Case 1:16-cv-00290-MN Document 145-1 Filed 12/05/18 Page 1 of 385 PageID #: 4403
`Case 1:16-cv-00290-MN Document 145-1 Filed 12/05/18 Page 1 of 385 PageID #: 4403
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`EXHIBIT A
`EXHIBIT A
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`Case 4:10-cv-05525-SBA Document 529-2 Filed 03/10/15 Page 1 of 22Case 1:16-cv-00290-MN Document 145-1 Filed 12/05/18 Page 2 of 385 PageID #: 4404
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`UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF CALIFORNIA
`OAKLAND DIVISION
`
`
`ZIPTRONIX, INC.,
`
`
`
`Plaintiff,
`
`
`vs.
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`OMNIVISION TECHNOLOGIES, INC.,
`TAIWAN SEMICONDUCTOR
`MANUFACTURING COMPANY LTD., and
`TSMC NORTH AMERICA CORP.,
`
`
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`Defendants.
`
`
`
`Case No: C 10-05525 SBA
`
`ORDER GRANTING
`OMNIVISION’S MOTION FOR
`SUMMARY JUDGMENT OF
`NONINFRINGEMENT OF NON-
`U.S. SALES
`
`
`UNDER SEAL
`
`Docket 498
`
`Plaintiff Ziptronix, Inc. (“Ziptronix”) brings the instant patent infringement action
`against Defendants OmniVision Technologies, Inc. (“OmniVision”), Taiwan
`Semiconductor Manufacturing Company, Ltd. (“TSMC Ltd.”), and TSMC North America
`Corp. (“TSMC NA”) (collectively, “TSMC”), alleging infringement of nine patents
`involving technology associated with the manufacture and structure of an image sensor
`found in devices with photo-capturing capabilities, e.g., tablets and smartphones. The
`parties are presently before the Court on OmniVision’s Motion for Summary Judgment of
`Noninfringement of Non-U.S. Sales. Dkt. 498. Having read and considered the papers
`filed in connection with this matter and being fully informed, the Court hereby GRANTS
`OmniVision’s motion, for the reasons stated below. The Court, in its discretion, finds this
`matter suitable for resolution without oral argument. See Fed.R.Civ.P. 78(b); N.D. Cal.
`Civ. L.R. 7-1(b).
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`Case 4:10-cv-05525-SBA Document 529-2 Filed 03/10/15 Page 2 of 22Case 1:16-cv-00290-MN Document 145-1 Filed 12/05/18 Page 3 of 385 PageID #: 4405
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`I.
`
`BACKGROUND
`A.
`FACTUAL SUMMARY
`The parties are familiar with the facts of this case. As such, the Court will only
`recite those undisputed facts that are relevant to resolving the instant motion.
`Ziptronix is a North Carolina company with its principal place of business in North
`Carolina. Ziptronix develops technologies concerning semiconductor integration processes,
`and is the owner of patents covering technologies related to advanced semiconductor
`processing. Specifically, Ziptronix owns patents directed to the bonding technology
`essential to the fabrication of the accused products in this action - OmniVision’s backside-
`illuminated image sensors (“image sensors”). An image sensor is a device that captures
`and converts light into an electronic signal corresponding to an image. Image sensors are
`incorporated into virtually all electronic devices having photo-capturing capabilities, e.g.,
`tablets and smartphones. Ziptronix also owns patents directed to the structures of the image
`sensors themselves.
`OmniVision is a Delaware corporation that is headquartered in Santa Clara,
`California. OmniVision designs image sensor chips (i.e., wafers) that are used in a variety
`of electronic products, including tablets and smartphones. OmniVision’s image sensors are
`the “brains” behind the imaging technology in these products. OmniVision secures the
`production of its image sensors through several manufacturing partners in Asia, including
`TSMC Ltd.
`TSMC Ltd. is a Taiwanese corporation that is headquartered in Hsinchu, Taiwan.
`TSMC Ltd. manufactures semiconductor wafers (“wafers”), a component of the accused
`image sensors.1 TSMC Ltd. serves as the “long-time foundry and process technology
`partner” of OmniVision. In this capacity, TSMC Ltd. manufactures wafers on behalf of
`
`
`1 TSMC NA, a subsidiary of TSMC Ltd., is a corporation headquartered in San Jose,
`California. TSMC NA facilitates sales of TSMC Ltd.’s wafers between TSMC Ltd. and its
`customers in the United States, including OmniVision. TSMC NA also performs certain
`marketing, customer service, and administrative functions in the United States for TSMC
`Ltd.
