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

______________________ HALO ELECTRONICS, IN C., Plaintiff

- Appellant

v.

PULSE ELECTRONICS, I NC. AND PULSE ELECTRONICS CO RPORATION , Defendants

- Cross

- Appellants

______________________

2013

- 1472, 2013

- 1656

______________________ Appeals from the United States District Court for the District of Nevada in No. 07

- CV

- 0331, Judge Philip M. Pro.

______________________
Decided: August 5, 2016

______________________
C RAIG E. C OUNTRYMAN , Fish & Richardson P.C., San Diego, CA for plaintiff

- appellant. Also represented by M ICHAEL J. K ANE , W ILLIAM W OODFORD , Minneapolis, MN

.

M ARK L EE H OGGE , Dentons US LLP, Washington, DC, for defendants

- cross

- appellants. Also represented by S HAILENDRA K. M AHESHWARI , C HARLES R. B RUTON , R AJESH C HARLES N ORONHA

.

______________________HALO ELECTRONICS , INC

. v. PULSE ELECTRONICS , INC

. 2

Before L OURIE , O’M ALLEY , and H UGHES , Circuit Judges

. L OURIE , Circuit Judge

. This case has returned to us on remand from the S upr eme Court of the United States. In its earlier appea rance in this court, Halo El ectronics, Inc. (“Halo”) appealed from the decisions of the United States District Court for the District of Nevada (1) granting summary judgment that Pulse Electronics, Inc. and Pulse Electronics Corp. (collectively, “Pulse”) did not sell or offer to sell within the United States th e accused products that Pulse manufa ctured , shipped, and delivered to buyers outside the United States and thus that Pulse did not directly infringe Halo’s U.S. Patents 5,656,985 (“the ’985 patent”) , 6,297,720 ( “the ’720 patent”) , and 6,344,785 ( “the ’785 patent”) (collectiv ely

, “the Halo patents”) with respect to those products ; and (2) holding that

, with respect to the accused products that Pulse sold and delivered in the United States

, Pulse’s infringement of the Halo patents was not willful , and thus declining to enhance damages under 35 U.S.C. § 284

. See Halo Elecs., Inc. v. Pulse Eng’g, Inc. , 810 F. Supp. 2d 1173, 1205

– 08 (D. Nev. 2011) (sale and offer for sale); Halo Elecs., Inc. v. Pulse Elecs., Inc.

, No. 2:07

- CV

- 00331
, 2013 WL 2319145, at *14

– 16 (D. Nev. May 28, 2013 ) (willfulness) ; Halo Elecs., Inc. v. Pulse Elecs., Inc. , No. 2:07

- CV

- 00331, ECF No. 523 (D. Nev. May 28, 2013) (final j udgment awarding damages without enhancement ).

Pulse cross

- appealed from the district court’ s dec isions (1) construing the claim limitation “ electronic su rface mount package” in the Halo patent s ; (2) construing the claim limitation “contour element” in Pul se’s U.S. Patent 6,116,963 ( “the ’963 patent” ) that Pulse asserted in its counter claim ; and (3) holding that the asserted claims of the Halo patent s wer e not invalid for obviousness. See Halo Elecs., Inc. v. Pulse Eng’g , Inc. , 721 F. Supp. 2d 989, 998

– 1001 (D. Nev. 2010) (claim construction) ; Halo , 2013 WL 2319145, at * 1– 7 (obviousness); Halo Elecs., Inc. v.H ALO ELECTRONICS , INC

. v. PULSE ELECTRONICS , INC

. 3

Pulse Elecs., Inc. , No. 2:07

- CV

- 00331, 2013 WL 4458754, at *1

– 3 (D. Nev. Aug. 16, 2013) (obvious ness).

W e affirm ed the s ummary judgment of no direct i nfringement of the Halo patents by th e accused products that Pulse manufactured, shipped, and delivered outside the United States b ecause Pulse did not sell or offer to sell those products within the United States

. Halo Elecs., Inc. v. Pulse Elecs., Inc. , 769 F.3d 1371, 1377

– 81 (Fed. Cir. 2014). In addition, applying the then

- controlling stan

dard for an award of enhanced damages and the related
two

- part test for willful infringement as stated in In re Seagate Technology , LLC , 497 F.3d 1360 (Fed. Cir. 2007) (en banc)

, and its progeny , we af firm ed the judgment of no willful infringement of the Halo patents with respect to products that were delivered in the United States and

, consequently, the district court’s decision not to enhance damages

. Halo , 769 F.3d at 1381

– 83. On the cross

appeal, because we found no reversible error in the co ntested claim construc tions , we affirm ed the judgment of direct infringement of the Halo patents with respect to products that Pulse delive red in the United States and the judgment of inducement with respect to products that Pulse delivered outside the United States

, but that were ultimately imported into the United States by others , as well as the judgment of non infringement of Pulse’s ’963 patent

. Id. at 1383

. We also affirm ed the judgment that the asserted claims of the Halo patents were not invalid for obviousness. Id.
Both parties petitioned for rehearing en banc, which
t his court denied. Halo Elecs., Inc. v. Pulse Elecs., Inc.

