Exporting Components of Patented Products: A Unique Way to Infringe

May 12, 2017

For the most part, United States patent law is only concerned with activities that take place in the United States and its territories. One of the rare exceptions to this may be found in 35 U.S.C. § 271(f). The first part of this statute makes it an act of infringement for a party in the United States to supply a foreign entity with components of a patented invention when the components are uncombined as sent but are supplied in a manner that induces their being combined abroad to form a product covered by the patent.1 Remarkably, liability may occur even though an infringing product has never been made, used, or sold in the United States and without the patent owner having experienced any demonstrable harm.
 
This article argues that the most recent interpretation of this statute by the Federal Circuit is so vague and expansive that it will be almost impossible for manufacturers operating in the United States to assess and avert the risk of patent infringement associated with the sale of components to foreign entities. The consequent incentive is for the manufacturer to either forgo the sale or to relocate manufacturing facilities outside the United States. Thus, § 271(f), which was enacted based in part on the idea that it would improve the United States trade balance and encourage the development of United States jobs, actually does the opposite. At a minimum, the language used in the statute should be clarified by the Supreme Court, and ideally, the statute should be repealed entirely.