It’s [NOT] Extraterritorial.

MediaTek Inc. v. Freescale Semiconductor, Inc., Case No. 11-cv-5341-YGR (Judge Rogers)

We all know that United States patent law is not supposed to extend to wholly extraterritorial acts of infringement - that is, acts of infringement that occur entirely outside the United States. See 35 U.S.C. § 271(a). So what happens when the accused infringing components were manufactured outside the United States, sold to a manufacturer outside the United States, and incorporated by that manufacturer into a product outside the United States? On the face of it, doesn't that seem like a classic example of extraterritorial infringement outside the scope of the United States patent laws? Not necessarily. At least not if the contract governing the sales of the accused components was negotiated and executed in the United States, according to Judge Rogers.

Defendant Freescale negotiated and signed a sales agreement with Amazon in the United States. Both Freescale and Amazon are United States entities. The sales agreement governed all products purchased by Amazon as well as Amazon's designees, which included foreign manufacturers like Foxconn and Ensky. The agreement also included an attachment listing the prices for the products to be sold by Freescale.

Judge Rogers noted that while Foxconn received the alleged infringing products in China for incorporation into the Amazon Kindle, also manufactured in China, Foxconn purchased those products pursuant to the sales agreement. Amazon, a United States entity, controlled the pricing terms for the purchases and, per the sales agreement, restricted Freescale's ability to negotiate pricing with those foreign designees. There was also evidence that the products were paid for by Amazon and that Amazon was listed as the customer for those products. Based on these facts, Judge Rogers denied Freescale's motion for summary judgment of noninfringement that was predicated on the argument that the accused products at issue were subject to extraterritorial sales.

Judge Rogers distinguished her case from that reviewed by the Federal Circuit in MEMC Electronic Materials, Inc. v. Mitsubishi Materials Silicon Corp., 420 F.3d 1369 (Fed. Cir. 2005). There, the accused products...