Category Archives: Litigation

U.S. Patent Liability based on Foreign Sales or Manufacturing

Posted on by
Reply

Can a Taiwan company that manufactures products in China and delivers them in Hong Kong, pursuant to contracts signed in Taipei, be held liable for infringing U.S. patents based on those transactions, even if it never imports the goods to or does business in the U.S.? Surprisingly, yes.

Direct Infringement. Under Section 271(a) of the U.S. Patent Act it is unlawful to make, use, offer to sell, sell or import in/into the U.S. any device that makes use of a valid patent, without authority from the patent owner. To do so constitutes direct infringement.

It’s not always clear what constitutes U.S. sales. In MEMC v. Mitsubishi, a Japanese supplier sold goods exclusively to a Japanese customer, but placed shipping labels on the products indicating a U.S. destination and otherwise helped facilitate importation by the customer. Nonetheless, a U.S. court found the supplier didn’t engage in U.S. sales.

However, in LightCubes v. Nothern Light, the court found a supplier engaged in U.S. sales despite delivering the goods in Canada, because it sold them to U.S. customers. And in SEB v. Montgomery Ward, the court found U.S. sales despite delivery in Hong Kong, because the supplier manufactured the goods with North American electrical fittings, affixed U.S. trademarks on the goods, and stated U.S. destinations on the invoices. Continue reading →

International Arbitration v. Litigation: Is ADR really Better?

Posted on by
2

How many times have we heard the old clichés about arbitration being faster, cheaper and preferable to litigation? Well, that may be true in some cases, but often a party may be better off with litigation. Making that determination depends on multiple factors. This article will address seven of them.

1. Speed Surveys note a growing perception that arbitration is no faster, no cheaper and less reliable than litigation. In theory, there are many methods to speed up arbitration, such as using just one arbitrator, rather than three; restricting discovery, witnesses and submissions; submitting the case on the pleadings; and so forth. However, parties may feel such limitations inhibit their ability to fairly present their case and receive a correct decision. Consequently, such methods may be less suitable for more costly or complex disputes.

2. Cost Resolving a US$10 million dispute in the International Court of Arbitration, using three arbitrators, will cost $397,367 in administrative costs and arbitrator fees; a US$5 million dispute with one arbitrator will cost $132,349; but those figures don’t include fees for attorneys and experts. As with speed, the parties may reduce cost by limiting evidence, procedures and number of arbitrators; but, again, any savings must be weighed against the possibility of compromised justice. Continue reading →