Most inventors know their patents are strictly
territorial - that is, a patent only prevents others from
making, using, or selling your invention inside the country
which issued the patent. But in today's environment of
multi-national corporations and instantaneous communications
can a small company or individual inventor protect
Consider the case of sole inventor Gerald
Pellegrini, who saw multi-national Analog Devices running
a nice little business in motor controller chips ("ADMC"
chips) - chips that probably infringed Pellegrini's patent.
One problem, though. Pellegrini only held a U.S. Patent and
Analog was manufacturing the chips outside of the country
and only selling them to non-US customers. Clearly Analog,
a U.S. company was profiting from this U.S. invention - and
the owner of the patent was determined to get his fair share
of those profits.
Pellegrini tried several arguments before the court. He
(and, apparently, it was Pellegrini himself) pointed out that
that Analog is incorporated in the
United States and has executive, marketing, and product line
responsibilities for ADMC product line; that the ADMC chips
were designed in the U.S.; that Analog arranged for the
overseas manufacture of the chips from its U.S. headquarters;
that Analog processed sales orders here and directed the
shipments of orders from here. In short, he contended that
Analog "supplie[d] or cause[d] to be supplied in or from
the United States" a product that infringed his patent.
Unfortunately for Pellegrini, he overlooked a critical
point. It is the product that must be supplied in or from
the U.S. Running a business is not an act of infringement,
even if the business is to make a product overseas that would
infringe if it were made in the U.S. The Court of Appeals
took one look at this case and stated clearly, "patent
infringement occurs where the offending act [making, using,
selling, offering for sale, or importing] is committed and not
where the injury is felt." Additionally, "the plain
language of [the law] focuses on the location of the accused
components, not the accused infringer."
Perhaps Pellegrini should have taken a different tack (and
perhaps he tried). Rather than suing Analog to stop it
from selling ADMC chips overseas he should have concentrated
on licensing Analog to import and sell them in the U.S.