A district court recently ruled that the U.S. Patent Act applies to U.S. flagged ships in international waters. M-I Drilling Fluids UK Ltd., v. Dynamic Air, Inc., (D. Minn., April 10, 2015). In this case, the plaintiff sued the defendant for patent infringement based on activity occurring on a U.S. flagged ship in international waters near Brazil. The defendant moved to dismiss the case because the activity occurred outside the U.S. The court applied the law of flag doctrine, which provides that a merchant ship is part of the territory of the country whose flag it flies. The district court then denied the motion to dismiss because the ship was flying a U.S. flag. A merchant ship flying a U.S. flag is considered a U.S. territory, and U.S. patent law applies.
Although not disputed for the purposes of the motion to dismiss, the court implied that if the ship was in foreign waters as opposed to international waters, U.S. patent law would likely still apply because the U.S. flagged ship is considered a U.S. territory regardless of where it is traveling. If the ship was flying a foreign flag, however, the court would likely not have applied U.S. patent law even if the ship was in U.S. waters because the ship would not be considered to be in U.S. territory. While the location of an act typically determines whether a party can enforce a U.S. patent, this case shows that sometimes other factors, such as the flag a ship uses, can be the deciding factor as to when U.S. law can apply. Therefore, companies should not just rely on location, but should carefully consider other relevant factors when trying to determine when acts may be subject to the protection of U.S. patents.