CAFC Reverses Injunction Against Contributory Infringer as Overbroad

ScreenShot088MTP v. Marathon Labels (Fed. Cir. 2007) (Non-precedential)

A jury found that the defendants were contributory infringers; had induced infringement of the claims; and were willful infringers. The district court overturned the willfulness finding but then issued a permanent injunction barring the defendants from using, selling, offering to sell, or importing the Smart Surface Placard that was used to re-label reusable containers in violation of the method claims.

On appeal, the CAFC quickly reversed the injunction finding it over-broad. In particular, because the products themselves do not infringe, the injunction should not prohibit sales for export.

Given the parties’ admissions, the district court’s injunction is overly broad and therefore an abuse of discretion. Given the parties’ admissions, the district court should not enjoin sales of the SSP to locations outside the United States, and should not enjoin sales of the SSP to resellers who sell to locations outside the United States.

This case again raises the general issue of how injunctive relief should be formulated against contributory infringers of a method claim.


3 thoughts on “CAFC Reverses Injunction Against Contributory Infringer as Overbroad

  1. 3


    Anon may be right that Union Carbide may no longer be valid to apply to this situation because it may have been undermined by the SCOTUS opinion in Microsoft v AT&T. But the problem with the SCOTUS opinion in Microsoft v AT&T is that could be read at least a couple of different ways. One way of reading the SCOTUS opinion is that the copies made of the exported software were not the “component” that was “supplied” within the meaning of 271(f). This is the most reasonable (and supportable basis) for the SCOTUS opinion. Under this interpretation, Union Carbide may still live, because 271(f) talks about supplying a “component” of a “patented invention”; “patented invention” could cover a patented method or process

    Another way to view the SCOTUS opinion is that 271(f) shouldn’t be interpreted so that it has an “extraterritorial effect. This is what the majority in SCOTUS (unfortunately in my opinion) seems to use to buttress its holding, and would potentially undermine Union Carbide. But that view by SCOTUS (if true, not simply dicta) flies in the face of why Congress enacted 271(f) in the first place, namely to overrule Deepsouth Packing in response to SCOTUS’ call for Congress to do so if it wished. More importantly, construing 271(f) to require an “extraterritorial effect” is completely unnecessary and a misreading of 271(f). As the Federal Circuit correctly held in Waymark v. Porta Systems, 271(f) doesn’t need the act of completing the patented invention abroad, simply the “intent” or “active inducement” that the exported “component” be used in the patented invention.

    Still, it remains to be seen how the Federal Circuit will handle 271(f) in the future. In my opinion, SCOTUS really muddied the water unnecessarily in Microsoft v. AT&T, as they so often do when they try (if they bother to try at all) to interpret any section of Title 35.

  2. 2

    Firstly, the patentee didn’t argue it.

    Secondly, Union Carbide is of somewhat doubtful validity post-Microsoft v. AT&T. Yes, everyone but ALITO sidestepped the question of the nitty-gritty definition of component (rather the court said it can’t be plans to make a component). But, it still overruled the decision, and explicitly cast doubt on Eolas (saying it couldn’t tell what the Fed Cir.’s reasoning was in Eolas). Union Carbide basically entirely relied on Eolas and AT&T in ignoring RIM and holding 271(f) to cover process claims. Additionally, the holding in AT&T that the presumption of non-extraterritoriality applies when interpreting the scope of an inherently extraterritorial statute is something the Fed. Cir. had basically ignored and would need to address in a subsequent case.

    The presumption pretty strongly points against Union Carbide, as it essentially tries to apply US method patents outside the US to entities that have a basis inside the US and somehow interact in a facilitting way with those outside the US country. The whole point of 271(f) was to get to a narrow case where someone got around the manufacturing/exporting rule by exporting it unassembled and with instructions. Yes, 271(f)(2) is somewhat broader than that, but the presumption of non-extraterritoriality says you don’t want to regulate behavior outside the US, which is what process patents do under 271(f), as opposed to exporting of physical components.

  3. 1

    The opinion states that the patentee conceded there is no infringement for use of the patented method in Mexico. Why no Union Carbide claim for infringement based on export of a component?

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