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Legal Updates
Jurisdiction Over Foreign Patents: A Costly Dilemma
for Patent Owners?
May 2007
by Parisa Jorjani
Should U.S. courts decide claims for infringement of foreign patents? After 13 years of silence on
this issue,[fn1] the Federal Circuit recently held in Voda v. Cordis Corp. that a district court abused
its discretion by allowing the patentee to add infringement claims based on foreign patents. [fn2]
A
basic principle of U.S. patent law is that it does not have extraterritorial effect; that is, patents
granted in the U.S. may not be enforced abroad. Similarly, with limited exceptions, U.S. patent law
does not restrict activities performed outside U.S. borders. An inventor seeking protection for an
invention both in the U.S. and abroad will need to procure patents both in the U.S. and in every
country in which he seeks protection. While it is possible to file international applications forming the
basis of such patents (for example, PCT and EPC applications[fn3]), there are no provisions for
“international” patents.
Thus, a patent owner confronted with infringing activity in the U.S. and abroad is faced with a costly
dilemma. It could focus on enforcing just its U.S. patents, in an attempt to halt infringement only in
the U.S. (and forego damages incurred because of infringement in other countries). Alternatively, it
could bring parallel actions for patent infringement in the U.S. and in every other country in which
infringement is occurring and in which it holds a patent, a rather expensive proposition. In Voda, the
patentee tried to exercise a third option by filing a lawsuit in U.S. district court alleging infringemen t
of both U.S. and foreign patents. [fn4]
While U.S. courts are designed to hear cases arising under federal law, they may exercise their
discretion to decide issues that arise under the laws of other jurisdictions. There are two bases for
this exercise of jurisdiction: diversity jurisdiction and supplemental jurisdiction. [fn5] The patentee in
Voda argued that its claims for foreign patent infringement should be included under supplemental
j
urisdiction. [fn6] In a succinct three-page opinion, the district court agreed, adding the claims of
foreign patent infringement to the case. [fn7]
In a sharply divided opinion, the Federal Circuit reversed. [fn8] The majority indicated that although §
1367 seems to authorize district courts to exercise supplemental jurisdiction over foreign law claims
in certain circumstances, the court’s decision to exercise its discretion to allow such claims in this
case was in error. [fn9]
A
uthorization. The Federal Circuit first analyzed whether § 1367(a) authorizes district courts to
exercise jurisdiction over claims involving foreign patents. [fn10] The court found that supplemental
j
urisdiction is authorized only over claims that “derive from a common nucleus of operative fact” with
the U.S.-based claims. [fn11] The analysis involves the application of several factors, including but
not limited to the differences in: (1) the U.S. and foreign patents, (2) the devices being accused of
infringement in the U.S. and abroad, (3) the acts alleged to be infringing, and (4) the U.S. and
foreign laws. [fn12] Because the district court did not analyze these factors and their determination
was not apparent from the record, the court declined to base its decision on an application of these
factors. [fn13]
Discretion. The Federal Circuit next turned to § 1367(c), which ultimately formed the basis of its
Related Practices:
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