, 7 80 F.3d 1357 (Fed. Cir. 2015). H alo then filed a petition for a writ of certiorari in the Supreme Court. Halo ’s petition presented two questions:

1. Whether the Federal Circuit erred by appl ying a rigid, two

- part test for enhancing patent i nfringement damages under 35 U.S.C. § 284, thatHALO ELECTRONICS , INC

. v. PULSE ELECTRONICS , INC

. 4

is the same as the rigid, two

- part test this Court rejected last term in Octane Fitness, LLC v. ICON Health & Fitness, Inc. , 134 S. Ct. 1749 (2014) for imposing attorney fees under the similarly

worded 35 U.S.C. § 285

. 2. Whether the Federal Circuit erred by holding that a U.S. defendant does not “ sell ” or “ offer to sell ” the patented invention “ within the United States” under 35 U.S.C. § 27 1(a), even though it enters [into ] a requirements contract with a U.S.
customer that they negotiate and execute in the U.S., that is governed by California law, that specifies the material terms, and that creates l egally binding obligations.

Petition for a Writ of Certiorari, at i, Halo Elecs., Inc. v. Pulse Elecs., Inc. , 579 U.S. __, 136 S. Ct. 1923 (2016) (No. 14

- 1513), 2015 WL 3878398, at *i. In addition, Pulse filed a conditional cross

- petition for a writ of certiorari on the obviousness issue. Conditional Cross

- Petition for a Writ of Certiorari, at i, Pulse Elecs., Inc. v. Halo Elecs., Inc.

, No. 15

- 121, 2015 WL 4550375, at *i (U.S. July 24, 2015).

T he Supreme Court granted Halo’s petition in part

, limit ing its review to Question 1 relating to enhanced damages

, and de clining to review Question 2 relating to sale and offer

- for

- sale

. Halo Elecs., Inc. v. Pulse Elecs., Inc. , 577 U.S. __, 136 S. Ct. 356 (2015 ). The Court also denied Pulse’s conditional cross -petition relating to obv iousness

. Pulse Elecs., Inc. v. Halo Elecs., Inc.

, 577 U.S.

__, 136 S. Ct. 236 (2015).

O n June 13, 2016, the Court announced its decision

. Halo Elecs., Inc. v. Pulse Elecs., Inc. , 57 9 U.S. __, 136 S. Ct. 1923 (2016) . The Court held that Section 284 of the Patent Act “ gives district courts the discretion to award enhanced damages

. . . in egregiou s cases of misconduct beyond typical infringement .” I d. at 1935 . The Court rejected the Seagate test as “unduly rigid” and “impermi s-H ALO ELECTRONICS , INC

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sibly encumber[ing] the statutory grant of discretion to district courts .” I d. at 1932 ( internal quotation marks omitted)

. Because we decided the enhanced damages issue under the Seagate framework, the Court vacated our decision and remanded the case for further proceedings.
On remand, we recalled our mandate and reopened the case on July 14 , 2016. Because t he Supreme Cour t’s review was limited to the issue of enhanced damages and left undisturbed the judgments o n other issues, we

re affirm the summary judgment of no direct infringement of the Halo patents by the accused products that Pulse manufactured, shipped, and delivered outside the United States, and we also re affirm all aspects of the cross

appeal. On those issues, w e restate herein the reasoning
sta ted in our earlier opinion

. B ecause the district court applied the Seagate test in declining to enhance damages

, however, w e vacate its unenhanced damages award with respect to products that were delivered in the United States, and reman d for further proceedings consistent with the Supreme Court’s opinion on enhanced damages

. B ACKGROUND
Halo is a supplier of electronic components and owns the ’985, ’720, and ’785 patents directed to surface mount electronic packages containing transformers for mounting on a printed circuit board inside electronic device s such as computer s and internet routers

. The Halo patent s are all derived from an application filed on August 10, 1995. At issue here are claims 6

– 8 and 16 of the ’985 patent, claims 1 and 6 of the ’720 patent , and claims 40 and 48 of the ’785 patent (collectively “the asserted claims”). Claim 6 of the ’985 p atent is representative and reads as follows:

6. An electronic surface mount package for mounting on a printed circuit board in an ele ctronic device, said electronic surface mount package comprising:HALO ELECTRONICS , INC

