While acts outside of the U.S. cannot give rise to liability for direct infringement under § 271(a), extraterritorial conduct that actively induces direct infringement in the U.S. violates § 271(b).
A licensee of patents claiming veterinary compositions for the control of fleas and ticks sued for infringement. The accused infringer, an India-based company, failed to respond to the complaint or enter an appearance. The district court entered a default judgment of infringement and enjoined the accused infringer from engaging in direct or indirect infringement. The accused infringer thereafter agreed to produce abroad and import into the United States a new flea and tick control product. The licensee filed a motion for contempt in response. A company involved in the production and sale of the new product intervened and was joined as a defendant. The district court found the parties in contempt for violating its earlier injunction against infringement.
The judgment was affirmed on appeal. The alleged infringer first raised a jurisdictional challenge, arguing that the district court lacked personal jurisdiction over the accused infringer when it entered the default judgment. The district court’s exercise of personal jurisdiction was proper under Rule 4(k)(2) even though the accused infringer consented to suit in an alternate forum during the contempt proceedings and the licensee did not plead Rule 4(k)(2) in the complaint. A defendant challenging a prior default judgment “may not do so by naming another forum that would not have had an independent basis for jurisdiction at the time of the original complaint.” Further, a plaintiff is not required to plead a specific basis for personal jurisdiction.
Where infringement is alleged based on a newly accused product, contempt requires proof that: “(1) the newly accused product is no more than colorably different from the previously adjudged infringing product, and (2) the newly accused product actually infringes the asserted patent.” In applying the second prong of this analysis, it was not improper for the district court to compare the accused product to the licensee’s commercial product, as opposed to the claims of the patent-in-suit themselves. Such a comparison is justified where “the benchmark commercial product represents a recognized embodiment of the patent in issue.”
The alleged infringer also sought reversal on grounds that it did not engage in activities within the United States. Specifically, the alleged infringer argued that liability under § 271 cannot be imposed based on foreign activities. While acts outside of the United States cannot give rise to liability for direct infringement under § 271(a), extraterritorial conduct that actively induces direct infringement in the United States violates § 271(b).
A copy of the opinion can be found here.