Agilent Gets a Shout-out at the Supreme Court

170126-courtHow often do you get to argue before the highest court in the land?  And then get complimented for it?

Today’s topic is complicated (it’s about legal stuff), but hopefully worth your time.  I’ll start with a simple question:

Can you be found guilty of violating a country’s law if your activity occurred outside that country?

Take patent infringement, for example.  Normally, a U.S. patent can be infringed only by activity occurring within the U.S.

But there is an exception.

Let’s say an evil company wants to get around U.S. patent protection.  The company manufactures all the parts of an infringing product in the U.S.  But then it ships those parts – still unassembled – to another country.  It assembles the finished product in the foreign country.  Finally, it ships the finished product all over the world, including into the U.S.

The company would be guilty of U.S. patent infringement for the finished products that it ships into the United States.  But is the company also guilty of patent infringement for the products that it made and sold outside the U.S.?

U.S. patent law holds that the evil company did infringe because:

  1. It made all the parts in the U.S. with the intention of assembling them into a finished product overseas, and
  2. The finished product would have infringed the U.S. patent if final assembly had occurred within the U.S.

This is known as the “extra-territorial exception.”

But let’s take this a step further.  What if only one of the parts is manufactured in the U.S. – and that part is a generic component?  I’m talking about a gear or a spring that is unpatented and readily available around the world.  In 2015, a U.S. court ruled that even if a single generic component of a patented product is manufactured in the U.S. – even if every other component and the final product are manufactured elsewhere – it still counts as U.S. patent infringement.

This is the situation in Life Technologies Corporation v. Promega Corporation.  Promega alleges that a DNA kit made by Life violates U.S. patents.  The kit is manufactured in the UK.  But one component – a generic, unpatented enzyme – is manufactured in the U.S. and shipped to the UK for inclusion in the finished kit.  After disagreements in the lower courts, the U.S. Supreme Court agreed to hear the case.

Think about it.  The “single component” could be nothing more than a commodity item.  A standard enzyme.  An off-the-shelf valve.  A tube of wash buffer solution.  Yet it would make an otherwise foreign product liable for U.S. patent infringement.  This could affect countless companies in high tech, including Agilent.

So when the Supreme Court took up the case, Agilent wanted to persuade the court to return the “extra-territorial exception” to a proper scope.  Agilent presented an amicus curia (“friend of the court”) brief, arguing that more than a single commodity component should be at issue before there is U.S. patent infringement for something happening overseas.

“It was wonderful to participate in the case by preparing the amicus brief,” says Bradford Schmidt, Agilent’s VP of Global Intellectual Property, who presented during oral arguments in December.  Justice Anthony Kennedy cited Agilent’s brief as “instructive” on the key issues and the related practical implications.

(Interestingly, Brad previously worked for Life Technologies.  He was intimately involved in this case from the beginning, including developing the legal strategy and positions that ultimately helped lead the case to the Supreme Court.)

“To be expressly called out by one of the Justices for having been informative on the key issues was beyond all expectation,” Brad says.  “It was personally very rewarding, since I had done the legal research, developed the arguments, and co-authored the amicus brief.

“Not to mention that I have been trying to get this point of law straightened out since 2012.”

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