. v. PULSE ELECTRONICS , INC

. 6

a one piece construction package having a side wall and an open bottom, a plurality of toroid transformers carried wit hin said package by a soft silicone material, said toroid transformers each having wires wrapped thereon, a plurality of terminal pins molded within and extending from the bottom of said packag e, each of said pins extending through a bottom of said side wall and having a notched post upon which said wires from said transformers are wrapped and soldered thereon, respectively.
’985 patent col. 4 ll. 19

– 33.
Pulse, a nother supplier of electronic components
, designs and sells surface mount electronic packages and manufactures those products in Asia

. Some of Pulse ’s products were deliv ered by Pulse to customers in the United States

, but the majority of them were delivered outside the United States, for example, to contract man ufacture r s f or companies such as Cisco. Those contract manufacture r s incorporated the electronic packages supplied by Pulse in to end products overseas, including internet routers manufactured for Cisco, which were then sold and shipped to consumers around the world.

For th ose products that Pulse delivered abroad

, all purchase orders were received at Pulse ’s sales offices abroad

. Halo

, 810 F. Supp. 2d at 1207. However, Pulse engaged in pricing negotiations in the United States with companies such as Cisco

, and Pulse’s employees in the United States approved prices that its agents quoted to foreign customers when the quoted prices fell below certai n thresholds

. Pulse also engaged in other activities in the United States, including meeting regularly with Cisco design engineers, sending product samples to CiscoH ALO ELECTRONICS , INC

. v. PULSE ELECTRONICS , INC

. 7

for pre

- approval, attending sales meetings with its cu stomers , and providing post

- sale support for its products.

A lthough Cisco out sourced its manufacturing activ itie s to foreign contract manufacturers

, Cisco negotiated with its component suppliers the pric es that its contract manufac ture rs would pa y when purchasing component parts

. As one of Cisco’s component suppliers, Pulse executed a general agreement with Cisco that set forth manufacturing capacity, low price warranty, and lead time terms

. J.A. 15135

– 37. However, th at general agreement did not refer to any specific Pulse product or price. Cisco typically sent a request for quote to its co mponent suppliers and Pulse responded with the proposed price and minimum quanti t y for each product as ident ified by its part number

. After further negotiation, Cisco issued the agreed- upon price, projected demand , and percent age allocation to Pulse for each product for t he upcoming quarter . The percentage allocation divided Cisco’s projected quarterly demand a mong its suppliers

. Cisco then communicated the price and allocation to its contract manufacturers in Asia

, and t he contract man ufacturers were expected to apply the Cisco price and allocation when ordering components from Pulse and other suppliers

. Upon receipt of purchase order s abroad , Pulse deli vered the electronic package products from its manufactu ring facility in Asia to Cisco contract manufacturer s, also lo cated in Asia , which then paid Pulse. After assembling the end products, the contract manufacturer s submitted invoices to Cisco that itemized the cost of Pulse products and other component s that were incorporated into the Cisco end products. Cisco then p aid the contract man ufacturer s for the end products

. Pulse allegedly knew of the Halo patents as early as 1998. In 2002, Halo sent Pulse two letters offering licen ses to its patents, but did not accuse Pulse of infringementHALO ELECTRONICS , INC

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in those letters

. J.A . 5953

– 54. The p resi dent of Pulse contacted a Pulse engineer , who spent about two hours

re viewing the Halo patents and concluded that they were invalid in view of prior Pulse products

. Pulse did not seek an opinion of counsel on the validity of the Halo patents at that time and continued to sell its surface mount electronic package products

. A Pulse witness later test ified that she was “ not aware of anyone in the company

. . . that made a conscious decision ” that “ it was permissible to continue selling” those p roducts. J.A. 2245.
In 2007, Halo sued Pulse for patent infringement

. Pulse denied infringement and challenged the validity of the Halo patents based on obviousness and other grounds

. Pulse also counterclaimed that Halo infringed Pulse’s ’963 patent directed to microelectronic connect ors.
The district court first construed the disputed claim limitations in the Halo patents and Pulse’s ’963 patent

. Relevant to this appeal, the court construed “electronic surface mount package” in the preamble of the H alo patent claim s as non

- limiting. Halo , 721 F. Supp. 2d at 999

– 1001. The court then further construed the term to mean “an electronic device configured to attach to the surface of a DC voltage only printed circuit board.” Id. In addition , the court co nstrued “contour element” in the ’963 patent claim s to mean “a raised or recessed feature that physically contacts the bend of an electrical lead both before and after the modular plug is inserted into the cavity.” Id. at 998

– 99. In view of that latter construction

, the parties stipulated to a ju dgment of noninfringement of the Pulse ’963 patent. Halo Elecs., Inc. v. Pulse Elecs., Inc.

