Halo Electronics, Inc. v. Pulse Electronics, Inc.
769 F.3d 1371
| Fed. Cir. | 2014Background
- Halo owns the '985, '720, and '785 patents directed to surface mount electronic packages with transformers.
- Pulse manufactured and sold electronic packages in Asia; some delivered to Cisco contract manufacturers abroad for worldwide end products.
- Pulse engaged in US-based pricing discussions with Cisco, but actual purchase orders and payments occurred abroad.
- Halo alleged Pulse knew of the patents since 1998 and Halo offered licenses in 2002; Pulse engineer reviewed patents and deemed them invalid.
- District court construed key terms, held no direct infringement for products manufactured/shipped abroad, and found no willfulness for US-delivered products.
- Jury found direct infringement for US-shipped products, inducement for foreign-delivered products later imported, and willfulness.”
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Pulse’s foreign-delivered products infringe § 271(a) as sold in the US | Halo argues sales/offer occurred in US due to US negotiations | Pulse contends sale occurred abroad since manufacturing/shipping/delivery were outside US | No direct infringement; sale occurred outside US |
| Whether Pulse offered to sell within the US those foreign-delivered products | Halo contends US-based pricing/negotiations targeted US market | Pulse argues negotiations in US did not bind to a US sale; contemplated sale abroad | Offered-to-sell liability not established; no US-based offer to sell |
| Whether Pulse’s infringement was willful under Seagate standard | Halo contends objective risk evident due to actual infringement | Pulse argues obviousness defense not objectively baseless and post-suit development acceptable | Willfulness not proven; objective prong not met |
| Cross-appeal: claim construction and obviousness challenges | Halo challenges constructions and nonobviousness ruling | Pulse challenges constructions and argues obviousness | No reversible error in claim constructions; claims not shown obvious |
| Whether noninfringement of Pulse’s '963 patent stands | Pulse seeks reversal of noninfringement finding | Halo defends noninfringement determination | Affirmed noninfringement of Pulse’s '963 patent |
| Whether Halo claims were not invalid for obviousness | Halo argues nonobviousness despite prior art | Pulse showed prior art; jury verdict supported nonobviousness | Not invalid for obviousness |
Key Cases Cited
- North American Philips Corp. v. American Vending Sales, Inc., 35 F.3d 1576 (Fed. Cir. 1994) (location of sale for liability; sale can occur at multiple sites)
- Litecubes, LLC v. N. Light Prods., Inc., 523 F.3d 1353 (Fed. Cir. 2008) (where sale occurs for § 271(a) liability; contracting outside US considered)
- MEMC Elec. Materials, Inc. v. Mitsubishi Materials Silicon Corp., 420 F.3d 1369 (Fed. Cir. 2005) (contracting and performance outside US; extraterritorial reach limited)
- Transocean Offshore Deepwater Drilling, Inc. v. Maersk Contractors USA, Inc., 617 F.3d 1296 (Fed. Cir. 2010) (location of contemplated sale controls offer-to-sell liability)
- Microsoft Corp. v. AT&T Corp., 550 U.S. 437 (Supreme Court 2007) (presumption against extraterritorial application of US patent law)
- NTP, Inc. v. Research In Motion, Ltd., 418 F.3d 1282 (Fed. Cir. 2005) (definition of sale and transfer of title for patent liability)
- Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 517 (Supreme Court 1972) (extraterritoriality principle in patent enforcement)
- In re Seagate Tech., LLC, 497 F.3d 1360 (Fed. Cir. 2007) (two-prong Seagate willfulness standard (objective then subjective))
- Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749 (Supreme Court 2014) (rejected rigid two-prong willfulness standard; flexible totality-of-circumstances test for § 284)
- Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs., Inc., 682 F.3d 1003 (Fed. Cir. 2012) (objective baselessness standard linked to § 285 fees; aligns with Seagate framework)
- Brooks Furniture Manufacturing, Inc. v. Dutailier International, Inc., 393 F.3d 1378 (Fed. Cir. 2005) (Brooks Furniture: Brooks presaged PRE-based approach to fee-shifting)
- Halo Elecs., Inc. v. Pulse Eng., Inc., No. 2:07-CV-00331, 2013 WL 2319145 (D. Nev. 2013) (district court decision on willfulness and obviousness before appellate review)