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Since 2001, federal funding of embryonic stem cell research has been restricted to a limited number of pre-existing cell lines, and some states have banned the research altogether. In response, a number of U.S.-based businesses are moving parts of their stem cell research programs abroad, to stem cell research “friendly” countries such as South Korea and Singapore. A more coordinated experiment in international scientific cooperation called the “World Stem Cell Hub” was launched in October, to combine South Korean expertise in cloning with Western knowledge of human disease. In the egalitarian vision of the World Stem Cell Hub’s founders, international cooperation among scientists will advance the frontiers of stem cell research more quickly than could be achieved by any one group acting alone. Cultural differences will present challenges, as evidenced by the recent resignation of the Hub’s leader in the face of ethical concerns over egg-harvesting practices not previously considered problematic in South Korea. Expansion of the international boundaries of scientific inquiry will also be limited by legal barriers, as participants procure exclusive patent rights to the products of their research, such as U.S. Patent No. 6,921,632 to South Korea’s MariaBiotech (to a method for establishing undifferentiated human embryonic stem cells by thawing cryopreserved human embryos). Thus, scientists who do stem cell research abroad may face the question Thomas Wolfe once posed: Can you go home again? Anyone familiar with the patent system knows that U.S. patent laws “do not … operate beyond the limits of the United States.” Brown v. Duchesne, 60 U.S. (19 How.) 183 (1857). In simplest terms, this means that U.S. patents don’t protect against the manufacture, use or sale of inventions outside of the United States. Technology, however, cannot always be easily contained within national borders. One can sometimes still benefit from a patented invention within the United States by performing steps of a method or constructing elements of a product elsewhere. Three recent decisions of the U.S. Court of Appeals for the Federal Circuit attempted to define the appropriate scope of extraterritorial patent law jurisdiction under 35 U.S.C. 271(a), (f) and (g) for software and networking-dependent inventions, where the transmission of electronic signals or source code between countries was at issue. Common to each was a global business model under which data and technology were shared across national borders, similar to the international efforts contemplated by companies and the World Stem Cell Hub. Sections 271(a), (f) and (g) were enacted to provide patentees with protection against certain offshore activities that would, if conducted within the United States, infringe the claims of an issued patent. Activities prohibited include making, using, offering to sell and selling a patented invention within, or by import into, the United States. See �271(a) (“whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States … infringes the patent”). Also prohibited is exporting components of a patented product to knowingly induce its construction abroad. See �271(f) (“Whoever … supplies … components of a patented invention … knowing … and intending that such component will be combined outside of the United States in a manner that would infringe the patent if [it] occurred within the United States, shall be liable as an infringer.”). Finally, importing a product made abroad by a patented process is also prohibited. See �271(g) (“Whoever … imports into the United States or offers to sell, sells, or uses within the United States a product which is made by a process patented in the United States shall be liable as an infringer.”). INTANGIBLE TECHNOLOGY For physical products, the applicability of extraterritorial patent law jurisdiction under �271 is relatively easy to determine. For intangible technology, the appropriate reach of the U.S. patent laws can be far more difficult to define, as illustrated in Eolas Technologies Inc. v. Microsoft Corp., 399 F.3d 1325 (Fed. Cir. March 2, 2005), reh’g en banc denied, 2005 U.S. App. Lexis 10067 (Fed. Cir. May 5, 2005), cert. denied, 2005 U.S. Lexis 8184 (U.S. Oct. 31, 2005). Microsoft Corp. exported a limited number of “golden master discs” containing the source code for the Windows operating system to foreign manufacturers, which downloaded the code onto hard drives for sale abroad. The hard drives were covered by the claims of a U.S. patent issued to Eolas. The question was whether Microsoft had supplied the foreign manufacturers with a “component” of a patented product to enable them to produce the product abroad, in violation of �271(f). Although the master discs never became a part of the hard drives, the source code did. Microsoft argued that source code isn’t a tangible article, and so couldn’t become a component of the hard drives. The court disagreed, finding that �271(f) applied to intangible data, such as a software source code, as well as physical objects. The source code at issue was a necessary element of the hard drives, without which they wouldn’t function as intended. As such, the code qualified as a component whose sale to foreign hard drive manufacturers induced them to produce a patented product in violation of �271(f). AT&T Corp. v. Microsoft Corp., 414 F.3d 1366 (Fed. Cir. July 13, 2005), also involved the Windows source code. The question was whether the act of “supplying” a component of a patented invention under �271(f) occurred when Microsoft shipped master discs containing the code to foreign customers. Microsoft contended that the act of “supplying” didn’t occur here because the source code wasn’t provided until copied from the discs, an act that occurred abroad. The court disagreed, saying that “the act of copying is subsumed in the act of ‘supplying,’ such that sending a single copy abroad with the intent that it be replicated” was sufficient to violate �271(f). Id. at 1370. NTP Inc. v. Research in Motion Ltd., 418 F.3d 1282 (Fed. Cir. Aug. 2, 2005), on reh’g after withdrawal of prior panel