Sec. 271(a) (Direct) Infringement Of Non-Method Claim

  • BASICS: To make or sell in the U.S. the “patented invention” where the claim is directed to a combination, the accused must make or sell in the U.S. the combination, for the patent is on “‘the assembled or functioning whole, not on the separate parts.’” Deepsouth Packing (U.S. 05/30/1972) (in context of exporting the parts for assembly abroad). “For product claims, whenever the product is made, used, or sold, there is always a direct infringer. . . . [T]he party that adds the final element to the combination ‘makes” the infringing product and thus is liable for direct infringement.” Akamai Tech. II (Fed. Cir. 08/31/12) (en banc), rev’d on other grounds, Limelight (U.S. 06/02/2014) (citing Deepsouth with approval; and the Patent “Act’s cornerstone principle that patentees have a right only to the set of elements claimed in their patents and nothing further.”). Cf. Bowman (U.S. 05/13/2013) (farmer who planted a self-replicating seed “made” the new seed: “In all this, the bean surely figured. But it was Bowman, and not the bean, who controlled the reproduction (unto the eighth generation) of Monsanto’s patented invention.”).
  • Capable Of Being Configured In Infringing Manner Insufficient Where Claim Requires Particular Configuration: Where claim requires a particular configuration, not merely capability, then infringement requires product to be so configured. Ball Aerosol (Fed. Cir. 02/09/09) rev’g Summ. J. infringement where claim recited “the protrusions resting upon the closed end of the cover to seat the holder on the cover,” which specifies a particular configuration, because “no proof that the Travel Candle was ever placed in the infringing configuration, and it is clear that the Travel Candle does not necessarily have to be placed in the infringing configuration.” (“BASC’s reliance on cases that found infringement by accused products that were reasonably capable of operating in an infringing manner is misplaced, since that line of cases is relevant only to claim language that specifies that the claim is drawn to capability.”); ViaTech (Fed. Cir. 05/23/18) (non-precedential) (aff’g non-infringement; pre-installation Windows with code for creating the alleged database upon installation does not satisfy claim that “requires the presence of a database, not simple ‘capability’”). Cf. Sorrell (Fed. Cir. 02/05/24) (non-precedential) (rev’g construction of “figurative handle” as “‘designed especially to be grasped by the hand,’” because it “improperly suggested a design intent requirement” but “for an ‘accused device[] to be infringing, [it] need only be capable of operating’ in the infringing manner”).
  • Where Claim Requires Capability, Need Show Accused Device Without Alteration Reasonably Capable Of Such Use: Where requires capability not configuration, then infringed by “a ‘reasonably capable’ accused device … particularly where, as here, there is evidence that the accused device is actually used in an infringing manner and can be so used without significant alterations.” Ericsson (Fed. Cir. 12/04/14); INVT (Fed. Cir. 08/31/22) (aff’g ITC non-infringement finding, despite claims requiring mere capability not configuration, i.e., “the claims recite a device with the capability of performing the recited functions when in operation without any modification or further programming.” “‘For performing’-type language like in Finjan is not the only way for a computer-implemented claim to be directed to capability,”; distinguishing Cross Med. and Ball Aerosol). “In contexts involving software functionality, we have never suggested that reasonable capability can be established without any evidence or undisputed knowledge of an instance that the accused product performs the claimed function when placed in operation…. Because we require claim limitations to have some teeth and meaning, proof of reasonable capability of performing claimed functions requires, at least as a general matter, proof that an accused product—when put into operation—in fact executes all of the claimed functions at least some of the time or at least once in the claim-required environment.”  “An accused device cannot meet the required capabilities of the ’439 claims without evidence or agreement that the accused device performs, without modification, the recited functions at least once when it is in operation.”); Silicon Graphics (Fed. Cir. 06/04/10) (rev’g license defense because accused software infringes even without operating system needed to activate that software: “even absent its use (or performance), this court has held that an apparatus claim directed to a computer that is claimed in functional terms is nonetheless infringed so long as the product is designed ‘in such a way as to enable a user of that [product] to utilize the function … without having to modify [the product]’”); Golden (Fed. Cir. 02/12/24) (non-precedential) (aff’g R. 12(b)(6) dismissal for failure to “plausibly alleg[e] that any of Samsung’s smartphones, as made and sold by Samsung, i.e., without any addition of hardware or software, contain ‘biosensors’ that perform the claimed sensing/detecting of hazardous agents”).