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`Case 4:10-cv-05525-SBA Document 529-2 Filed 03/10/15 Page 3 of 22Case 1:16-cv-00290-MN Document 145-1 Filed 12/05/18 Page 4 of 385 PageID #: 4406
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`OmniVision in Taiwan.2 After the wafers are manufactured, they are delivered to
`OmniVision or one of its vendors in Taiwan. OmniVision or one of its customers then
`arranges for additional components to be added to the wafers by several manufacturing
`firms in Asia. After the manufacturing process is complete, the finished products (i.e., the
`accused image sensors) are delivered to third-party fabricators (i.e., manufacturers) in Asia
`for inclusion into end-user applications such as tablets and smartphones. Some of these
`end-user applications are subsequently imported and sold in the U.S.
`Ziptronix accuses OmniVision of directly infringing the patents-in-suit by making,
`using, offering to sell, selling, and/or importing the accused image sensors and/or the
`wafers used in the image sensors into the United States. Ziptronix also accuses
`OmniVision of inducing infringement of the patents-in-suit by acting with specific intent to
`actively and knowingly encourage its customers, i.e., third-party Original Equipment
`Manufacturers (“OEMs”), Value Added Resellers (“VARs”), and Distributors, to use, offer
`to sell, sell, and/or import the accused image sensors and/or the wafers used in the image
`sensors into the United States.
`According to Ziptronix, OmniVision engages in targeted marketing efforts in the
`U.S. to sell its image sensors and generates almost all of its revenue by selling products,
`including products containing the accused image sensors, for use by third-party OEMs,
`VARs, and Distributors, “most notably
`.” Ziptronix
`further asserts that these third parties incorporate the accused image sensors into their
`branded consumer electronic products (e.g.,
`) that are then imported, sold,
`and used in various countries throughout the world, including the U.S. Although Ziptronix
`has identified several entities that it claims are third-party OEMs (i.e.,
`
`), its opposition only discusses OmniVision’s relationship with
` which, according to Ziptronix, is OmniVision’s
` Ziptronix
`
`2 In June 2007, OmniVision and TSMC Ltd. entered into a Joint Development and
`Manufacturing Agreement whereby OmniVision would produce the circuit and sensor pixel
`designs for the image sensors while TSMC Ltd. would develop all necessary fabrication
`processes to manufacture the image sensors.
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`offers no evidence or discussion regarding OmniVision’s relationship with any other third-
`party OEM, VAR, or Distributor.3
`B.
`PROCEDURAL HISTORY
`The operative pleading before the Court is the Second Supplemental and Amended
`Complaint for Patent Infringement (“Second Amended Complaint”). Dkt. 139. The
`Second Amended Complaint alleges claims for direct infringement and indirect
`infringement (based on the theory of induced infringement). The patents-in-suit are United
`States Patent Nos. 7,387,944, 7,335,572, 7,553,744, 7,037,755, 6,864,585, 7,807,549,
`7,871,898, 8,053,329 and 8,153,505. On October 2, 2014, the Court granted TSMC’s
`motion for summary judgment. Dkt. 493.
`OmniVision subsequently filed the instant motion for summary judgment. The
`motion is directed to Ziptronix’s direct infringement claims, to the extent those claims are
`predicated on OmniVision’s “non-U.S.” sales of the accused image sensors, i.e., sales
`where the accused image sensors are delivered to buyers outside the United States. Def.’s
`Mot. for Summ. J. at 2. Dkt. 498. OmniVision’s motion “does not address [its] sales [of
`image] sensors for delivery to U.S. addresses.” Id. n.1. OmniVision also moves for
`summary judgment on Ziptronix’s indirect infringement claims. The motion is fully
`briefed and ripe for adjudication.
`II.
`LEGAL STANDARD
`Federal Rule of Civil Procedure 56 provides that a party may move for summary
`judgment on some or all of the claims or defenses presented in an action. Fed.R.Civ.P.
`56(a)(1). “The court shall grant summary judgment if the movant shows that there is no
`
`
`3 OmniVision accuses Ziptronix of impermissibly attempting to interject a new
`theory of liability by identifying
` as an OEM for the time in its opposition brief, given
` was not identified as a
`M in the pleadings. However, Ziptronix was not
`that
`requ
`o specifically identify third parties by name at the pleading stage. See In re Bill
`of Lading Transmission & Processing Sys. Patent Litig., 681 F.3d 1323, 1336 (Fed. Cir.
