Background
Ajinomoto Co., a Japanese food and chemical company, owned a U.S. patent covering a method for genetically engineering bacteria to overproduce threonine — an amino acid used as a nutritional supplement in animal feed. The patented method involved modifying the DNA of Escherichia coli to enhance its production of threonine, resulting in bacterial strains that could generate the amino acid in commercially significant quantities. Threonine production using genetically modified bacteria represented a major advance in industrial biotechnology and fermentation chemistry.
Archer-Daniels-Midland (ADM), one of the world’s largest agricultural processing companies, sought to compete in the threonine market. ADM obtained bacterial strains from ABP International, a Swedish supplier that had a license from a Ajinomoto-related entity — but that license was geographically limited and explicitly excluded the United States. ADM imported those bacteria into the United States and used them domestically to produce threonine for commercial sale. Ajinomoto sued, alleging that ADM’s importation and domestic use of the bacteria — which were made using the patented process — constituted infringement of the U.S. patent under 35 U.S.C. § 271(g).
The Court’s Holding
The Federal Circuit affirmed the district court’s judgment of infringement and upheld the damages award. On the core § 271(g) question, the court confirmed that importing into the United States a product made by a process patented in the United States constitutes infringement, regardless of where the manufacturing occurred or whether the manufacturer had authorization under some foreign license arrangement.
Section 271(g), enacted as part of the Process Patent Amendments Act of 1988, was specifically designed to close a loophole in U.S. patent law: prior to the Act, a foreign manufacturer could use a U.S. process patent freely abroad and then import the resulting products into the United States without liability. The Ajinomoto case confirmed that this provision applies to living organisms manufactured using a patented process — the bacteria were “made by” the patented process within the meaning of the statute. ADM’s defense that the bacteria were produced by a licensed foreign entity did not protect ADM because the foreign license expressly excluded U.S. activity, and ADM’s own importation and use in the United States was not authorized.
The court also upheld the district court’s findings on patent validity, rejecting ADM’s challenges based on enablement, best mode compliance, and inventor signature requirements. The damages calculation — a royalty of $1.23 per kilogram of threonine produced using the infringing bacterial strains — was affirmed with modifications to the time period covered.
Key Takeaways
- Section 271(g) imposes liability for importing into the United States any product made by a process patented in the United States, regardless of whether the manufacturing occurred abroad and regardless of foreign license arrangements that did not authorize U.S. activities.
- The Process Patent Amendments Act of 1988 was enacted to prevent circumvention of U.S. process patents by manufacturing the resulting products abroad and importing them — courts apply this provision broadly to effectuate this congressional purpose.
- A foreign license to use a patented process does not protect an importer who brings the resulting product into the United States if the foreign license expressly excluded U.S. territory from its scope.
- Section 271(g) applies to living biological organisms — such as genetically modified bacteria — manufactured using patented methods, as well as to traditional chemical or mechanical products of patented processes.
- Companies importing products — including biological inputs and fermentation-derived materials — should conduct freedom-to-operate analysis for U.S. process patents even when the manufacturing occurs entirely outside the United States.
Why It Matters
Ajinomoto v. Archer-Daniels-Midland is a significant case in biotechnology patent law and in the interpretation of § 271(g) process patent liability. The decision confirmed that process patents covering biological manufacturing methods — including the genetic engineering of microorganisms — receive the full protection Congress intended under the Process Patent Amendments Act, including protection against importation of products made by the patented process abroad.
For companies in the amino acid, fermentation products, and industrial biotechnology sectors, the case underscores a critical compliance point: using a process licensed only in another country to produce products that will be imported into the United States triggers U.S. patent infringement liability under § 271(g). The geographic scope of manufacturing licenses must be carefully matched to intended markets. The case also reinforces that genetically modified living organisms are products subject to normal patent infringement analysis — the biological nature of the product does not create any immunity from process patent liability.