Promega Wins $50 Million Jury Verdict -- and the Court Takes It Away Because Promega Did Not Show That Infringing Products Were Made or Sold in the United States or Imported into the United States

September 27, 2012

Plaintiff Promega Corporation ("Promega") filed an action against Life Technologies Corporation, Applied Biosystems, LLC and Invitrogen IP Holdings, Inc. for infringing and inducing infringement of five patents pertaining to copying of sequences of a DNA strand. In a previous licensing agreement, Life Technologies and Applied Biosystems were permitted to sell the Promega patented products within certain fields. Promega asserted that the defendants were making and selling the products into unpermitted fields, such as clinical diagnostics, clinical research and research markets. The jury agreed with Promega and awarded more than $50 million in damages.

Promega filed a motion to enhance damages, for attorneys and costs and a permanent injunction. The defendants filed a motion asserting that they were entitled to judgment in their favor based on their equitable defenses and also because Promega failed to prove its affirmative case.

Although the district court found that the defendants failed to prove their equitable defenses, the district court agreed with the defendants that Promega had failed to prove infringement. As noted by the district court, "Plaintiff relied on two theories of infringement at trial. First, it argued that defendants sold accused products that included components supplied from the United States, in violation of 35 U.S.C. § 271(f) (1). Second, it argued that the accused products were manufactured in or imported into the United States, in violation of 35 U.S.C. § 271(a). The jury found that all of the accused products defendants sold during the relevant time frame satisfied the requirements for one or both of these provisions."

As explained by the district court, "Defendants argue that plaintiff failed to prove that a 'substantial portion of the components' of the accused products was supplied from the United States, that defendants 'actively induce[d]' the combination of components or that they did so 'in a manner that would infringe the patent is such combination occurred within the United States.'"

Section 271 provides: "[w]hoever without authority supplied 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."

After finding the defendants had not waived their position, the district court then addressed whether a single component is sufficient under section 271 and concluded it was not: "Similarly to § 271(f) (2) uses the phrase 'where such component is uncombined' in whole or in part. In that instance, the reference to the singular 'component' must be to a component that is 'supplied in or from the United States' rather than to the invention as a whole because § 271(f) does not apply to single components inventions. Further, because § 271(f) (1) does not apply to single component inventions. Further, because § 271(f)(1) employs the same phrasing as § 271(f)(2) ('where such components are uncombined in whole or in part'), it follows that the term 'such components' in § 271(f)(1) refers to the components from the Untied States as well. Nken v. Holder, 556 U.S. 418, 426 (2009) ('[S]tatutory interpretation turns on 'the language itself, the specific context in which that language is used, and the broader context of the statute as a whole'') (quoting Robinson v. Shell Oil Co., 519 U.S. 337, 341 (1997))."

The district court then analyzed whether there was sufficient evidence of multiple components. "Plaintiff relies on the designated deposition testimony of Michelle Shepherd, another employee of defendants, who said that '[c]omponents of the kits are manufactured in' the United States. Dkt. #551-1, at 129. When asked to specify which components, she said, '[t]he allelic ladders.' Id. However, it is not reasonable to infer from this testimony that all of the accused products defendants sold worldwide since 2006 included allelic ladders. Again, Shepherd's testimony is vague; she does not provide any time frame. This is a problem in light of Sandulli's more specific testimony that defendants manufactured allelic ladders in the United States in the past, but no longer do so. Tr. Trans., dkt. #558, at 46. In addition, Shepherd did not testify that all of the accused kits included allelic ladders. Rather, when asked about the origins of a kits ordered in Germany, she said that she was 'only able to speak to the U.S. shipping and manufacturing,' dkt. #551-1 at 130, so it is impossible to infer from her testimony anything about the origin of components in kits shipped outside the United States. I conclude that plaintiff failed as a matter of law to prove that all of the accused products from 2006 to 2012 included a "substantial portion" of components from the United States."

The defendants also asserted that Promega failed to prove active inducement and the district court found against Promega on this point as well. "I cannot accept plaintiff's interpretation of § 271(f)(1) in the face of all the reasons not to. These include the facts of Deepsouth, the Supreme Court's instruction to construe § 271(f) narrowly, the Federal circuit's interpretation of the relevant phrase, the legislative history of § 271(f), the canon to interpret the same words in the same way and the ordinary meaning of the word 'induce.' It is particularly telling that plaintiff fails to address in its brief any of the reasons undermining its position. It may well be that Congress would have chosen its words differently had it contemplated the loophole it left open, but courts must apply statutes as they are written, not as the court believes they should have been written. Thus, plaintiff's failure to adduce any evidence that it induced the actions of a third party is a second and independent reason for concluding that plaintiff failed as a matter of law to prove its claim under § 271(f)(1)."

Finally, the district court rejected Promega's argument under section 271(a). "Alternatively, plaintiff argues that all of defendants' sales violated § 271(a), which provides: 'whoever without authority makes, uses, offers to sell, or sells any patented invention, within the united States or imports into the United States any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefore, infringes that patent.' In particular, plaintiff says that the jury could have found that all of the accused products are made in or imported into the United States. With respect to § 271(a), plaintiff relies entirely on Shepherd's testimony. However, she admitted she did not know where all the kits were made. Tr. Trans., dkt. #551-1, at 129 ('I'm not certain there - all of these varieties of AmpFLSTR kits are assembled in Foster City [California]. They may be assembled in Warrington [the United Kingdom].'). And, as noted above, she admitted she did not know whether foreign orders came through the United States. Id. ('I'm only able to speak to the U.S. shipping and manufacturing.'). Accordingly, even if the jury were to ignore all the evidence that many of the accused products are not made in or imported into the United States, it could not find reasonably from Shepherd's testimony that all of defendants' sales infringed under § 271(a)."

As a result, the district court found that "Plaintiff has failed to point to evidence that would sustain a finding that all of the accused products defendants sold between August 2006 and January 2012 would meet the requirements of § 2719a) or 9f)(1). Because plaintiff did not adduce evidence regarding defendants' sales of any subset of products that would meet those requirements, defendants are entitled to judgment as a matter of law. In addition, because plaintiff did not seek a new trial on damages in the event the court reached this conclusion, that issue is waived."

Promega Corporation v. Life Technologies Corporation, Case No. 10-cv-281-bbc (W.D. Wisc. September 13, 2012)

The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. We represent inventors, patent owners and technology companies in patent licensing and litigation. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Stan Gibson at 310.201.3548 or SGibson@jmbm.com.