Patent Damages For Infringing Acts Outside Of The US
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.
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.
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