Patent Matters LLC

Territorial Limits of Patent law.

Patents are generally believed to be the most territorial form of intellectual property. However, with the modernization of the world economy, there is a strong push against the traditional territorial limits of patent laws in the United States.

Patent infringement is defined by the statute in 35 USC. Section 271 (a) that provides: “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.” Additionally, Sections 271(b) and 271(c) define indirect infringement, creating liability for contributing or inducing acts that constitute patent infringement in the United States. The terms “United States” and “this country” mean the United States of America, its territories and possessions” [35 U.S.C 100 (c)].

United States territory is defined as any area of land, air, or sea under jurisdiction of the United States federal governmental authority. That includes the continental United States, Alaska, Hawaii, Puerto Rico, Guam, the U.S. Virgin Islands, the Northern Marina Islands and American Samoa.

On land, one who practices the patented invention within the “United States its territories and possessions” infringes the patent rights. The U.S. embassies in other countries are considered the United states territory and under the patent law boundaries. The Antarctic region falls under the Antarctic Treaty that suspends all claims to the territorial sovereignty.

At sea, the United Nations Convention on the Law of the Sea (UNCLOS) sets forth the boundaries of sovereignty by nations over adjacent sea territories. However, the U.S. Congress has never indorsed the treaty, thus the treaty currently remains advisory in nature. Only Territorial Seas (first 12 nautical miles of the U.S. coast) and Continental Shelf that includes the seabed and subsoil of submarine areas belonging to the United States lay within U.S. patent jurisdiction. The Contiguous zone, Exclusive Economic Zone and High Seas are not included. Any sea vessel that bears the United States flag regardless of its breath, port, or location at the High Sea is covered under the Law of Flag and under the territorial sovereignty and patent law boundaries of the United States. In some circumstances, the Temporary Presence exception may apply (35 U.S.C. Section 272). This exception allows for the “use of any invention in any vessel, aircraft or vehicle of any country which affords similar privileges to vessels, aircraft or vehicles of the United States, entering the United States temporarily or accidentally” and , “shall not constitute infringement of any patent, if the invention is used exclusively for the needs of the vessel, aircraft or vehicle and is not offered for sale or sold in or used for the manufacture of anything to be sold in or exported from the United States.”

In the air, according to the 49 U.S.C Section 40103 (1): “The United States Government has exclusive sovereignty of airspace of the United States” that runs up to an altitude of 100 km (62 mi) above sea level over a land territory of U.S. Outer space belongs to no state and is governed by the Outer Space Treaty, Intergovernmental Agreement (IGA) and Registration Convention of Objects Launched into Outer Space. However, U.S. patent law has an explicit provision along these lines for inventions in outer space under Title 35, Section 105 of the U.S. Code. [https://www.uspto.gov/web/offices/pac/mpep/consolidated_laws.pdf]

In the United States, all cases litigated under patent law fall under federal jurisdiction. The majority of patent infringement litigation involve acts of infringements that occur within the territorial limits of the United Sates. However, this norm is changing as businesses become more global.

Congress reacted to this economic globalization by broadening the scope of infringing activities to protect patent owners from unauthorized use beyond US borders. They accomplished this through legislative amendments to the Patent Act. The new section [35 U.S.C. §271(f)] was added by Congress in 1984 with the intention to impose liability for exporting components of a patented invention for assembly abroad. Under this section, supplying all or any substantial combined and/or uncombined parts of the patented invention from or into the United States for further assembly abroad without authority constitutes a patent infringement under the U.S. law. Based on this provision, the Supreme Court considered extraterritoriality in its 2007 decision in Microsoft Corp. v. AT&T Corp. They held that software components on golden master discs were protectable under U.S. patent law.

In 1998, Congress added section 271(g) to Title 35 of the Patent Act. This amendment creates a cause of action against those that import, sell or use, without permission, a product “made-by” a process covered under U.S patent law. This amendment applies regardless of where the process is performed or where the product is made. Under this section, a product is not considered to be “made-by” a patented process if it is materially changed or becomes a non-essential component of another product. [35 U.S.C 271 (g)].

Recent decisions by the Federal Circuit have interpreted the scope of acts deemed infringing under section 271. They include Eolas Technologies, Inc. v. Microsoft Corp., AT&T Corp. v. Microsoft Corp., Bayer AG v. Housey Pharmaceutical, Inc., NTP, Inc. v. Research in Motion, Ltd. etc.

While still predominantly limited to infringing activities in the United States, according to 35 U.S.C. § 271(f), 271(g), the infringement of a U.S. patent may take place even though certain activities occur abroad. These recent decisions and legislative amendments are proof that the original rules of territoriality are changing.

The United States is one of many countries that has expanded its patent protection to reach some infringements occurring outside of the United States. In light of the extraterritorial reach of U.S. patent protection, business parties conducting operations in the United States and abroad have to be vigilant in order to avoid the liability for infringement under U.S. patent law.

By Irina Pomestchenko, May 2018

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Sources:

https://www.uspto.gov

https://www.uspto.gov/web/offices/pac/mpep/mpep-9015-appx-l.html#d0e305527

https://scholarship.law.nd.edu/cgi/viewcontent.cgi?article=4716&context=ndlr

https://www.finnegan.com/en/insights/the-extraterritorial-reach-of-u-s-patents-implications-for-the.html

http://www.antarctica.gov.au

http://scholarship.law.wm.edu/cgi/viewcontent.cgi?article=1163&context=wmlr

http://www.un.org/depts/los/convention_agreements/convention_overview_convention.htm

https://www.venable.com/files/Event/46926dbe-3ef3-4020-bb26-59597adff4a8/Presentation/EventAttachment/ef4d4646-d2b3-4483-91e2-a69352ca630e/Current_Trends_In_IP_Law.pdf

https://en.wikipedia.org/wiki/United_Nations_Convention_on_the_Law_of_the_Sea