"westerngeco" and the Patent Act: an Analysis of the Patent Act and the Presumption Against Extraterritoriality
| Publication year | 2020 |
"Westerngeco" and the Patent Act: An Analysis of the Patent Act and the Presumption Against Extraterritoriality
Samuel Tanner Lowe
University of Georgia School of Law
"Westerngeco" and the Patent Act: An Analysis of the Patent Act and the Presumption Against Extraterritoriality
Cover Page Footnote
J.D. Candidate, 2020.
WESTERNGECO AND THE PATENT ACT: AN ANALYSIS OF THE PATENT ACT AND THE PRESUMPTION AGAINST EXTRATERRITORIALITY
Samuel Tanner Lowe1
I. Introduction..............................................................................................98
II. Background................................................................................................99
A. TRACING THE HISTORICAL ORIGINS OF PATENT LAW.........................99
B. THE PRESUMPTION AGAINST EXTRATERRITORIALITY IN PATENT LAW......................................................................................................101
C. LOOKING AT THE PRESUMPTION AGAINST EXTRATERRITORIALITY WITHIN THE CONTEXT OF WESTERNGECO LLC V. ION GEOPHYSICAL CORP...................................104
III. Analysis.......................................................................................................106
IV. Conclusion................................................................................................110
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The sovereignty of nation states is of particular interest in this time of increasing globalization and integration. Of course, that is to be expected as sovereign power has changed throughout time, taking on new aspects and shedding old ones. This transient nature will undoubtedly affect or try to affect those parts of the law that depend on sovereignty such as patent law, which is the subject of this Note. But first, in order to understand this, the nature of sovereignty must be determined.
An adequate definition might be elusive given the changing nature of the subject, but Daniel Philpott, a professor from Notre Dame, has provided a definition that is quite suitable due to its specificity and simplicity.2 Philpott defines sovereignty as "supreme authority within a territory".3 Under this "supreme authority" arose the concepts of patents and the notorious presumption against extraterritoriality that rests within American law. What then are these concepts and how do they fit within the binding system that is our law?
A patent is something that "cover{s} practical inventions in the 'useful arts'."4 In order for an individual to be granted a patent, it must be "new and nonobvious."5 It remains open for a period of twenty years, and during that twenty years, no one can "make, use, sell, offer to sell, or import the invention."6 Regarding the scope, it has been famously said that patents can cover "anything under the sun that is made by man."7 This scope, however, has been built off of and limited by domestic concerns.8 It is this limitation to domestic concerns in our law that is also the basis of the presumption against extraterritoriality.
What is this presumption? The presumption against extraterritoriality is the concept that when a court is analyzing a law, it is to be presumed that the law only applies domestically with no foreign effect.9 If the law is to have foreign effect, Congress must explicitly state that motivation.10 The Supreme Court has stated that the "[c]ourts presume that federal statutes apply only within the territorial jurisdiction of the united States."11 The Court further notes that this is because of "the commonsense notion that Congress generally legislates with domestic concerns in mind."12
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How then does this presumption affect patents? WesternGeco LLC v. ION Geophysical Corp. provides the requisite backdrop for the presumption.13 The Court analyzed the Patent Act and looked at whether or not some of the stipulations of the Patent Act rebutted the presumption against extraterritoriality, thereby extending the Patent Act to a direct foreign effect.14 The Court decided not to answer that question, as it did not see a need to do so.15 Additionally, the Court thought that in answering the question, it would raise issues that it thought unwise to answer.16 The goal of this Note will be to take up where the Court left off and provide an adequate answer to the question. First, I will provide background on the history of patents, the presumption against extraterritoriality, and the WesternGeco LLC case. Next, I will contend that the Patent Act does not rebut the presumption against extraterritoriality. In light of this interpretation, I will argue that Congress should not rewrite the law so as to rebut the presumption because to do so would extend the reach of sovereignty beyond its reasonable limit.
A. TRACING THE HISTORICAL ORIGINS OF PATENT LAW
First, the history of patent law and the Patent Act must be detailed. Patent law has a fascinating history.17 Part of what makes it so intriguing is that there is a noticeable lack of documentation describing the advent of patent law.18 In fact, one author notes, "patent history is a subject that is still largely waiting to be written."19 However, that has not stopped some from trying. In his book, Patent Law Essentials: A Concise Guide, Alan Durham attempts to briefly describe the origin and evolution of patent law in the United States.20 He notes that United States patent law, as in many other areas, had its origin in England.21 Until the seventeenth century, patents were, as Durham describes it, a "legally sanctioned monopoly."22 While this concept of patents continued for some time, it ultimately evolved:
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Undoubtedly popular with the government and with the patent owners, these "odious monopolies" were a source of resentment to consumers and potential competitors. In 1624, the Crown relented and the Statute of Monopolies, abolishing the general power of the monarch to grant exclusive rights, became law. Importantly, the statute ending the general practice of monopolies specifically exempted patents allowing inventors the exclusive right to their inventions.23
This "exclusive right" was carried over to the colonies, which eventually became the United States.24 The idea was so compelling that it was put into the United States Constitution, which gives Congress the 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."25 Durham correctly notes that this clause is the source of patent law for this country.26 Durham continues his introduction to patents by describing some of the theoretical frameworks behind the concept.27 One such theory is that inventors have a "natural right" over their inventions.28 Another theory, which Durham articulates as more apparent in the Constitution itself, is one that is more pragmatic in form. Under this theory, a patent's purpose is to provide incentive for inventors to act. Because patents provide protection for new ideas, inventors will seek to invent because they can adequately profit from it.29 Additionally the patent system allows for inventions to be adequately described for the use of the public so as to further increase social usefulness.30
Patents further evolved through the 1836 Patent Act.31 The modern Patent Office was created by this act in order to evaluate applications for patents.32 However, that was not the only major change. Additionally, the rationale underlying patent law shifted from concepts of productivity and social usefulness to one of property rights for the inventor (regardless of whether the invention was at all useful).33 In this way, economic development no longer became the primary question when determining whether to issue or approve a patent.34
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The Patent Act continued to change over the next century. In 1984, Congress added amendments to the Act, which are quite important to the discussion this note focuses on.35 These amendments are 271(f)(1) and 271(f)(2), which state as follows:
(f)(1) Whoever without authority supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce the combination of such components outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer;36
(f)(2) Whoever without authority supplies or causes to be supplied in or from the United States any component of a patented invention that is especially made or especially adapted for use in the invention and not a staple article or commodity of commerce suitable for substantial non-infringing use, where such component is uncombined in whole or in part, knowing that such component is so made or adapted and intending that such component will be combined out- side of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.37
These amendments are the focus on whether or not the Patent Act rebuts the presumption against extraterritoriality.
B. THE PRESUMPTION AGAINST EXTRATERRITORIALITY IN PATENT LAW
The presumption is an old rule that extends far back in time.38 One example of its use is the case of Am. Banana Co. v. United Fruit Co., in which the Supreme Court had to reckon with the idea of extraterritoriality.39 In that case, the defendant company had created an alleged monopoly and hindered the business of the plaintiff.40 However most of the defendants' actions were done outside
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the territory of the United States.41 The Court wrote as follows regarding the extraterritorial nature of the case:
No doubt in regions subject to no sovereign, like the high seas, or to no law that civilized countries would recognize as adequate, such countries may treat some relations...
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