Divided Patent Infringement in Willowood Case

Tuesday, November 24, 2020

The current denial of certiorari in Willowood with out Supreme Court docket remark provides one other tile to the mosaic of precedent contemplating divided (induced, contributory) infringement of methodology patents; Syngenta Crop Prot., LLC v. Willowood, LLC, 944 F.3d 1344 (Fed. Cir. 2019). The Supreme Court docket’s most up-to-date resolution on the subject is Limelight Networks, Inc. v. Akamai Techs., Inc., 572 US 915 (2014)). In Limelight, which bounced a few instances on the Federal Circuit, the Supreme Court docket phrased and answered the query—once more with a “no”—”whether or not a defendant could also be accountable for inducing infringement of a patent underneath 35 U.S.C. § 271(b) when nobody has straight infringed the patent underneath 35 U.S.C. § 271(a) or another statutory provision.” 572 U.S. at 917; (35 U.S.C. § 271).

In line with the Federal Circuit in Willowood, nonetheless, though infringement within the US can typically be sufficiently divided to keep away from “common” infringement (35 U.S.C. § 271(a)) a course of carried out past US borders, and in any other case “divided” into different-party steps, can nonetheless produce a product that infringes 35 USC 271(g).

The Limelight court docket, by Justice Alito, appeared to be saying that underneath § 271(a) there are three prospects: direct infringement (all the steps within the declare), no infringement (not one of the steps within the declare), and one thing undefined (some, however not all, of the steps within the declare).

As a result of the vary of prospects between “not one of the steps” and “all the steps” would appear to be unclear in virtually all instances, the Limelight Court docket understandably settled on “all steps; in any other case non-infringing.” Thus, two of the three prospects are non-infringing.

Willowood, nonetheless, produced a unique consequence.

Syngenta sued Willowood for a number of causes. Syngenta sells plant fungicides into the agricultural market, two of which incorporate azoxystrobin as an lively ingredient. In line with Syngenta, its QUADRIS® fungicide controls “many illnesses together with strobilurin-resistant frogeye leaf spot,” and its QUILT XCEL® fungicide “helps crops stand up to moist circumstances” (https://www.syngenta-us.com/fungicides/quadris). A College of Nebraska report states that yield loss estimates might be as excessive as 30% nationally from frogeye leaf spot. In flip, the Division of Agriculture describes the Farm money worth of the US soybean market as $31.2 billion in 2019; USDA Soybean Market.

Willowood sells equivalent compositions with equivalent ingredient labels underneath the names “Azoxy 2SC” and AzoxyPro Xtra.” The agricultural market acknowledges these as equivalent or akin to the Syngenta manufacturers (e.g., Reichman Gross sales).

One in all Syngenta’s methodology patents recited a two-step course of (etherification adopted by condensation) for making azoxystrobin and one other methodology patent recited an outlined proportion of a catalyst used to speed up the condensation step.

Syngenta additionally sued Willowood for copyright infringement of its product labels and infringement of “compound” patents. The copyright declare deserves its personal copyright legislation remedy, however for now the difficulty is whether or not, for extremely regulated content material (the labels of fungicides), do Willowood’s equivalent labels for its azoxystrobin fungicides infringe any copyright(s) to which Syngenta could also be entitled? The District Court docket denied all of Syngenta’s copyright claims, on the grounds that federal labeling necessities for pesticides merely precluded copyright safety for the “required components” of such labels. The Federal Circuit discovered this conclusion to be too broad, and remanded the case for a better take a look at Syngenta’s doable copyright claims.

Turning to divided infringement of the tactic patents, “Willowood” was technically 4 firms, one in all which (“Willowood China”) bought azoxystrobin from a Chinese language provider, then bought it to “Willowood USA,” which then imported the composition into the US.

Willowood due to this fact addresses an analogous, however barely completely different necessary query than did Limelight (and one in all first impression): whether or not 35 U.S.C. § 271(g) (which defines merchandise made abroad by strategies recited in a US patent declare to be infringing) requires that—as in Limelight—each step of the claimed course of to be carried out by, or attributable to, a single entity.

The Federal Circuit determined to concentrate on the phrase “product” in § 271(g) and held that the imported product would infringe no matter whether or not or not a single entity carried out all the infringing steps abroad.

(g) Whoever with out authority imports into the USA or provides to promote, sells, or makes use of inside the USA a product which is made by a course of patented in the USA shall be liable as an infringer, if the importation, supply to promote, sale, or use of the product happens in the course of the time period of such course of patent. . . .

The court docket’s logic was as follows. The District Court docket had determined that § 271(g) had the identical single entity requirement as § 271(a). The Federal Circuit, nonetheless, started with an compulsory assertion about correct statutory interpretation, after which identified that the literal phrases of § 271(g) referred to “a product,” and thus § 271(g) lined merchandise reasonably than strategies.

The Federal Circuit then drew the excellence between § 271(a) (single entity requirement) and § 271(g) (no single entity requirement) by explaining that § 271(a) creates legal responsibility when the infringer makes, makes use of, sells, or imports the patented invention.

In slight distinction, § 271(g) defines infringement by the act of importing a product reasonably than a claimed invention. In different phrases § 271(g) defines infringement primarily based on the product and never from the steps of constructing the product and thus whatever the direct-versus-indirect evaluation.

To bolster the argument the court docket identified that the adjoining, however completely different part—271(f)—consists of one more phrase completely different from § 271(g). Part 271(f) makes use of the, “if such mixture occurred inside the USA” language that’s absent from § 271(g). Once more, primarily based on rules of statutory building, when Congress makes an specific assertion in a single a part of the statute (“f”), however not in one other (“g”), that is thought of to be an intentional distinction reasonably than an unintended one.

The court docket discovered the legislative historical past in keeping with its place, however then wrapped up by contemplating § 295. This might need been higher because the main argument reasonably than the trailing one.

Part 295 acknowledges the difficulties in acquiring discovery abroad, particularly methodology patent discovery (e.g., American Bar Affiliation March 23, 2020 Follow Factors; “Getting Discovery Throughout Borders”). Primarily based on such difficulties § 295 (i) creates an specific presumption that an imported product was made by an infringing methodology; and (ii) locations the burden on the infringer to indicate that such product was not made by an infringing methodology.

Right here, there appears to have been no debate by both aspect as as to if azoxystrobin had been imported, and there was additionally professional testimony at trial that azoxystrobin could be troublesome or inconceivable to make exterior of the patented strategies. In different circumstances, after all, the presumption of § 295 is likely to be much more useful in actuality than it was right here in idea.

Maybe one shade tree define may very well be as follows:

Part 271(a)—you infringe for those who (a single entity) make, use or promote;
Part 271(g)—you infringe for those who (not essentially a single entity) import a product made by an infringing methodology;
Part 271(f)—you infringe for those who induce an infringing mixture, together with doing it abroad if it could infringe within the US;
Part 295—you in all probability infringe, so please show that you do not.

In abstract, Willowood holds that (i) infringing merchandise would be the measure, (ii) abroad infringement of a patented methodology is prone to be presumed, and (iii) the variety of entities exterior the US that collectively perform the steps merely would not matter.