opinion, further reh’g en banc denied, 2005 U.S. App. Lexis 23112 (Fed. Cir. Oct. 7, 2005), involved Research in Motion Ltd.’s (RIM) BlackBerry wireless e-mail technology. Using a handheld BlackBerry device, users receive e-mail messages that are delivered to a user-controlled computer. The messages are copied, encrypted and forwarded to a “relay” station run by RIM in Canada. The station sends them along to a wireless network, which delivers them to a handheld. Messages sent from a handheld follow the same path in reverse. The issue raised was whether, under �271(a), infringement by manufacture, use or sale of a patented product within the United States could be found notwithstanding the location of the relay station in Canada. The court held that when an invention is a system of components, the question is not whether the entire system is present within the country. Instead, one must determine if the system can be used apart from where one or more of its components are physically located. If so, use occurs at “the place at which the system as a whole is put into service, i.e., the place where control of the system is exercised and beneficial use of the system obtained.” Id. at 1317. For the BlackBerry device, control and beneficial use of the system was determined to occur in the United States, in violation of �271(a). If, however, the invention had been a series of method steps to be performed rather than system of components to be used, the result might have been different. In this respect, methods “cannot be used within the United States … unless each of the steps is performed within this country.” Id. at 1318. THREE HYPOTHETICAL SITUATIONS To illustrate how claims of a U.S. stem cell-related patent might be applied (or not) to international research activities under �271, consider Claim 1 of U.S. patent No. 6,921,632, which reads as follows: “1. A process for making undifferentiated [not committed to becoming a particular type of adult cell] human embryonic stem cells, comprising the steps of: (a) thawing a cryopreserved [frozen] human blastocyst embryo; (b) isolating [removing] the inner cell mass by a process comprising the step of removing the trophectoderm [an outer membrane formed on the blastocyst] from said embryo using anti-human lymphocyte antibody [a cell that will bind a specific protein, if present]; and (c) culturing at least a portion of said inner cell mass on a medium [nutrient base] capable of sustaining undifferentiated embryonic stem cells, whereby undifferentiated human embryonic stem cells are established.” Assume that the blastocyst of Claim 1 is obtained in South Korea. Assume further that any of the following then occurs: A cryopreserved blastocyst is sent to the United States where the claimed method steps are performed; undifferentiated stem cells produced by the claimed method in South Korea are sent to the United States for study; or potential drugs are tested in South Korea on undifferentiated stem cells and the test results are sent to the United States for use in further drug development. Given the Eolas, AT&T and NTP decisions, do any of these scenarios result in infringement liability under �271(a), (f) or (g)? In the first hypothetical, the answer is probably yes, under �271(a). Even though a blastocyst necessary to allow one to perform the patented process is created outside the United States, the patent claims don’t require an infringer to be the one who obtains the blastocyst. Instead, the claims are concerned only with what is done with the blastocyst after it is cryopreserved. Because all the method steps are performed on the cryopreserved blastocyst in the United States, the patent claims are infringed. In the second hypothetical, the answer is again probably yes, under �271(g). Although all of the patented process steps are performed outside of the United States, the immediate product of the process is imported into the United States in violation of the statute. Note, however, that had the cells been “materially changed by subsequent processes” prior to importation, the result might be different. In the third hypothetical, however, the answer is probably no, under �271(a), (f) and (g). The test results provided under the hypothetical could qualify as a “component” of a patented invention ( Eolas), and are “supplied” ( AT&T). However, the test results aren’t used to make a product covered by the patent claims, so �271(f) doesn’t apply. As to � 271(g), the test results don’t constitute “a product made by a process patented in the United States.” Rather, they are generated from use of a product outside of the United States not prohibited by �271(g). It could be argued that “beneficial use” of the patented method occurs when the test results are sent here, based on NTP. However, methods “cannot be used within the United States … unless each of the steps is performed within this country.” 418 F.3d at 1318. Thus, the provision of test results from the use of a product of the patented method abroad is not sufficient for infringement under �271(a). Nor is the fact that the service of performing the process steps overseas is offered for sale to a party in the United States. As the Federal Circuit noted, “[i]t is difficult to envision what property is transferred merely by one party performing the steps of a method claim in exchange for payment by another party.” Id. at 1319. Thus, the generation, transfer and use of test data outlined in the third hypothetical probably does not give rise to infringement under �271(a). No one can know today what technological changes are in our future, especially in the rapidly evolving field of stem cell research. What is certain is that as technology evolves, so too will the ways in which extraterritorial patent jurisdiction is applied to it. Hence, scientists doing stem cell research on foreign soil may well be able to “go home again,” but should do so with caution. Stacy Taylor is a partner in the intellectual property department of Foley & Lardner, in its Del Mar and Palo Alto, Calif., offices. She specializes in biotechnology patents and trademark law.

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