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Archived updates for Wednesday, August 24, 2005

Knowledge of Importation of Product Sold Overseas Not Infringement under §271(a)

In Memc Electronic Materials, Inc. v. Mitsubishi Materials Silicon Corp., et al. (Fed Cir., August 19, 2005) , the court considered whether certain of SUMCO’s activities in the United States, as would be construed by a reasonable jury, are sufficient to establish an "offer for sale" or "sale" within the meaning of 35 U.S.C. § 271(a). Section 271(a) provides as follows:
Except as otherwise provided in this title, whoever without authority makes,
uses, offers to sell, or sells any patented invention, within the United States
or imports into the United States any patented invention during the term of the
patent therefor, infringes the patent.
In this case, the court did not think that MEMC presented any relevant evidence to support its claim that SUMCO offered to sell the accused wafers to Sumsung Austin in the United States:

MEMC points to no evidence of negotiations occurring in the United States
between SUMCO and Samsung Austin. At the same time, transmittal of e-mails
containing technical data from SUMCO to Samsung Austin cannot constitute an
"offer for sale."

First, unlike the price quotation letters in 3D Systems, the e-mails, while containing a description of the allegedly infringing wafers, do not contain any price terms. Accordingly, on their face, the e-mails cannot be construed as an "offer" which Samsung Austin could make into a binding contract by simple acceptance. See Rotec Indus., 215 F.3d at 1251. MEMC contends that the e-mails contain an implicit price term—one that has been previously agreed upon by Samsung Japan and SUMCO. However, in the circumstances of this case (where the e-mails did not incorporate a price term), any negotiations that may have occurred between Samsung Japan and SUMCO outside of the United States are irrelevant to the inquiry of whether, in the United States, SUMCO has offered to sell the accused wafers.

Turning to the question of actual sale, the undisputed evidence is as follows: (1) Samsung Japan alone controls when SUMCO receives an electronic purchase order and how many wafers are ordered; (2) Samsung Japan designates a third party packaging company to transport the wafers to Samsung Austin; (3) Samsung Japan arranges for the packaging, labeling, and shipping of the wafers; and (4) Samsung Japan pays SUMCO electronically for the wafers after they are delivered by the packaging company. Significantly, as far as the sale is concerned, MEMC points to no additional evidence. Thus, any "sale" of the wafers took place between SUMCO and Samsung Japan, and the sale occurred in Japan where all of the essential activities took place.

However, as noted above, MEMC presents no evidence that SUMCO entered into
any negotiations with Samsung Austin in the United States concerning the accused
wafers and no evidence that title of the wafers passed directly from SUMCO to
Samsung Austin. Mere knowledge that a product sold overseas will ultimately be
imported into the United States is insufficient to establish liability under section 271(a). See Rotec Indus., 215 F.3d at 1251 (finding that the only activities that are relevant to direct infringement are those activities that take place within the borders of the United States). In short, MEMC has presented no evidence demonstrating that SUMCO sold the accused wafers to Samsung Austin in the United States. Based upon the foregoing, we see no error in the district court’s grant of summary judgment of no direct infringement under 35 U.S.C. § 271(a).

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