, No. 2:07

- CV

- 00331, ECF No. 215 (D. Nev. Sept. 2, 2010 ). Pulse moved for summary judgment that it did not d irectly infr inge the Halo patents by selling or offering to sell products that Pulse manufactured, shipped, and delivered outside the United States. The district courtH ALO ELECTRONICS , INC

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granted the motion

, holding that those products were sold and offered for sale outside the United S tates and beyond the scope of § 271(a)

. Halo , 810 F. Supp. 2d at 1206

– 08.

T he parties next proceeded to trial on Halo’ s claims of (1 ) direct infringement by products that Pulse shipped in to the United States and (2 ) inducement of infringement by products that Pulse shipped outside the United States but were incorporated in to end products that were ult imately imported into the United States. The jury found that: (1) Pulse directly infringed the Halo patents with products that it shipped in to the Unit ed States; (2) it induced others to infringe the Halo patents with products that it delive red outside the United States but ultimately were imported into the United States in finished end products; (3) it was highly probable that Pulse’s infring ement w as willful; and (4) the asserted claims of the Halo patents were not invalid for obviousness. Halo , 2013 WL 2319145, at *1 ; Halo Elecs., Inc. v. Pulse Elecs., Inc. , No. 2:07

- CV

- 00331, ECF No. 482 (D. Nev. Nov. 26, 2012)

. The jury awarded Halo $1.5 millio n in reasonable royalty damages. Id

. In response to Pulse’s post

- trial motion, t he district
court applied the Seagate test and concluded that the objective component of the willfulness inquiry was not satisfied because Pulse “reasonably relied on at least its obviousness defense” and Pulse’s unsuccessful obviou sness defense was not “objectively baseless .” Halo , 2013 WL 2319145, at * 15 . The court therefore held that Pulse ’s infringement was not willful

, i d. at *16, and thus did not enhance damages under § 284

, Halo

, No. 2:07

- CV

- 00331, ECF No. 523 (D. Nev. May 28, 2013) ( final judgment awarding damages without enhancement)

. Pulse also moved for JMOL of invalidity for alleged obviousness of the Halo patent claims , which the district court denied

. Halo , 2013 WL 2319145, at *1

– 7; Halo

, 2013 WL 4458754, at *1

– 3. The court reasoned tha t,HALO ELECTRONICS , INC

. v. PULSE ELECTRONICS , INC

. 10

because Pulse did not file a pre

- verdict motion under Fed. R. Civ. P. 50(a) on the issue of obviousness , Pulse had waived its right to challenge the jury’s implicit f actual findings underlying the nonobviousness general verdict. Id. While noting that “each of the elements present in the asserted patent claims also were present in the prior art, except the standoff element” in two of the asserted claim s, Halo , 2013 WL 2319145, at *3, t he court presumed that the jury resolved all factual disputes relating to the scope and content of the prior art and secondary considerations in Halo’s favor and concluded that the asserted claims were not invalid for obviousness based upon those pr esumed factual findings, i d. at *3–7.

Halo appealed and Pulse cross -appealed

. We have j urisdiction pursuant to 28 U.S.C. § 1295(a)(1).

D ISCUSSION

I. Sale and Offer for Sale

We review the district court’s grant or denial of su mmary judgment under the law of the regional circuit , here the Ninth Circuit

. Lexion Med., LLC v. Northgate Techs., Inc. , 641 F.3d 1352, 1358 (Fed. Cir. 2011). A pplying the law of t he Ninth Circuit , we re view the grant or denial of summary judgment de novo

. H umane Soc’y of the U.S. v. Locke , 626 F.3d 1040, 1047 (9th Cir. 2010)

. Summary judgment is appropri ate when, drawing all justifiable inferences in the nonmovant’s favor, “there is no genuine dispute as to any material fact and the movant is entitled to ju dgment as a matter of law.” Fed. R. Civ. P. 56(a); Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 255 (1986).
Halo argues that the district court erred in granting summary judgment of no direct infringement with respect to products that Pulse delivered abroad. Halo contends that those products were sold and offered for sale within the United States because negotiation s and contracting activities occurred with in the United States, which r e-H ALO ELECTRONICS , INC

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sulted in binding contracts that set specif ic terms for price and quantity. Halo argues that the location of the sale or offer for sale should not be limited to the location of delivery . Halo also argues that it suffered economic harm in the United States as a result of Pulse’s sales

. Pulse responds that the products at issue were sold or offered for sale outside the United States because those products were manufactured, ordered, invoiced, shipped

, and delivered abroad

. Pulse maintains that its pricing discussions with Cisco in the United States we re merely forecasts and were not a guarantee that Pulse would receive a ny actual order from any of Cisco’s contract manufacturers. Pulse also responds that the district court’s holding is consistent with our case law and the presumption against extraterri torial application of United States laws

. Pulse contends that Halo improperly sought to expand the geographical scope of § 271(a) to reach activities outside the United States

. We agree with Pulse that the district court did not e rr in granting summary ju dgment of no direct infringement with respect to those products that Pulse manufactured, shipped, and delivered outside the United States because those products were neither sold nor offered for sale by Pulse within the United States.

