Patent Infringement through Foreign Offer for Domestic Sale: Transocean V. Maersk

Article excerpt

I. INTRODUCTION II. HISTORY     A. Presumption against extraterritorial application of the       United States patent law     B. Interpreting "offer to sell within the United States"         i. Construing "offer to sell" in the Federal Circuit         ii. Federal Circuit: Interpreting "offer to sell within           the United States"             a. Rotec's majority: is a domestic offer sufficient               to constitute "offer to sell" infringement?             b. Litecubes Court: Is Sale Itself Sufficient to               Constitute an "Offer to Sell" Infringement?         iii. Interpreting "Offer to Sell Within the United States"           in Federal District Courts             a. Quality Tubing--both offer and contemplated sale               must be within the United States             b. Offer made in the United States is sufficient to               constitute "offer to sell" infringement         iv. When the subject matter of an "offer for sale" is at           issue             a. The option to modify the infringing product to               non-infringing one             b. The subject the offeror intended to offer and               understood by the offeree is the subject of an               "offer to sell"             c. Conditional acceptance does not negate an offer               to sell III. REVIEW OF TRANSOCEAN V. MAERSKIN THE FEDERAL CIRCUIT     A. The Factual Background in Transocean     B. The Federal Circuit's Offer to Sell Analysis     C. "Willfulness" Infringement Analysis IV. THE FEDERAL CIRCUIT IN TRANSOCEAN CREATED NON-PRECEDENTIAL   "OFFER TO SELL" ANALYSIS      A. The Federal Circuit's Interpretation of "Offer to Sell        Within the United States" is Inconsistent with Statutory        Language      B. The Federal Circuit's Interpretation of "Offer to Sell        Within the United States" Departs From the Precedent      C. Interpreting a Foreign Offer as an Infringement Activity        Contradicts the Presumption Against Extraterritoriality      D. Ignoring the Location of the Offer is Likely to Put United        States Companies at a Competitive Disadvantage      E. The Court Misinterprets the Subject Matter of the "Offer        to Sell"      F. The Economic Interest of the Patentee Does Not Justify the        Court's Holding V. CONCLUSION 

Cite as 12 J. HIGH TECH. L. 566 (2012)

I. Introduction

The purpose of the United States patent law is to "promote the [p]rogress of [s]cience and useful [a]rts, by securing for limited [t]imes to ... [i]nventors the exclusive[r]ight to their ... [discoveries." (1) The exclusive right is reflected in the infringement statute, 35 U.S.C. [section] 271. (2) As in most other areas of laws, the infringement statute has evolved and has been revised with time. (3) For example, prior to 1994, patent holders only had the right to exclude others from making, using, or selling inventions. (4) Thus, contracting to make or beginning to make infringing devices did not constitute infringement, nor did intent, preparation, or a threat to sell an infringing device. (5) Increasing international trade not only breaks the national barriers of modern business transactions, (6) but also transforms international intellectual property agreements and United States intellectual property law. (7) Substantial changes in the United States patent law arose from the Trade Related Aspects of Intellectual Property Agreement (TRIPS). (8) Specifically, under 35 U.S.C. [section] 271(a), patentees now have the right to bring an infringement action against parties who "offer to sell" the patented product within the United States. (9)

Although the scope of the statutory cause of action for infringement has increased, the territorial reach of exclusive patent rights remains limited to the United States. (10) Historically, the Supreme Court held that the exclusive rights granted by U.S. patent law were confined to the United States and its territories, and that the infringing activities must occur wholly within the United States. …