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Category : jurisdiction

Patent Damages for Infringing Acts Outside of the US

One of the bedrock principles of patent law is that it only applies territorially: A US patent holder cannot sue for infringing acts in Nepal. But there are some grey areas. Specifically, US laws provide that a party can be liable for patent infringement where they make components in the US for assembly outside the US:

(1) Whoever without authority supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce the combination of such components outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.

(2) Whoever without authority supplies or causes to be supplied in or from the United States any component of a patented invention that is especially made or especially adapted for use in the invention and not a staple article or commodity of commerce suitable for substantial noninfringing use, where such component is uncombined in whole or in part, knowing that such component is so made or adapted and intending that such component will be combined outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.

35 USC 271(f)

The notable thing about the above-quoted law is that it is specifically written to apply to domestic parties acting extra-territorially. This leaves open the question of whether other–non-specific patent laws–also apply extra-territorially.  Yesterday the Supreme Court took up the question of whether the patent damages statute, 35 USC 284, can apply to capture international profits under the infringing acts under 35 USC 271(f) noted above.

Writing for the 7-2 majority in WesternGeco LLC v. Ion Geophysical Corp., Justice Thomas wrote that the patent damages statute applies outside the US because it works in tandem with the infringement statute above. The Court’s rationale is that “When determining the focus of a statute, we do not analyze the provision at issue in a vacuum. If the statutory provision at issue works in tandem with other provisions, it must be assessed in concert with those other provisions. Otherwise, it would be impossible to accurately determine whether the application of the statute in the case is a ‘domestic application.’ And determining how the statute has actually been applied is the whole point of the focus test.”

The Court’s conclusion is limited to the damages statute’s application in conjunction with 35 USC 271(f), so its expansion from the damages statute to other statutes may be challenging.

Top Patent Cases of 2017

Supreme Court: Patent Infringement Lawsuits Only in State of Incorporation or Regular Place of Business

The Supreme Court issued a unanimous decision (it does happen) TC Heartland LLC v Kraft Food Group Brands LLC. The Court found that a plaintiff must bring patent infringement suits in the defendant’s state of incorporation or where the defendant has committed acts of infringement and has a regular and established place of business. This holding overturns almost 30 years of precedent in the federal courts and should put an end to the odd popularity of geographically inconvenient districts like the Eastern District of Texas.

Supreme Court: No Laches Defense in Patent Infringement Actions

Equity aids the vigilant, not those who slumber on their rights. This is a legal maxim that speaks to fairness, and in the courts, the maxim finds its roots in the equitable defense of laches.

The Supreme Court’s 7-1 SCA Hygeine Products AKT vs. First Quality Products, LLC (S. Ct. 2017) decision considered whether laches could be used as a defense when 7 years had passed from when a party first received notice of potential infringement and the date a patent owner filed an infringement complaint. Returning to the maxim, the Court concluded that “Laches cannot be interposed as a defense against damages where the infringement occurred within the [statute of limitations].”

En banc Federal Circuit OKs Amending Patents in AIA Post Grant Proceedings

The En Banc Federal Circuit gave patent owners a win late this year, shifting the burden of proof to patent challengers in Post Grant Proceedings in In Re Aqua Products, Inc. Before Aqua Products, patent owners bore the burden of proof to show that their amendments were unpatentable; now, challengers must show that such amendments are not patentable. This shift tips the scale in favor of patent owners and is a win for parties subject to post grant challenges.

Supreme Court: Patent Infringement Lawsuits Only in State of Incorporation or Regular Place of Business

The Supreme Court issued a unanimous decision (it does happen) today in TC Heartland LLC v Kraft Food Group Brands LLC. The Court found that a plaintiff must bring patent infringement suits in the defendant’s state of incorporation or where the defendant has committed acts of infringement and has a regular and established place of business.

This holding overturns almost 30 years of precedent in the federal courts and should put an end to the odd popularity of geographically inconvenient districts like the Eastern District of Texas.

The statute in question is 28 USC 1400(b): “Any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.”

The United States Federal Circuit Court of Appeals had interpreted this section in view of  28 USC 1391(c), which states that “[f]or purposes of venue under this chapter, a defendant that is a corporation shall be deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced.” VE Holding Corp. v. Johnson Gas Appliance Co., 917 F. 2d 1574 (Fed. Cir. 1990).

The Supreme Court rejected the Federal Circuit’s interpretation, “The current version of §1391 does not contain any indication that Congress intended to alter the meaning of §1400(b).”

This holding should give rise to increased patent litigation suits in Delaware and other states that are friendly to corporations.

Justice Thomas wrote the opinion for the Court.