United States Court of Appeals for the Federal Circuit
2006-1646
LITECUBES, LLC,
and CARL R. VANDERSCHUIT,
Plaintiffs-Appellees,
v.
NORTHERN LIGHT PRODUCTS, INC.
(doing business as GlowProducts.com),
Defendant-Appellant.
Rudolph A. Telscher, Jr., Harness, Dickey & Pierce, P.L.C., of St. Louis, Missouri,
argued for plaintiffs-appellees. With him on the brief were Matthew L. Cutler and Kara R.
Yancey.
F. Ross Boundy, Davis Wright Tremaine LLP, of Seattle, Washington, argued for
defendant-appellant. With him on the brief was Robert J. Carlson, Christensen O’Connor
Johnson Kindness PLLC, of Seattle, Washington. Of counsel on the brief was Kevin P.
Anderson, Wiley Rein LLP, of Washington, DC. Of counsel was Julian D. Forman, Davis
Wright Tremaine LLP, of Seatte, Washington.
Appealed from: United States District Court for the Eastern District of Missouri
Judge E. Richard Webber
United States Court of Appeals for the Federal Circuit
2006-1646
LITECUBES, LLC, and CARL R. VANDERSCHUIT,
Plaintiffs-Appellees,
v.
NORTHERN LIGHT PRODUCTS, INC.
(doing business as GlowProducts.com),
Defendant-Appellant.
Appeal from the United States District Court for the Eastern District of Missouri in case
no. 4:04-CV-00485, Judge E. Richard Webber.
___________________________
DECIDED: April 28, 2008
___________________________
Before NEWMAN, Circuit Judge, ARCHER, Senior Circuit Judge, and GAJARSA,
Circuit Judge.
GAJARSA, Circuit Judge.
This patent and copyright case requires that we clarify the often-confused
boundary between elements of a federal claim, which must be established before relief
can be granted, and the requirements for establishing subject matter jurisdiction.
Plaintiffs-Appellees Litecubes, LLC and Carl R. Vandershuit (collectively “Litecubes”),
brought an action in the U.S. District Court for the Eastern District of Missouri alleging
patent and copyright infringement by Defendant-Appellant Northern Lights Products,
Inc., doing business as GlowProducts.com (“GlowProducts”). The district court entered
a judgment against GlowProducts after a jury verdict of copyright and patent
infringement. Subsequently, GlowProducts filed a motion to dismiss the case for lack of
subject matter jurisdiction on the grounds that it did not sell the allegedly infringing
products within the United States, nor import the products into the United States. The
district court denied the motion on the grounds that GlowProducts did import the goods
into the United States.
GlowProducts appeals the denial of its motion to dismiss for lack of subject
matter jurisdiction. We affirm the district court’s denial of the motion to dismiss, but do
so on different grounds. The district court erred in treating the issue of whether the
goods had been imported into the United States as an issue impacting its subject matter
jurisdiction. A plaintiff must prove that allegedly infringing activity took place in the
United States to prevail on claims of patent or copyright infringement, but as with any
other element of the claims, failure to do so does not divest the federal courts of subject
matter jurisdiction over the action.
We also affirm the district court’s denial of GlowProducts’ motion for a judgment
as a matter of law. Substantial evidence supports the jury’s finding of infringement.
We have jurisdiction to hear the appeal pursuant to 28 U.S.C. 1295(a)(1).
I.
A.
Vanderschuit is the owner and founder of Litecubes, and the inventor and owner
of U.S. Patent No. 6,416,198 (the “’198 patent”). The ’198 patent discloses an
illuminatable novelty item that can be placed in beverages, i.e., a lighted artificial “ice
cube.” Litecubes is the licensee of the ’198 patent and the owner of a registered
copyright on the Litecube (the “Litecube Copyright”).
2006-1646 2
Litecubes asserted three independent claims from the ’198 patent, claims 1, 16,
and 31. Claim 1 claims:
An illuminatable beverage accessory device comprising:
a. at least one light source;
b. at least one power source switchably connected to said light source;
c. a cartridge having a light-source chamber to contain said light source, a
power-source chamber below said light-source chamber, and two wire
lead channels on the cartridge underside and in communication with said
light-source chamber;
d. a lid under said cartridge, said lid having a lid chamber mating with said
power-source chamber to thereby contain said power-source therein and
further having a power-switching means for powering said at least one
light source into and from an on-light mode into and from an off-light
mode;
e. a housing covering said cartridge and said lid such that a cavity is
defined therein and a water-tight integrity is maintained within said
housing; and
f. a filler within said cavity, said filler adapted to retain heat when said
device is heated.
’198 patent cols. 7-8 (emphasis added). Claim 16 is identical to claim 1 except that
subpart (f) requires “a filler within said cavity, said filler adapted to retain cold when said
device is cooled.” Id. cols. 8-9. Claim 31 differs from claims 1 and 16 in that (a) it does
not require a filler adapted to retain heat or cold, and (b) it requires that the power
source “reciprocally translate . . . from an open light-on mode to a closed light-off
mode.” Id. cols. 9-10.
At a Markman hearing, the district court construed the claim 1 term “a filler within
said cavity, said filler adapted to retain heat when said device is heated” to mean “filler
within said cavity, said filler made suitable to or fit for the specific use of retaining heat
2006-1646 3
when said device is heated.” Litecubes v. N. Light Prods., Inc., No. 4:04cv00485 (E.D.
Mo. March 7, 2005) (“Markman Order”) (emphasis added). Similarly, the district
construed the relevant term in claim 16 to mean “filler within said cavity, said filler made
suitable to or fit for the specific use of retaining cold when said device is cooled.” Id.
(emphasis added). Neither party challenges these constructions on appeal.
B.
GlowProducts is a Canadian corporation operating from its offices in Victoria,
British Columbia, which acquires novelty items from Chinese manufacturers and then
sells the items primarily in North America. GlowProducts does not have offices,
facilities, or assets in the United States. Evidence at trial, however, established that
GlowProducts sold the accused products directly to customers located in the United
States and that GlowProducts would ship the products, f.o.b., 1 from its Canadian offices
to its customers in the United States.
Two types of products sold by GlowProducts are at issue, the EXA cubes and the
ICM cubes (which include the “8 Mode Multi Cube” and the “3 Setting Flashing Lighted
Ice Cube”). Both products are artificial ice cubes containing an L.E.D. and battery. The
EXA cubes are nearly identical to the Litecube product (“the Litecube”) and include a
power source that can “reciprocally translate . . . from an open light-on mode to a closed
light-off mode,” ’198 patent cols. 9-10. GlowProducts does not allege any error on the
merits in the jury’s finding that the “EXA” cube infringed claim 31; nor does it contest the
merits of the jury’s finding that the EXA cube infringes the Litecube Copyright.
1
“F.o.b” or “free on board” is “a method of shipment whereby goods are
delivered at a designated location, usually a transportation depot, at which legal title and
thus the risk of loss passes from seller to buyer.” MEMC Elec. Materials, Inc. v.
Mitsubishi Materials Silicon Corp., 420 F.3d 1369, 1374 n.3 (Fed. Cir. 2005).
2006-1646 4
The ICM cubes are a different shape than the Litecube and, thus, were not
alleged to have infringed the Litecube Copyright. Nor do they have a reciprocally
translating power source as required by claim 31. Accordingly, at issue at trial was
whether they infringe claims 1 and 16 of the ’198 patent. In dispute was only whether
the ICM cubes meet the limitation that the cube contain a filler adapted to retain heat or
cold when the device is heated or cooled. GlowProducts concedes that the ICM cubes
meet all of the remaining limitations of claims 1 and 16.
