Covers a 2009 decision by the U.S. Court of Appeals for the Federal Circuit, which held that 35 USC 271(f) does not apply to method patent claims.

1. CARDIAC PACEMAKERS v.
ST. JUDE MEDICAL:
Section 271(f) Does Not Cover
Method Claims
© 2009 Womble Carlyle Sandridge & Rice, LLP
by: Michael A. Cicero
Atlanta Office
Patent Legal Issues Meeting
September 3, 2009
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2. [Alternative Title]
CARDIAC PACEMAKERS v.
ST. JUDE MEDICAL:
How St. Jude Took a Sad Song and Made it
Worse for Method Patent Holders
© 2009 Womble Carlyle Sandridge & Rice, LLP
by: Michael A. Cicero
Atlanta Office
Patent Legal Issues Meeting
September 3, 2009
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3. DISCLAIMER
Womble Carlyle presentations are intended to
provide general information about significant
legal developments and should not be
construed as legal advice regarding any
specific facts and circumstances, nor should
they be construed as advertisements for legal
services.
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4. Topics Addressed
• Text of 35 U.S.C. § 271(f)
• Union Carbide (Fed. Cir. 2005)
• Majority opinion in Cardiac Pacemakers
• Judge Newman’s dissent in Cardiac
Pacemakers
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5. 35 U.S.C. § 271(f)
Generally directed at the exportation, from the United States,
of components of patented inventions.
(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.
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6. 35 U.S.C. § 271(f)
(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 non-
infringing 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.
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7. Compare: 35 U.S.C. § 271(c)
(c) Whoever offers to sell or sells ... a component of a patented
machine, manufacture, combination or composition, or a
material or apparatus for use in practicing a patented
process, constituting a material part of the invention,
knowing the same to be especially made or especially
adapted for use in an infringement of such patent” shall be
liable as a contributory infringer.
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8. Union Carbide Chem. & Plastics
Tech. Corp. v. Shell Oil Co., 425
F.3d 1366 (Fed. Cir. 2005)
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9. Facts in Union Carbide
• Union Carbide obtains ‘243 Patent for method of producing
ethylene oxide (EO), a gas used to produce ethylene glycol
which, in turn, is used to produce polyester fiber, resin, and
film.
• Use of catalyst comprising silver plus other alkali metals
was found to produce EO with greater efficiency.
• Shell Oil brings DJ action in S.D. Tex. on ‘243 Patent + 2
other Union Carbide patents.
• One month later, Union Carbide sues Shell Oil for
infringement of same patents in D. Del.
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10. Procedural History in Union Carbide
• Cases consolidated for trial in D. Del.  j/Shell Oil.
• On appeal:  aff’d in part, rev’d in part, & remanded.
• On Remand: Jury trial held only on ‘243 Patent.
• Court grants MIL to exclude evidence of damages
arising from Shell’s exportation of catalysts.
• Jury awards around $265,000 in damages.
• Shell Oil appeals denial of JMOL motions of
noninfringement and invalidity; Union Carbide x-appeals
MIL ruling on damages (§ 271(f) issue).
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11. Holdings in Union Carbide
• CAFC affirms denial of Shell Oil’s JMOL motions.
• CAFC reverses the MIL ruling, remands back to D. Del. for
recalculation of damages.
• A prior decision (Eolas Techs. v. Microsoft Corp. (Fed. Cir.
2005)) held “that every component of every form of
invention deserves the protection of 35 U.S.C. § 271(f); i.e.,
that ‘components’ and ‘patented inventions’ under § 271(f)
are not limited to physical machines.” Union Carbide, 425
F.3d at 1379 (italics in original).
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12. Holdings in Union Carbide (cont’d)
• “This statutory language uses the broad and inclusive term
‘patented invention’ . . . [S]ection 101, explains that an
invention includes ‘any new and useful process, machine,
manufacture or composition of matter.’” Eolas, 399 F.3d at
1338-39.
• “Thus, as Eolas explained, the statute makes no distinction
between patentable method/process inventions and other
forms of patentable inventions.” Union Carbide, 425 F.3d
at 1379.
• Thus, Shell Oil’s exportation of catalysts may result in
liability under § 271(f). District Court abused its discretion.
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13. Cardiac Pacemakers, Inc. v. St. Jude
Med., Inc., 576 F.3d 1348, 2009 WL
2516346 (Fed. Cir. 2009)
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14. Procedural History in Cardiac Pacemakers
• Cardiac obtained a method patent (“the ‘288 Patent”),
Claim 4 of which was directed to a method of heart
stimulation using an implantable cardio defibrillator
(“ICD”).
• In November 1996, Cardiac sued St. Jude Medical, Inc. and
Pacesetter, Inc. (collectively, “St. Jude”) in S.D. Ind. for
infringement of the ‘288 Patent + another (‘472) patent.
• S.D. Ind. granted JMOL of invalidity and noninfringement
of ‘472 patent, which Cardiac did not appeal.
• As to ‘288 Patent, series of retrials, appeals, and remands
ensued.
