Federal Circuit Grants Rare En Banc Review to Decide Whether 35 U.S.C. § 271(f) Applies to Method Claims

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Patent law 35 U.S.C. § 271(f)(1) provides that whoever supplies from the United States all or a substantial portion of the components of a patented invention and actively induces another to combine those components abroad is liable for infringement, if combining the components in the United States would infringe a U.S. patent. The Federal Circuit has held that Section 271(f) allows product patent holders to reach covered overseas activities. In a rare grant of en banc review, the Court of Appeals for the Federal Circuit will hear argument on whether (and, if so, to what extent) Section 271(f) applies to method claims as well as product claims.

In a March 6 order, the Federal Circuit vacated the December 18, 2008 panel decision in Cardiac Pacemakers Inc. v. St. Jude Medical Inc., Nos. 2007-1296 and 2007-1347, and announced that it would hear en banc the following question: "Does 35 U.S.C. § 271(f) apply to method claims, as well as product claims?" Based on prior Federal Circuit decisions holding that Section 271(f) applies to patented methods and processes, the lower court allowed recovery of damages for infringement of U.S. process claims where the patented process was performed overseas using a machine that was made in the United States but was not covered by a valid U.S. patent. On appeal, the panel affirmed, rejecting St. Jude's argument that damages must be limited to U.S. sales of the infringing product. The panel concluded that the Supreme Court's decision in Microsoft Corp. v. AT&T Corp., 550 U.S. 437 (2007), "left open the question of whether [Section] 271(f) applied to method claims," and it was without power to reverse another Federal Circuit panel's prior holding. In an unusual move, the entire court will now take up the issue.

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