Patent Law - No Infringement for Extraterritorial Completion of Method Patents - Cardiac Pacemakers, Inc. V. St. Jude Medical, Inc

Article excerpt

U.S. patent law generally grants the patentee the right during the patent term to exclude others from making, using, or selling the invention within the boundaries of the United States. (1) An exception to the general grant, section 271(f) of the Patent Act extends a patentee's rights extraterritorially allowing inventors to seek infringement damages against anyone who supplies "all or a substantial portion of the components of a patented invention" from the United States to a foreign country for assembly. (2) In Cardiac Pacemakers, Inc. v. St. Jude Medical Inc., (3) the Court of Appeals for the Federal Circuit considered en banc whether section 271(f) applied to method claims. (4) The Federal Circuit held that method claims were not within the scope of section 271(f) and limited infringement damages to implantable cardioverter defibrillators (ICD) used in the patented method sold within the United States. (5)

The long and complex patent litigation began when Cardiac Pacemakers, Inc. (Cardiac) filed suit against St. Jude Medical, Inc. (St. Jude) on November 26, 1996 alleging that St. Jude infringed several of Cardiac's ICD product and method patents in the United States and abroad. (6) Cardiac sought damages for the manufacture and sale of ICDs directly infringing any product patents, the sale of ICDs with programming capable of performing Cardiac's method claims, and the sale of ICDs that actually performed the method steps. (7) After a 2001 trial and subsequent appeal, Cardiac's only claim left in dispute was from U.S. Patent No. 4,407,288 ('288 patent), claiming a method of heart stimulation that detects and treats heart arrhythmias through either single or multimode operation with cardioversion. (8) The alleged infringement specific to the '288 patent concerned St. Jude selling ICDs to doctors that were programmed to a noninfringing defibrillation mode but capable of performing the patented method. (9) St. Jude provided the doctors with instructions to program the ICDs to perform the infringing cardioversion mode. (10) In the subsequent appeal, the '288 patent's claim construction was modified and remanded for a new trial of infringement in light of the claim construction and for reassessment of damages. (11)

On remand, St. Jude raised new invalidity arguments concerning the modified claim construction and filed a motion for summary judgment to limit Cardiac's damages to only those ICDs that performed the '288 method in the United States. (12) The district court denied a limitation of damages to ICDs used within the United States relying on Federal Circuit precedent that allowed section 271(f) recovery of damages for methods practiced abroad if the method used products shipped from the United States. (13) The district court ultimately precluded an award of damages when it granted summary judgment of anticipation to St. Jude because the broader claim construction made the '288 patent obvious in light of prior art and thus invalid. On appeal, a panel of the Federal Circuit reversed the anticipation summary judgment and affirmed the refusal to limit damages. Both parties filed petitions for rehearing en banc, but the Federal Circuit granted only St. Jude's petition regarding section 271(f) and the limitation of damages to territorial sales of the ICDs. (16) In the en banc decision, the Federal Circuit held that method claims were not within the scope of section 271(f) because a method's components are the actually-performed steps and not the products used to perform the steps. (17)

In Deepsouth Packing Co. v. Laitram Corp., (18) the Court refused to attach U.S. patent infringement liability to a manufacturer who shipped disassembled components of a device for reassembly overseas absent explicit legislative consent from Congress. (19) In direct response to Deepsouth Packing, Congress enacted section 271(f) to prevent companies from evading U.S. patent laws by manufacturing all that is necessary to make an infringing device and simply "supplying [the] components of a patented product" for completion of the invention abroad. …