a) “makes” claimed invention

  • Meaning Of “Make” And “Manufacture”: “Assembling the components of an invention is an infringing act of making the invention.” Lifetime (Fed. Cir. 09/07/17) (rev’g Iqbal / Twombly dismissal of complaint; sufficient to allege that defendant’s agent installed a seal component onto an RV where claim recited the combination of the RV and seal); Cross Med. (Fed. Cir. 09/30/05) (rev’g Summ. J. of infringement; genuine dispute as to whether surgeons during surgery contact the bone with a particular member, which contact would make the claimed combination). “A final assembler can be liable for making an infringing combination … even if it does not make each individual component element.” Centrak (Fed. Cir. 02/14/19) (rev’g Summ. J. of non-infringement; genuine dispute of material fact where evidence that defendant’s personnel “complete at least a portion of the final system configuration and software setup necessary to make the system work.”) “‘Manufacture,’ … is ‘the production of articles for use from raw or prepared materials by giving to these materials new forms, qualities, properties, or combinations, whether by hand-labor or by machinery.’” Am. Fruit Growers (U.S. 03/02/1931) (quoted with approval in Samsung (U.S. 12/06/2016) (rev’g Fed. Cir. restriction of term “article of manufacture” to article sold separately, in design patent damages statute.)); Deepsouth Packing (U.S. 05/30/1972) (“We cannot endorse the view that the ‘substantial manufacture of the constituent parts of [a] machine’ constitutes direct infringement when we have so often held that a combination patent protects only against the operable assembly of the whole, and not the manufacture of its parts.”) Cf. Fastship (Fed. Cir. 06/05/18) (“A product is ‘manufactured’ [for purposes of section 1498] when it is made to include each limitation of the thing invented and is therefore suitable for use.” Aff’g holding that certain ship was still under construction when patent expired and declining to adopt the meaning of “make” in section 271(a)). Cf. Acceleration Bay (Fed. Cir. 10/04/21) (aff’g no direct infringement of claimed hardware component (comprising “means for” elements) by defendant who provides accused video-game software to be installed by customer on customer’s hardware, without installing the software on the hardware, which software controls the processors on the hardware and provides the hardware’s allegedly claimed functions; distinguishing Centrak).
  • Permissible “Repair” And “Kin To Repair” (E.g., Modifications To Improve Usefulness) Vs. Forbidden “Reconstruction” Of Authorized Patented Combination: A “combination is within the grant.” Aro Mfg. I (U.S. 02/27/1961) (6-3) (replacing worn fabric top of a convertible car (which car had been licensed by patent owner) does not directly infringe claim to combination of the flexible top, automobile body structure, folding bow structure, sealing strip, and a wiping arm); Wilbur-Ellis (U.S. 06/08/1964) (no “making” infringement where second-hand purchaser of patent-owner-authorized (and not spent) fish packing machine, resized several parts of the patented combination so that it could repack into larger cans: “the size of cans serviced by the machine was no part of the invention; nor were characteristics of size, location, shape and construction of the six elements in question patented. Petitioners in adapting the old machines to a related use were doing more than repair in the customary sense; but what they did was kin to repair for it bore on the useful capacity of the old combination”). “Maintenance of the ‘use of the whole’ of the patented combination through replacement of a spent, unpatented element does not constitute reconstruction.” Id. “Mere replacement of individual unpatented parts, one at a time, whether of the same part repeatedly or different parts successively, is no more than the lawful right of the owner to repair his property.” “‘Although there is no right to ‘rebuild’ a patented combination, the entity ‘exists’ notwithstanding the fact that destruction or impairment of one of its elements renders it inoperable; and that, accordingly, replacement of that worn-out essential part is permissible restoration of the machine to the original use for which it was bought. The Court explained that it is ‘the use of the whole’ of the combination which a purchaser buys, and that repair or replacement of the worn-out, damaged or destroyed part is but an exercise of the right ‘to give duration to that which he owns, or has a right to use as a whole.’ The distilled essence of the Wilson case was stated by Judge Learned Hand …: ‘The [patent] monopolist cannot prevent those to whom he sells from . . . reconditioning articles worn by use, unless they in fact make a new article.’”) Aro Mfg. I (U.S. 02/27/1961). Owner of patented combination may prematurely repair it by replacing an unpatented component before it is spent. Kendall (Fed. Cir. 06/04/96). Improving the usefulness of the patented combination is akin to “repair” and permissible. Hewlett-Packard (Fed. Cir. 08/12/97). “A reconstruction occurs after the patented combination, as a whole, has been spent, when ‘the material of the combination ceases to exist.'” Hewlett-Packard (Fed. Cir. 08/12/97) (aff’g Summ. J. of no infringement; buying new unspent ink cartridge designed to be non-refillable to be refillable, and then reselling them as refillable ink cartridges, is more akin to permissible repair than to impermissible reconstruction).
