Friday, June 22, 2012

Defendant Not Liable for Subsidiary’s Infringing Importation Absent Proof of Defendant’s Control Over Importation Activities

Following a bench trial, the court found that defendants did not infringe plaintiff's intraluminal stent graft patent under 35 U.S.C. § 271(g) because a nonparty foreign subsidiary of a defendant -- and not one of the named defendants -- imported the accused product. "[The nonparty subsidiary] appears to be a subsidiary of [a named defendant]. However, the exact structure of the company and control of divisions is something that was not argued by either party. . . . Since the evidence before the Court makes clear that [the nonparty foreign subsidiary] is the actual importer in this case, the question is whether one of the named defendants can be found to be vicariously or jointly liable because they 'controlled' or owned [the foreign subsidiary]. . . . [The evidence] support[s] the conclusion that [a named defendant] ‘controlled and directed’ [the foreign nonparty subsidiary] subassembly manufacturing of the [accused product]. However . . . it is not the manufacturer but the importer who is liable under [35 U.S.C. § 271(g)]. Thus, if the Court is to apply joint infringement or vicarious liability to Section 271(g) infringement, it appears it must also find evidence that [the named defendant] or one of the other named defendants, directed or controlled the actual importing activity of [the nonparty foreign subsidiary]. . . . The Court finds that the evidence submitted at trial is simply insufficient to support such a conclusion. [The nonparty foreign subsidiary] is the entity listed on all shipping contracts admitted during trial. If the Court were to draw a contrary conclusion and find that one of the named defendants 'directed or controlled' this importing/shipping activity, it would be a mere assumption."

W.L. Gore & Associates, Inc. v. Medtronic, Inc., et. al., 2-10-cv-00441 (VAED June 18, 2012, Order) (Davis, J.).

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