$1.54 Billion Damages Award Vacated: Were Goods That Never Entered U.S. “Sold” Domestically?

In Carnegie Mellon University v. Marvell Technology Group, No. 2014-1492 (Fed. Cir. Aug. 4, 2015), the Federal Circuit vacated the largest damages judgment in history for patent infringement—$1.54 billion. It concluded that accused chips not made in, or imported into, the United States may nevertheless be included in the damages analysis if the United States is the location of “sale.” But, the Court remanded the case for the district court to determine whether the chips were sold in the United States.

The Court stressed that § 271(a) clearly defined the extraterritorial reach of patent infringement damages—“making or using or selling in the United States or importing into the United States, even if one of more of those activities also occur abroad.”  Accordingly, the Court concluded that where a physical product is used to measure damages for the infringement of method patents, “territoriality is satisfied when and only when any one of those domestic actions for that unit (e.g., sale) is proved to be present, even if others of the listed activities for that unit (e.g., making, using) take place abroad.” For Marvell’s chips that were not made, used, or imported into the United States, the Court held that the chips needed to be sold domestically to be used in measuring the royalty, and that question required a remand.