  • Right To Repair Patented Combination Does Not Authorize Making Patented Component Of Combination: Morgan Envelope (U.S. 03/19/1894) (purchasers of toilet-paper dispenser from patent owner permitted to sell own toilet paper with fixture despite patent on combination of that type of fixture and paper, because the toilet paper was not patented); Auto Body Parts (Fed. Cir. 07/23/19) (aff’g that truck purchasers not authorized to buy replacement hoods and headlamps that infringe design patents thereon).
  • “Repair” Is An Affirmative Defense On Which Alleged Infringer Has Burden: Repair is an affirmative defense to a claim of infringement, in the nature of an implied license, and the party raising the affirmative defense has the burden of establishing it by a preponderance of the evidence. Jazz Photo (Fed. Cir. 08/21/01) (permissible repair of authorized cameras: “(1) removing the cardboard cover, (2) cutting open the plastic casing, (3) inserting new film and a container to receive the film, (4) replacing the winding wheel for certain cameras, (5) replacing the battery for flash cameras, (6) resetting the counter, (7) resealing the outer case, and (8) adding a new cardboard cover.”)
    • TIPS:
  • Infringement Not Avoided By Non-Infringing Mode of Operation: “Infringement is not avoided merely because a non-infringing mode of operation is possible.” Z4 Techs. (Fed. Cir. 11/16/07) (aff’g infringement of CRM and method claims); Core Wireless (Fed. Cir. 08/16/18) (aff’g jury verdict of infringement of product claims; “To take a simple example, a patent that claims an automobile configured to operate in third gear would be infringed by an automobile that is configured to operate in first, second, and third gears. The automobile is at all times configured to operate in any one of its possible gears, including the infringing one, even if the automobile is never driven in the infringing gear.”); Hilgraeve (Fed. Cir. 09/17/01) (“in determining whether a product claim is infringed, we have held that an accused device may be found to infringe if it is reasonably capable of satisfying the claim limitations, even though it may also be capable of non-infringing modes of operation”); John Bean (Fed. Cir. 09/24/20) (non-precedential) (“for” limitation describes capability of product and patentee’s product is reasonably capable of use in claimed manner, so no false marking); see Wisconsin Alumni (Fed. Cir. 09/28/18) (rev’g denial of JMOL of no infringement; although “a product that ‘sometimes, but not always, embodies a claim nonetheless infringes,”’ no evidence that accused product’s hashing algorithm sometimes hashes only one instruction to a tag).
  • Software Provider Does Not “Make” Claimed System Requiring Software To Be Loaded On Computer: One “makes” a claimed system by combining all of its elements (in the U.S.). “The customer, not Qwest, completes the system by providing the ‘personal computer data processing means’ and installing the client software.” Centillion Data (Fed. Cir. 01/20/11); Acceleration Bay (Fed. Cir. 10/04/21) (aff’g no direct infringement of claimed hardware component (comprising “means for” elements) by defendant who provides accused video-game software to be installed by customer on customer’s hardware, without installing the software on the hardware, which software controls the processors on the hardware and provides the hardware’s allegedly claimed functions; distinguishing Centrak); Synchronoss (Fed. Cir. 02/12/21) (aff’g Summ. J. no direct infringement by providing software for download where claimed device requires hardware). But device maker who loads software (or script) into customer’s device to provide it with claimed functionality, directly infringes device claim. Omega Patents I (Fed. Cir. 04/08/19) (aff’g jury verdict of direct infringement).
