**United States Court of Appeals for the Federal Circuit**

04-1054

GERALD N. PELLEGRINI,

> Plaintiff-Appellant,

v\.

ANALOG DEVICES, INC.,

Defendant-Appellee.

[Gerald N. Pellegrini]{.underline}, Worcester Electromagnetics
Partnership, of Wellesley, Massachusetts, pro se.

[Wayne L. Stoner]{.underline}, Hale and Dorr, of Boston, Massachusetts,
for defendant-appellee. Of counsel was [Richard W. O'Neill]{.underline}.

Appealed from: United States District Court for the District of
Massachusetts

Judge Rya W. Zobel

#### United States Court of Appeals for the Federal Circuit

04-1054

GERALD N. PELLEGRINI,

Plaintiff-Appellant,

v\.

ANALOG DEVICES, INC.,

> Defendant-Appellee.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

DECIDED: July 8, 2004

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Before LOURIE, RADER, and BRYSON, [Circuit Judges]{.underline}.

LOURIE, [Circuit Judge]{.underline}.

Gerald Pellegrini appeals from the decision of the United States
District Court for the District of Massachusetts granting partial
summary judgment in favor of Analog Devices, Inc. ("Analog") in a patent
infringement suit. [Pellegrini v. Analog Devices, Inc.]{.underline}, No.
02-11562-RWZ (D. Mass. May 7, 2003) (Memorandum of Decision). Because
there are no genuine issues of material fact in dispute and Analog is
entitled to partial judgment as a matter of law, we affirm.

BACKGROUND

Pellegrini is the sole inventor and owner of U.S. Patent 4,651,069,
directed to brushless motor drive circuits. Analog develops and
fabricates integrated circuit chips, including a line of chips called
"ADMC" chips. In August 2002, Pellegrini sued Analog, alleging direct
infringement and inducement of infringement of the '069 patent,
contending that certain claims of the '069 patent read on the
combination of ADMC chips and other components in brushless motors. Both
parties moved for summary judgment.

It is undisputed that the ADMC chips are manufactured exclusively
outside of the United States.[^1] It is also undisputed that most of
those chips are sold and shipped to customers outside the United
States.[^2] Noting that the U.S. patent laws do not have
extraterritorial effect, the district court granted Analog's motion for
partial summary judgment with respect to products containing those chips
(hereinafter, "ADMC products") sold and shipped to non-U.S. customers,
and the court denied Pellegrini's motion. The district court rejected
Pellegrini's argument that, because Analog's headquarters are located in
the United States and instructions for the production and disposition of
the ADMC chips emanate from the United States, the chips should be
regarded as having been "supplie\[d\] or cause\[d\] to be supplied in or
from the United States" and Analog should be liable as an infringer
under 35 U.S.C. § 271(f)(1). Accordingly, the district court entered
separate and final judgment in Analog's favor pursuant to Fed. R. Civ.
P. 54(b) with respect to Pellegrini's claim under § 271(f)(1).[^3]

Pellegrini timely appealed to this court. We have jurisdiction pursuant
to 28 U.S.C. § 1295(a)(1).

DISCUSSION

Summary judgment is appropriate when there are no genuine issues of
material fact and the moving party is entitled to judgment as a matter
of law. Fed. R. Civ. P. 56(c); [Johns Hopkins Univ. v. Cellpro,
Inc.]{.underline}, 152 F.3d 1342, 1353 (Fed. Cir. 1998). We review a
district court's grant of summary judgment [de]{.underline}
[novo]{.underline}, reapplying the summary judgment standard. [Conroy v.
Reebok Int'l]{.underline}, 14 F.3d 1570, 1575 (Fed. Cir. 1994).
Additionally, "\[w\]hen evaluating a motion for summary judgment, the
court views the record evidence through the prism of the evidentiary
standard of proof that would pertain at a trial on the merits." [Eli
Lilly & Co. v. Barr Labs., Inc.]{.underline}, 251 F.3d 955, 962 (Fed.
Cir. 2001). In that process, we draw all justifiable inferences in the
nonmovant's favor. [Anderson v. Liberty Lobby, Inc.]{.underline}, 477
U.S. 242, 255 (1986). We also review the district court's statutory
construction [de]{.underline} [novo]{.underline}. [Bayer AG v. Housey
Pharms., Inc.]{.underline}, 340 F.3d 1367, 1370 (Fed. Cir. 2003).

This case presents the question whether components that are manufactured
outside the United States and never physically shipped to or from the
United States may nonetheless be "supplie\[d\] or cause\[d\] to be
supplied in or from the United States" within the meaning of 35 U.S.C. §
271(f)(1) if those components are designed within the United States and
the instructions for their manufacture and disposition are transmitted
from within the United States. This is a matter of first impression for
this court. According to § 271(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 a manner as to actively induce the combination of such
components outside 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.

