Federal Circuit

Says no patent infringement

For non-US sales

The Federal Circuit Court of Appeals affirmed that there is no infringement of US blog 11.26.14 patent rights where the allegedly infringing goods were made, shipped, and delivered to buyers outside the United States. The case of Halo Electronics, Inc. v. Pulse Electronics, Inc. involves rival makers of electronic components. In 2002, Halo offered to license its patents to Pulse. Pulse declined, concluding that the patents were invalid. In 2007, Halo sued Pulse for infringing its patents. Pulse sought summary judgment on the grounds that it doesn’t sell or offer to sell the allegedly infringing components in the US. Under US patent law, “whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States . . . infringes the patent.

Pulse makes its components in Asia and delivers most of them to buyers outside the US. Some Pulse components are sold to contract manufacturers for US companies such as Cisco, and the end products are sold and shipped to buyers in the US and around the globe. In connection with the components that weren’t sold directly in the US, Pulse engaged in a number of sales-related activities that had a connection to the US:

· Pulse negotiated prices within the US for foreign customers.

· Pulse met with foreign customers’ design engineers in the US.

· Pulse sent product samples to US end-users of its components.

· Pulse attended sales meetings with foreign customers in the US.

· Pulse provided post-sale support for its products in the US.

The district court granted Pulse’s summary judgment motion and the parties proceeded to trial on Halo’s infringement claims based on products that Pulse shipped directly to the US. A jury found that those sales did indeed infringe Halo’s US patent rights. Halo appealed the summary judgment on the non-US sales. The Federal Circuit concluded that Pulse’s sales-related activities were not actually “sales” within the meaning of US patent law, and so upheld the granting of summary judgment. This case provides a useful checklist for activities that will NOT be considered US sales for purposes of giving rise to a US patent infringement action.