An Offer Made Abroad to Sell Within the U.S. May Cause Infringement of a U.S. Patent

Authored by D. Brian Kacedon, Douglas W. Meier, and John C. Paul

A U.S. patent typically grants the patent holder the right to exclude others from making, using, selling, offering for sale, or importing a patented product within the United States. Generally, this means that the U.S. patent laws only protect against infringing activities occurring inside the United States. On some occasions, however, activities occurring outside the United States can result in infringement liability in the United States. In Transocean Offshore Deepwater Drilling, Inc. v. Maersk Contractors USA, Inc., No. 09-1556 (Fed. Cir. August 18, 2010), the Court of Appeals for the Federal Circuit examined whether an offer for sale occurring outside of the U.S. can constitute an act of infringement of a U.S. Patent. In this case, the Federal Circuit held that the an offer made in Norway by a U.S. company to a U.S. company to sell a product within the U.S., for delivery and use within the U.S., constituted an infringing offer to sell. The Court further held that a contract between two U.S. companies for the sale of a patented invention with delivery and performance in the U.S. constitutes a sale under § 271(a) as a matter of law.

The technology in this case related to an improved apparatus for offshore drilling.  Maersk USA's Danish parent company, Maersk A/S, contracted with a third party to build the accused rig in Singapore. Later, Maersk A/S negotiated with Statoil ASA, a Norwegian company, for Statoil's use of the accused rig. The companies reached an agreement for use of the rig, and Maersk USA and Statoil Gulf of Mexico LLC ("Statoil"), a Texas corporation, signed a contract in Norway. Among other things, this 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.

Transocean sued Maersk USA in the U.S. District Court for the Southern District of Texas for infringement based on the contract between Maersk USA and Statoil. Specifically, Transocean argued that the contract constituted an infringing offer for sale as well as an infringing sale. The district court granted summary judgment of noninfringement in favor of Maersk USA, however, finding that because the negotiating and signing of the contract occurred outside the U.S. there was no act of infringement in the U.S.  On appeal, the Federal Circuit reversed the district court's decision.

The Federal Circuit began its analysis with the relevant patent statute, which states that "whoever without authority . . . offers to sell, or sells any patented invention, within the United States . . . infringes the patent." The Federal Circuit held that this language requires that the offer must be to sell a patented invention within the United States. Thus, the focus belongs not on the location of the offer, but rather on the location of the future sale that would occur pursuant to the offer.

According to the Court, adopting Maersk USA's position would require reading the statute as "offers made within the United States to sell" or "offers made within the United States to sell within the United States." The Court explained that adopting such an interpretation would create real harm in the U.S. to patentees by allowing a U.S. company to travel abroad to make offers to sell back into the U.S. without any liability for infringement.

Finally, the court also held that the contract constituted an infringing sale because it provided for delivery and performance in the U.S.

Strategy and Conclusion

In conclusion, this case further clarified the territorial reach of the offer-to-sell language of 35 U.S.C. § 271(a).

1. A U.S. company may be liable for infringement under U.S. patent law for making an offer outside of the U.S. to another U.S. company to sell a product within the U.S., for delivery and use within the U.S.
2. A U.S. company may be similarly liable for executing a contract outside of the U.S. with another U.S. company for the sale of a patented invention with delivery and performance in the U.S. 
3. These holdings, which stay true to the language of the statute, ensure that companies cannot simply avoid offer-to-sell liability for patent infringement by negotiating and executing a contract outside the U.S.

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