In a closely-watched case involving a damages award of $53.7 million against the makers of BlackBerry handheld devices, the Federal Circuit held that infringement of a patent under §271(a) could be established even where a claimed element was practiced outside the territorial United States. Competitors seeking to avoid infringement under this section by practicing all or portions of claimed inventions abroad are advised to reconsider their strategy under a broadened interpretation of the Supreme Court's decades-old decision in Deepsouth.
In NTP Inc. v. Research in Motion, Ltd., No. 03-1615 (December 14, 2004), the Federal Circuit affirmed the district court's decision that 35 U.S.C. §271(a) did not require each element of a patent claim to be practiced in the United States for infringement to be proven. The Court affirmed the finding of infringement on 9 of 14 claims in NTP's patents by RIM's BlackBerry® product, and remanded the infringement determination of several claims based on an erroneous claim construction.
NTP's patents-in-suit are directed to the integration of existing electronic mail systems with RF wireless communication networks. RIM's BlackBerry system integrates existing electronic mail systems with RF wireless communication networks to enable a mobile user to send and receive email, much like one uses a mobile cellular telephone. When new mail is detected by the Desktop solution of the accused BlackBerry product, the Desktop redirector is notified and retrieves the messages from the mail server. It then copies, encrypts, and routes the message to the BlackBerry relay component of RIM's wireless network (described by RIM as the control point of the accused system,) which is located in Canada. A jury verdict combined with other assessments resulted in a judgment of $53.7 million.
On appeal, RIM asserted that for §271(a) to apply, the entire accused system and method must be contained or conducted within the territorial bounds of the United States. RIM relied on the Supreme Court's decision in Deepsouth supporting its argument that interpretation of §271 prohibited extraterritorial United States patent protection.
But the federal circuit was unpersuaded, and distinguished Deepsouth by noting that that the location of the RIM's infringement was within the territorial United States, not abroad as in Deepsouth. The court found that even though one of the accused components in RIM's BlackBerry system was located in Canada, the beneficial use and function of the whole operable system assembly was within the United States. Further, the court concluded that when two domestic users communicate via BlackBerry devices, their use of the BlackBerry system occurs within the United States, regardless of whether the messages exchanged between them are transmitted outside of the United States at some point along their wireless journey.
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