C.
Litecubes filed this action in April 2004. A five-day jury trial was held in October
2005. Midway through trial, GlowProducts raised for the first time the issue of subject
matter jurisdiction, arguing that the trial court did not have jurisdiction over the claims
because there was no evidence that at the time the lawsuit was brought GlowProducts
had made any sales in the United States or imported products into the United States.
Trial Tr. vol. III 169. GlowProducts’ theory was that because its sales to United States’
customers were shipped f.o.b., the sales took place in Canada and that it was the
customer who imported the goods into the United States.
After the trial had concluded and the jury entered a verdict of willful infringement,
GlowProducts filed a motion to dismiss for lack of subject matter jurisdiction on these
grounds. Neither Litecubes nor the district court challenged GlowProducts
characterization of the issue as jurisdictional. Instead Litecubes opposed the motion on
the grounds that there was ample evidence that GlowProducts had sold, offered to sell,
or imported the allegedly infringing products to the United States. Id. The district court
agreed. The court denied GlowProducts’ motion, finding evidence of infringement
2006-1646 5
“sufficient to establish subject matter jurisdiction in this Court” because GlowProducts
“clearly imported the accused products into the United States.” Litecubes v. N. Light
Prods., Inc., No. 4:04cv00485, at *3 (E.D. Mo. Aug. 25, 2006) (Memorandum and
Order). The district court did not reach the issue of whether there were sales or offers to
sell in the United States. 2 The district court also dismissed GlowProducts’ motions for
judgment as a matter of law (“JMOL”), concluding that substantial evidence supported
the jury verdict. Id. at *12
After the district court issued a final judgment, GlowProducts appealed. In their
initial briefing to this court, both parties assumed, without any analysis, that the issue of
whether there was allegedly infringing activity in the United States was jurisdictional.
However, because we have an independent obligation to properly determine our own
jurisdiction, the panel requested that the parties be prepared to discuss at oral
argument:
Whether failing to establish that an alleged infringer “makes, uses, offers
to sell, or sells any patented invention, within the United States or imports
into the United States any patented invention” is sufficient to divest the
federal courts of subject matter jurisdiction over a patent infringement
action, or instead whether the location of the allegedly infringing activity is
a factual element of the claim which must be proven to show patent
infringement but which does not affect the subject matter jurisdiction of the
federal courts.
2
Litecubes had not initially pled infringement based on importation, relying
instead only on the sale and offer to sell prongs of § 271. However the court allowed
Litecubes leave to amend their complaint to include importation (and held that this
amendment would relate back to the initial filing) because the issue was raised at trial.
2006-1646 6
Letter to Parties (Nov. 29, 2007). 3 At oral argument, Litecubes argued for the first time
that the issue was not one of subject matter jurisdiction, but should properly be
considered an element of the claim. GlowProducts did not provide any authority to the
contrary, suggesting only that it was “not an easy question.” 4
II.
Subject matter jurisdiction is a question of law that we review de novo.
Pennington Seed, Inc. v. Produce Exch. No. 299, 457 F.3d 1334, 1338 (Fed. Cir. 2006);
see also Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 95 (1998) (“Every federal
appellate court has a special obligation to ‘satisfy itself not only of its own jurisdiction,
but also that of the lower courts in a cause under review,’ . . . .” (quoting Mitchell v.
Maurer, 293 U.S. 237, 244 (1934))). Pursuant to 28 U.S.C. § 1338(a), “[t]he district
courts shall have original jurisdiction of any civil action arising under any Act of
Congress relating to patents, plant variety protection, copyrights and trademarks.”
Under what is known as the “well-pleaded complaint rule,” subject matter jurisdiction
exists if a “well-pleaded complaint establishes either that federal patent law creates the
cause of action or that the plaintiff’s right to relief necessarily depends on resolution of a
substantial question of federal patent law, in that patent law is a necessary element of
one of the well-pleaded claims.” AT&T Co. v. Integrated Network Corp., 972 F.2d 1321,
3
The parties were also asked to address whether the extraterritorial scope
of the Copyright Act was an issue of subject matter jurisdiction and whether that issue
should be decided under the Eighth Circuit’s or this Circuit’s law.
4
Both parties suggested that if the issue was not jurisdictional, this court
could still consider whether there was sufficient evidence that the allegedly infringing
acts took place within the United States by reviewing the district court’s denial of
Litecubes’ motion for JMOL on this issue, despite Litecubes’ failure to appeal the denial
of JMOL on this ground.
2006-1646 7
1323-24 (Fed. Cir. 1992) (quoting Christianson v. Colt Indus. Operating Corp., 486 U.S.
800, 808 (1988)).
Litecubes alleged in its complaint that GlowProducts violated 35 U.S.C. § 271(a),
which provides that “[e]xcept as otherwise provided . . . whoever 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.” It is beyond dispute that this statute creates a federal
cause of action for patent infringement over which the district courts have subject matter
jurisdiction under § 1338(a). 5 And Litecubes, as GlowProducts concedes, properly pled
every element of a § 271(a) claim, alleging in Count I of its complaint that GlowProducts
has infringed the ’198 patent by “offering for sale and/or selling in the United States and
in this judicial district illuminatable beverage accessories” that “infringe one or more
claims of the ’198 patent.” Compl. ¶ 26.
Nevertheless, GlowProducts argues that even though Litecubes’ well-pleaded
complaint establishes that federal patent law creates the cause of action, there is no
subject matter jurisdiction over this suit because Litecubes has failed to prove that
GlowProducts sold or offered to sell products in the United States or imported products
into the United States.
Subject matter jurisdiction does not fail simply because the plaintiff might be
unable to ultimately succeed on the merits. See Steel Co., 523 U.S. at 89 (“[J]urisdiction
. . . is not defeated . . . by the possibility that the averments might fail to state a cause of
5
The district court also has jurisdiction over § 271(a) causes of action under
28 U.S.C. § 1331, the general federal question jurisdictional statute, to which the same
well-pleaded complaint rule applies, Franchise Tax Bd. v. Constr. Laborers Vacation
Trust, 463 U.S. 1, 27-28 (1983).
2006-1646 8
action on which petitioners could actually recover.” (quoting Bell v. Hood, 327 U.S. 678,
682 (1946))). To the contrary, “[i]t is firmly established . . . that the absence of a valid
(as opposed to arguable) cause of action does not implicate subject-matter jurisdiction,
i.e., the courts’ statutory or constitutional power to adjudicate the case.” Id. (emphasis in
original). Thus, a failure to prove the allegations alleged in a complaint requires a
decision on the merits, not a dismissal for lack of subject matter jurisdiction. See, e.g.,
Binderup v. Pathe Exch., Inc., 263 U.S. 291, 305 (1923). Indeed even if, unlike here, the
complaint fails to allege a cause of action upon which relief can be granted, this “failure
to state a proper cause of action calls for a judgment on the merits and not for a
dismissal for want of jurisdiction.” 6 Bell, 327 U.S. at 682.
As the Supreme Court long ago held:
A complaint setting forth a substantial claim under a federal statute
presents a case within the jurisdiction of the court as a federal court; and
this jurisdiction cannot be made to stand or fall upon the way the court
may chance to decide an issue as to the legal sufficiency of the facts
alleged any more than upon the way it may decide as to the legal
sufficiency of the facts proven. Its decision either way upon either question
is predicated upon the existence of jurisdiction, not upon the absence of it.
