Background
Rotec Industries owned a U.S. patent on a conveyor system for transporting and placing concrete during construction. Mitsubishi Corporation participated in a consortium that bid on the Three Gorges Dam project in China, and the consortium’s bid included equipment that Rotec alleged infringed its U.S. patent. Rotec sued Mitsubishi for patent infringement, arguing that Mitsubishi had made an “offer to sell” the patented invention in violation of 35 U.S.C. § 271(a) and had also “supplied” patented components from the United States in violation of § 271(f).
The district court granted summary judgment for Mitsubishi, holding that neither the domestic nor the extraterritorial infringement theories supported liability because the relevant activities — the offer, the manufacturing, and the ultimate use of the equipment — all occurred outside the United States. Rotec appealed, arguing that any “offer” communicated to a U.S. entity, even for foreign use, triggered § 271(a).
The case arose after Congress amended § 271(a) in 1994 (as part of the Uruguay Round Agreements Act) to add “offer to sell” as a separate act of infringement, and the Federal Circuit had not yet fully defined the geographic scope of that new provision.
The Court’s Holding
The Federal Circuit affirmed. Writing for the majority, Judge Rader held that U.S. patent law is territorial: § 271(a) only reaches acts of infringement that occur within the United States. Because the “offer to sell” in this case was made abroad in connection with a project to be performed entirely abroad using equipment manufactured abroad, the offer did not infringe the U.S. patent. The majority analogized to the Supreme Court’s Deepsouth Packing decision, which held that assembly and use occurring entirely outside the U.S. cannot infringe U.S. patents.
The court also rejected the § 271(f) theory. That provision imposes liability on those who “supply” components from the United States for combination abroad into a patented invention. Here, the components were manufactured outside the U.S. (primarily in France, China, and Japan), not supplied from within the United States, so § 271(f) did not apply.
Judge Newman dissented, arguing that an offer made to U.S. entities — even for foreign projects — should constitute an “offer to sell” within the U.S. because the offer is received and accepted in the U.S., and that the majority’s holding would enable circumvention of U.S. patents through minor geographic restructuring of transactions.
Key Takeaways
- The “offer to sell” prong of § 271(a) is geographically limited: the offer must be made in the United States to constitute infringement.
- Offers made abroad for foreign projects, even if communicated to U.S. parties, do not infringe U.S. patents under § 271(a).
- Section 271(f) liability requires components to be supplied from within the United States; foreign-manufactured components assembled abroad do not trigger it.
- U.S. patent rights remain fundamentally territorial and do not follow U.S. companies into foreign markets.
- The case highlighted tensions between patent protection and the realities of global bidding and procurement that Congress and courts have continued to address in subsequent decisions.
Why It Matters
Rotec clarified the geographic scope of the “offer to sell” amendment to U.S. patent law and reinforced the territorial nature of U.S. patent rights. As multinational corporations increasingly engage in cross-border transactions, the question of when a deal negotiated partly in the U.S. but performed abroad triggers U.S. patent rights is of significant commercial importance. The case established that geography of the offer — not the nationality of the parties — determines whether § 271(a) applies.
The decision also underscored that § 271(f), which was designed to close the loophole identified in Deepsouth (U.S. manufacturers shipping unassembled components abroad), requires a U.S. domestic source of supply. Collectively, Rotec reinforces the principle that U.S. patent law does not have an unlimited extraterritorial reach and that careful transaction structuring can keep foreign activities outside the scope of U.S. patent liability.