Wednesday, October 22, 2014

Halo Electronics loses appeal at the CAFC; the Federal Circuit analyzes the meaning of a sale.

In HALO ELECTRONICS, INC. v. PULSE ELECTRONICS, INC. , the CAFC affirmed decisions of D. Nevada against the appeal of Halo.

There are issues of on-sale, willful infringement, and limitations from the claim preamble.

Of products sold by Pulse, the defendant in this case, patentee Halo argued:

Halo argues that the district court erred in
granting summary judgment of no direct infringement with respect
to products that Pulse delivered abroad. Halo contends
that those products were sold and offered for sale within
the United States because negotiations
and contracting activities occurred
within the United States, (...)

The CAFC noted

We agree with Pulse that the district court did not err
in granting summary judgment of no direct infringement
with respect to those products that Pulse manufactured,
shipped, and delivered outside the United States
because those products were neither sold nor offered for sale by
Pulse within the United States

Microsoft Corp. v. AT&T Corp., 550 U.S. 437, 441 (2007)
(“It is the general rule under United States patent law that no infringement
occurs when a patented product is made and sold in
another country.”).

And Deepsouth is invoked

Any doubt as to whether
Pulse’s contracting activities
in the United States constituted a sale
within the United States under § 271(a) is
resolved by the presumption
against extraterritorial application of
United States laws.
“The presumption that United States law governs domes-
tically but does not rule the world applies
with particular force in patent law.”
Microsoft , 550 U.S. at 454 -55.
As the Supreme Court has stated
on multiple occasions,
“[o]ur patent system makes no claim to extraterritorial
effect; these acts of Congress do not, and were not intended to, operate beyond
the limits of the United States, and
we correspondingly reject the claims of others to such
control over our markets.” Id. at
444 (quoting Deepsouth
Packing Co. v. Laitram Corp., 406 U.S. 518, 531 (1972)

Of alleged willfulness by Pulse:

Halo also contends that after
Pulse received Halo’s notice letters
in 2002, the Pulse engineer
only performed a cursory review of the Halo
patents and Pulse did not rely on that
analysis to assess whether it was infringing a valid patent.
Halo asserts that the court erred in holding that
the objective prong was not met simply
because Pulse raised a non-frivolous
obviousness defense

Pulse presented evidence that the prior art
disclosed each element of the asserted claims,
that itwould have been predictable to combine and
modify the prior art to create the claimed electronic packages
, and that there were differences between the prior art consid-
ered by the PTO and the prior art introduced at trial.
See Halo , 2013 WL 2319145, at *15 (summarizing evidence
presented by Pulse on obviousness).


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