Binderup, 263 U.S. at 305; see also Christianson, 486 U.S. at 807-08 (noting the
longstanding rule that “in order to demonstrate that a case is one ‘arising under’ federal
patent law ‘the plaintiff must set up some right, title or interest under the patent laws, or
at least make it appear that some right or privilege will be defeated by one construction,
6
There is a limited and narrow exception to Bell’s general rule if the federal
claim pled is “immaterial and made solely for the purpose of obtaining jurisdiction” or
“wholly insubstantial and frivolous.” Steel Co., 523 U.S. at 89. Dismissal for lack of
subject matter jurisdiction on the grounds that the federal claim asserted is not
colorable, however, is “proper only when the claim is ‘so insubstantial, implausible,
foreclosed by prior decisions of this Court, or otherwise completely devoid of merit as
not to involve a federal controversy.’” Id. (quoting Oneida Indian Nation of N.Y. v.
County of Oneida, 414 U.S. 661, 666 (1974)). This is clearly not our case.
2006-1646 9
or sustained by the opposite construction of these laws.’” (quoting Pratt v. Paris Gas
Light & Coke Co., 168 U.S. 255, 259 (1897))); Montana-Dakota Utils. Co. v. N.W. Pub.
Serv. Co., 341 U.S. 246, 249 (1951) (“Petitioner asserted a cause of action under the
Power Act. To determine whether that claim is well founded, the District Court must take
jurisdiction, whether its ultimate resolution is to be in the affirmative or the negative. If
the complaint raises a federal question, the mere claim confers power to decide that it
has no merit, as well as to decide that it has.”).
Accordingly, there can be no question that Litecubes’ allegations, which state a
claim under the patent laws, are sufficient to create general federal question jurisdiction.
Moreover, while Congress can restrict the federal question jurisdiction granted in § 1331
or § 1338, for example by mandating that a certain threshold fact be established in
order for the federal court to have jurisdiction over a particular cause of action, 7 the
Supreme Court has recently reiterated in a unanimous opinion that it is critical to
distinguish between a statutory limitation that is truly jurisdictional and one that is simply
an element of the claim that must be established on the merits. Arbaugh v. Y & H Corp.,
546 U.S. 500 (2006). As the Supreme Court explained, there are important
7
“[C]ertain statutes confer subject-matter jurisdiction only for actions
brought by specific plaintiffs, e.g., 28 U.S.C. § 1345 (United States and its agencies and
officers); 49 U.S.C. § 24301(l)(2) (Amtrak), or for claims against particular defendants,
e.g., 7 U.S.C. § 2707(e)(3) (persons subject to orders of the Egg Board); 28 U.S.C. §
1348 (national banking associations), or for actions in which the amount in controversy
exceeds, e.g., 16 U.S.C. § 814, or falls below, e.g., 22 U.S.C. § 6713(a)(1)(B), 28
U.S.C. § 1346(a)(2), a stated amount.” Arbaugh, 546 U.S. at 516. And at times
Congress has enacted a separate provision limiting the scope of the § 1331 in narrow
circumstances. See, e.g., Weinberger v. Salfi, 422 U.S. 749, 756-61 (holding that 42
U.S.C. § 405(h) bars 28 U.S.C. § 1331 jurisdiction over suits to recover Social Security
benefits).
2006-1646 10
consequences of labeling a requirement as a “determinant of subject-matter jurisdiction,
rather than an element of [the plaintiff’s] claim for relief”:
First, “subject-matter jurisdiction, because it involves the court’s power to
hear a case, can never be forfeited or waived.” Moreover, courts, including
this Court, have an independent obligation to determine whether subject-
matter jurisdiction exists, even in the absence of a challenge from any
party. . . .
Second, in some instances, if subject-matter jurisdiction turns on
contested facts, the trial judge may be authorized to review the evidence
and resolve the dispute on her own. If satisfaction of an essential element
of a claim for relief is at issue, however, the jury is the proper trier of
contested facts.
Third, when a federal court concludes that it lacks subject-matter
jurisdiction, the court must dismiss the complaint in its entirety. . . . In
contrast, when a court grants a motion to dismiss for failure to state a
federal claim, the court generally retains discretion to exercise
supplemental jurisdiction, pursuant to 28 U.S.C. § 1367, over pendent
state-law claims.
Id. at 514 (internal citations omitted).
The Court cautioned that courts have at times erroneously called a limitation
jurisdictional that was actually simply an element of the claim:
On the subject-matter jurisdiction/ingredient-of-claim-for-relief dichotomy,
this Court and others have been less than meticulous. “Subject matter
jurisdiction in federal-question cases is sometimes erroneously conflated
with a plaintiff’s need and ability to prove the defendant bound by the
federal law asserted as the predicate for relief—a merits-related
determination.”
Id. at 511 (quoting 2 J. Moore et al., Moore’s Federal Practice § 12.30[1], at 12-36.1 (3d
ed. 2005)); see also Steel Co., 523 U.S. at 90 (“‘Jurisdiction . . . is a word of many, too
many, meanings’”); Montana-Dakota Utils. Co., 341 U.S. at 249 (holding that the Court
of Appeals erred in reversing a judgment of the district court on the grounds that there
was no subject matter jurisdiction, noting that “[a]s frequently happens where jurisdiction
2006-1646 11
depends on subject matter, the question whether jurisdiction exists has been confused
with the question whether the complaint states a cause of action”). To prevent such
mischaracterizations, the Arbaugh Court issued a “readily administrable bright line rule”:
“If the Legislature clearly states that a threshold limitation on a statute’s scope shall
count as jurisdictional, then courts and litigants will be duly instructed . . . . But when
Congress does not rank a statutory limitation on coverage as jurisdictional, courts
should treat the restriction as non-jurisdictional in character.” Id. at 516.
Here, Congress has not clearly stated in 35 U.S.C. § 271 or in any other statute
that § 271’s requirement that the infringing act happen within the United States is a
threshold jurisdictional requirement as opposed to an element of the claim. To the
contrary, the statute, which creates liability for patent infringement on “whoever 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” in no way distinguishes the territorial limitation from any of the other
elements necessary to show infringement. Id.
In most situations our analysis would end there—Arbaugh’s bright line rule
mandates that the requirement that the allegedly infringing act occur in the United
States be treated as non-jurisdictional. However, at least pre-Arbaugh, there has been a
particular tendency among courts and litigants to label limitations on the extraterritorial
reach of a statute as “jurisdictional.” 8 We therefore must consider whether there is
8
See, e.g., McBee v. Delica, 417 F.3d 107 (1st Cir. 2005) (Lanham Act);
United Phosphorus, Ltd. v. Angus Chem. Co., 322 F.3d 942 (7th Cir. 2003) (en banc)
(Foreign Trade Antitrust Improvement Act); Mannington Mills, Inc. v. Congoleum Corp.,
595 F.2d 1287 (3d Cir. 1979) (Sherman Antitrust Act); Des Brisay v. Goldfield Corp.,
549 F.2d 133 (9th Cir. 1977) (Securities Act).
2006-1646 12
something unique about a limitation that determines the extraterritorial scope of a
statute that converts what would otherwise be a factual element of the claim into a
restriction on the subject matter jurisdiction of the federal courts. We conclude that
there is not.
There is no absolute rule prohibiting the extraterritorial reach of federal statutes.
Rather, it is well-established that “Congress has the authority to enforce its laws beyond
the territorial boundaries of the United States.” E.E.O.C. v. Arabian Am. Oil Co., 499
U.S. 244, 248 (1991). Whether Congress did extend any particular statute to reach
extraterritorial activity is simply a question of statutory interpretation. 9 If Congress has
extended a cause of action to reach extraterritorial activity, there is no independent bar
to the federal courts adjudicating such extraterritorial disputes, providing a court has
personal jurisdiction over the defendants. 10 Thus, in these respects, a limitation on the
extraterritorial scope of a statute is no different than any other element of a claim which
must be established before relief can be granted under a particular statute.
