In Carnegie Mellon University v. Marvell Technology Group, Ltd., Appeal No. 2014-1492, the Federal Circuit reversed a damages award partially hinging on sales of products outside the United States and asked the lower court to reconsider whether products made and used outside of the United States could be considered as “sold” in the United States.
CMU sued Marvell in 2009, alleging that Marvell's semiconductor chips infringed CMU’s patents. A jury awarded CMU $1.17 billion as a reasonable royalty for the infringing acts. The district court extended the award to the date of judgment, awarded an enhancement of the past damages award based on Marvell’s willfulness (found by the jury and the district court), and entered a record judgment of roughly $1.54 billion for past infringement and a continuing royalty at 50 cents per Marvell-sold chip.
The Federal Circuit affirmed the judgment of infringement and validity but chopped the damages award, leaving $278 million intact and ordering a new trial to recalculate the remaining amount. The Federal Circuit reversed the grant of enhanced damages for willfulness, ruling that Marvell's defense was objectively reasonable, so Marvell could not have willfully infringed. The Federal Circuit also held that some of the award may improperly reach beyond United States borders. The Federal Circuit specifically ruled that $278 million of the award properly covered Marvell products made and delivered abroad, but imported into the United States. But for Marvell products made and delivered abroad but never imported into the United States, a new trial was needed to determine where those chips were sold. “The standards for determining where a sale may be said to occur do not pinpoint a single, universally applicable fact that determines the answer, and it is not even settled whether a sale can have more than one location. Places of seeming relevance include a place of inking the legal commitment to buy and sell and a place of delivery, and perhaps also a place where other substantial activities of the sales transactions occurred.” But the Federal Circuit declined to settle on a legal definition or to decide whether any sale has a unique location as the “governing standards have not been the subject of meaningful briefing here.” The Federal Circuit asked the district court to consider whether the chips made and used outside the United States could be considered as sold in the United States. “To the extent, and only to the extent, that the United States is such a location of sale, chips not made in or imported into the United States may be included in the past-royalty award and ongoing-royalty order.”