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15. Procedural History in Cardiac Pacemakers
(cont’d)
In the last remanded proceeding, the district court (S.D. Ind.):
• Granted Cardiac’s MSJ of infringement.
• Denied Cardiac’s MSJ of no inequitable conduct.
• Granted St. Jude’s MSJ of anticipation; j/invalidity.
• On St. Jude’s MSJ to limit damages:
• Granted motion to extent of restricting damages to only
those ICDs that actually performed the claimed steps.
• Denied motion to extent of refusing to limit damages to
U.S. sales of ICDs.
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16. Prefacing Decisions in Cardiac Pacemakers
12/18/08 Panel Decision
• [MSJ of infringement not appealed].
• Reversed MSJ decisions re invalidity and unenforceability.
Under law of the case, those issues should not have been
encompassed within the remand. CAFC reinstated prior
jury verdicts that the ‘288 Patent was not proven invalid or
unenforceable.
• Affirmed both parts of the damages MSJ ruling.
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17. Prefacing Decisions in Cardiac Pacemakers
12/18/08 Panel Decision – (cont’d)
• St. Jude argued that the Supreme Court’s AT&T v. Microsoft
decision overturned prior CAFC cases regarding § 271(f).
• CAFC disagreed, finding that AT&T left open the question of
whether § 271(f) applied to method claims, and thus that it
had no authority to overturn Union Carbide.
03/06/09 En Banc Order
Grants Petition for Rehearing En Banc, orders briefing as to the
§ 271(f) issue. Panel Decision of 12/18/08 vacated.
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18. Amici Curiae Briefs
• 6 amici briefs filed.
• Only one of them, filed on behalf of Ormco Corp., argued
that § 271(f) applies to method claims.
• Amicus brief of both Federal Circuit Bar Ass’n & AIPLA:
• The Supreme Court’s AT&T decision undermined the
rationale used in Union Carbide.
• Language of the statute, statutory framework, and
legislative history “confirm” that § 271(f) does not apply
to method claims.
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19. En Banc Decision in Cardiac Pacemakers
• Maintained all rulings in Panel Decision except for the one
based on § 271(f).
• A method step qualifies as a “component” of a process and
thus meets the definition requirement for a “component”
under § 271(f), but a method step:
• Is not the same thing as “physical component[] used in
the performance of the method.”
• Cannot be “supplied.” “Ordinary meaning” of “supply”
“impl[ies] the transfer of a physical object. Supplying
an intangible step is thus a physical impossibility.”
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20. En Banc Decision in Cardiac Pacemakers
(cont’d)
• When Congress enacted § 271(f), it was concerned with
closing a loophole as to exportation of products, not
processes.
• Legislative history behind statute is “almost completely
devoid of any reference to the protection of method
patents.”
• AT&T cautions that: (1) infirmities with a statute are to be
addressed by Congress, not the courts; and (2) there is a
presumption against extraterritoriality.
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21. En Banc Decision in Cardiac Pacemakers
(cont’d)
RESULT: Union Carbide, Eolas, and any other
decisions holding that § 271(f) applies to method
claims are, to that extent, overruled.
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22. Judge Newman’s Dissent
• “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.”
• Echoed rationale of Eolas in emphasizing “invention” text
in § 271(f) and its definition in § 101.
• Compared § 271(c): “When a specific statutory class is
intended it is explicitly stated . . . . The text of § 271(f)
states no such limitation, and presents no ambiguity in its
use of ‘patented invention.’”
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23. Judge Newman’s Dissent – (cont’d)
• Rule of statutory construction: “identical words used in
construction
different parts of the same act are intended to have the same
meaning.” Here, majority opinion discards that rule and
holds that “invention” has meaning unique to subsection (f).
• Legislative History: Text of early bills read “machine,
History
manufacture, or composition of matter.” Subsequent bills
replaced that text with the term “invention.”
• Thus, when Congress intended to plug loophole with
enactment of § 271(f), it intended to address all classes of
patentable invention, not just products.
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24. Judge Newman’s Dissent – (cont’d)
• Contemporary context:
context
• “[P]rocess information, as well as the results of process
steps, are readily supplied from one entity to the other.”
• In Quanta Computer, the Supreme Court reminded us
that apparatus and method claims “may approach each
other so nearly that it may be difficult to distinguish the
process from the function of the apparatus.”
• “The challenge of applying important and complex law
to new facts is poorly met by holding that no law applies
to any facts.”
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25. Judge Newman’s Dissent – (cont’d)
• Parting Shots:
Shots
• “A statutory interpretation that results in all process
inventions being seriously devalued, is not free from the
charge of ‘absurd result.’”
• “[I]t is not necessary (nor is it our prerogative) to
destroy the statute for all process industries, in order to
avert potential abuses in unknown circumstances.”
• “The court’s ruling reopens, for process inventions, the
loophole that was plugged by § 271(f) for all patented
inventions.”
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26. In Closing:
Though you may be disheartened
about this latest judicial assault on
method claims . . . .
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27. Don’t Let the Sun Catch You Crying
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28. QUESTIONS?
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