Congressional authority to regulate extraterritorial behavior does implicate a type
of “jurisdiction”—the “jurisdiction to prescribe” recognized under international law. The
“jurisdiction to prescribe” is a state’s authority to “make its law applicable to the
activities, relations, or status of persons,” including its “authority to subject foreign
9
While there is a presumption that Congress does not intend a statute to
apply to extraterritorial activity, it is only a presumption and can be rebutted if Congress
has clearly expressed an affirmative intention to the contrary. Id.
10
The personal jurisdiction requirement—which prevents federal courts from
exercising authority over defendants without sufficient contacts with the United States,
see Int’l Shoe Co. v. Washington, 326 U.S. 310 (1945)—is an important limitation on the
jurisdiction of the federal courts over purely extraterritorial activity that is independent of
the extraterritorial reach of a federal statute or the court’s subject matter jurisdiction.
Here, there is no dispute that the district court had personal jurisdiction over
GlowProducts.
2006-1646 13
interests or activities to its laws.” Restatement (Third) of the Foreign Relations Law of
the United States § 401 & comment a (1987) (“Restatement”); see also Hartford Fire
Ins. Co. v. California, 509 U.S. 764, 813 (1993) (Scalia, J., dissenting). 11 But as the
influential Restatement recognizes, this type of “jurisdiction” is distinct from a court’s
“jurisdiction to adjudicate” or from the domestic law concept of the “subject matter
jurisdiction” of federal courts. Restatement § 401 comments a & c, § 421 comments a
& j. 12
Emphasizing this distinction, the Supreme Court held in Lauritzen v. Larsen, 345
U.S. 571 (1953), that the extraterritorial scope of a statute was an element of the claim,
not a requirement of subject mater jurisdiction. In Lauritzen, the Court considered
whether the Jones Act, which on its face created a cause of action for “any seaman who
shall suffer personal injury in the course of his employment,” 46 U.S.C. § 688 (1952),
applied to a dispute between two Danish citizens that took place on a Danish ship in
11
It is well-established that international law does not provide an
independent limitation on Congress’ legislative authority. See, e.g., Lauritzen v. Larsen,
345 U.S. 571, 578 (1953). But it is the international law concept of territorial limitations
on the jurisdiction to prescribe that underlays the longstanding presumption that
Congress does not intend its statute to have extraterritorial effect. See, e.g., F.
Hoffmann-La Roche Ltd. v. Empagran S.A., 542 U.S. 155, 163 (2004) (“[T]his Court
ordinarily construes ambiguous statutes to avoid unreasonable interference with the
sovereign authority of other nations.”); The Charming Betsy, 6 (Cranch) U.S. 64, 118
(1804) (Marshall, C.J.). Thus, as discussed above, the question is generally whether
Congress has exercised its prescriptive jurisdiction to reach extraterritorial behavior, not
whether it has such jurisdiction. Of course, more generally, Congress does have
domestic limitations on its jurisdiction to prescribe, or what is also called its legislative
jurisdiction—it can only exercise those powers given to it in Article I of the U.S.
Constitution. Here this power is provided by Article I Section 8’s grant of power “to
promote the Progress of Science and useful Arts, by securing for limited Times to
Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”
12
The Restatement notes that some courts have used the term “subject
matter jurisdiction” to refer to what it calls jurisdiction to prescribe. Recognizing the
confusion this engenders, the Restatement avoids the use of the term “subject matter
jurisdiction.” Restatement § 401 comment c.
2006-1646 14
international waters. Relying on the long-standing presumption that, if possible, statutes
should be construed consistent with international law, the Court held as a matter of
statutory construction that the Jones Act did not reach such extraterritorial activities.
Lauritzen, 345 U.S. at 577-93. Nevertheless, the Court dismissed the defendant’s
contention that the district court was without jurisdiction over the claim. Noting that the
defendant had not objected to personal jurisdiction, the Court explained, “[a]s frequently
happens, a contention that there is some barrier to granting plaintiff’s claim is cast in
terms of an exception to jurisdiction of subject matter. A cause of action under our law
was asserted here, and the court had power to determine whether it was or was not well
founded in law and in fact.” Id. at 575 (citing Montana-Dakota Utils. Co., 341 U.S. at
249); see also Hartford Fire Ins. Co., 509 U.S. at 812-13 (Scalia, J., dissenting) (“It is
important to distinguish two distinct questions raised by this petition: whether the District
Court had jurisdiction, and whether the Sherman Act reaches the extraterritorial conduct
alleged here. . . . Respondents asserted nonfrivolous claims under the Sherman Act,
and 28 U.S.C. § 1331 vests district courts with subject-matter jurisdiction over cases
‘arising under’ federal statutes. . . . The second question—the extraterritorial reach of
the Sherman Act—has nothing to do with the jurisdiction of the courts. It is a question of
substantive law turning on whether, in enacting the Sherman Act, Congress asserted
regulatory power over the challenged conduct.”).
Notably, while some courts have, notwithstanding Lauritzen, at times referred to
the extraterritorial scope of a particular statute as a jurisdictional requirement, in
Arbaugh, the Supreme Court pointed to one of its own decisions, E.E.O.C. v. Arabian
American Oil Co., 499 U.S. 244 (1991), in which it had characterized the extraterritorial
2006-1646 15
effect of Title VII as jurisdictional, as an example of a “drive-by jurisdictional ruling[]” in
which it had been “less than meticulous” in distinguishing between subject matter
jurisdiction and an ingredient of a claim for relief. Arbaugh, 546 U.S. at 511. The Court
explained that such cases “should be accorded ‘no precedential effect’ on the question
of whether the federal court had the authority to adjudicate the claim in suit.” Id.
Arbaugh’s treatment of Arabian American Oil, coupled with the Court’s holding in
Lauritzen, strongly suggests that limitations on the extraterritorial reach of statutes are
subject to Arbaugh’s general rule—they should be considered elements of the claim
unless Congress has clearly labeled the limitation jurisdictional. Id. at 516. 13
Consistent with this understanding, while our court has never addressed the
issue explicitly, we have been able to find no instance in which this court has treated the
question of whether allegedly infringing activity took place within the United States as a
question of subject matter jurisdiction. Rather, either the question has arisen in the
context of whether there was personal jurisdiction, see, e.g., Beverly Hills Fan Co. v.
13
The Supreme Court’s holding in Arbaugh, as well as the application of
Arbaugh’s rule to the extraterritorial scope of a statute, was anticipated in significant
respects by the dissent in the Seventh Circuit’s en banc decision in United Phosphorous
v. Angus Chemical Co., 322 F.3d 942, 953 (7th Cir. 2003) (en banc) (Wood, J.,
dissenting). Judge Wood, writing for herself and three other members of the court
concluded the Foreign Trade Antitrust Improvements Act (“FTAIA”), which states that
the Sherman Act “shall not apply” to conduct involving foreign trade or commerce
unless that conduct has a “direct, substantial and reasonably foreseeable effect” on
U.S. commerce, should be construed as an element of an antitrust claim, not an issue
of subject matter jurisdiction. Persuasively, Judge Wood explained that “the fact that the
FTAIA does not contain a clear congressional statement that it is intended to restrict the
subject matter jurisdiction of the federal courts (or for that matter even a brief mention of
the term ‘jurisdiction’) should be enough to resolve the question before us.” Id. at 955;
see also id. at 954, 953-65 (faulting the majority for failing to properly distinguish
between the subject matter jurisdiction of the courts and Congress’s prescriptive
jurisdiction and arguing that “the ‘subject matter jurisdiction’ characterization is
inconsistent with the Supreme Court’s decision in Steel Co.”)
