N.D. Cal. says products imported into the US required to be marked for pre-suit damages

The Northern District of California, in Corning Optical Commc'ns Wireless LTD. v. SOLiD, Inc., et al., Case No. 5:14-cv-03750 (Judge Paul S. Grewal) (September 28, 2015), denied plaintiff's motion for reconsideration of the Court's order granting summary judgment in favor of defendants that "there is no genuine dispute that Section 287(a) applies to Corning's claims" because Corning imported patented articles into the US. (slip op. at 2). The Court also found the location of the sales of the patented products was the US under Section 271(a).

Plaintiff was headquartered in Israel and its American parent was in Virginia. The undisputed evidence at summary judgment showed that plaintiff's "typical transaction under [its] arrangement with its American parent company" was:

A sale of an accused distributed antenna system to an American end customer starts with the customer issuing a purchase order to Corning's American parent. The parent company then issues a purchase order to Corning, and Corning in turn issues another purchase order to a third-party manufacturer. The manufacturer ships the product directly to the end customer in the United States. Corning takes title to a product when it leaves the manufacturer and retains it until it reaches the end customer. Immediately before title transfers to the customer, Corning's American parent takes "flash title," temporary legal ownership that lasts only a split second.

(slip op. at 2). For the motion for reconsideration, plaintiff argued that its American parent imported the patented products into the US. (slip op. at 3).

The Court acknowledged that "there is very little case law addressing what factors determine whether an entity has imported or sold a product [in the US] for the purposes of Section 287(a)." (slip op. at 3). Based on the presumption that words have the same meaning when they are in different sections of the same statute, the Court looked to the Federal Circuit precedent on Section 271(a) for guidance, specifically, Carnegie Mellon Univ. v. Marvell Tech. Group, Ltd., Case No. 2014-1492, 2015 WL 4639309, at *21 (Fed. Cir. Aug. 4, 2015); Halo Elecs., Inc. v. Pulse Elecs., Inc., 769 F.3d 1371, 1379 (Fed. Cir. 2014); Nuance Commc'ns v. Abbyy Software House, 626 F.3d 1222, 1233 (Fed. Cir. 2010); MEMC Elec. Materials, Inc. v. Mitsubishi Materials Silicon Corp., 420 F.3d 1369, 1376-77 (Fed. Cir. 2005).

Relying on Section 271(a) precedent, the Court found that the plaintiff imported the patented products into the US. The Court noted that the undisputed facts confirmed "[f]or at least a substantial percentage of its transactions, the plaintiff patentee holds legal title to its DAS products until a split second before they reach their end customers in the United States. Nothing Corning properly submits suggests otherwise." The undisputed facts further showed that "Corning ships products into the US, and in fact ships them directly to the end customers who ordered them from Corning's American parent." The Court concluded that since Corning imported the patented products into the US, Section 287(a) required marking. (slip op. at 4). Corning's declaration from US customs that its American parent imported the patented products was unpersuasive. The Court said that the declaration only showed that the American parent was listed as the importer for one shipment under trade law, not patent law.

The Court also found that Corning's sales occur in the US. The Court said the factors "relevant to the location of a sale under Section 271(a) include where the title transfer took place, the terms of the sale agreement, where the parties formed that agreement, the location of delivery and where payment occurred." (slip op. at 4-5). The undisputed facts showed that legal title to the patented products passed in the US. "[T]he purchase orders from the end customer came from the United States. So did the purchase order to Corning. Corning therefore sold the products to an American parent for distribution to American end customers. Finally, payment went from the United States to Corning according to a transfer pricing arrangement." (slip op. at 5).