A case involving the extraterritorial application of the United States patent laws got a little closer to review by the United States Supreme Court today when the Court requested the Solicitor General weigh in on the issues presented. In Maersk Drilling USA, Inc. v. Transocean Offshore Deepwater Drilling, Inc. Case No. 13-43, the petitioner is asking the Court to reverse the Federal Circuit’s ruling that a contract to provide services involving an infringing product (or non-infringing alternative) constitutes an “offer to sale” under Section 271(a) when the contract was negotiated and entered into entirely outside of the United States. As usual, the Scotus Blog has a nice link to the relevant documents.
The petitioner Maersk Drilling apparently entered into a contract with another company to provide oil drilling services in U.S. waters. Because there was some uncertainty whether Transocean’s patents were invalid, Maersk reserved the right in the contract to provide a non-infringing equipment. The contract was negotiated and executed entirely in Europe. The district court initially granted summary judgment holding, not only that the patents in suit were invalid, but also that there could be no infringement since there was no offer to sell an infringing product in the United States. Maersk had only offered to sell services, and this offer had occurred entirely overseas.
The Federal Circuit, however, reversed, holding that the location of the parties when they enter into the sales contract does not matter when the sale is to take place in the United States. The Federal Circuit, however, did not address Maersk’s argument that a contract to provide services using an infringing product cannot be an offer to sell that product in the United States.
On remand, the case proceeded to trial before a jury, which found in favor of Transocean on all issues presented and awarded Transocean $15 million in damages. The District Court granted Maersk’s motion for JMOL holding, among other things, that Maersk did not offer to sell within the meaning of Section 271(a). The Federal Circuit again reversed, holding that the fact that Maersk reserved for itself the right to modify the equipment to avoid infringement did not mean it had not offered to sell the equipment. The court reasoned that an offer to sell must be judged by what was offered for sale, not what was actually delivered. Because Maersk had offered to sell an infringing product, the court held that it had infringed – even though it ultimately delivered a non-infringing product.
In its cert petition, Maersk takes issue with the Federal Circuit’s reasoning. First and foremost, it argues that an offer to provide services using infringing equipment is not an offer to sell that equipment within the meaning of Section 271(a). It also argues that, because the allegedly infringing activity took place entirely in a foreign country, the United States patent laws simply do not apply – especially given that it ultimately used a non-infringing product when it performed the drilling services.
Four amici curiae, including the Government of Denmark and several intellectual property professors, have filed briefs, uniformly supporting the grant of certiorari in this case and uniformly seeking reversal.
Will the Supreme Court grant certiorari in this case? We will see. According to some scholarly research, the fact that the Court has sought the views of the Solicitor General raises the chances of cert being granted from under one percent to about 34 percent. While that is still long odds, the international implications and the Federal Circuit’s arguable expansion of “offer to sale” to include offers to provide services makes this an interesting candidate and one worth watching.