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Transocean, Halo, Extraterritoriality, Offer to Sell, Patent, Infringement, RJR Nabisco


To comply with the obligations of the Uruguay Round Agreements, particularly the Agreement on the Trade Related Aspects of Intellectual Property (TRIPS), Congress amended 35 U.S.C. § 271(a) to make it an act of infringement to “offer to sell” a patented invention within the United States. See Uruguay Round Agreements Act, Pub. L. No. 103-465, §§ 531-533, 108 Stat. 4809 (1994).

The Federal Circuit has interpreted this provision in a manner contrary to the presumption against the extraterritorial reach of United States laws. The Federal Circuit has held that location of the ultimate sale contemplated in the offer controls the locus of the act of infringement, not the location of the offer. Transocean Offshore Deepwater Drilling, Inc. v. Maersk Contractors USA, Inc., 617 F.3d 1296, 1309 (Fed. Cir. 2010) (holding that “the location of the contemplated sale controls whether there is an offer to sell within the United States.”). The Federal Circuit further clarified that an offer made in the United States to sell the invention abroad is not infringing. Halo Elecs., Inc. v. Pulse Elecs., Inc., 831 F.3d 1369, 1380 (Fed. Cir. 2016).

As a result, the court has created an odd dichotomy: activity entirely outside of the United States can trigger liability for infringement of a United States patent, whereas activity within the United States does not. Such an approach is inconsistent with the presumption against extraterritoriality, particularly the two-step framework of RJR Nabisco, Inc. v. European Community, 136 S. Ct. 2090, 2101 (2016). This issue is of considerable importance, and this case is an excellent vehicle for assessing the appropriate territorial scope of § 271(a).