April 13, 2015
On April 10, 2015, in M-I Drilling Fluids UK Ltd. v. Dynamic Air Inc., the United States District Court for the District of Minnesota held that the United States Patent Act (“Patent Act”) applies to U.S.-flagged ships in international waters.
The case involves allegations of patent infringement that occur on ocean-going vessels in international waters. The plaintiff, M-I Drilling Fluids UK Ltd., owns patents that relate to conveyance systems for transporting oil-well waste from oil rigs. M-I sued the defendant, Dynamic Air, for infringement of these patents, alleging that Dynamic Air infringed the patents by installing or directing the installation of pneumatic conveyance systems on board the vessels Resolution and Pinnacle. Both vessels are U.S.-flagged ships.
Dynamic Air moved to dismiss, predicating its motion on lack of subject matter jurisdiction or on the alternative grounds that the complaint failed to state a legally cognizable claim. In an order entered on April 10, the court denied Dynamic Air’s motion to dismiss.
The court first reviewed the applicable procedural rules and determined that the motion was properly considered as a motion to dismiss for failure to state a legally cognizable claim. On the merits of the motion, the court reviewed the Patent Act as well as certain Supreme Court cases in international law. Based on this review, the court held that the Patent Act does apply to U.S.-flagged ships. The court premised this conclusion on its analysis of the “law of the flag” doctrine. Under this doctrine, “[w]hile on the high seas, a vessel is deemed to be part of the territory of the nation to whose citizens it belongs, and under whose flag it sails.” The court recognized that U.S. patent law is geographically limited in scope to U.S.-based activity, but nonetheless determined that activity on international waters could be deemed part of the “United States” under the law of the flag doctrine. The court rejected Dynamic Air’s argument that it should construe the Patent Act narrowly.
M-I Drilling is an interesting decision that addresses the interplay between the Patent Act and other areas of law; in this case, principles of international law. If you have questions regarding the decision, please contact Allen E. Hoover, author of this alert.
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