Claims of Infringement in US Support Request for Damages Arising from Sales in Other Countries

The World in U.S. Courts: Fall 2017 - Intellectual Property – Patent | September.01.2017

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Card–Monroe Corp. v. Tuftco Corp., US District Court for the Eastern District of Tennessee, September 1, 2017

The plaintiff Card-Monroe Corp. sued a competitor, Tuftco Corp., for patent infringement in connection with patents for the production of carpet-tufting machines and methods. Tuftco allegedly developed an infringing technology and then built and sold machines that practiced the technology. Among many claims addressed by the Court before trial, Tuftco sought to exclude sales outside the US from potential damages calculations, arguing that the Patent Act had no extraterritorial application.

The Court reviewed the recent appellate decision in Power Integrations, Inc. v. Fairchild Semiconductor International, Inc. that had addressed the territorial scope of patent infringement claims, and denied Tuftco’s request. The Court first observed that a defendant’s “exploitation” of a patented invention outside the US “is not infringement at all.” It then took the rule of the Fairchild Semiconductor case to mean that sales outside the US could only be subject to a US infringement suit to the extent based on the “accused infringer’s domestic activities, such as its manufacture or offers for sale” in the US.

The Court also discussed the rules of WesternGeco L.L.C. v. ION Geophysical Corp. and Carnegie Mellon University v. Marvell Technology Group, Ltd., under which damages can be based on “making or using or selling in the United States or importing into the United States, even if one or more of those activities also occur abroad.” Although Carnegie Mellon involved a method claim, the Court found it equally applicable to “machine” claims.

The Court thus found that Card-Monroe could seek damages for sales outside the US based on its allegations of US patent infringement.

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