2006-1646 16
Royal Sovereign Corp., 21 F.3d 1558, 1569-72 (Fed. Cir. 1994), which is not contested
here, or the issue has been treated as an element of the claim that is a question of fact
for the jury to decide, see, e.g., Rotec Indus., Inc. v. Mitsubishi Corp., 215 F.3d 1246,
1258 (Fed. Cir. 2000) (affirming the district court’s grant of summary judgment on the
grounds that there had been no offer to sell in the United States because the plaintiff
“offers no evidence upon which a reasonable jury could find in its favor” on the issue);
MEMC Elec. Materials, Inc. v. Mitsubishi Materials Silicon Corp., 420 F.3d 1369, 1377
(Fed. Cir. 2005) (affirming a grant of summary judgment of no direct infringement under
35 U.S.C. § 271(a) because “MEMC has presented no evidence demonstrating that [the
alleged infringer] sold the accused wafers . . . in the United States”).
We therefore conclude that Arbaugh’s rule governs the instant inquiry, and we
find, consistent with this court’s prior implicit treatment, that Congress has not clearly
stated that any of the limitations in § 271 are jurisdictional. Accordingly, we hold that
whether the allegedly infringing act happened in the United States is an element of the
claim for patent infringement, not a prerequisite for subject matter jurisdiction. 14 Given
this holding, we affirm the district court’s denial of GlowProducts’ motion to dismiss the
patent claims for lack of subject matter jurisdiction, but do so on different grounds.
There was no need for the district court to consider whether GlowProducts had imported
products into the United States in order to determine whether it had jurisdiction over the
case. Litecubes, by alleging a violation of § 271, has properly invoked federal question
14
Foreign litigants nevertheless have substantial protection if the activity
complained of took place wholly outside of the United States. In many such cases, the
court may not have personal jurisdiction over the defendant. Moreover, such cases will
often be able to be quickly disposed of in a Rule 12(b)(6) motion to dismiss for failure to
state a claim or in a motion for summary judgment.
2006-1646 17
jurisdiction under § 1331 and § 1338. This jurisdiction does not depend on whether
Litecubes is able to succeed on the merits in proving all of the elements of patent
infringement that it alleged in the complaint.
III.
GlowProducts also argues that the district court had no subject matter jurisdiction
over Litecubes’ copyright claims as the U.S. copyright laws have no extraterritorial
reach. This Circuit “applies copyright law as interpreted by the regional circuits,” here
the Eighth Circuit. Pods, Inc. v. Porta Stor, Inc., 484 F.3d 1359, 1368 (Fed. Cir. 2007)
(quoting Amini Innovation Corp. v. Anthony Cal., Inc., 439 F.3d 1365, 1368 (Fed. Cir.
2006)). However “[o]n matters relating to this court’s jurisdiction, we apply Federal
Circuit law, not that of the regional circuit from which the case arose.” Nystrom v. TREX
Co., 339 F.3d 1347, 1350-51 (Fed. Cir. 2003). The question raised here, whether the
lack of extraterritorial reach of the Copyright Act limits the subject matter jurisdiction of
the federal courts, implicates the substance of the Copyright Act but is ultimately a
question of our jurisdiction. Accordingly, we believe that we have an independent
obligation to determine for ourselves whether jurisdiction is proper, and we apply
Federal Circuit law. 15
Under the U.S. Copyright Act, the owner of copyright has the exclusive right to
“distribute copies . . . of the copyrighted work to the public by sale or other transfer of
ownership, or by rental, lease, or lending.” 17 U.S.C. § 106. In addition, the Act
provides that “[i]mportation into the United States, without the authority of the owner of
15
Even if we were to apply Eighth Circuit law, we would reach the same
result. Neither this court nor the Eighth Circuit has decided the issue presented. Thus
our analysis of how the Eighth Circuit likely would decide the issue would be based on
the same analysis of Supreme Court and other circuit precedent as here.
2006-1646 18
copyright under this title, of copies . . . of a work that have been acquired outside the
United States is an infringement of the exclusive right to distribute copies . . . under
section 106 [17 U.S.C. § 106].” Id. § 602. By its terms § 106 does not require that the
distribution of the goods occur within the United States. It has long been established,
however, that the Copyright Act does not “reach acts of infringement that take place
entirely abroad.” Subafilms Ltd. v. MGM-Pathe Commn’ns Co., 24 F.3d 1088, 1098 (9th
Cir. 1994) (en banc); see also, e.g., The Robert Stigwood Group Ltd. v. O’Reilly, 530
F.2d 1096, 1101 (2d Cir. 1976) (“Copyright laws do not have extraterritorial operation.”).
Both parties stated at oral argument that the Patent Act and the Copyright Act
should be interpreted consistently, and thus that if the Patent Act’s requirement that the
infringing act take place in the United States is not a jurisdictional requirement, the
exclusion from the Copyright Act of acts taking place entirely abroad should also not be
jurisdictional. We agree.
The principles and case law discussed above, which led us to conclude that the
Patent Act’s territorial requirement is an element of the claim that must be established to
prove infringement, but not a requirement for subject matter jurisdiction, apply equally to
the Copyright Act’s limitation on the extraterritorial reach of the statute. As discussed,
whether the territorial limitation is explicit in the statute, as in the Patent Act, or implied
based on the presumption that Congress does not intend its acts to have extraterritorial
effect, as in the Copyright Act, the limit on the extraterritorial reach of a statute is a
question of statutory interpretation—what did Congress intend the scope of its exercise
of prescriptive jurisdiction to be—not an independent limitation on the federal court’s
authority. And Arbaugh’s bright-line rule applies. That is, whether an accused action is
2006-1646 19
within the extraterritorial limitation should be treated as an element of the claim, not a
predicate for subject matter jurisdiction, unless Congress has clearly provided that the
limitation is jurisdictional. See Arbaugh, 546 U.S. at 516 (“[W]hen Congress does not
rank a statutory limitation on coverage as jurisdictional, courts should treat the
restriction as non-jurisdictional in character.”); Lauritzen, 345 U.S. 571 (holding that the
Jones Act, which on its face had no territorial limitations, did not reach purely
extraterritorial activities, but that this requirement was not a limitation of the jurisdiction
of the federal courts); see also supra Part II.
As in the patent context, in its brief to this court and at the district court,
GlowProducts assumed without any analysis that the lack of extraterritorial effect of the
copyright laws is a question of subject matter jurisdiction rather than a question of
whether a claim upon which relief can be granted has been established. But the cases
it relies on provide minimal support for such a position.
