Patent Law's Domestic Sales Trap

Abstract

In 2015, Carnegie Mellon University v. Marvell Technology Group, Ltd. firmly shut the door on the worldwide causation theory holding that patentees could not recover damages based on foreign sales even if those sales were somehow caused by infringement in the United States. But just as it closed one troubling loophole, the Federal Circuit opened another. Based on a mishmash of factors, the decision suggested that patent law may classify some products that have never entered this country as still being sold in the United States. If that view prevails, many products that are made, delivered, and ultimately used abroad will still infringe patents under this country’s law.

This Essay argues that subjecting such sales to United States patent law fails to respect Supreme Court precedent and is inconsistent with principles of international comity. What’s more, the Federal Circuit’s poorly developed rule for determining where a sale takes place creates unnecessary uncertainty and will trap the unwary. Accordingly, the courts should rethink how patent law locates a sale, and adopt the same bright line rule found in other areas of the law. The location of a sale should depend on the location of the products where legal title passes from the seller to the buyer. Such a rule makes both practical sense and is consistent with this country’s conservative approach to applying its laws extraterritorially.

Keywords: patent law, international, sales, infringement

JEL Classification: 034