  • CRM Claim Covers Copy Of Software On A Media Not The Software Itself: “The Supreme Court has recognized the important distinction between software and a particular copy of it on a CRM.” Brumfield (Fed. Cir. 03/27/24) (aff’g exclusion of damages expert theory seeking reasonable royalty on foreign sales of software, for infringement of a CRM claim, where expert’s report was “not focused on making an individual memory-device unit, whether freestanding (like a memory stick) or a part of a larger physical unit (like a hard drive in a personal computer or server). They have referred, instead, to the TWS BookTrader software itself—’the instructions themselves detached from any medium’ (rather than a ‘tangible ‘copy’”), ‘software in the abstract,’ software ‘[a]bstracted from a usable copy.’” (citing Microsoft v. AT&T)).
  • Device With Claimed Structures And Capabilities Directly Infringes Even Without The Software Needed To Activate And Use That Accused Functionality: “An apparatus claim directed to a computer that is claimed in functional terms is nonetheless infringed so long as the product is designed ‘in such a way as to enable a user of that [product] to utilize the function . . . without having to modify [the product].’ Fantasy Sports Props., Inc. v., Inc., 287 F.3d 1108, 1118 (Fed. Cir. 2002). Where, as here, a product includes the structural means for performing a claimed function, it can still infringe ‘separate and apart’ from the operating system that is needed to use the product.” Silicon Graphics (Fed. Cir. 06/04/10). “[W]hen the asserted claims recite capability, our case law supports finding infringement by a ‘reasonably capable’ accused device on a case-by-case basis particularly where, as here, there is evidence that the accused device is actually used in an infringing manner and can be so used without significant alterations.” Ericsson (Fed. Cir. 12/04/14) (aff’g infringement; claim recited “a processor for arranging information for transmission . . . which identifies a type of payload information.”); VirnetX (Fed. Cir. 11/22/19) (non-precedential) (aff’g jury verdict of infringement; substantial evidence of infringement even though steps had to be taken, and specifically by an “IT person,” to configure the product to have the capabilities recited in CRM claim, because the underlying code did not need to be rewritten). But see Nazomi (Fed. Cir. 01/10/14) (purchase and installation of optional software needed for the accused function would constitute a “modification” of the accused products, and thus no infringement without that software installed; discussing multiple cases on this issue: “The installation of JTEK software is not unlocking existing functionality, but adding new functionality not currently present.”).
    • Same (At Least Sometimes) For Accused Software Not Combined With Hardware Needed To Activate Or Use Its Accused Functionality: Citing Fantasy Sports with approval: “The software, although not in and of itself a computer for playing fantasy football games, infringed so long as a user could activate ‘the functions programmed into a piece of software . . . only [by] activating means that are already present in the underlying software.’ Id. at 1118. ‘In other words, an infringing software must include the ‘means for scoring . . . bonus points’ regardless whether that means is activated or utilized in any way.’ Id.Silicon Graphics (Fed. Cir. 06/04/10). But see Centillion Data (Fed. Cir. 01/20/11) (distinguishing Fantasy Sports).
    • Same For Binary Code That Is “Locked” And Inaccessible To Client/User Without Buying A Key: System and media claims infringed by software including recited functionality, even though that code was “locked” and inaccessible without the user purchasing a decryption key. Panel equates inaccessible code on disk to a “structure,” such as an engine that’s turned off: “Thus, it is undisputed that software for performing the claimed functions existed in the products when sold—in the same way that an automobile engine for propulsion exists in a car even when the car is turned off.” Finjan (Fed. Cir. 11/04/10); see Versata I (Fed. Cir. 05/01/13) (aff’g direct infringement of CRM claim, where plaintiff’s expert had configured software to use patented invention: expert had merely “configur[ed] the inherent functions of SAP’s software” and “activated functions already present in the software”; no mention of Deepsouth). Expert “presented evidence that the [source] code, without modification, was designed to provide the claimed function.”
    • But Mere Ability To Be Programmed To Have The Recited Function, May Not Be Enough: Aff’g construction of “a memory for storing …” as “a memory that must perform the recited function (i.e., storing ….),” as Spec. supported that the memory is actually programmed or configured to store the recited information. Typhoon Touch (Fed. Cir. 11/04/11); accord Nazomi (Fed. Cir. 01/10/14) (claim requires specific, non-generic functions requiring combination of software and hardware to perform, not just hardware whose intended use environment includes software. No infringement because accused CPUs do not include software enabling accused functions; distinguishing Silicon Graphics).

