Patent Infringement in International Waters
Does the United States Patent Act apply to a U.S. ship in international waters? Judge Montgomery considered this question in M-I Drilling Fluids UK Ltd. v. Dynamic Air Inc., Case No. 14-cv-4857.
The lawsuit pits St. Paul manufacturer Dynamic Air against M-I Drilling Fluids UK Ltd., the owner of patents relating to the transport of oil well waste from oil rigs. Dynamic installed equipment on U.S. flagged ships that transported oil waste from rigs off the coast of Brazil. M-I contends that the use of Dynamic’s equipment infringes and filed suit in the District of Minnesota. Dynamic moved to dismiss on the grounds that the United States Patent Act does not apply to conduct occurring on a U.S. ship in international waters.
The Patent Act expressly applies to “the United States of America, its territories and possessions.” Dynamic argued that the Patent Act should be given a narrow reading, and should not cover the alleged infringement because the Act does not explicitly state that it applies to U.S. ships in international waters. Judge Montgomery rejected the argument, declaring that it “holds neither fresh nor sea water.”
The decision required application of the centuries old “doctrine of the flag,” which treats a merchant ship as part of the territory of the country whose flag she flies. After analyzing the doctrine and the legislative history for the Patent Act, Judge Montgomery held that the doctrine of the flag “must be saluted under the facts of this case,” and denied Dynamic’s motion.