by Dennis Crouch
Back in 1969, long before Bubba Gump, Louisiana Judge Alvin Rubin explained the virtues of shrimp: “Shrimp, whether boiled, broiled, barbecued or fried, are a gustatory delight.” Laitram Corp. v. Deepsouth Packing Co., 301 F. Supp. 1037 (E.D. La. 1969). The Deepsouth case was about patented equipment for deveining shrimp in order to render them “more pleasing to the fastidious as well as more palatable.” Id. Deepsouth litigated its case to the Supreme Court, and the Court eventually allowed the company to escape some portion of its adjudged liability based upon the territorial limits of U.S. patent law.
We know that U.S. patents are territorially limited. Although Deepsouth was barred from using Laitram’s patented inventions throughout the United States, Deepsouth began selling its deveining machine to folks outside of the US in a partially constructed form. The company explained the setup to one of its customers in Brazil:
We are handicapped by a decision against us in the United States. This was a very technical decision and we can manufacture the entire machine without any complication in the United States, with the exception that there are two parts that must not be assembled in the United States, but assembled after the machine arrives in Brazil.
The Fifth Circuit had sided with the patentee — holding that “Such a dependence on technicality would require us to countenance obvious schemes, perhaps as simple as omitting an important screw, designed to evade the mandate of § 271(a).” However on certiorari, the Supreme Court felt itself bound by the statute and precedent. The court particularly rejected the notion that “substantial manufacture” can constitute direct infringement ”
[W]e have so often held that a combination patent protects only against the operable assembly of the whole and not the manufacture of its parts.
Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518, 528 (1972). The decision was 5-4, with Justice Blackman writing in dissent and arguing that “The Court has opened the way to deny the holder of the United States combination patent the benefits of his invention with respect to sales to foreign purchasers.” Bills eliminating this loophole were quickly introduced into Congress, and eventually became law in 1984, creating 35 U.S.C. § 271(f). Patent Law Amendments Act of 1984, Pub. L. No. 98-622, 98 Stat. 3383. The new law creates two avenues for liability:
- Supplying a “substantial portion” of the uncombined components of the patented invention from the US in a way that induces combination abroad. 271(f)(1).
- Knowingly supplying a part from the US that is especially designed as a component of a patented invention and not a staple article or commodity with substantial non-infringing use. 271(f)(2).
Deepsouth has important implications beyond the component-export arena. The case is an important example of the Supreme Court refusing to fill a gap in statutory language. However, the court majority was also clear that the refusal to gap-fill was one-sided — the majority did not want to expand patent rights without Congressional input:
[W]e should not expand patent rights by overruling or modifying our prior cases construing the patent statutes, unless the argument for expansion of privilege is based on more than mere inference from ambiguous statutory language. We would require a clear and certain signal from Congress before approving the position of a litigant who, as respondent here, argues that the beachhead of privilege is wider, and the area of public use narrower, than courts had previously thought. No such signal legitimizes respondent’s position in this litigation.”
Deepsouth at 531. The dissent suggested that the precedent was not so clear and so the demand to overrule or modify was fairly slight.
The anti-patent-right-expansion policy of Deepsouth was repeated in Parker v. Flook, 437 U.S. 584, 596 (1978) (“we must proceed cautiously when we are asked to extend patent rights into areas wholly unforeseen by Congress”) and again in Justice Brennan’s dissent in Diamond v. Chakrabarty, 447 U.S. 303, 319 (1980) where he wrote:
[W]e must be careful to extend patent protection no further than Congress has provided. In particular, were there an absence of legislative direction, the courts should leave to Congress the decisions whether and how far to extend the patent privilege into areas where the common understanding has been that patents are not available.
Chakrabarty. See also, Asgrow Seed Co. v. Winterboer, 513 U.S. 179, 195 (1995) (“A statutory restraint on this basic freedom [of Farmers to have right to collect and replant seeds] should be expressed clearly and unambiguously.” Stevens, J. in dissent).
Deepsouth was decided before the PCT became available and well before TRIPs and the global expansion of patent rights. We might question whether there is still a need for the US to extend rights to overlap those available abroad, especially as it tends to injury U.S. manufacturing capability.
How is does the advent of the PCT change the calculus here? The Paris Convention long pre-dates Deep south and the other cases you cite, and applicants were free on the basis of Paris to seek protection elsewhere, claiming priority from their priority application, having a year in which to file in other Paris Convention countries. The PCT a convenient system for deferring by an additional 18 months (beyond the Paris priority year) the cost of seeking patent protection in PCT member countries. You comment implies that the PCT provides world-wide patent rights, but it doesn’t, as any licensed practitioner should know.
