A federal judge in Minnesota ruled that the US Patent Act applies to US-flagged ships in international waters.
The plaintiff, M-I Drilling Fluids UK, Ltd., alleged that the defendant, Dynamic Air, Inc., infringed on its patented pneumatic conveyance system technology used for transporting oil well waste from oil rigs.
A Brazilian company asked for proposals for a pneumatic conveyance system. M-I’s Brazilian sister company and Dynamic’s Brazilian subsidiary each submitted one. Dynamic got the contract.
M-I alleged that Dynamic installed (or directed the installation of) a pneumatic conveyance system on US-flagged ships located in international waters and that these systems infringed M-I’s patents.
Territorial Limits on Patent Law
US patent law gives patent holders the
right to exclude others from making, using, offering for sale, or selling the [patented] invention throughout the United States or importing the invention into the United States.(Emphasis added.)
The US Supreme Court ruled in an 1856 case involving a French-owned-and-built ship, with an allegedly patent-infringing gaff, that entered the port of Boston that
the rights of property and exclusive use granted to a patentee does not extend to a foreign vessel lawfully entering one of our ports.
“Law of the Flag”
In maritime law, the “law of the flag” doctrine states that:
a merchant ship is part of the territory of the country whose flag she flies, and that actions aboard that ship are subject to the laws of the flag state.
Dynamic argued that the 1952 Patent Act narrowed the scope of the Act’s applicability to prohibit application of the law of the flag.
However, held the court, “This argument holds neither fresh nor sea water.”
Although Congress has not explicitly authorized application of US patent law to US-flagged ships, the court found that the legislative history supported this.
Although US patent law applies to US-flagged ships in international waters, under 35 U.S.C. § 272, it does not apply to foreign ships that are only temporarily in US waters:
The use of any invention in any vessel, aircraft or vehicle of any country which affords similar privileges to vessels, aircraft or vehicles of the United States, entering the United States temporarily or accidentally, shall not constitute infringement of any patent, if the invention is used exclusively for the needs of the vessel, aircraft or vehicle and is not offered for sale or sold in or used for the manufacture of anything to be sold in or exported from the United States.
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Photo Attribution: “Brig Niagara full sail” by Lance Woodworth – originally posted to Flickr as Brig Niagra full sail. Licensed under CC BY 2.0 via Wikimedia Commons.