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Foreign F.O.B. Shipment of Infringing Product Does Not Defeat Federal Subject Matter Jurisdiction

By Judith L. Grubner

F.o.b. or 'free on board' is a shipping method under which goods are delivered at a designated location where legal title (and thus the risk of loss) passes from the seller to the buyer. The Court of Appeals for the Federal Circuit has determined that a trial court does not lose subject matter jurisdiction over a patent or copyright infringement case where all sales of accused products to U.S. customers were made f.o.b. in Canada by a Canadian corporation. Litecubes, LLC v. Northern Light Prods., Inc., ___ F.3d ____ (Fed. Cir. 2008). Whether a defendant 'makes, uses, offers to sell or sells any patented invention, within the United States or imports into the United States any patented invention' is a factual element required to prove patent infringement, but does not affect federal subject matter jurisdiction.

Background

The inventor/owner Carl Vanderschuit and the licensee Litecubes, LLC of U.S. Patent No. 6,416,198 (the ”198 patent') sued Northern Light Products, Inc. (d/b/a GlowProducts.com), a Canadian corporation located in Victoria, British Columbia, for patent and copyright infringement. GlowProducts acquired novelty items from Chinese manufacturers and sold them directly to customers in the U.S. The '198 patent disclosed a lighted artificial ice cube known as the Litecube. Litecubes owned the registered copyright on the Litecube product. After a jury rendered a verdict of willful patent and copyright infringement, the U.S. District Court for the Eastern District of Missouri entered a judgment against GlowProducts.

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