A. Sale Section 271(a) of the patent statute provides in rel evant part that “ whoever without authority makes, uses, offers to sell , or sells any patented invention, within the United States

. . . infringes the patent. ” 35 U.S.C. § 271(a) (emphases added); Microsoft Corp. v. AT &T Corp. , 550 U.S. 437, 441 (2007) (“It is the general rule under United States patent law that no infringement occurs when a patented product is made and sold in another country.”). We first consider whether th e pro ducts that Pulse manufac tured , shipped, and delivered toHALO ELECTRONICS , INC

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buyers abroad were sold within the United States for purposes of § 271(a).

Our earlier cas es addressing the issue of the location of a sale arose in the context of personal jurisdiction. I n North American Philips Corp. v. American Vending Sales, Inc. , 35 F.3d 1576 (Fed. Cir. 1994), a case involving d omestic sales by defendants who shipped products from Texas and California free on board (f.o.b. ) to buyers in Illinois

, and concerning whether a trial court in Illinois had personal jurisdiction over the defendants , we held that patent infringement occurs where the infringing sales are made. Id. at 1577

– 79 (citing Beverly Hills Fan Co. v. Royal Sovereign Corp. , 21 F.3d 1558, 1570

– 71 (Fed. Cir. 19 94)). We stated that:
[T] he “selling” of an infringing article has both a physical and a conceptual dimension to it. That is to say, it is possible to define the situs of the tort of infringement

- by

- sale either in real terms as i ncluding the location of the seller and the buyer and perhaps the points along the shipment route in between, or in formal terms as the single point at which some legally operative act took place, such as the place where the sales transaction would be deemed to have occurred as a matter of commercial law.

Id. at 1579. We rejected the defendants’ argument that the location of the sale was limited to “ the place where legal title passe [d] rather than the more familiar places of contracting and perfor mance

. ” Id. (citing Burger King Corp. v. Rudzewicz , 471 U.S. 462, 478

– 79 (1985)). And w e held that the sale in that case occurred in Illinois where the buyer was located, but “not necessarily only there .” Id. Thus, under North American Philips , a sale may occur at multi ple locations, incl uding the location of the buyer

, for purposes of personal jurisd iction

.H ALO ELECTRONICS , INC

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I n subsequent cases in which we addressed the issue of liability under § 271(a) rather than personal jurisdi ction , we applied similar analyse s to determine where a sale occurred based on factors that included places of
contract ing and performance

. Litecubes, LLC v. N. Light Prods., Inc. , 523 F.3d 1353, 1370 (Fed. Cir. 2008) ; MEMC Elec. Materials, Inc. v. Mitsubishi Materials Silicon Corp.

, 420 F.3d 1369, 1377 (Fed. Cir. 2005)

. Although the place of contract ing may be one of several possible locations of a sale to confer personal jurisdiction

, we have not deemed a sale to have occurred within the United States for purpo ses of liability under § 271(a) based solely on negotiation and contracting activities in the United States when the vast majority of activities underlying the sales transa ction occurred wholly outside the United States

. For such a sale

, one must examine whether the activities in the United States are sufficient to consti tute a “sale” under § 271(a) , recognizing that a strong policy against extrate rritorial liability exists in the patent law

. See Microsoft

, 550 U.S. at 455 (“The traditional understanding that our patent law operate[s] only domesticall y and do[es] not extend to foreign activities is embedded in the Patent Act itself.” (alterations in original) (citati on and quotation marks omitted)) ; MEMC , 420 F.3d at 1375

– 76 (“[T]he reach of section 271(a) is limited to infringing activities that occur within the United States.”).
The pat ent statute does not define the meaning of a

“ sale ” within the United States for purposes of § 271(a)

. We have stated that “the ordinary meaning of a sale includes the concept of a transfer of title or property .” NTP, Inc. v. Research in Motion, Ltd. , 418 F.3d 1282, 1319 (Fed. Cir. 2005). Indeed, Article 2 of the Uniform Commer cial Code

, which is recognized as a persuasive authority on the sale of goods

, provides that “[a] ‘sale’ consists in the passing of title f rom the seller to the buyer for a price.” U.C.C. § 2- 106 ; see also Black’s Law Dictio nary 1364 (8th ed. 2004) (defining “sales” as “[t]he transferHALO ELECTRONICS , INC

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of property or title for a price”)

. Section 2

- 106 separately defines a “con tract for sale” as including “both a present sale of goods and a contract to sell goods at a future time

