Union Carbide Chemicals & Plastics Technology Corp. et al. v. Shell Oil Company et al.
Decided October 3, 2005 pdf copy
Judge Rader with Judges Mayer and Prost

*          "[T]he exportation of a component…used in the performance of a patented
process or method" abroad "may result in liability under 271(f)."

Union sued Shell at the U.S. District Court for the District of Delaware for allegedly infringing and inducing of infringement overseas and in the U.S., of patent claims to a method of making ethylene oxide. A jury found that Shell had contributorily infringed by selling catalyst to third parties and Judge Sue Robinson limited damages to domestic use because of an interpretation that USC 271(f) does not apply. Both sides appealed.

The Federal Circuit vacated the damages award "because 271(f) governs method/process inventions."

Industry generally is globally integrated and companies often decide where and when to make a product or conduct a service based on costs in different countries. In response, a patentee should consider how method claims might be asserted against companies that use a material from the US to practice a patented method in another country.

MEMC Electronic Materials, Inc. v. Mitsubishi Materials Silicon Corp. et al.
Decided August 22, 2005 pdf copy
Judge Schall with Judges Newman and Dyk

*             An overseas user of a U.S. patented process and who collaborates closely with a final purchaser in the U.S. risks inducing infringement by the purchaser under 35 U.S.C. 271(b).

This case explores what an overseas company may do when practicing a U.S. patent method claim overseas for the benefit of a final end user in the U.S. Mitsubishi manufactured silicon wafers made by a process described in MEMC’s U.S. patent and supplied the wafers to Samsung Japan in Japan. Samsung Japan sold the wafers to Sumsung Austin (in Texas). All sales negotiations occurred in Japan, but Mitsubishi provided technical information directly to Samsung Austin, and coordinated shipments to that U.S. company. MEMC later sued Mitsubishi at the U.S. District Court for the Northern District of California under 35 U.S.C. 271 (a) and (b) for alleged direct infringement and inducement of infringement of MEMC’s process patent claims. Judge Saundra Armstrong granted Mitsubishi summary judgment of no infringement under both theories and both sides appealed various issues to the Court of Appeals for the Federal Circuit.

The Federal Circuit affirmed no direct infringement because all of Mitsubishi’s negotiations, contracting and performance occurred outside the U.S. The Federal Circuit, however, reversed summary judgment of no inducement of infringement because: 1) Mitsubishi "had knowledge of MEMC’s patent as well as knowledge of Samsung Austin’s potentially infringing activities;" 2) email evidence showed that Mitsubishi "works with Samsung Austin to coordinate shipment dates" including "a shipment of certain wafers directly to Samsung Austin in order to address technical problems;" and 3) Mitsubishi "made several on-site visits to Samsung Austin (to give) technical presentations."

In a technically complicated field, a manufacturer often works closely with an end user to correct problems and to improve product quality. These activities could be seen as inducing infringement in some situations.

           Eolas Technologies Inc. and the Regents of the University of California v. Microsoft Corp.
                                                    Decided March 2, 2005 pdf copy
                                        Judge Rader with Judges Friedman and Plager

*               "[S]oftware code made in the United States and exported abroad is a 'component of a patented invention' under section 271(f)."

Eolas sued Microsoft at the U.S. District Court for the Northern District of Illinois for allegedly infringing patent claims to software that allows interactive gaming by an internet browser. After a jury trial, Judge James Zagel rejected Microsoft's affirmative defenses of invalidity and inequitable conduct, and held that Microsoft owes Eolas royalty for related software that Microsoft sent overseas for sale, under section 271(f) of the patent code. Microsoft appealed to the Federal Circuit.

The Federal Circuit vacated and remanded for a new trial because the district court erroneously had concluded that an anticipating public use by another more than one year before the filing date subsequently became abandoned, after the user moved to a more advanced version of his software. The Federal Circuit pointed out that "creating an improved version of an invention does not in any sense abandon the original invention." The Federal Circuit also affirmed the ruling that Microsoft's shipments of browser software overseas was a transfer of a component of a patented invention as an infringement of a U.S. patent under 35 U.S.C. 271(f) because "every form of invention eligible for patenting falls within the protection of section 271(f)."

Software inventions enjoy the same protections as hardware under the patent laws (including 271(f)) and increasingly are seen as indistinguishable from hardware. The Federal Circuit in this case noted that "[o]n a functioning computer, software morphs into hardware and vive versa at the touch of a button."

NTP v. Research in Motion, Ltd.
Decided December 14, 2004 pdf copy
Judge Linn with Judges Michel and Schall

* A system having one part overseas infringes a U.S. patent if "the location of the
beneficial use and function of the whole operable system assembly is the United States."

NTP sued Research in Motion ("RIM") at the U.S. District Court for the Eastern District of Virginia for allegedly infringing claims to systems and methods with its BlackBerry system wireless email system. Following a jury verdict of direct, induced and contributory infringement by RIM on all asserted claims, judge James Spencer awarded NTP damages and an injunction. RIM appealed to the Federal Circuit.

The Federal Circuit concluded that the claim term "originating processor" had been interpreted incorrectly, vacated the judgment in part, and remanded to determine if the jury verdict should be set aside. Most interestingly, the Federal Circuit confirmed the district court's finding that territoriality under section 271(a) of title 35 (requirements for a direct infringement claim) was met even though a claimed component (e-mail relay station) was located in Canada. The Federal Circuit explained that a wireless system with a component overseas can infringe, because of "control of the equipment from the United States" and "beneficial use…within the United States."

This complicated case involved 5 patents with 31 disputed claim terms, and led to a willfulness finding, award of attorney's fees and more than $53 million in damages. But the Federal Circuit flipped the case back after more narrowly defining one term, from a fresh review of the written description and how "one skilled in the art would understand" that term.