`2012) (“To state a claim for indirect infringement, . . . a plaintiff need not identify a
`specific direct infringer if it pleads facts sufficient to allow an inference that at least one
`direct infringer exists.”). In addition, OmniVision has not argued, let alone shown, that
`summary judgment is appropriate because
`is not an OEM.
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`genuine dispute as to any material fact and the movant is entitled to judgment as a matter of
`law.” Id.; see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). The moving
`party has the burden of establishing the absence of a genuine dispute of material fact.
`Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); Fed.R.Civ.P. 56(c)(1)(A) (requiring
`citation to “particular parts of materials in the record”). If the moving party meets this
`initial burden, the burden then shifts to the non-moving party to present specific facts
`showing that there is a genuine issue for trial. See Celotex, 477 U.S. at 324; Matsushita
`Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986).
`“On a motion for summary judgment, ‘facts must be viewed in the light most
`favorable to the nonmoving party only if there is a ‘genuine’ dispute as to those facts.’”
`Ricci v. DeStefano, 557 U.S. 557, 586 (2009) (quoting in part Scott v. Harris, 550 U.S. 372,
`380 (2007)). “Only disputes over facts that might affect the outcome of the suit under the
`governing law will properly preclude the entry of summary judgment. Factual disputes that
`are irrelevant or unnecessary will not be counted.” Anderson, 477 U.S. at 248. A factual
`dispute is genuine if it “properly can be resolved in favor of either party.” Id. at 250.
`Accordingly, a genuine issue for trial exists if the non-movant presents evidence from
`which a reasonable jury, viewing the evidence in the light most favorable to that party,
`could resolve the material issue in his or her favor. Id. “If the evidence is merely
`colorable, or is not significantly probative, summary judgment may be granted.” Id. at 249-
`50 (internal citations omitted).
`III. DISCUSSION
`A.
`DIRECT INFRINGEMENT
`1.
`Law of the Case
`As a preliminary matter, OmniVision contends that summary judgment on
`Ziptronix’s direct infringement claims is appropriate under the law of the case doctrine
`because the Court previously determined that OmniVision’s foreign sales are outside the
`scope of United States patent law. In response, Ziptronix argues that the law of the case
`doctrine does not apply because the “facts related to OmniVision’s relevant dealings with
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` and the parties’ detailed performance under the
` had not been developed during discovery at the time of
`the earlier motion by the TSMC defendants.” Ziptronix further argues that these issues
`were not “directly presented by TSMC’s earlier motion, which . . . did not encompass
`details of OmniVision’s activities in relation to the device manufacturers in the United
`States . . . whom OmniVision directly interacts and services.”
`The law of the case doctrine, a judicial invention, aims to promote the efficient
`operation of the courts. Hall v. City of Los Angeles, 697 F.3d 1059, 1067 (9th Cir. 2012).
`It generally preludes a court from reconsidering an issue decided previously by the same
`court or by a higher court in the identical case. Id. The issue in question must have been
`decided explicitly or by necessary implication in the previous disposition. Id. Application
`of the doctrine is discretionary. Id. A court may depart from the law of the case if: (1) the
`first decision was clearly erroneous; (2) there has been an intervening change in law; (3) the
`evidence before the court when reconsidering the issue is substantially different; (4) there
`are other changed circumstances; or (5) a manifest injustice would result from applying the
`doctrine. United States v. Cuddy, 147 F.3d 1111, 1114 (9th Cir. 1998).
`In a prior order, the Court granted summary judgment in favor of TSMC on
`Ziptronix’s direct infringement claims, ruling that, in light of the strong presumption that
`United States patent law does not operate extraterritorially, TSMC Ltd.’s manufacture and
`delivery of accused products outside the United States does not constitute direct
`infringement. See Ziptronix, Inc. v. OmniVision Technologies, Inc., --- F.Supp.3d ----,
`2014 WL 5463051, at *5-6 (N.D. Cal. Oct. 21, 2014) (Armstrong, J.). The Court also
`granted summary judgment in favor of TSMC on Ziptronix’s indirect infringement claims.
`Id. at *6-7. Among other things, the Court determined that Ziptronix had failed to cite
`particular evidence in the record from which a reasonable jury could conclude that either
`TSMC Ltd. or TSMC NA actively induced any act of direct infringement on the part of
`OmniVision within the United States. Id. at *7. The Court found that while Ziptronix
`contended that OmniVision had engaged in infringing activity related to actively marketing
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`and selling the accused image sensors to third-party customers within the United States, it
`failed to cite any evidence in the record demonstrating that OmniVision uses, offers to sell,
`or sells the accused image sensors within the United States. Id. Further, the Court found
`that, to the extent Ziptronix attempted to show that OmniVision engaged in activity related
`to selling the accused image sensors to third-party customers in the United States, the
`evidence it cited was insufficient to establish direct infringement within the United States.