. ” While we have held that a sale is “not limited to the transfer of tangible property” but may also be determined by “the agreement by which such a transfer takes place,” Transoc ean Offshore Deepwater Drilling, Inc. v. Maersk Contractors USA, Inc. , 617 F.3d 1296, 1311 (Fed. Cir. 2010) (citing NTP , 418 F.3d at 1319), the location of actual or anticipated performance under a “contract for sale” remains pertinent to the transfer of t itle or property from a seller to a buyer

, see id. at 1310 (considering the location of delivery and performance under a contract)

. Consistent with all of our precedent, we conclude that

, when substantial activities of a sales transaction

, inclu ding the f inal formation of a contract for sale encompass ing all essential terms as well as the delivery and perfo rmance under that sales contract

, occur entirely outside the United States, pricing and contracting negotiations in the United States alone do not const itute or transform those extraterritorial activities into a sale within the United States for purposes of § 271(a)

. On undisputed facts, the products under discussion here were manufactured, shipped, and delivered to buyers abroad. Halo , 810 F. Supp. 2d a t 1207 ( “All accused products [at issue] were at no point, in transit or othe rwise, in the United States.”). In addition

, Pulse received the actual purchase orders for those products abroad

. Although Pulse and Cisco had a general business agre ement , that agreement did not refer to

, and was not a contract to sell , any specific product

. J.A. 15135

– 37. While Pulse and Cisco engaged in quarterly pricing negotiations for specific products

, the negotiated price and projected demand did not constitute a firm agreement to buy and sell

, bind ing on both Cisco and Pulse

. Instead, Pulse received purchase orders from Cisco’s foreign co ntract manufacturers

, which then firmly established theH ALO ELECTRONICS , INC

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essential terms including price and quantity of binding
contract s to buy and sell . Moreover, Pulse was paid abroad by those contract manufacturers , not by Cisco, upon fulfill ment of th e purchase orders. Thus, substa ntial activities of the sales transactions at issue , in add ition to manufacturing and delivery, occurred outside the Unit ed States. Although Halo did present evidence that pricing negotiations and certain contracting and marke ting activities took place in the United States, w hich purport edly resulted in th e purchase orders and sales

overseas , as indicated

, such pricing and contract ing negotia tions alone are insufficient to constitute a “sa le” within the United States. 1 Any doubt as to whether Pulse’s contracting activities in the United States constituted a sale within the United States under § 271(a) is resolved by the presumption against extraterritorial application of United States law s

.
“ The presumption that United States law governs dome stically but does not rule the world applies with particular force in patent law .” Microsoft , 550 U.S. at 454

– 55. As the Supreme Court has stated on multiple occasions

, “[o]ur patent system makes no claim to extraterritorial effect; these acts of Congress do not, and were not inten ded to, operate beyond the limits of the United States, and we correspondingly reject the cla i ms of others to such control over our markets.” Id. at 444 (quoting Deepsouth Packing Co. v. Laitram Corp. , 406 U.S. 518, 531 (1972)

1 On these facts, we need not reach Halo’s arg ument that the place where a contract for sale is legally formed can itself be determinative as to whether a sale has occurred in the United States because we agree with the district court here that the pricing negotiations and contracting activities in the United States to which Halo points did not constitute the final formation of a defin itive, binding contract for sale.HALO ELECTRONICS , INC

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(quoting Brown v. Duchesne , 60 U.S. (19 How.) 183, 195 (1857) )) (internal citation and quotation marks omitted).

“F oreign conduct is [generally] the domain of foreign law,” and in patent cases , foreign law “may embody different policy judgments about the relative rights of inventors, competitors, and the public in patented inve ntions.” Id. at 455 (alteration in ori ginal) (quoting Brief for United States as Amicus Curiae 28 ). As the Supreme Court has stated, if one desires to prevent the selling of its patented invention in foreign countries, its proper remedy lies in obtaining and enforcing foreign patents. See De epsouth , 406 U.S. at 531 (“ To the degree that the inventor needs protection in markets other than those of this coun try, the wording of 35 U.S.C. §§ 154 and 271 reveals a congressional intent to have him seek it abroad through patents secured in countries where his goods are being used. ”).

We also reject Halo’s argument that the sales at issue occurred in the United States simply because Halo suffered economic harm as a result of those sales

. The incurring of harm alone does not control the infringement inquiry. As indicated , Pulse’ s activities in the United States were insufficient to constitute a sale within the United States to support direct infr ingement

. See N. Am. Philips , 35 F.3d at 1579 (“[T] he statute on its face clearly

su ggests the conception that the ‘tort’ of patent infring ement occurs where the offending act is committed and not where the injury is felt. ”). Moreover, Halo recovered dam ages for products that Pulse delivered outside the United States but were ultimately imported into the United States in finished end products based on a theory of inducement. Following Halo’s logic, a foreign sale of goods cov ered by a U.S. patent that harms the business interest of a U.S. patent holder w ould incur infringement liability under § 271(a)

. S uch an extensi on of the geographicalH ALO ELECTRONICS , INC

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scope of § 271(a) in effect would confer a worldwide excl usive right to a U.S. patent holder , which is contrary to the statute and case law

. See, e.g.

, Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc. , 711 F.3d 1348, 1371

– 72 (Fed. Cir. 2013) (“[T]he entirely extraterritorial pr oduction, use, or sale of an invention patented in the United States is an i ndependent, intervening act that, under almost all circumstances, cuts off the chain of causation initiated by an act of domestic infringement.”) (citing Morrison v. Nat’l Austl. Bank Ltd. , 561 U.S. 247, 266 (2010) (“ But the presumption against extraterritorial application would be a craven watchdog indeed if it r etreated to its kennel whenever some domestic activity is involved in the case. ” (emphasis in original))).

We therefore hold that the district court did not err in granting summary jud gment that Pulse did n ot sell within the United States those products that Pulse man ufactured, shipped, and delivered abroad

. B. Offer for Sale

We next consider whether Pulse offered to sell within the United States those products that Pulse manufa ctured , shi pped, and delivered abroad

. An “offer to sell ” generally occurs when one “communicate[s] a manifest ation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it. ” MEMC , 420 F.3d at 1376 (internal quotation marks omitted) . We have held that “ a description of the allegedly infringing merchandise and the price at which it can be purchased ”
may constitute an offer to sell. 3D Sys., Inc. v. Aarotech Labs ., Inc. , 160 F.3d 1373, 1379 (Fed. Cir. 1998)

. 3D Systems did not, however, involve international transa ctions and in that case this court considered the issue of offer to sell in a personal jurisdiction context.

Mor e importantly

, we have held that “the location of the contemplated sale controls whether there is an offer toHALO ELECTRONICS , INC

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sell within the United States .” Transocean , 617 F.3d at 1309 (emphasis added)

. “In order for an offer to sell to constitute infringement, the offer must be to sell a p atented invention within the United States.” Id

. In Transocean , contract negotiations occurred outside the United States for delivery and performance in the United States. This court held that the location of the conte mplated sale controlled and that the offer to sell infringed the patent at issue

. The case now before us involves the opposite situ ation, where the negotiations occurred in the United States, but the contemplated sale occurred outside the United States. We adopt the reasoning of Transocean and conclude here that Pulse did not directly infringe the Halo patents under the “offer to sell” provision by offering to sell in the United States the products at issue, because the locations of the contemplated sales were outside the United States. Cis co outsourced all of its manufacturing activities to foreign countries, and it is undisputed that the location s of the contemplated sale s were outside the United States

. Likewise, w ith respect to other Pulse
customers , there is no evidence that the products at issue were contemplated to be sold within the United States. An offer to sell, in order to be an infringement, must be an offer contemplating sale in the United States. Otherwise, the presumption against extra territoriality would be breached. If a sale outside the United States is not an infringement of a U.S. patent, an offer to sell, even if made in the United States, when the sale would occur outside the United States

, similarly would not be an infringement of a U.S. patent

. We therefore hold that Pulse did not offer to sell the products at issue within the United States for purposes of § 271(a). For the foregoing reasons, we affirm the summary judgment of no direct infringement with respect to thoseH ALO ELECTRONICS , INC

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produc ts that Pulse manufactured, shipped, and delivered abroad.
II. Enhanced Damages Applying the then

- controlling Seagate test for willful infringement, the district court determined that Pulse did not willfully infri nge the Halo patents with respect to produ cts that were delivered in the United States , and thus declined to enhance damages under 35 U.S.C. § 284

. Under Seagate

, e stablishing willful infringement required
a two

- prong analysis entailing an objective and a subje ctive inquiry

. First, the patent ee was required to “ show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.” Seagate , 497 F.3d at 1371

. Second, with the “threshold objective standard ” satisfied, the patentee was required to “ also demonstrate that this objec tively

- defined risk (dete rmined by the record developed in the infringement pr oceeding) was either known or so obvious that it should have been known to the accused infringer.” Id.