GlowProducts’ reliance on Subafilms, which it cites as its primary authority, is
misplaced. While GlowProducts is correct that Subafilms is a leading case on the
extraterritorial reach of the Copyright Act, Subafilms did not hold that the extraterritorial
limitation limited the subject matter jurisdiction of the federal courts. Rather, Subafilms
held that “the mere authorization of acts of infringement that are not cognizable under
the United States copyright laws because they occur entirely outside of the United
States does not state a claim for infringement under the Copyright Act.” 24 F.3d at 1099
(emphasis added). Moreover, Subafilms reaffirmed that “the existence of subject matter
jurisdiction under 28 U.S.C. § 1338(a) is distinct as a general matter from the question
of whether a valid cause of action is stated.” Subafilms, 24 F.3d at 1091 n.5. The court
2006-1646 20
further recognized, without deciding, that Peter Starr Production Co. v. Twin Continental
Films, 783 F.2d 1440 (9th Cir. 1986), which it overruled in part, may have erred in
“framing the subject matter jurisdiction inquiry as coextensive with the question of
whether the allegations in the complaint stated a good cause of action.” Subafilms, 24
F.3d at 1091 n.5; see also L.A. News Serv. v. Reuters Tel. Int’l, Ltd., 340 F.3d 926, 931
& n.9 (9th Cir. 2003) (“Subafilms reaffirmed that the copyright laws have no application
beyond the U.S. border . . . . Subafilms also suggested that federal question jurisdiction
under the copyright laws may not be coextensive with legislative jurisdiction under those
laws, i.e., the reach Congress has chosen to give to American intellectual property
statutes.”). Similarly, none of the Second Circuit cases on which GlowProducts relies
hold that the extraterritorial reach of the Copyright Act is a question of subject matter
jurisdiction. See, e.g., The Robert Stigwood Group, 530 F.2d at 1101 (holding that
performances of the copyrighted work performed in Canada were properly excluded
from the calculation of damages); cf. Bassett v. Mashantucket Pequot Tribe, 204 F.3d
343, 349 (2d Cir. 2000) (holding that the federal courts have subject matter jurisdiction if
a suit arises under the Copyright Act, which occurs when “(1) [T]he complaint is for a
remedy expressly granted by the Act, e.g., a suit for infringement or for the statutory
royalties for record reproduction; or, (2) [T]he complaint . . . asserts a claim requiring
construction of the Act . . . .” (internal quotation marks omitted)).
A least one circuit has treated the extraterritorial effect of the copyright laws as a
question of subject matter jurisdiction. See Palmer v. Braun, 376 F.3d 1254, 1258 (11th
Cir. 2004) (“[I]t is only where an infringing act occurs in the United States that the
infringement is actionable under the federal Copyright Act, giving federal courts
2006-1646 21
jurisdiction over the action.”). In Palmer, however, the Eleventh Circuit did not have the
benefit of Arbaugh’s recent clarification of the boundary between subject matter
jurisdiction and elements of the claim nor its suggestion that this confusion between
subject matter jurisdiction and elements of a claim has extended to the issue of the
extraterritorial scope of a statute. Arbaugh, 546 U.S. at 511. Moreover, Palmer simply
assumed the issue was a jurisdictional one, without any analysis of whether the
question was more properly considered a question on the merits. We decline to follow
the Eleventh Circuit’s approach.
There is no indication that Congress intended the extraterritorial limitations on the
scope of the Copyright Act to limit the subject matter jurisdiction of the federal courts.
Accordingly, we hold that the issue is properly treated as an element of the claim which
must be proven before relief can be granted, not a question of subject matter
jurisdiction, and we affirm the district court’s denial of GlowProduct’s motion for
dismissal for lack of subject matter jurisdiction over the copyright claims.
IV.
In addition to filing the post-trial motion to dismiss, GlowProducts filed motions for
judgment as a matter of law, arguing that substantial evidence did not support the jury
verdicts of infringement for either the copyright or patent claims. In part, these motions
were based on the same argument as the motion to dismiss—that Litecubes had failed
to establish that any of the allegedly infringing acts took place within United States
borders. Unlike the motion to dismiss, these JMOL motions were a procedurally correct
mechanism to challenge the jury findings of infringement based on the location of the
allegedly infringing activity. GlowProducts, however, has not appealed this aspect of its
2006-1646 22
JMOL motions. Accordingly, we ordinarily would consider the issue waived and decline
to reach the issue. See SmithKline Beecham Corp. v. Apotex Corp., 439 F.3d 1312,
1319 (Fed. Cir. 2006) (“[A]rguments not raised in the opening brief are waived.”).
However, the circumstances here are rather unusual, and both parties at oral argument
appeared to agree that if we concluded that the extraterritorial issue was not
jurisdictional, we should consider the issue under the JMOL standard. Given this, and
that the parties have fully briefed the issue, albeit under the incorrect rubric of subject
matter jurisdiction, we exercise our discretion, see id. at 1320 n.9 (noting that the court
maintains discretion to consider arguments not properly raised in the briefs), to consider
whether the district court erred in denying Litecubes’ JMOL motions on the ground that
the evidence was insufficient to establish a sale or offer for sale of the allegedly
infringing products within the United States or importation of the products to the United
States.
When reviewing a district court’s denial of a JMOL motion, “we reapply the
district court’s JMOL standard anew.” Juicy Whip v. Orange Bang, 292 F.3d 728, 736
(Fed. Cir. 2002); Chicago Title Ins. Co. v. Resolution Trust Corp., 53 F.3d 899, 904 (8th
Cir. 1995) (“We review the grant or denial of a motion for judgment as a matter of law de
novo, using the same standard employed by the district court.”). “Therefore, for [a party]
to prevail on appeal it must prove that the jury’s factual findings were not supported by
substantial evidence or that the facts were not sufficient to support the conclusions
necessarily drawn by the jury on the way to its verdict.” Mycogen Plant Sci., Inc. v.
Monsanto Co., 243 F.3d 1316, 1331 (Fed. Cir. 2001) (quoting Tec Air, Inc. v. Denso
Mfg. Mich., Inc., 192 F.3d 1353, 1357 (Fed. Cir. 1999)); Jackson v. Prudential Ins. Co.,
2006-1646 23
736 F.2d 450, 453 (8th Cir. 1984) (“[JMOL] motions should not be granted if reasonable
persons could differ as to the conclusions to be drawn from the evidence. . . . The trial
court has not erred if there is substantial evidence -- more than a mere scintilla of
evidence -- to support a verdict in favor of the party opposing such a motion.” (internal
citations omitted)).
Although the district court based its ruling on a finding that GlowProducts
imported its goods into the United States, we believe that the preferable initial inquiry,
given the facts of this case and our prior established law, is whether there was a sale
within the United States. It is uncontested that GlowProducts sold and shipped the
allegedly infringing products directly to customers located in the United States.
GlowProducts bases its argument that these were not sales in the United States on the
grounds that the products were shipped f.o.b., and thus title over the goods were
transferred while the goods were still in Canada. Our case law, however, is inconsistent
with such a theory, and we conclude that there is substantial evidence of a sale within
the United States for the purposes of § 271.
In North American Philips Corp. v. American Vending Sales, Inc., 35 F.3d 1576
(Fed. Cir. 1994), a personal jurisdiction case, this court rejected the notion that simply
because goods were shipped f.o.b., the location of the “sale” for the purposes of § 271
must be the location from which the goods were shipped. Id. at 1579 (holding that the
“tort” of patent infringement is defined by § 271 and occurs “where the allegedly
infringing sales are made”). To the contrary, we determined that the sale also occurred
at the location of the buyer. Id. The court recognized that
unlike the ‘making’ and the ‘using’ of an infringing article, which as purely
physical occurrences are relatively straightforward to place, the ‘selling’ of
2006-1646 24
an infringing article has both a physical and a conceptual dimension to it.
That is to say, it is possible to define the situs of the tort of infringement-
by-sale either in real terms as including the location of the seller and the
buyer and perhaps the points along the shipment route in between, or in
formal terms as the single point at which some legally operative act took
place, such as the place where the sales transaction would be deemed to
have occurred as a matter of commercial law.