35 U.S.C. § 271(f)(1) (2000). Section 271(f) was enacted in the wake of
the United States Supreme Court's decision in [Deepsouth Packing Co. v.
Laitram Corp.]{.underline}, 406 U.S. 518 (1972), in which the Court
acknowledged that unauthorized manufacturers of patented products could
avoid liability for infringement under the then-existing law by
manufacturing the unassembled components of those products in the United
States and then shipping them outside the United States for assembly.
Congress enacted § 271(f) in order to close that loophole. [Rotec
Indus., Inc. v. Mitsubishi Corp.]{.underline}, 215 F.3d 1246, 1250 n.2
(Fed. Cir. 2000). As explained in the Congressional Record:

Section 101 \[of the Bill\] makes two major changes in the patent law in
order to avoid encouraging manufacturers outside the United States.

. . . .

\[Section 271(f)\] will prevent copiers from avoiding U.S. patents by
supplying components of a patented product in this country so that the
assembly of the components may be completed abroad. This proposal
responds to the . . . decision in [Deepsouth]{.underline} . . .
concerning the need for a legislative solution to close a loophole in
patent law.

130 Cong. Rec. H10525 (1984).

On appeal, Pellegrini asserts that the district court failed to
consider, or at least did not address, certain relevant facts and that
the court misapplied and incorrectly interpreted controlling case law.
In his first argument, Pellegrini contends that the record shows that
Analog is incorporated in the United States and has executive,
marketing, and product line responsibilities for ADMC products; that
Analog conceived and designed the ADMC products; that Analog is the
exclusive manufacturer of ADMC products; that Analog makes all
development and production decisions for ADMC products; that Analog is
responsible for the fabrication, assembly, and testing of ADMC products;
that ADMC uses, subcontracts with, and pays others for the express
purpose of the proprietary fabrication, assembly, and testing of ADMC
products; that Analog's ADMC products are capable of motor control; that
Analog sets budgetary pricing and receives payment for ADMC products
sold worldwide; and that Analog receives purchase orders from and
invoices customers worldwide for ADMC products and increases production
levels for ADMC products in response to those purchase orders. According
to Pellegrini, these facts satisfy the "supplies" requirement of §
271(f)(1) because they evidence acts of infringement occurring inside
the United States.

Analog responds that Pellegrini's facts are not supported by the record,
but, even if they are credited, they are irrelevant because they do not
demonstrate that the accused ADMC chips at issue were "supplied in or
from the United States." According to Analog, § 271(f)(1) is simply
inapplicable to products manufactured outside the United States and
never shipped to or from the United States.

Pellegrini then argues that Analog exports its ADMC products, regardless
of their origin, from the United States. That contention is based on the
fact that Analog apparently includes the following boilerplate statement
on all of its commercial invoices, even for shipments that originate
outside the United States:

These commodities, technology, or software were exported from the United
States for ultimate destination to (Enter Countries), in accordance with
Export Administration Regulations. Diversion contrary to US Law
prohibited.

Above listed products may be assembled in one or more of the following
countries, HONG KONG, INDONESIA, IRELAND, KOREA, PHILIPPINES, TAIWAN,
THAILAND, MALAYSIA, or SINGAPORE.

Pellegrini does not contend that Analog's ADMC chips are in fact
physically exported from the United States. Rather, he points out that
Analog explained to the district court that the above statement is
included to demonstrate compliance with U.S. export laws, and he argues
that Analog should not be allowed to enjoy the benefit of such a
declaration with respect to U.S. export laws while simultaneously
escaping liability under U.S. patent laws.

Analog responds that the above-quoted boilerplate language is included
in its invoices only out of an abundance of caution and does not
indicate whether the products were ever physically present in the United
States or if they were shipped to or from the United States. Analog
points out that the U.S. Supreme Court explained nearly 150 years ago in
[Brown v. Duchesne]{.underline}, 60 U.S. (19 How.) 183 (1857), that the
U.S. patent laws "do not, and were not intended to, operate beyond the
limits of the United States." [Id.]{.underline} at 195; [see
also]{.underline} [Int'l Rectifier Corp. v. Samsung Elecs.
Co.]{.underline}, 361 F.3d 1355, 1360 (Fed. Cir. 2004). Analog also
points out that Pellegrini made a deliberate decision not to seek
foreign patent protection for the invention claimed in the '069 patent,
and he is bound by the obvious and foreseeable consequences of that
decision.

We agree with Analog that § 271(f)(1) does not apply to the facts of
this case. First, § 271(f) is clear on its face. It applies only where
components of a patent invention are physically present in the United
States and then either sold or exported "in such a manner as to actively
induce the combination of such components outside the United States in a
manner that would infringe the patent if such combination occurred
within the United States." Secondly, as Pellegrini himself recognizes,
we explained in [North American Phillips v. American Vending Sales,
Inc.]{.underline}, 35 F.3d 1576 (Fed. Cir. 1994), that "the 'tort' of
patent infringement occurs where the offending act \[making, using,
selling, offering for sale, or importing\] is committed and not where
the injury is felt." [Id.]{.underline} at 1579. There is no dispute that
the ADMC chips are not made, used, sold, or offered for sale in the
United States. The plain language of § 271(f)(1) focuses on the location
of the accused components, not the accused infringer. Pellegrini
contends that it is irrelevant that the chips within the scope of the
partial summary judgment never enter the United States, because to
impose a location requirement would lead to a "seemingly contradictory
construction of §271(f)(1)." According to Pellegrini, "it is difficult
to understand how the combination of such components outside the United
States can occur if they are inside the United States." However, the
language of § 271(f) clearly contemplates that there must be an
intervening sale or exportation; there can be no liability under §
271(f)(1) unless components are shipped from the United States for
assembly.

