Transocean Offshore Deepwater Drilling v. Maersk Contractors USA (Fed. Cir., August 18, 2010)
An offer made in another country to sell a product within the U.S. for delivery and use within the U.S. constitutes an offer to sell under 35 U.S.C. §271(a), according to the Federal Circuit.
Transocean accused Maersk USA’s drilling rig of infringing three of its U.S. patents that relate to an improved apparatus for conducting offshore drilling.
Maersk USA’a parent company Maersk A/S, which is a Danish company, contracted with Keppel FELS Ltd. to build the accused rig in Singapore. Later, Maersk A/S negotiated with Statoil ASA (a Norwegian company) to Statoil’s use of the accused rig. The companies came to an agreement for use of the rig and Maersk USA and Statoil Gulf of Mexico LLC (Statoil), a Texas Corporation, signed the contract in Norway. The contract specified that the “Operating Area” for the rig was the U.S. Gulf of Mexico but that Statoil had the right to use the rig outside the Operating Area with certain limitations.
The contract also mentioned Transocean’s U.S. patents. Maersk USA specifically retained the right to make “altercations” to the accused rig “in view of court or administrative determinations around the world.” One of these “determinations” came when Transocean asserted the same patent claims against another competitor. Transocean prevailed in that case and the district court required the competitor to make a design change to its rig to avoid infringement. Thereafter, Maersk made the same design change.
The district court found, among other things, that the patents were not infringed. More specifically, the district court found that there was no sale or offer to sell under 35 U.S.C §271(a). The district court relied on the fact that the negotiation and signing of the contract took place outside of the U.S. and that the contract gave Maersk the option to alter the rig to avoid infringement.
The Federal Circuit disagreed. Section 271(a) defines infringing conduct: “whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States . . . infringes the patent.” An offer to sell is a distinct act of infringement separate from an actual sale. An offer to sell differs from a sale in that an offer to sell need not be accepted to constitute an act of infringement. There is no dispute that there was an offer to sell in this case.
In order for an offer to sell to constitute infringement, the offer must be to sell a patented invention within the United States. The focus should not be on the location of the offer, but rather the location of the future sale that would occur pursuant to the offer. Although it is the general rule under U.S. patent law that no infringement occurs when a patented product is made and sold in another country, the location of the contemplated sale controls whether there is an offer to sell within the United States.
The purpose of holding someone who offers to sell liable for infringement is to prevent generating interest in a potential infringing product to the commercial determent of the rightful patentee. Accordingly, the Federal Circuit held that the district court erred because a contract between two U.S. companies for performance in the U.S. may constitute an offer to sell within the U.S. under 35 U.S.C. §271(a).
The parties further disputed whether the device sold in the contract was “the patented invention.” Maersk USA argued that it was not an infringing sale because it reserved the right to alter the rig to avoid infringement and because the rig was not complete at the time of contracting.
The Federal Circuit held that a contract between two U.S. companies for the sale of the patented invention with delivery and performance in the U.S constitutes a sale under 35 U.S.C. §271(a) as a matter of law. Maersk USA and Statoil signed a contract and the schematics that accompanied that contract could support a finding that the sale was of an infringing article under 35 U.S.C. §271(a). The fact that Maersk USA, after execution of the contract, altered the rig in response to the lawsuit with the other competitor is irrelevant. The potentially infringing article is the rig sold in the contract, not the altered rig that Maersk USA delivered to the U.S.