b) “uses” claimed invention

  • Use Of Claimed “System” Requires Control Of System And Benefit From Each And Every Element Of The System: “To prove an infringing ‘use’ of a system under § 271(a), a patentee must demonstrate ‘use’—that is, ‘control’ and ‘benefit’—of the claimed system by an accused direct infringer…. [T]o use a system, a person must control (even if indirectly) and benefit from each claimed component…. [R]equires the patentee to demonstrate that the direct infringer obtained ‘benefit’ from each and every element of the claimed system. In addition, the direct or indirect control required ‘is the ability to place the system as a whole into service.’” Intellectual Ventures (Motorola) (Fed. Cir. 09/13/17) (2-1) (rev’g denial of JMOL of no direct infringement; no substantial evidence that phone users (as opposed to the MMS centers operated by wireless carriers) benefitted from (received or even knew how to request) the claimed authentication delivery reports: “wherein the authenticating device is configured to: generate a delivery report that indicates a delivery event and a time of the delivery event.” This is not “a situation where a customer simply elects not to take advantage of a known and available functionality.”) “The alleged benefit should be tangible, not speculative, and tethered to the claims.” Grecia (Fed. Cir. 03/06/18) (non-precedential) (aff’g R. 12(b)(6) dismissal of complaint for failure to plausibly plead retailer’s use of system, no part of which retailer possessed, because failure to plead sufficient facts that retailer benefits from each element of the claimed system.)
    • This Standard May Not Apply To Multi-Component “Device” Claims: Intellectual Ventures (Motorola) (Fed. Cir. 09/13/17) (parties treated claim reciting “device configured to” as if it were a “system” claim under Centillion; not deciding correct standard had parties not so agreed.)
    • Infringement By “Use” Requires Use Of Entire System: Fantasy Sports considered only whether the district court should have considered whether the defendant directly infringed because “it housed all of the necessary software on its servers.” “This does not equate to a holding that in order to prove ‘use’ of a patented invention, a patent owner must only show that the accused infringer makes software available . . . the entire system is not used until a customer loads software on its personal computer and processes data.” Centillion Data (Fed. Cir. 01/20/11); Synchronoss (Fed. Cir. 02/12/21) (aff’g Summ. J. no “use” direct infringement by entity that provides software for download, of a “device” claim requiring hardware); see Grecia (Fed. Cir. 03/06/18) (non-precedential) (aff’g R. 12(b)(6) dismissal of complaint for failure to plausibly plead retailer’s use of system; distinguishing Centillion).
  • Customer Directly Infringes Distributed-System Claim Reciting Local And Remote Elements (By Causing Use Of All Its Elements), But Service Provider Does Not: Claim directed to electronic billing system with back-office and local personal computer elements. Defendant provided PC application software to subscribing customers for access to some features of the service. “We hold that to ‘use’ a system for purposes of infringement, a party must put [“each and every … element of”] the invention into service, i.e., control [“the ability to place the system as a whole into service,” not physical possession or control] the system as a whole and obtain benefit from it.” Customers used the system by making queries and/or by subscribing, causing the back-end system to perform processing and to respond: “but for the customer’s actions, the entire system would never have been put into service.” But service provider did not use the system: “it never puts into service the personal computer data processing means. Supplying the software for the customer to use is not the same as using the system.” Centillion Data (Fed. Cir. 01/20/11); Georgetown Rail (Fed. Cir. 08/01/17) (aff’g “use” infringement of system claim; claim recited a light sensor, an optical receiver, and a processor for analyzing recorded images per claim-recited algorithm; defendant collected data and shipped it on disk to third-party in Europe to analyze and return results. Analogous to Centillion, where defendant “collects and gathers data by its system platform on the front-end. Then, [it] sends the gathered information to a back-end third-party company with instructions to process and analyze the information. The fact that the transmission from the front-end to the back-end in this case involves ‘physically remov[ing] the hard drives with data . . . and ship[ping] them overseas to [third party]’ is of no consequence.”).
