In our first posting
(here) of Merial Limited, BASF Agro B.V. v. CIPLA Ltd., et al.,
Nos. 2011-1471, 1472 (Fed. Cir. 2012), we discuss the Court of
Appeals ruling on Fed. R. Civ. P. 4(k)(2). Here we address an
equally important issue for the international practitioner: the
extraterritorial limits to a federal district court's contempt
power. The contempt citation read on Cipla, which the defendants
said limited its activities of a joint venture in India. The
District Court disagreed and found that Cipla has contemptuously
"caused an infringing product to be sold in the United
States", in direct violation of" an earlier District
In analyzing the issue, the Federal Circuit first rejected
"the blanket proposition that domestic patent law does not,
and was not intended to, reach past the territorial limits of the
United States". The Federal Circuit did acknowledge that
"purely extraterritorial conduct cannot constitute direct
infringement" under Section 271(a) of the Patent Act in Title
35; that statute includes express language limiting its scope to
"[W]hoever 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 therefore, infringes the patent"
So for direct infringement there needs to be an infringing act
in the U.S.
At the same time,
where a foreign party, with the requisite knowledge and intent,
employs extraterritorial means to actively induce acts of direct
infringement that occur within the United States, such conduct is
not categorically exempt from redress under § 271(b). Cf. DSU
Med. Corp. v. JMS Co., 471 F.3d 1293, 1305–06 (Fed. Cir.
2006) (en banc in relevant part) (approving of a jury instruction
that read, in part: "Unlike direct infringement, which must
take place in the United States, induced infringe-ment does not
require any activity by the indirect infringer in this country, so
long as the direct infringement occurs here.").
The Federal Circuit concluded: "We therefore reject the
Appellants' over-broad contention that acts outside of the
United States cannot violate any provision of §
271″. The Court of Appeals affirmed the District
Court's finding that Cipla had induced infringement, though it
did not parse which acts did or did not occur in the U.S. and which
acts needed to in order to establish indirect infringement.
On Tuesday, January 2, 2013 President Obama signed into law the FY 2013 National Defense Authorization Act (the "FY 2013 NDAA"), a large legislative package that includes the Iran Freedom and Counter-Proliferation Act of 2012 (the "IFCPA") -- the fourth major legislative expansion of US sanctions against Iran in just the past two years.