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§ 271(f)(1) Is Inapplicable to Products Manufactured and Distributed Outside the U.S.

July 08, 2004

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Last Month at the Federal Circuit - August 2004

Judges: Lourie (author), Rader, and Bryson

In Pellegrini v. Analog Devices, Inc., No. 04-1054 (Fed. Cir. July 8, 2004), the Federal Circuit affirmed a SJ of noninfringement of certain products made and distributed outside the U.S.

Gerald Pellegrini owns U.S. Patent No. 4,651,069 (“the ‘069 patent”) directed to a brushless motor drive circuit. Pellegrini sued Analog Devices, Inc. (“Analog”), alleging infringement by Analog’s “ADMC” chips. The ADMC chips are manufactured exclusively outside of the U.S., and most of them are sold and shipped to customers outside the U.S. The district court granted Analog’s motion for partial SJ with respect to products containing the ADMC chips. The district court had rejected Pellegrini’s argument that because Analog’s headquarters are located in the U.S. and instructions for the production and disposition of the ADMC chips emanate from the U.S., the chips should be regarded as having been caused to be supplied in or from the U.S. under 35 U.S.C. § 271(f)(1).

According to Pellegrini, Analog is incorporated in the U.S. and has exclusive marketing and product-line responsibility for ADMC products. Analog conceived and designed the ADMC products in the U.S. and makes all development and production decisions in the U.S. Analog is also responsible for the fabrication, assembly, and testing of the ADMC products and subcontracts, and pays others for the proprietary fabrication, assembly, and testing of the ADMC products. Analog responded by stating that § 271(f)(1) is inapplicable to products manufactured outside of the U.S. and never shipped to or from the U.S.

The Federal Circuit agreed that § 271(f)(1) does not apply to the facts of this case. Rather, it applies only to where components of the patented invention are physically present in the U.S. and then either sold or exported in such a manner as to induce the combination of the components outside of the U.S. According to the Court, § 271(f)(1) clearly refers to the physical supply of components, not simply to the supply of instructions or corporate oversight. Although Analog may be giving instructions from the U.S. that cause the components of the patented invention to be supplied, it is undisputed that those components are not actually supplied in or from the U.S. Thus, there was no liability under § 271(f)(1).