  • Service Provider Directly Infringes (By Use) Claim Directed To User-Remote Station In A Distributed Environment: Where claim “focuses exclusively on” a remote station but also “defines the environment in which that … station must function,” including reciting a local station having certain recited functionality, a party using the remote station (but not directly the local station) directly infringes (solely, not jointly) the claim through such use of the station in that environment. “That other parties are necessary to complete the environment in which the claimed element functions does not necessarily divide the infringement between the necessary parties.” Uniloc (Fed. Cir. 01/04/11). Cf. Advanced Software (Fed. Cir. 06/02/11) (steps recited in preamble of method claim and system claim (reciting how a financial instrument was formed) are limitations of the claim, but “limit only the claimed environment, not the claimed method or system,” and thus did not need to be performed or used by the accused infringer); Grecia (Fed. Cir. 03/06/18) (non-precedential) (aff’g R. 12(b)(6) dismissal of complaint for failure to plausibly plead retailer’s use of system (mostly controlled by credit card companies), distinguishing Uniloc).
  • Sec. 271(a) “Use” Not Met By Mere Display Of Accused Device: Infringing “use” under Sec. 271(a) requires that the thing accused actually be “put into action or service;” merely displaying device is not necessarily “use” under Sec. 271(a). Med. Solutions (Fed. Cir. 09/09/08).
  • System May Be Used In U.S. Even If Part Of System Is Foreign: “Use” of patented combination may occur in U.S. even if not all “components” of the patented system are in the U.S. NTP (Fed. Cir. 08/02/05) (Blackberry case: “The use of a claimed system under section 271(a) is 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.”).
  • TIPS:

c) “sells” or “imports” claimed invention

  • “Sell” Has Its Ordinary Meaning And Normally Requires Transfer Of Title For A Price: “The definition of “sale” is: “1. The transfer of property or title for a price. 2. The agreement by which such a transfer takes place. The four elements are (1) parties competent to contract, (2) mutual assent, (3) a thing capable of being transferred, and (4) a price in money paid or promised.” Black’s Law Dictionary1337 (7th ed.1999). Thus, the ordinary meaning of a sale includes the concept of a transfer of title or property.” NTP (Fed. Cir. 08/02/05) (no “sale” of method claims by performing some steps of the method.); Halo II (Fed. Cir. 08/05/16) (no offer to sell in U.S.; “Article 2 of the Uniform Commercial Code, which is recognized as a persuasive authority on the sale of goods, provides that “[a] `sale’ consists in the passing of title from the seller to the buyer for a price.” U.C.C. § 2-106; see also Black’s Law Dictionary 1364 (8th ed. 2004) (defining “sales” as “[t]he transfer of property or title for a price”); cf. Medicines (Fed. Cir. 07/11/16) (en banc) (“on sale” context: where patent owner contracted with supplier to make batches of product using new process, aff’g sale of manufacturing services not sale of product of patented product-by-process, in part because not transfer of title: “to be ‘on sale’ under § 102(b), a product must be the subject of a commercial sale or offer for sale, and that a commercial sale is one that bears the general hallmarks of a sale pursuant to Section 2-106 of the Uniform Commercial Code”); Trading Techs. (Fed. Cir. 02/25/10) (on sale context: aff’g contract for programming services not a sale: “The transaction at issue must be a ‘sale’ in a commercial law sense. ‘[A] sale is a contract between parties to give and to pass rights of property for consideration which the buyer pays or promises to pay the seller for the thing bought or sold.’”). See Milo & Gabby (Fed. Cir. 05/23/17) (non-precedential) ( not seller under the Copyright Act (and would not be under the Patent Act) where it “merely provided an online marketplace that third-party sellers could use to sell their products and then, in some instances when the third-party sellers used the additional Amazon services, shipped the products to the final destination. While “at least in the context of the term “sale” under 35 U.S.C. § 102(b), passage of title is not of “talismanic” significance, we have found the presence or absence of passage of title to be a significant indicator of whether a sale has occurred in the patent law context.”) Cf. McMillan (Tex. 06/25/2021) (answering No to certified question from 5th: “Under Texas products-liability law, is Amazon a ‘seller’ of third-party products sold on Amazon’s website when Amazon does not hold title to the product but controls the process of the transaction and delivery through Amazon’s Fulfillment by Amazon program?” “In cases where an ordinary sale takes place, we have never held that a seller can be anyone other than the person or entity who relinquishes title.”).
  • Thing Sold Must Have All Elements Of Claim: Omega Patents I (Fed. Cir. 04/08/19) (rev’g direct infringement verdict where claim recited “a transmitter and a receiver for receiving signals from said transmitter” but defendant’s device in vehicle communicated with cell-phone tower not sold by defendant).