The Supreme Court has now rejected the Seagate test as “unduly rigid” and inconsistent with “ the statutory grant of discretion to district courts” to enhance damages under § 284. Halo

, 136 S. Ct. at 1932 (internal quotation marks omitted). In particular , the Court rejected the clear

- and

- convincing standard of proof

, as well as the tripartite framework for appellate review. Id. at 1934. The Court also rejected Seagate ’s requirement of “ a fin ding of objective recklessness in every case before district courts may award enhanced damages. ” Id. at 1932. Such a threshold requirement, the Court explained, “excludes from discretionary punish ment many of the most culpable offenders, such as the ‘wanton and malicious pirate’ who intentionally infringes another’s patent

— with no doubts about its validity or any notion of a defense

— for no pu rpose other than to steal the patentee’s business.” Id.HALO ELECTRONICS , INC

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Rather, “ [t] he subjective willfulness of a patent infringer, intentional or knowing, may warrant enh anced damag es .” Id. at 1933. Moreover, the Court held that Section 284 allows di strict courts to exercise their discretion in deciding whet her to award enhanced damages, which “are generally reserved for egregious cases of culpable behavior” beyond “typic al infringement.” Id. at 1932; see also id. at 1933

– 34 (“ Section 284 allows district courts to punish the full range of culpable behavior. Yet n one of this is to say that enhanced damages must follow a finding of egregious misconduct

. . . . [S] uch punishment should generally be reserved for egregious cases typified by willful misco nduct.”).
Here, the jury awarded Halo $1.5 million in reason able royalty damages with respect to products that were delivered in the United States. T he jury also f ound that it was highly probable that Pulse’s infringement was willful

. However, t he district court determined that the objective
prong of the Seagate test was not met because it conclu ded that the obviousness defense that Pulse presented at trial was not objectively baseless. On appeal, Pulse does not challenge the propriety of the jury finding of subje ctive willfulness. In light of the Supreme Court’s decision, we vacate the district court’s determination of no willful infringement . We remand for the district cour t to exercise its discretion and to decide whether, taking into conside ration the jury’s un challenged subjective willfulness fin ding as one factor in its analysis, an enhancement of the damages award is warranted

. Halo argues that Pulse did not actually r ely on any invalidity defense pre

- suit when selling the accused products be cause Pulse’s obviousness defense was developed after the lawsuit was filed in 2007

. As the Supreme Court explained, “culpability is generally mea sured against the knowledge of the actor at the time of theH ALO ELECTRONICS , INC

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challenged conduct.” Halo , 136 S. Ct. at 1933. Thus

, in assessing the culpability of Pulse’s conduct

, the district court should consider , as one factor in its analysis, what Pulse knew or had reason to know at the time of the infringement of the Halo patents

. Accordingly, we vacate the district court’s decision not to enhance damages under § 284 and remand for further proceedings

. III. Cross

- Appeal

Pulse cross

- appeals from the district court’s constru ction of the claim limitations “electronic surface mount package” in the Halo patents and “contour element” in Pulse’s ’963 patent and the resulting judgment s of i nfringement of the Halo patents and noninfring e ment of Pulse’s ’963 patent

. We have considered Pulse’s arg uments but find no re versible error in those judgments

. We therefore affirm the judgment of direct infringement with respect to products that Pulse delivered in the Uni ted States and the judgment of inducement with respect to product s that Pulse delivered outside the United States but ultimately were imported into the United States in finished end products, as well as the judgment of non

infringement of Pulse’s ’963 patent

. In addition, Pulse cross

- appeals from the judgment that the a sserted claims of the Halo patents were not invalid for obviousness

. I t is true that the record evidence indisputably shows that almost all the limitations in the asserted claims were known elements of electronic pac kages that existed in the prior art . H owever, Pulse did not file a motion during trial under Fed. R. Civ. P. 50(a) on the issue of obviousness before that issue was submitted to the jury and thus waived its right to challenge the jury’s implicit factual findings underlying the nonobv iousness g eneral verdict. The district court thus correctly presumed that the jury resolved all factual disputes relating to the scope and content of the prior art andHALO ELECTRONICS , INC

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secondary considerations in Halo’s favor. Based upon those presumed factual findings, the court did not err in reaching the ultimate legal conclusion that the asserted claims were not invalid for obviousness. We therefore affirm the judgment that the asserted claims of the Halo patents were not invalid for obvious ness

. C ONCLUSION For the foregoing reasons, we affirm the j udgment that Pulse did not directly infringe the Halo patents by sell ing or offer ing to sell within the United States those accused products that Pulse manufactured, shipped, and delivered outside the United States

. W ith respect to the infringing products that were delivered in the United States, we vacate the unenhanced damages award and remand for the district court to determine whether an award of enhanced damages is appropriate

. On the cross

appeal, because we discern no reversible error in the contested claim constructions, we affirm the judgment of direct infringement with respect to products that Pulse delivered in the United States and the judgment of i nducement with respect to products that Pulse delivered outside the United States

, but that were imported into the United States by others, as well as the judgment of non

infringement of Pulse’s ’963 patent. We also affirm the judgment that the asserted claims of the Halo patents were not shown to be invalid for obviousness

. AFFIRMED IN PART, VACATED IN PART, AND REMANDED

C OSTS

No costs

.