Id. North American Philips rejected the formalistic approach and concluded that
regardless of whether the goods were shipped f.o.b., “to sell an infringing article to a
buyer in Illinois is to commit a tort there (though not necessarily only there.).” Id.
(explaining that “to hold otherwise would exalt form over substance in an area where the
Supreme Court has generally cautioned against such an approach” (citing Burger King
Corp. v. Rudzewic, 471 U.S. 462 (1985))). Moreover, the court explained that “even if
we were to conclude that a ‘mechanical’ test might be appropriate here for some
reason, appellee has failed to explain why the criterion should be the place where legal
title passes rather than the more familiar places of contracting and performance.
Appellees have pointed to no policy that would be furthered by according controlling
significance to the passage of legal title here.” Id.; see also McGoldrick v. Berwind-
White Coal Mining Co., 309 U.S. 33, 64 (1940) (“[T]he place where the title passes has
not been regarded as the test of the interstate character of a sale. We have frequently
decided that where a commodity is mined or manufactured in one State and in
pursuance of contracts of sale is delivered for transportation to purchasers in another
State, the mere fact that the sale is f.o.b. cars in the seller's State and the purchaser
pays the freight does not make the sale other than interstate.”); cf. Rotec Indus., Inc. v.
Mitsubishi Corp., 215 F.3d 1246, 1258 (Fed. Cir. 2000) (looking to federal law to
2006-1646 25
interpret “offer to sale” under § 271 and concluding that it “is to be interpreted according
to its ordinary meaning in contract law, as revealed by traditional sources of authority”).
While North American Philips dealt with the issue of where a “sale” took place
under § 271 in the context of personal jurisdiction, we see no basis for construing the
location of a “sale” differently when the issue is whether the plaintiff has established that
the sale took place within the United States for the purposes of infringement. Indeed,
this court has already relied on North American Philips’s interpretation of § 271 when
determining whether summary judgment of non-infringement was appropriate on the
grounds that there was no sale in the United States. See MEMC Elec. Materials, Inc. v.
Mitsubishi Materials Silicon Corp., 420 F.3d 1369, 1377 (Fed. Cir. 2005) (“North
American Philips . . . noted that in some cases the criterion for determining the location
of a “sale” under section 271(a) is not necessarily where legal title passes; the ‘more
familiar places of contracting and performance’ may take precedence over the passage
of legal title. Thus simply because an article is delivered ‘free on board’ outside of the
forum, a sale is not necessarily precluded from occurring in the forum.”); see also
Rotec, 215 F.3d at 1254. In MEMC, as here, the issue was whether the defendant’s
actions could be construed by a reasonable jury to constitute a sale or offer to sell in the
United States. It was undisputed that the defendant SUMCO manufactured the accused
chip wafers in Japan and then sold the product to a Japanese company, Samsung
Japan; Samsung Japan then sold the products to Samsung Austin, in the United States.
Relying on North American Philips, the court found it “significant[]” that “there was no
evidence that ‘contracting and performance’ took place in the United States.” MEMC,
420 F.3d at 1377. The court explained that there was no evidence demonstrating a sale
2006-1646 26
directly from SUMCO to Samsung Austin, and that “all of the essential activities” of the
sale between SUMCO and Samsung Japan took place in Japan. Id. Accordingly, the
court found no error in the district court’s grant of summary judgment of non-
infringement. Id. In contrast, here it is undisputed that GlowProducts sold the products
directly to customers in the United States. Since the American customers were in the
United States when they contracted for the accused cubes, and the products were
delivered directly to the United States, under North American Philips and MEMC there is
substantial evidence to support the jury’s conclusion that GlowProducts sold the
accused cubes within the United States.
Since we find substantial evidence of a sale within the United States, we need
not determine whether there was also an offer to sell within the United States or
importation into the United States.
We also conclude that substantial evidence supported the jury verdict of
copyright infringement. Although we apply Eighth Circuit law to the question of whether
GlowProducts’ activities are within the scope of the Copyright Act, the Eighth Circuit has
not spoken on the extraterritorial scope of the Act. We therefore “need to predict how
the[Eighth Circuit] would have decided the issue.” Panduit Corp. v. All States Plastic
Mfg. Co., 744 F.2d 1564, 1575 (Fed. Cir. 1984).
Section 106(3) of the Copyright Act makes it an act of infringement to “distribute”
copies of the copyrighted work “to the public by sale.” 17 U.S.C. § 106(3); Nat’l Car
Rental Sys., Inc. v. Computer Assocs. Int’l, Inc., 991 F.2d 426, 429 (8th Cir. 1993); 2-8
Nimmer on Copyright § 8.11 (2007) (“The copyright owner . . . has the exclusive right
publicly to sell, give away, rent or lend any material embodiment of his work.”). Neither
2006-1646 27
party has argued that courts should interpret identical, generalized terms such as “sale”
or “importation” differently between the Copyright Act and the Patent Act. To the
contrary, both parties rely on their arguments regarding the Patent Act to support their
arguments for the applicability of the Copyright Act. See Appellants’ Br. 25
(“GlowProducts does not ‘import’ under the Copyright Act for the same reasons it does
not ‘import’ under the Patent Act.”); Appellee’s Br. 45 (“For the same reasons that
jurisdiction exists under the Patent Act, jurisdiction similarly exists under the Copyright
Act.”). We agree that the term “sale” should be interpreted consistently in copyright and
patent law, and accordingly, conclude that the Eighth Circuit would find substantial
evidence of sales in the United States sufficient to uphold the jury’s finding of liability
under the Copyright Act. 16
Moreover, the Copyright Act does not explicitly require that sales be “in the
United States,” and courts have generally held that the Copyright Act only does not
reach activities that “that take place entirely abroad.” Subafilms, 24 F.3d at 1098
(emphasis added); see 4-17 Nimmer on Copyright § 17.02 (“[A] distinction should be
drawn between purely extraterritorial conduct, which is itself nonactionable, and conduct
that crosses borders, so that at least a part of the offense takes place within the United
States. . . . It may be concluded . . . that U.S. courts may entertain such multiterritorial
infringement claims.”). Thus for example, in Palmer, the Eleventh Circuit found that the
Copyright Act applied when the alleged infringer, analogously to the instant case, sold
copyrighted work from France to customers in the United States, and then shipped
these works to the U.S. buyers. Palmer, 376 F.3d at 1258; see also GB Mktg. USA Inc.
16
If there are arguments for interpreting the location of the “sale” for
Copyright Act purposes differently than for the Patent Act, these have been waived.
2006-1646 28
v. Gerolsteiner Brunner GmbH & Co., 782 F. Supp. 763, 772-73 (W.D.N.Y. 1991), cited
by Palmer, 376 F.3d at 1258 (holding that a bottle water distributor could maintain an
action under the Copyright Act against a foreign bottler who applied labels to the bottles
in Germany, when the labels were specifically designed for marketing in the United
States and were sold to a company which imported the bottles to the United States).
Substantial evidence supports the jury’s conclusion that, by selling to customers in the
United States, GlowProducts’ distribution of the accused products has taken place, at
least in part, in the United States.
We therefore affirm the denial of JMOL for the copyright claim.
V.
GlowProducts also argues that even assuming that the allegedly infringing
activity was within the United States, the district court erred in refusing to issue a
judgment as a matter of law on the question of patent infringement by the ICM cubes.
