The World in U.S. Courts: Spring 2016 - Intellectual Property: Patent
Plaintiff M-I is a UK corporation engaged in the business of developing and installing systems on ships to assist in the removal of waste created by the undersea drilling of oil wells. M-I and the defendant Dynamic Air, a Brazilian corporation, responded to a request for proposals for the installation of such systems issued by the Brazilian state-owned oil company, Petrobas. Dynamic Air won the bid and, at the direction of Petrobas, installed systems on seven ships, three of which were U.S.-flagged. M-I sued Dynamic Air in U.S. District Court in Minnesota (where Dynamic Air's corporate parent is located), claiming that the installation of Dynamic Air's systems on the three U.S.-flagged ships anchored in Brazilian waters infringed U.S. patents held by M-I.
Among the issues addressed by the Court was the applicability of U.S. patent laws to actions taken on U.S.-flagged ships outside U.S. territorial waters. Applying a ruling from a related case, the Court held that under the "Law of the Flag" the ships were U.S. territory, and so a U.S. patent infringement claim could be brought based on the installation of the systems.
[Editor's Note: The M-I Drilling Fluids case is also addressed in the Personal Jurisdiction/Foreign Sovereign Immunities Act/Forum Non Conveniens section of this report.]