February 22, 2017 / 4:29 PM / a year ago

Thermo Fisher did not infringe genetic-testing patent, U.S. top court says

(Reuters) - The U.S. Supreme Court on Wednesday cleared a subsidiary of biotech company Thermo Fisher Scientific Inc of infringing a genetic-testing kit patent held by Promega Corp, overturning a lower court’s decision.

The justices ruled 7-0 that the subsidiary, Life Technologies Corp [LTCL.UL], could not be held liable for violating the patent by shipping one part of a testing kit from the United States to Britain, where it was assembled with other components and sold overseas.

California-based Life Technologies and privately held Wisconsin-based Promega both sell DNA testing kits for forensic identification, paternity testing, medical research and other uses.

They were fighting over a law that prevents companies from evading U.S. patent infringement laws by shipping the parts of a patented invention to a foreign locale and making the infringing product there. The law forbids supplying a “substantial portion of the components” from the U.S. for this purpose.

Life Technologies assembles its DNA testing kits in Britain. But one component of the kit, an enzyme to make copies of DNA, is shipped from the United States.

Justice Sonia Sotomayor, writing for the court, said the law “has a quantitative, not a qualitative, meaning” and was not meant to include a single component supplied from the United States.

Promega sued Life Technologies in 2010 in federal court in Madison, Wisconsin, alleging infringement of a patent on a DNA analysis kit. A jury in 2012 awarded Promega $52 million in damages, but the judge later set aside the verdict saying there should be no damages on foreign sales because the one shipped element did not amount to a “substantial portion” of the kit’s components.

In 2014, the Federal Circuit Court of Appeals, a specialized patent court in Washington, again ruled in favor of Promega. The court said that the enzyme, though just one part of the kit, represented a “substantial portion” because the kit would be useless without it.

Life Technologies, whose case was backed by the former Obama administration, appealed to the Supreme Court in 2015, arguing that the law relates to the quantity of components involved, not their relative importance in a product. To infringe a U.S. patent, all or nearly all of the components must come from the United States, the company said.

Life Technologies argued that the Federal Circuit’s decision “dangerously expands the extraterritorial reach of U.S. patent law” and could hurt domestic manufacturers and parts suppliers.

Chief Justice John Roberts did not participate in the case.

Reporting by Andrew Chung in New York; Editing by Will Dunham

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