GlowProducts argues that JMOL was appropriate because the ICM cubes do not
meet the limitation of claim 1 that requires the cubes to contain a “filler adapted to retain
heat when said device is heated” or the limitation of claim 16 that the cubes contain a
“filler adapted to retain cold when said device is cooled.” The parties do not contest the
propriety of the district court’s claim construction. Therefore, the only issue is whether
substantial evidence supports the jury’s factual finding that GlowProducts’ cubes met
the contested claim limitations, which as construed require that the filler be “made
suitable to or fit for the specific use of retaining heat when said device is heated” or
“made suitable to or fit for the specific use of retaining cold when said device is cooled.”
2006-1646 29
Markman Order, at *5. We conclude there was substantial evidence to sustain the jury’s
finding.
A.
At trial, Dr. Kevin Trankler, a chemist with expertise in thermodynamics, testified
as an expert witness on Litecube’s behalf. Trankler concluded that after running various
tests on the ICM cube to “determine. . . whether the filler material had the ability to
retain cold over a period of time,” J.A. at 927, it was his opinion that the filler in the cube
“is adapted to retain heat or cold.” J.A. at 937. He also testified that he was aware that
“adapted” was defined by the court as requiring the filer be “suitable for or fit to the
specific purpose of.” J.A. at 928. Trankler’s experiment demonstrated that after the ICM
cube was placed in the freezer, the filler cooled to -6.1 C (below the freezing
temperature of water), and that when the frozen cube was placed in room temperature
water, the filler took approximately thirty minutes to return to room temperature. Trankler
concluded based on these and similar results that the filler was adapted to retain heat or
cold. He explained that insulators such as ceramics, wood, or Styrofoam would not be
adapted to retain heat or cold because “they would warm up a lot faster” and “may not
cool down to the same temperature either” as the ICM filler. J.A. at 931-32. 17
In addition, Litecubes introduced excerpts from GlowProducts’ website describing
the accused cubes as being adapted to keep drinks warm or cool. For example, the
website stated, “[t]he 8 Mode Multi-Cube is a great lighted ice cube for livening up your
17
In their brief GlowProducts suggests that “Trankler admitted that
comparable tests results for a sandwich ‘would likely look the same.’” Appellants’ Br. 30.
This leaves out part of Trankler’s testimony. When asked on cross examination what the
curve (i.e., plot of temperature v. time) would look like for a sandwich, Trankler testified
that he “suspect[ed] that the curve would look the same; it would still be a curve, but
that the slope would be farther to the left.” J.A. at 940.
2006-1646 30
drinks. Not only will it amuse your guests, but it will keep their drink warm or cool with its
internal gel” and explained that “[t]his light up ice cube also comes with internal gel that
can be heated or frozen to keep your drink warm or cool.” J.A. at 6262-64.
Vanderschuit, Litecubes’ founder, also testified that artificial ice cubes, including
Litecube’s own product, would never be able to match, nor were they intended to match,
the cooling properties of an actual ice cube, but instead would simply slightly lower the
temperature of a room temperature drink for twenty to thirty minutes or help maintain
the temperature of a cooled drink for slightly longer. 18
To rebut Trankler’s testimony, GlowProducts called as its expert witness Dr. Ann
Mescher. She admitted there was nothing technically wrong with Trankler’s tests but
suggested that “he simply didn’t answer the question.” J.A. at 995. According to
Mescher, the appropriate question was whether the fillers “make a practical difference,”
i.e., in her words, whether they were “particularly suited for the specific purpose of
keeping a hot drink hotter than it would be if it weren’t there.” J.A. at 992, 995. To
answer this question, Dr. Mescher ran two tests and concluded that the filler had “no
practical effect.” In the first test, she placed a GlowProducts cube and a Litecube that
had been refrigerated overnight in a glass of water that was also refrigerated overnight
and compared the water temperature in these glasses to a control refrigerated glass of
water without a cube. She found that neither the Litecube nor the GlowProducts cube
had “a measurable impact on the rate at which the liquids heat.” The validity of this test
was called into question during cross examination by her admission that water was the
18
Supporting this contention was the fact that Litecube’s own commercial
embodiment of the patent performed identically to the GlowProducts’ cubes in tests
done by GlowProducts’ expert.
2006-1646 31
substance most well-adapted to retain heat or cold at the relevant temperatures, and
that if one used a cube that had water as the filler, it would also not show any
measurable difference from the control. In her second experiment, she froze
GlowProducts and Litecubes cubes in the freezer overnight to cool them to -28 C and
then placed each in a room temperature glass of water. She found that that the cubes
lowered the temperature of the water by about one degree and that it took about sixty
minutes for the water to return to its initial temperature. She characterized these results
as showing that the cubes had “no measurable impact.” J.A. at 1022-23.
B.
As construed, the contested claim limitation required the jury to find that
GlowProducts’ cubes contained “filler made suitable to or fit for the specific use of
retaining heat when said device is heated” or “filler made suitable to or fit for the specific
use of retaining cold when said device is cooled.” Markman Order, at *5.
No one disputed the scientific accuracy of Dr. Trakler’s experiments that showed
that the filler material used by GlowProducts was able to cool down to the temperature
of the freezer and retain its cold temperature above room temperature for about thirty
minutes, nor Dr. Mescher’s experiment which showed that the allegedly infringing
products when frozen were able to keep a glass of water below room temperature for
about an hour. Whether a person skilled in the art would consider this level of cold
retention sufficient to make the filler material “suitable to” the specific use of retaining
cold or heat, is a question of fact for the jury. Faced with conflicting expert testimony,
the jury was entitled to credit Dr. Trankler’s testimony that the level of cold retention
shown by the filler established that the material was adapted to the purpose of retaining
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cold. See Comark Commc’ns. v. Harris Corp., 156 F.3d 1182, 1192 (Fed. Cir. 1998) (“It
is not the province of an appellate court to second guess the jury’s credibility
determinations or to reevaluate the weight to be given the evidence”); Brooktree Corp.
v. Advanced Micro Devices, Inc., 977 F.2d 1555, 1569 (Fed. Cir. 1992) (“Issues of
credibility of witnesses are for the jury, and are not amenable to appellate review.”); cf.
Anderson v. Bessemer City, 470 U.S. 564, 575 (1985) (“When [in a bench trial] a trial
judge’s finding is based on his decision to credit the testimony of one of two or more
witnesses, each of whom has told a coherent and facially plausible story that is not
contradicted by extrinsic evidence, that finding, if not internally inconsistent, can virtually
never be clear error.”). 19 The jury could also have taken into consideration the testimony
of Litecubes’ founder as well as GlowProducts’ own advertising as to what level of heat
retention made the filler suitable to the specific use of retaining heat or cold in the
context of the invention. This evidence also supported the finding that the filler used in
the GlowProducts’ cubes was suitable to the specific use of retaining heat or cold.
Accordingly, we hold that the district court did not err in denying the JMOL motion on
these grounds.
VI.
We conclude that there is no basis to overturn the jury verdict of copyright
and patent infringement. While we do not adopt the district court’s reasoning, the district
court reached the correct result in denying GlowProduct’s motion to dismiss for lack of
19
The jury need not have credited Mescher’s argument that for the filler to
be “suitable to or fit for the specific use of retaining cold” it must have a “practical effect”
on the temperature of the water the cube was in. No such result was required by the
district court’s claim construction. But even if this was a requirement, the jury could have
found that the tests, including Mescher’s own, established a sufficient practical effect to
meet the claim limitations.
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subject matter jurisdiction. The issues of the extraterritorial reach of the Patent and
Copyright Acts raised in the motion are not properly considered jurisdictional. We further
conclude that substantial evidence supports the jury’s verdict of infringement. The
judgment of the district court is, therefore, affirmed.
AFFIRMED
COSTS
No costs.
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