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Issue 231 | June 13, 2004
Pellegrini v. Analog Devices

In a matter of first impression for the Federal Circuit, in Pellegrini v. Analog Devices, the Court declined to apply U.S. patent laws extraterritorially, and held that 35 U.S.C. 271(f)(1) is inapplicable to components manufactured outside the United States and never shipped into the United States.

Section 271(f)(1) states:

“Whoever without authority supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention, where such components are uncombined in whole or in part, in such a manner as to actively induce the combination of such components outside the United States in a manner that would infringe the patent if such combination occurred within the United States shall be liable as an infringer.”

Congress enacted Section 271(f)(1) to close a loophole that allowed parties to manufacture individual components of an otherwise infringing device within the United States and then ship those components outside the United States for assembly.

In Pellegrini, the Federal Circuit addressed whether a party violates section 271(f)(1) by performing certain activities within the United States, but never manufacturing components of an allegedly infringing device within the United States, and never physically shipping those components to or from the United States. The activities performed by the defendant in Pellegrini included designing allegedly infringing products, receiving purchase orders for allegedly infringing products, having responsibility for worldwide manufacturing and sales of allegedly infringing products, having marketing and product line responsibilities for allegedly infringing products, and providing instructions for the manufacture and disposition of allegedly infringing products--all within the United States.

The Federal Circuit first held that section 271(f)(1) only applies to components of a claimed invention that were physically present within the United States, and “then either sold or exported ‘in such a manner as to actively induce the combination of such components outside the United States in a manner that would infringe the patent if such combination occurred within the United States.’”

The Federal Circuit then held that the tort of patent infringement occurs where the infringing act is committed, not where the injury is felt.

On the facts of Pellegrini, the Federal Circuit held that section 271(f)(1) was inapplicable, and affirmed the district court’s finding of summary judgment on this issue, because there was no dispute that the defendant did not make, use, sell, or offer to sell the allegedly infringing products in the United States, and because it did not import the allegedly infringing products into the United States.

http://fedcir.gov/opinions/04-1054.doc

Please contact Eric R. Moran of McDonnell Boehnen Hulbert & Berghoff LLP (312) 913-3302 or at moran@mbhb.com with any questions that you might have about these materials.

The information contained in this email is provided for informational purposes only and does not represent legal advice. Neither the APLF nor the author intends to create an attorney client relationship by providing this information to you through this message.

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