Since the days of Stanislavski and Strasberg, aspiring thespians have been schooled in the ways of "method acting." Under this technique, an actor strives to emulate a character's emotional and psychological state through various exercises. Critics of method acting chide it as lacking substance and pretentious. In fact, legend has it that, when he was preparing for a tense scene in the movie The Marathon Man, Dustin Hoffman went without sleep for several days. When he told his co-star, Sir Laurence Olivier, that he was doing this to get into his character, Olivier dismissed the method with the simple instruction: "Try Acting, Dear Boy."
The Federal Circuit must have been channeling Sir Laurence when it recently ruled that there is no method - literally - in the statutory framework of Section 271(f) of the Patent Code. Specifically, in Cardiac Pacemakers Inc. et al. v. St. Jude Medical, Inc. et al., the Federal Circuit ruled that Section 271(f) of the Patent Code does not include method claims under any circumstance. Section 271(f) was enacted specifically in response to a 1972 Supreme Court decision, known as DeepSouth, which held that a domestic party could escape liability for infringing a combination patent merely by selling unassembled components to other countries, for reassembly and for use overseas. As a result, Section 271(f) prohibits a domestic entity from supplying components of a patented invention with the intent that the components be combined overseas in accordance with the scope of a patent claim.
The facts underlying this decision were fairly straightforward, notwithstanding a complicated procedural history on a variety of other patents and legal issues. Essentially, the defendant manufactured and sold implantable cardioverter defibrillators ("ICDs"), small devices that detect and correct abnormal heart rhythms. The patent at issue claimed a method of heart stimulation using such an ICD. At issue was whether the patent holder could recover for sales of such ICDs from the U.S. to other countries. While the ICDs in question practiced the claimed method during normal use, such use did not occur within the territorial limits of U.S. Patent Law.
With the exception of a lone dissent by Judge Newman, the Federal Circuit en banc said no. The court began its analysis with a review of precedent regarding Section 271(f), focusing upon the Supreme Court's reversal of its earlier decision in AT&T Corp. v. Microsoft Corp. The Federal Circuit noted that "the Court sent a clear message that the territorial limits of patents should not be lightly breached." Judge Lourie, writing for the majority, placed greatest emphasis upon canons of statutory construction, explaining that the statute's use of the words "component" and "supplied" when referring to the "patented invention" connote physical apparatus, not a method. Given this language, the court reasoned that the well recognized distinction between method and apparatus claims "dooms" any effort to read the statute more expansively. Finally, the court noted that the legislative history of the section was "almost completely devoid" of any reference to method patents.
Judge Newman's dissent criticized the "winner takes all" approach of the majority, noting that the phrase "patented invention" - as it is used throughout the statute - has always been understood as including method claims. Judge Newman also took issue with the majority's characterization of Section 271(f)'s legislative history, noting that other language connoting physical apparatus was stricken from the original version of the statute, and that a report prepared by the PTO presented in congressional hearings that the statute would correct the situation created by the DeepSouth case for both apparatus and method/process patents. Finally, Judge Newman voiced concern that the facts of infringement were not particularly well developed, noting that the claim was not an abstract, disembodied process, but was intended to capture the result of use of a specific physical device. Judge Newman thus called for an approach that would avoid the recreation of a DeepSouth-type loophole, by considering the nuances of whether patents involving information and electronic methods nonetheless have structural aspects that fall within the "components" and "supplied" language of the statute.
Our take? Given the strength of Judge Newman's dissent, and the commercial impact of this ruling, this is another candidate for Supreme Court review. As it currently stands, however, the Federal Circuit's decision leaves no room for method claims under Section 271(f) and patent holders will have to rely on apparatus claims if they wish to recover for domestic activity directed to foreign markets. Unless the Supreme Court intervenes, the Federal Circuit has made itself clear: When it comes to issuing rulings about methods, it is not acting.
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