As stated above, Analog does not make, use, sell, or offer to sell ADMC
products in the United States, and it does not import ADMC products into
the United States. Analog also does not supply ADMC chips in or from the
United States, and does not cause ADMC chips to be supplied in or from
the United States. Thus, 35 U.S.C. § 271(f)(1) is inapplicable.
"\[S\]uppl\[ying\] or caus\[ing\] to be supplied" in § 271(f)(1) clearly
refers to physical supply of components, not simply to the supply of
instructions or corporate oversight. In other words, although Analog may
be giving instructions from the United States that cause the components
of the patented invention to be supplied, it is undisputed that those
components are not being supplied in or from the United States.

Moreover, the fact that Analog notes on its invoices that its
"commodities" were exported from the United States does not stand up
against the uncontested fact that no ADMC chips were exported from the
United States. Compliance with the export laws is not an issue before
this court.

Pellegrini further argues that [Crowell v. Baker Oil Tools]{.underline},
143 F.2d 1003 (9th Cir. 1944), demonstrates that liability as a
"manufacturer" does not require the performance of the actual physical
manufacturing. Although Pellegrini's statement is correct insofar as
[Crowell]{.underline} held that one cannot escape liability for
infringement as a manufacturer of infringing products simply by
employing an agent or independent contractor to carry out the actual
physical manufacturing, [id.]{.underline} at 1004 ("It is obvious that
one may infringe a patent if he employ an agent for that purpose or have
the offending articles manufactured for him by a independent
contractor."), there is no suggestion in [Crowell]{.underline} that the
manufacturing need not nonetheless be carried out in the United States.
As stated above, Analog's defense is not based on the use of a
contractor, but rather on extraterritorial manufacture.

Finally, Pellegrini contends that the district court's reliance on our
decision in [Rotec]{.underline} was incorrect and misplaced. Pellegrini
points out that in [Rotec]{.underline}, no U.S. defendant was alleged to
be the manufacturer or seller of the accused components, whereas it is
undisputed that Analog is the exclusive manufacturer of the ADMC
products sold worldwide or that Analog invoices and receives payment for
those products. Although factually correct, that distinction is legally
unavailing. The present case is analogous to [Rotec]{.underline} in the
only sense that matters here: Analog's ADMC chips within the scope of
the summary judgment, like the crane and conveyor belt system components
at issue in [Rotec]{.underline}, are not made in, used in, sold in,
offered for sale in, or imported into the United States, 215 F.3d at
1247, 1256, and they are therefore outside of the reach of U.S. patent
laws. As in [Rotec]{.underline}, the present record "contains no
evidence that any Defendant 'supplied or caused to supply' any component
of a patented invention in or from the United States." [Id.]{.underline}
at 1256. Pellegrini speculates that "had there been admissible evidence
to show an 'offer for sale' occurring in the United States \[in
[Rotec]{.underline}\], the Court would have judged otherwise." Be that
as it may, there is no evidence of record here that Analog has offered
to sell the ADMC chips domestically. Although Analog receives purchase
orders, has responsibility for worldwide manufacturing and sales of ADMC
products, and has marketing and product line responsibilities for ADMC
products, there is no evidence of record that any of that manufacturing
occurs in the United States or that Analog offers to sell those products
in the United States. As the Supreme Court explained in [Dowagiac Mfg.
Co. v. Minn. Moline Plow Co]{.underline}., 235 U.S. 641 (1915), "the
right conferred by a patent under our law is confined to the United
States and its territories, and infringement of this right cannot be
predicated on acts wholly done in a foreign country." [Id.]{.underline}
at 650.

We have considered Pellegrini's other arguments and find them
unpersuasive.

CONCLUSION

Because there is no genuine issue of material fact and Analog is
entitled to judgment as a matter of law with respect to the ADMC
products that are not manufactured in the United States and are never
shipped to or from the United States, the decision of the district court
is

######### AFFIRMED.

[^1]: The ADMC chips are manufactured by Analog in Ireland and by two
    independent contractors hired by Analog in Taiwan.

[^2]: Analog concedes that it has imported a small number of ADMC chips
    into the United States, [e.g.]{.underline}, for testing purposes,
    but those chips are not the subject of the summary judgment on
    appeal.

[^3]: The district court granted partial summary judgment under Rule
    54(b) only on the question whether Analog's accused ADMC chips
    manufactured outside the United States and never shipped to or from
    the United States infringed the '069 patent as a matter of law.
    Because that is the only issue decided by the court and appealed to
    us, we state no opinion as to the viability of Pellegrini's
    remaining causes of action set forth in his complaint, including his
    claims that Analog induced its customers to infringe the '069 patent
    and directly infringed the '069 patent by having imported the ADMC
    chips for testing.