`Id. Ziptronix cited evidence that OmniVision has a
`
` wherein OmniVision agreed to offer the accused image
` manufacturing companies located abroad. Id.
`sensors for purchase to
`The Court held that, “[a]t most, [this evidence] establishes that two United States
`companies
` in the United States
`of image sensors abroad. . . . [S]uch conduct does not constitute
`a sale ‘within the United States’ amounting to direct infringement. No infringement occurs
`when a patented product is made and sold in another country.” Id. (citations omitted).
`While the Court previously decided, based on the evidence presented in connection
`with TSMC’s motion for summary judgment, that OmniVision’s sales of accused products
`manufactured and delivered abroad do not constitute “sales” within the United States
`amounting to direct infringement, the Court exercises its discretion and declines to apply
`the law of the case doctrine. Following the issuance of the prior summary judgment order,
`there has been an intervening change in law. The Federal Circuit recently issued a decision
`directly addressing the issues presented by the instant motion. See Halo Electronics, Inc. v.
`Pulse Electronics, Inc., 769 F.3d 1371, 1378 (Fed. Cir. 2014). In addition, the evidence
`presented in connection with the instant motion is substantially different than the evidence
`submitted in connection with the prior motion for summary judgment.
`2.
`Presumption Against Extraterritoriality
`
`OmniVision contends that partial summary judgment is appropriate on Ziptronix’s
`direct infringement claims because its “non-U.S.” sales of the accused image sensors are
`outside the scope of United States patent law. As such, OmniVision’s motion implicates
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`the presumption against extraterritoriality, i.e., the presumption that United States patent
`law does not operate outside the United States to prohibit infringement abroad.
`An act of direct patent infringement occurs when an entity “without authority . . .
`offers to sell, or sells any patented invention, within the United States . . .” 35 U.S.C.
`§ 271(a). An act of direct infringement also occurs when an entity “without authority . . .
`offers to sell, [or] sells . . . within the United States a product which is made by a process
`patented in the United States . . .” 35 U.S.C. § 271(g). “It is axiomatic that U.S. patent law
`does not operate extraterritorially to prohibit infringement abroad.” Power Integrations v.
`Fairchild Semiconductor Int’l, 711 F.3d 1348, 1371 (Fed. Cir. 2013) (“foreign exploitation
`of a patented invention . . . is not infringement at all”). The “general rule under United
`States patent law is that no infringement occurs when a patented product is made and sold
`in another country.” Microsoft Corp. v. AT & T Corp., 550 U.S. 437, 441 (2007).
`“[F]oreign law alone, not United States law, currently governs the manufacture and sale of
`components of patented inventions in foreign countries.” Id. at 456. “The presumption that
`United States law governs domestically but does not rule the world applies with particular
`force in patent law.” Id. at 454-455 (“The traditional understanding that our patent law
`operate[s] only domestically and do[es] not extend to foreign activities is embedded in the
`Patent Act itself.”) (alterations in original) (citation and quotation marks omitted).
`It is well established that direct infringement liability is “limited to infringing
`activities that occur within the United States.” MEMC Elec. Materials, Inc. v. Mitsubishi
`Materials Silicon Corp., 420 F.3d 1369, 1375 (Fed. Cir. 2005). “Mere knowledge that a
`product sold overseas will ultimately be imported into the United States is insufficient to
`establish liability under section 271(a).” Id. at 1377. Whether activities in the United
`States are sufficient to establish an “offer to sell” or “sale” within the meaning of § 271(a)
`may be resolved on summary judgment. Id. at 1375-1377 (affirming summary judgment of
`no direct infringement for product sales in Japan).
`In determining the location of a “sale” under § 271(a), the location of negotiation
`and contracting does not control; courts may also consider “other factors such as the place
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`of performance.” Transocean Offshore Deepwater Drilling, Inc. v. Maersk Contractors
`USA, Inc., 617 F.3d 1296, 1310 (Fed. Cir. 2010); see MEMC, 420 F.3d at 1377 (“[T]he
`criterion for determining the location of a “sale” under section 271(a) is not necessarily
`where legal title passes, because the ‘more familiar places of contracting and performance’
`may take precedence over the passage of legal title.”). The Federal Circuit has recently
`explained that a “sale” is “not deemed to have occurred within the United States for
`purposes 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 transaction
`occurred wholly outside the United States. For such a sale, one must examine whether the
`activities in the United States are sufficient to constitute a ‘sale’ under § 271(a),
`recognizing that a strong policy against extraterritorial liability exists in the patent law.”