  • Charging For Use Of System May Constitute Sale: In re Cygnus Telecomm’ns. (Fed. Cir. 08/19/08) (aff’g district court ruling that because patent owner had “charged users of the 386 system for the calls they made using that system, he engaged in a ‘sale’ of the service within the meaning of section 102(b)”); Medicines (Fed. Cir. 07/11/16) (en banc) (“we decline to draw a bright line rule making the passage of title dispositive” because, for example, “an inventor could commercially exploit a newly invented machine by charging others a fee to use it without transferring title to it”).
  • Factors Determining Whether Sale Inside Or Outside U.S.: In view of strong policy against extraterritorial liability: “when substantial activities of a sales transaction, including the final formation of a contract for sale encompassing all essential terms as well as the delivery and performance under that sales contract, occur entirely outside the United States, pricing and contracting negotiations in the United States alone do not constitute or transform those extraterritorial activities into a sale within the United States for purposes of § 271(a).” Halo II (Fed. Cir. 08/05/16); The California Institute (Fed. Cir. 02/04/22) (approving jury instruction as consistent with Halo II). But the Federal Circuit has not defined a test for this determination. Carnegie Mellon (Fed. Cir. 08/04/15) (method claims infringed in U.S. development of custom-designed chips; vacating part of damages award and remanding for determination of whether chips made, delivered and used outside U.S. were “sold” in U.S. for damages-determination purposes: “standards . . . do not pinpoint a single universally applicable fact that determines the answer, and it is not even settled whether a sale can have more than one location”). See Syngenta Crop (Fed. Cir. 12/18/19) (aff’g jury verdict that Chinese defendant did not import or sell in U.S. where product sold to U.S. affiliate F.O.B. Hong Kong, affiliate is registered as the importer and manages clearing of shipments through customs and reimburses Chinese defendant for freight charges).
  • Meaning Of “Import”: See Comcast (Fed. Cir. 03/02/20) (aff’g ITC finding that respondent (which is not importer of record) imported set-top boxes for purposes of Sec. 337 where it causes the products to enter the U.S. by placing orders therefor, specifies the functions and software, restricts sales of the products to others, and the products work only on respondent’s network).

d) “offers to sell” claimed invention

  • General Contract Principles Determine Whether Offer To Sell: MEMC (Fed. Cir. 08/22/05) (aff’g no offer in U.S. “We have defined liability for an ‘offer to sell’ under section 271(a) ‘according to the norms of traditional contractual analysis.’ Thus, the defendant must ‘communicate[] a `manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it.'”); Rotec (Fed. Cir. 06/13/00) (aff’g Summ. J. no offer to sell in U.S.: “we conclude that the meaning of ‘offer to sell’ is to be interpreted according to its ordinary meaning in contract law, as revealed by traditional sources of authority”); 3D Sys. (Fed. Cir. 11/12/98) (rev’g finding of no personal jurisdiction. “Offer to sell” not governed by State law. “As a matter of federal statutory construction, the price quotation letters can be regarded as ‘offer[s] to sell’ under § 271 based on the substance conveyed in the letters, e.,a description of the allegedly infringing merchandise and the price at which it can be purchased.”).
  • Location Of Contemplated Sale Determines Location Of Offer To Sell: The focus should not be on the location of the offer, but rather the location of the future sale that would occur pursuant to the offer.” Transocean (Fed. Cir. 08/18/10) (finding offer to sell to be in U.S.); Halo I (Fed. Cir. 10/22/14) (no offer to sell in U.S. where negotiations in U.S. contemplated sale outside U.S.). ; Tex. Advanced (Fed. Cir. 05/01/18) (aff’g Summ. J. that 98.8% of units were not offered for sale in U.S.), modified (Fed. Cir. 07/09/18) (same result).
  • Post-Offer Or Post-Sale Modifications Cannot Avoid Infringement: If one offers for sale or enters contract for sale of a product having an infringing design, that is an act of infringement even if the product is modified before delivery to not infringe. Transocean (Fed. Cir. 08/18/10) (schematics attached to the contract).
  • Advertisement Generally Not An Offer To Sell: General advertisement, not sent to particular customers, stating a price floor (“starting at only $1400”), showing use of the product, was only a solicitation of an offer to purchase, not an offer for sale. Smith (Fed. Cir. 08/22/16) (non-precedential) (rev’g denial of JMOL of no infringement).

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