Patent infringement is governed by section § 271(a), which applies only to activity "within the United States." Courts often face the question of infringement liability when the allegedly infringing acts occur outside the United States. The Federal Circuit addressed this issue in Rotec Industries, Inc. v. Mitsubishi Corp., where it held that infringement cannot arise from acts wholly performed in a foreign country. A magistrate judge in the Eastern District of New York recently applied Rotec to recommend granting summary judgment of noninfringement to a defendant whose accused activities took place overseas.

In Image Processing Technologies, LLC v. Canon, Inc.,1 the parties disputed whether Canon infringed one of Image Processing's patents by including any of four firmware functions in Canon’s digital cameras. Canon moved for summary judgment of noninfringement for one of the four accused firmware functions (without addressing the other three).

The firmware function raised in Canon's motion for summary judgment is used only as part of a hardware calibration step in Canon's foreign factories and, very infrequently, in service facilities in the United States. Canon therefore argued that (1) using this firmware function at its foreign manufacturing facilities does not infringe and (2) the use or sale of Canon’s digital cameras (which contain the installed but unexecuted firmware function) does not infringe.

According to Canon, its foreign use could not constitute infringement as a matter of law, regardless of the scope of the patent's claims. The magistrate judge agreed, noting that although Image Processing argued Canon was liable for importing the accused cameras into the United States, it did not offer any evidence contesting whether execution of the firmware function in foreign manufacturing facilities constituted infringement.

Canon also sought summary judgment of noninfringement because its cameras, as sold in the United States, could not execute the accused firmware function. To execute that function, the cameras needed to be connected to an external device not available to the public and located in a service facility. In response, Image Processing argued that the cameras were capable of running the accused function, because customers could run it by using a publicly available method known as the Canon Hack Development Kit, which was not created or maintained by Canon. In recommending that the district court grant Canon's motion, the magistrate judge noted that the Federal Circuit, in Telemac Cellular Corp. v. Topp Telecom, Inc., held that a device capable of being modified to operate in an infringing manner does not, without more, constitute infringement. Thus, because the cameras as sold by Canon could not execute the accused firmware function, they could not infringe Image Processing’s patent.

The magistrate judge also recommended denying summary judgment of invalidity, finding that the issue required resolution of factual disputes relating to (1) whether an earlier patent application by the inventor of Image Processing's patent disclosed the limitations now at issue and (2) whether public demonstrations by the inventor before filing the application for the patent now at issue taught all aspects of the claims. For Canon’s invalidity arguments to prevail, it would have to show that the earlier patent application or public demonstrations contained sufficient detail. The judge also recommended denying summary judgment of invalidity based on three prior-art references, similarly concluding that a jury should resolve factual disputes regarding what each reference taught.

Strategy and Conclusion

This case illustrates the territorial limits of the Patent Act, which governs activities taking place within the United States. Thus, patent owners must ensure that they pursue claims against suitable activity. When a product infringes only when used in a particular way, it may be more difficult to prove infringement unless the patent owner can show that the product was actually used in that way. Thus, it can benefit patent applicants to include claims directed to products with the capability to perform a particular method, rather than products that actually perform the method. While indirect infringement could address situations where a manufacturer causes its end users to use a product in a particular manner, liability for these acts requires additional elements of proof on the intent to cause that use.