Under U.S. law, a patent owner can sue an infringer in U.S. Federal court if the infringer “without authority makes, uses, offers to sell or sells any patented invention in the United States. .” But what if the invention is sold by a business located outside the U.S. and shipped to a customer located in the U.S.?
The Federal Circuit Court has considered this issue at least twice. In Litecubes v Northern Light Productions, a Canadian company took orders for goods from U.S. customers and shipped goods to those U.S. customers. The goods in Litecubes were shipped f.o.b. Canada. “F.o.b” stands for “free on board” and means that title to the goods passed to the buyer in Canada. The court concluded that the Canadian supplier ‘sells’ the goods in the U.S. by dealing directly with U.S. customers and by shipping to the U.S., regardless of where the title transfer occurs.
In SEB v Montgomery Ward, decided on February 5, 2010, the court held that products shipped by a Chinese supplier to a retailer located in the U.S. were ‘sold in the United States’ and subjected the Chinese supplier to infringement liability in U.S. federal court. The court considered factors such as the direct copying of the patented product by the Chinese supplier and the marking of the U.S.-bound products with U.S. brand names as evidence that the Chinese supplier ‘sells’ the products in the U.S.
In short, if a supplier located in another country sells an infringing product to a U.S. customer, that supplier is liable under U.S. patent law and can be sued in U.S. Federal court.
–Robert Yarbrough, Esq.