Some readers might think that an offer to sell has to occur within the United States in order to meet the requirements of 35 U.S.C. § 271(a).¹  According to the Federal Circuit,² however, the actual location of an offer to sell is immaterial, so long as the offer contemplated performance within the United States.

On October 7, 2013, the Supreme Court of the United States issued a Call for the Views of the Solicitor General³ (CVSG) in Maersk Drilling USA, Inc. v. Transocean Offshore Deepwater Drilling, Inc., S. Ct. No. 13-43 (2013), to focus on what constitutes an “offer to sell . . . within the United States” under 35 U.S.C. § 271(a).

This case involves a dispute between two companies involved in building deepwater oil-drilling rigs, and specifically a feature of these rigs known as “dual-activity.”⁴  Transocean holds several patents to these types of rigs, which Maersk’s rigs were alleged to have infringed.

Maersk’s Danish parent corporation contracted with foreign shipyards to build dual-activity rigs, including the rig at issue in this case.  In 2006, Statoil Gulf of Mexico LLC, a U.S. company, requested through its Norwegian parent company bids for a marine-drilling contract.  Maersk and Transocean submitted competing bids in response, with Maersk offering one dual-activity rig and Transocean offering Statoil a choice of single- and dual-activity rigs.

Maersk won and, in November 2006, entered into a $650 million contract with Statoil in the Gulf of Mexico.  The contract by its terms was governed by U.S. law and constituted what the district court found to be an offer for sale of an infringing rig.  The contract included mention of Transocean’s U.S. patents, with Maersk retaining the right to make “alterations” to the “accused rig” in view of court or administrative determinations throughout the world.  Maersk eventually delivered the rig to U.S. waters, but modified it to avoid infringement. 

Therefore, the actual offer for sale is the only possibly infringing act.  The question addressed in the 2010 decision is whether an offer made in Norway by a U.S. company to another U.S. company to sell a product within the United States for delivery and use within the United States constitutes an offer to sell within the United States.  The Federal Circuit held that it does.

The Supreme Court has not decided whether to grant certiorari in this case.  If the ruling is allowed to stand, then marketing and sales activities outside of the United States can expose a party to liability in the United States.  When drafting patent-application claims, until this issue is settled, it is advisable to attempt to ensure that all claim limitations in a U.S. patent are realized within the United States.  While the Federal Circuit found the offer for sale of the claimed apparatus took place outside the United States, the apparatus was intended for delivery to the United States.  An apparatus is a relatively unitary thing, but combination and systems claims may be more challenging, and methods claims—particularly using remote users, distributed systems, or the Internet—are the most vulnerable to territorial issues in both cases.

¹ 35 U.S.C. § 271(a) (“Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.”).

² See Transocean Offshore Deepwater Drilling, Inc. v. Maersk Contractors USA, Inc., 617 F.3d 1296 (Fed. Cir. 2010).

³ The Solicitor General supervises and conducts virtually all U.S. government litigation in the U.S. Supreme Court.  The United States is involved in approximately two-thirds of all the cases the U.S. Supreme Court decides on the merits each year, according to the U.S. Department of Justice. See http://www.justice.gov/osg/.

⁴ A dual-activity rig essentially carries two complete drilling systems for increasing efficiency of the rig.