`Halo, 769 F.3d at 1378. “[W]hen substantial activities of a sales transaction, including the
`final formation of a contract for sale encompassing all essential terms as well as the
`delivery and performance under that sales contract, occur entirely outside the United States,
`pricing and contracting negotiations in the United States alone do not constitute or
`transform those extraterritorial activities into a sale within the United States for purposes of
`§ 271(a).” Id. at 1379.
`The relevant facts concerning OmniVision’s direct infringement liability are largely
`undisputed. OmniVision designs image sensor chips (i.e., wafers) that are manufactured by
`TSMC Ltd. in Taiwan. See Dkt. 496. After the wafers are delivered to OmniVision or one
`of its vendors in Taiwan, OmniVision or one of its customers arranges for additional
`components to be added to the wafers by several different foreign entities in Asia.4 Id.
`Once the additional manufacturing steps are complete, the finished image sensors (i.e., the
`accused image sensors) are delivered to OmniVision’s customers. Id.; see Cisneros Decl.
`¶ 12, Dkt. 498-1. The vast majority of OmniVision’s sales of the accused image sensors
`are to third-party component integrators outside the United States, often for incorporation
`
`4 Neither TSMC entity performs any of the subsequent manufacturing steps. See
`Dkt. 496.
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`into end-user applications such as tablets and smartphones. Cisneros Decl. ¶¶ 6, 12-13.
`From December 6, 2010 to April 30, 2014, 99.98% of OmniVision’s revenue from
`its sales of the accused image sensors was derived from sales where a purchase order was
`issued to OmniVision’s foreign subsidiary in Hong Kong or Singapore, with delivery of the
`accused image sensors to a customer outside the United States. Cisneros Decl. ¶ 6.5 When
`a customer located outside the United States issues a purchase order to request the accused
`image sensors from OmniVision, it does so by sending the order to OmniVision’s foreign
`subsidiary in Singapore.6 Id. ¶ 10. OmniVision’s foreign subsidiary then issues sales
`orders and internal supply orders, and schedules manufacturing with TSMC Ltd. as needed
`to fill the order. Id. In most cases, OmniVision does not sell its products directly to
`branded consumer electronics companies such as
` Id. ¶ 13. Instead, OmniVision
`sells almost all of its accused image sensors directly to foreign manufacturers who build
`end-user products overseas for such companies. Id. Some of these products
`are subsequently imported and sold in various countries, including the United States. Id.
`Ziptronix contends that summary judgment is inappropriate because the evidence in
`the record establishes that OmniVision engages in substantial and actionable infringing
`sales and “support activity” within the United States related to OmniVision’s alleged “non-
`U.S. sales” of the accused image sensors. Ziptronix argues that a genuine issue of material
`fact exists as to whether such activities constitute sales within the United States in violation
`of § 271(a). In support of its position, Ziptronix asserts that the essential terms of the
`contract for the sale of the accused image sensors to
` foreign
`manufacturers are negotiated, established, and agreed upon by OmniVision and
`the United States, including an agreement regarding the specific pricing for specific
`products. Ziptronix further asserts that all of the material terms of the individual purchase
`
`5 The remaining 0.02% of OmniVision’s revenue over the same period was derived
`from sales where the sensors were delivered to a customer with a United States address.
`Cisneros Decl. ¶ 6. OmniVision does not move for summary judgment as to these sales.
`6 Prior to September 2012, this function was managed by an office in Hong Kong.
`Cisneros Decl. ¶ 10.
`
` in
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`orders issued by
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` foreign manufacturers are governed by
` as implemented through the
`7 established by OmniVision and
`
` on a
`during their meetings in the United States. According to Ziptronix, because the evidence in
`the record shows that material aspects of the contract are performed in the United States,
`summary judgment is inappropriate. The Court disagrees.
`In light of the strong presumption that United States patent law does not operate
`extraterritorially, Microsoft, 550 U.S. at 444, 454-455, the Court finds that the accused
`image sensors that are manufactured, shipped, and delivered for sale abroad fall outside the
`scope of United States patent law even though Ziptronix produced evidence showing that
`OmniVision engages in domestic marketing and contract activities related to the sale of the
`accused image sensors.8 See Halo, 769 F.3d at 1377-1381 (no direct infringement where
`accused products were manufactured, shipped, and delivered abroad because such conduct
`does not constitute “sale” within the United States in violation of U.S. patent law); see also
`Ion, Inc. v. Sercel, Inc., No. 5:06-CV-236-DF, 2010 WL 3768110, at *4 (E.D. Tex. Sept.