“[W]e must be careful to extend patent protection no further than Congress has provided. In particular, were there an absence of legislative direction, the courts should leave to Congress the decisions whether and how far to extend the patent privilege into areas where the common understanding has been that patents are not available.”
Sage advice indeed.
Then why is it O.K. for SCOTUS to restrict patent protection (eligibility) . . . no more than Congress has provided?
And why is it O.K. for the CAFC to even further restrict patent protection (eligibility) . . . no more than Congress . . . and no more than SCOTUS . . . have provided?
Then why is it O.K. for SCOTUS to restrict patent protection (eligibility) . . . no more than Congress has provided?
This formulation begs the question. I wish that the Court had gone the other way on eligibility in Mayo and Myriad, but the Court would not characterize what they did in those cases as “restricting” eligibility relative to what Congress has provided. The Court would say that they are “giving effect” to Congressional intent in those cases.
I wish that Congress would speak up and say “no, that was not our intent when we promulgated §101.” Congress’ persistent silence since Alice, however, regrettably indicates that they are happy with the outcome so far.
Well, we both know (if you were to allow yourself to be inte11ectually honest) that such was scrivining from the bench and NOT interpreting the words of Congress — and I know that you recently seen this very thing from Wandering through, whom you still “read.”
Further, had you been paying attention (oh, over the last decade), you would have recognized that the Act of 1952 was aimed at the Supreme Court and their (then) “gist of the invention” nonsense. No way this can be taken as the Court implementing the will of Congress — and quite the opposite.
And at last, the fact that Congress has been silent cannot be taken as confirmation. It should be abundantly clear given the R v D divisiveness, that silence as to patent matters cannot be so taken.
[T]he [C]ourt majority was also clear that the refusal to gap-fill was one-sided — the majority did not want to expand patent rights without Congressional input…
At the risk of belaboring the obvious, this is an application of the ordinary principle of statutory construction that exceptions to a general rule should be narrowly applied. New Jersey v. U.S. EPA, 626 F.2d 1038, 1045 (D.C. Cir. 1980). As Judge Rich once noted (1 APLA Q. J. 26 (1972)), “§103… is the provision which assures that the patent grant of exclusive right is not in conflict with the anti-monopoly policy brought to this country from England by the colonists… .”
In other words, “anti-monopoly” is the general rule, and patents are a narrow exception to this general rule. The operation of the patent laws, therefore, need to be carefully cabined to make sure that they do not end up negating the general rule to which they are an exception. That is why the Court needs to be more wary of expanding the patent right beyond Congressional authorization than of shrinking the patent right relative to Congressional authorization (although the Court needs also to be on guard against that). The harm of shrinkage can always be remedied by Congress through subsequent legislation, while the harm of restraint of trade where Congress did not intend to restrain trade cannot be undone once done.
Total B$ — there is nothing stopping Congress from legislating post court decision in either direction.
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The case is an important example of the Supreme Court refusing to fill a gap in statutory language. However, the court majority was also clear that the refusal to gap-fill was one-sided — the majority did not want to expand patent rights without Congressional input”
If only they had such reticence in the reverse direction (and rather than “filling any gaps” they would avoid scrivining new requirements — exceptions — not in the Patent Act).
Deepsouth was decided before the PCT became available and… the global expansion of patent rights.
Is the implication here that we do not need §271(f) now because the patentee has a remedy in BR courts? Have you tried enforcing a patent in BR lately. It is scarcely a close approximation of the U.S. justice system. If two U.S.-headquartered companies want to fight about IP ownership, how about we leave that to the U.S. courts, and not drag BR into it. Meanwhile, we should scrap TRIPS (or at least the patent and copyright portions) and let the developing world set their own IP policies to best suit their own well-being.
Greg, can you enlarge on “we” and “scrap”, please. Who is “we” and what does “scrapping” entail? In patent law, how about The Paris Convention? Would you “scrap” that too?
I can see that a sovereign State can withdraw from membership of an international Agreement, if only because the UK has done it, recently, in leaving the European Union. But the EU remains in existence and much as some people in England would like to “scrap” it, they can’t. Who can?
