Lake Cherokee Hard Drive Technologies, L.L.C. v. Marvell Semiconductor, Inc., No. 2:10-cv-00216-JRG, slip op. (E.D. Tex. August 6, 2013).
In Lake Cherokee Hard Drive, the court blocked extraterritorial sales based on established Federal Circuit precedent, disallowing a marking defense that was not timely raised. Defendant argued Plaintiff failed to mark its products and, therefore, was not entitled to pre-suit damages under §287(a). But, the court shot down the defense because Defendant raised it too late – after discovery closed.
Plaintiff sued alleging infringement. Defendant moved for summary judgment on two grounds: (1) Plaintiff could not recover damages for extraterritorial sales of a third-party; and (2) Plaintiff failed to mark and was not entitled to pre-suit damages under §287(a). Id. at 2.
The court examined whether a contract between two U.S. companies, negotiated and executed in the United States, for the sale of a patented invention with delivery and performance outside the United States constitutes a sale under §271(a). Id. at 6. Relying on the Federal Circuit’s holding in Transocean, the court said no, granting Defendant’s motion for summary judgment on the 77% of the accused sales that were extraterritorial. Id. The court decided the location of the negotiation and contracting does not control where the sale occurred. Id.
The court also said issues of material fact remained regarding accused products manufactured and delivered abroad but ultimately imported in to the U.S. by downstream consumers. The 23% of the sales base comprised of such sales was a proper subject for trial. Id. at 7.
Failure to Mark
The court did not reach the merits of the motion for summary judgment regarding the marking issue because Defendant failed to timely disclose the issue during discovery. Even though Plaintiff propounded an interrogatory expressly related to marking, Defendant did not disclose any marking theory until after discovery closed. Based on this failure, the court precluded Defendant’s marking theory from trial, denying the motion for summary judgment. Id. at 8.