`16, 2010) (holding that devices manufactured and distributed abroad fall outside the scope
`of U.S patent law even though defendant quoted prices from its U.S. offices, orders were
`received in the U.S., and payment was received in the U.S. in U.S. dollars), aff’d, 464
`Fed.Appx. 901 (Fed. Cir. 2012); Quality Tubing, Inc. v. Precision Tube Holdings Corp., 75
`F.Supp.2d 613, 625 (S.D. Tex. 1999) (holding that the defendant, “as a matter of law,
`
`7 The
`is
`sensors. Iam
`cl.,
`representatives attend meetings on a
`to discuss the
` Id. at 89:11-90-3
`8 To the extent Ziptronix suggests that OmniVision’s knowledge that the accused
`image sensors will eventually be incorporated into products that will be imported and sold
`in the United States is relevant to the direct infringement inquiry, the Court disagrees.
`“Mere knowledge that a product sold overseas will ultimately be imported into the United
`States is insufficient to establish liability under section 271(a).” MEMC, 420 F.3d at 1377;
`see also Wing Shing Products (BVI), Ltd. v. Simatelex Manufactory Co., Ltd., 479
`F.Supp.2d 388, 405 (S.D.N.Y. 2007) (the fact that party had knowledge that another party
`was importing allegedly infringing goods into the U.S. does not create liability under
`§ 271(a)).
`
` for the accused image
`1. Typically, OmniVision
` facilities in the United States
`
` at
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`committed no act of infringement under section 271(a) or (g) by contracting, in the United
`States, to manufacture, sell, and deliver a product in Scotland and Norway, for use in
`Norway”). The Federal Circuit’s recent decision in Halo controls.
`In Halo, suppliers of electronic components, Pulse Electronics, Inc. and Pulse
`Electronics Corp. (collectively “Pulse”), were sued for patent infringement by Halo
`Electronics, Inc. (“Halo”). Halo, 769 F.3d 1371. While some of Pulse’s products were
`delivered by Pulse to customers in the United States, the majority of its products were
`delivered outside the United States to, among others, contract manufacturers for Cisco
`Systems Inc. (“Cisco”). Id. at 1375. Those contract manufacturers incorporated the
`electronic packages supplied by Pulse into end-user products overseas, which were then
`sold and shipped to consumers around the world, including consumers in the United States.
`Id. The district court granted summary judgment in favor of Pulse, finding that Pulse did
`not sell or offer to sell within the United States the accused products that Pulse
`manufactured, shipped, and delivered to buyers outside the United States. Id. at 1374. On
`appeal, the Federal Circuit held that “the district court did not err in granting summary
`judgment that Pulse did not sell within the United States those products that Pulse
`manufactured, shipped, and delivered abroad.” Id. at 1379-1381.
`In so holding, the Federal Circuit explained as follows:
`On undisputed facts, the products under discussion here were
`manufactured, shipped, and delivered to buyers abroad. . . . In
`addition, Pulse received the actual purchase orders for those
`products abroad. Although Pulse and Cisco had a general
`business agreement, that agreement did not refer to, and was not
`a contract to sell, any specific product. . . . 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, binding on both
`Cisco and Pulse. Instead, Pulse received purchase orders from
`Cisco’s foreign contract manufacturers, which then firmly
`established the essential terms including price and quantity of
`binding contracts to buy and sell. Moreover, Pulse was paid
`abroad by those contract manufacturers, not by Cisco, upon
`fulfillment of the purchase orders. Thus, substantial activities
`of the sales transactions at issue, in addition to manufacturing
`and delivery, occurred outside the United States. Although Halo
`did present evidence that pricing negotiations and certain
`contracting and marketing activities took place in the United
`States, which purportedly resulted in the purchase orders and
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`Case 4:10-cv-05525-SBA Document 529-2 Filed 03/10/15 Page 13 of 22Case 1:16-cv-00290-MN Document 145-1 Filed 12/05/18 Page 14 of 385 PageID #: 4416
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`sales overseas, as indicated, such pricing and contracting
`negotiations alone are insufficient to constitute a ‘sale’ within
`the United States.
`
`Halo, 769 F.3d at 1379