As the UK is finding out, there are good reasons why countries sign up to Internnational Conventions and follow the Rules of the “Club” of which they are members. When you advocate scrapping GATT-TRIPS, is it with your fingers crossed behind your back? Are you saying it just for fun or to precipitate a debate about how economically powerful bully the economically weak, especially amongst sovereign States? What was that saying about international diplomacy, something about friendship counting for nothing, and that the only thing that counts is the economic interest of the State? Is it no longer in the economic interests of the USA for it to be a member of the GATT-TRIPS Club?
You write that “we” should “let” the developing world choose their own patent laws. Does that mean that, up to now “you” haven’t been doing that?
There is something about the age-old human brain (remorselessly exploited by the algorithms underlying social media) that seeks to render every issue binary, a Them vs Us issue. But dividing countries into an “Us” group of “developed” countries and a “Them” group of “developing” countries strikes me as unhelpful, to say the least. Every sovereign State has its own unique set of economic challenges, I would say; the developed countries (UK?) just as much as the developing (PRC?) ones.
Care to expand on your thoughts, Greg? I’m curious.
Thanks for your follow up, Max. Right now, accession to TRIPS is a precondition for WTO membership. When I said that “we” should “scrap” TRIPS, what I really meant is that TRIPS should be decoupled from WTO membership. Such a change would permit countries whose best interests are not served by EP style patent & copyright laws from needing to install such.
Well, that was a little glossy, and of not much value.
… permit countries whose best interests are not served by EP style patent & copyright laws from needing to install such.
Bah, garbled nonsense. My apologies. That should have read “… permit countries whose best interests are not served by EP style patent & copyright laws not
from needingto install such.”I am wondering if MaxDrei saw enough in your response to satisfy his curiosity.
I am curious as well (and since the request was from a fellow “patticake friend,” perhaps Greg will deign to answer).
[H]ow about The Paris Convention? Would you “scrap” that too?
Definitely not. Nor the PCT. Those agreements seem entirely salutary. Any nation who thinks it in their interests to join such compacts definitely should do so (or remain in them if they have already joined).
>because the patentee has a remedy in BR courts?
Might have a remedy in BR courts if they had the foresight seek a national phase BR patent 10-15 years ago. It’s not a trivial decision to spend that kind of $$$ necessary for global protection when your business is still in its infancy.
(FWIW, BR apparently signed the Paris convention in 1884, so Deepsouth technically ‘had a remedy’ in BR courts back then)
Good point. Nothing about the arrival of the PCT or TRIPS really changes the fact that the patentee had a remedy even before §271(f). It was, however, a crummy remedy (and still is). It was perfectly sensible of Congress to think that a better remedy (i.e., the remedy of §271(f)) more fully accords with American justice.
Not to be confused with the line that applies to the Supreme Court (and those with unblinking — and unthinking — fealty to that body’s jurisprudence):
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Not to be confused with the other “shrimp peelers cases” that were on antitrust-discriminatory U.S. licensing of those machines, which some consider the worst antitrust law decisions ever since the licensing fee differences were clearly economic-benefit-justified: In re Grand Caillou Packing Co., et al., 65 FTC 799, (June 4, 1964); LaPeyre v. F.T.C., 366 F.2d 117 (5th Cir. 1966); Peelers Co. v. Wendt, 260 F. Supp. 193 (W.D. Wash. 1966); Laitram Corp. v. King Crab Inc., 244 F. Supp. 9 (D. Alaska 1965) (collectively, the shrimp peelers cases).
There was another shrimp peeler case from the 19th century that was nothing but patent law. I can’t remember the name of the case when it got to scotus. Regardless, it was some great litigating.
White v. Dunbar, 119 U.S. 47, 48 (1886) (patent covers a “method of preserving shrimps, by first lining the inside of the can with a coating of asphaltum cement, and then with paper coated with a solution of paraffine, or kindred substance. The can is then filled with shrimp, sealed up, and subjected to the boiling or steaming process, in the usual manner of canning vegetables and meats”).
The decision is cited for the principle that a patent claim is designed to force the patentee do precisely define the invention, and the specification cannot alter or enlarge that scope, although it may explain the scope.
Ah, thanks, this leads to wondering if the famous no “nose of wax” claim construction quote from that case was suggested by the contemplated smell of those shrimp canned in asphalt?
No, it was about an apparatus for deveining shrimps. I throwed away the book that had that case just the other day. It was a soft cover, big and kinda red. Some patent enforcement class back in the day. I hate throwing away books.
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