which may have effect on the foreign reach of United States patents.[1] The Supreme Court granted a petition for certiorari filed by Life Technologies, Corporation (“Petitioner”).[2]  The petition resulted from a lawsuit in which Petitioner was held liable for patent infringement for the shipment of a single component of a patented invention to the United Kingdom.[3] Section 271(f)(1) of the Patent act “assigns infringement to anyone who supplies or causes to be supplied ‘all or a substantial portion of the components of a patented invention.’”[4] The Federal Circuit specifically found that “there are circumstances in which a party may be liable under § 271(f)(1) for supplying or causing to be supplied a single component for combination outside the United States.”[5]

The petition asks the Supreme Court to decide whether the Federal Circuit committed error in finding that “supplying a single, commodity component of a multi-component invention from the United States is an infringing act under 35 U.S.C. § 271(f)(1), exposing the manufacturer to liability for all worldwide sales.”[6] The petition asserts that the Federal Circuit’s decision broadly expanded the extraterritorial application of United States patent law because patent infringement damages were awarded based on Petitioner’s worldwide sales, even though, according to Petitioner, the only connection between Petitioner’s foreign sales and the United States was the single shipment of a component from its facility in the United States to one of its United Kingdom based facilities.[7] The Petitioner made several arguments in its petition against the Federal Circuit’s ruling by citing to the text of the Patent Act and what it believed to be the proper interpretation of 35 U.S.C. § 271(f)(1).[8] The Petitioner also alleged that the Federal Circuit’s decision is contrary to the “‘presumption that United States law governs domestically but does not rule the world.’”[9] Petitioner warns that allowing expansion of the Patent Act’s extraterritorial reach would have a negative impact on the business community, requiring businesses to account for the “potentially crushing burden of U.S. patent infringement liability for worldwide sales, based on the supply of any individual component, however common and useful for non-infringing purposes.[10]

A ruling by the Supreme Court is likely to have a significant impact on the foreign reach of US patents. The Petitioner seeks a narrow interpretation whereas the Respondent seeks to keep the broader interpretation provided by the Federal Circuit. Our firm will be monitoring the status of this case and its potential impact. Please contact our office if you have any questions regarding the information in this article.

Daniel Devine, Esq.
Santucci Priore, P.L.
Shareholder

[1] See, Life Tech. Corp. v. Promega Corp., No. 14-1538, 2016 WL 3461575 (Jun. 27, 2016); http://www.scotusblog.com/case-files/cases/life-technologies-corporation-v-promega-corporation/
[2] Id.
[3] See, Promega Corp. v. Life Tech. Corp., 773 F.3d 1338, 1353 (Fed. Cir. 2014).
[4] Id. (emphasis in original)
[5] Id.
[6] See, http://www.scotusblog.com/wp-content/uploads/2016/03/Life-Techs-Pet-App-14-1538.pdf
[7] Id.
[8] Id.
[9] Id.
[10] Id. (emphasis in original).

Post-expiration royalties barred for Spider-Man related patent

In Kimble, et. al. v. Marvel Entertainment, LLC[1], the Supreme Court upheld previous precedent[2] which created a bright line rule preventing patent owners from obtaining royalties from sales made after the patent term has expired. The dispute in this case resolved around an agreement between Marvel and Stephen Kimble for the sale of Mr. Kimble’s patent on a toy that allows a person to shot webs (i.e., pressurized foam string) “from the palm of [the] hand” similar to comic-book hero Spider-Man.[3] Pursuant to the agreement Mr. Kimble was to receive a 3% royalty on future sales from Marvel with no set end date for royalties.[4]

Marvel filed an action for declaratory judgment to determine that it was not required to pay Mr. Kimble royalties after the term of the patent expired based upon the Brulotte rule.[5] Mr. Kimble argued that the Brulotte rule should be abandoned and replaced by a case by case approach based upon antitrust law’s “rule of reason.”[6] The Supreme Court rejected this argument and upheld the Brulotte rule noting that while there is economic criticism of the rule, the question would be best resolved in Congress, which, to date, had “spurned multiple opportunities to reverse Brulotte.”[7] The Supreme Court also noted that there are ways around the Brulotte rule.[8]

As noted by the Supreme Court, “[p]atents endow their holders with certain superpowers, but only for a limited time.”[9] A patent typically expires 20 years from the date that the application was filed.[10] During the term of the patent, the owner has exclusive rights to sell or license the patented article. However, once the term expires, the right to make or use the article passes to the public. There are different types of patents, some of which expire in less than 20 years. Thus, agreements relating to patent rights can be complicated and involve consideration of several factors, such as how the term of the patent will affect the agreement. Please contact our office if you have any questions regarding patents or the information in this article.

Daniel Devine, Esq.
Santucci Priore, P.L.
Shareholder

[1] No. 13-720, 2015 WL 2473380 (U.S. Jun. 22, 2015).
[2] Specifically the case entitled Brulotte v. Thys, Co., 379 U.S. 29 (U.S. 1964).
[3] Kimble, supra.
[4] Id.
[5] Id.
[6] Id.
[7] Id.
[8] Kimble, supra.
[9] Id.
[10]35 U.S.C. § 154(a)(1).