  United States Court of Appeals
      for the Federal Circuit
              __________________________

     TRANSOCEAN OFFSHORE DEEPWATER
             DRILLING, INC.,
             Plaintiff-Appellant,
                           v.
        MAERSK CONTRACTORS USA, INC.,
               Defendant-Appellee.
              __________________________

                      2009-1556
              __________________________

   Appeal from the United States District Court for the
Southern District of Texas in case No. 07-CV-2392, Judge
Kenneth M. Hoyt.
             ___________________________

                Decided: August 18, 2010
              ___________________________

   GREGORY A. CASTANIAS, Jones Day, of Washington,
DC, argued for plaintiff-appellant. With him on the brief
was THOMAS J. DAVIS.         Of counsel was KARLA R.
GOLDMAN. Of counsel on the brief were CHARLES B.
WALKER, JR., MICHAEL S. MCCOY and WARREN S. HUANG,
Fulbright & Jaworski L.L.P., of Houston, Texas.

   WILLIAM H. FRANKEL, Brinks Hofer Gilson & Lione, of
Chicago, Illinois, argued for defendant-appellee. With
him on the brief were GLEN P. BELVIS, MARK H. REMUS
TRANSOCEAN   v. MAERSK CONTRACTORS                       2


and DAVID P. LINDNER. Of counsel on the brief was LEE L.
KAPLAN, Smyser Kaplan & Veselka, L.L.P., of Houston,
Texas.
              __________________________

  Before, GAJARSA, MAYER, and MOORE, Circuit Judges.
MOORE, Circuit Judge.
    Transocean Offshore Deepwater Drilling, Inc. (Trans-
ocean) appeals from a final judgment of the U.S. District
Court for the Southern District of Texas. The district
court, on summary judgment, held that the asserted
claims of the patents-in-suit are invalid, not infringed,
and that defendant Maersk Contractors USA, Inc.
(Maersk USA) did not act willfully. For the reasons set
forth below, we reverse-in-part, vacate-in-part, affirm-in-
part, and remand.
                      BACKGROUND
    Transocean asserted claims 10-13 and 30 of U.S. Pat-
ent No. 6,047,781 (’781 patent), claim 17 of U.S. Patent
No. 6,068,069 (’069 patent), and claim 10 of U.S. Patent
No. 6,085,851 (’851 patent) against Maersk USA. The
patents-in-suit share a common specification. The patents
relate to an improved apparatus for conducting offshore
drilling. In order to exploit oil and other resources below
the sea floor, the disclosed rig must lower several compo-
nents to the seabed including the drill bit, casings (metal
tubes that create the wall of the borehole), and a blow-out
preventer (BOP) that sits atop the well to prevent rupture
during extended drilling. Id. col.8 l.40-col.9 l.30. The
structure for lowering these elements and rotating the
drill is called the derrick. Id. col.4 l.66-col.5 l.3. The
derrick includes a top drive to rotate the drill and draw-
works to move components (such as the drill, casing, and
3                      TRANSOCEAN   v. MAERSK CONTRACTORS


BOP) to and from the sea floor. Id. col.6 ll.52-61; col.7
ll.65-67.
    The derrick lowers and raises the drill bit and other
components on the drill string. The drill string is a series
of pipe sections, or “joints,” that the rig assembles on the
surface. To begin the drilling process, the rig lowers the
drill bit into the water toward the sea floor, adding more
and more pipe sections or “joints” to the top of the drill
string. For example, if the joints are each 30’ long, the
drawworks would lower the drill 30’ and then pause to
attach a new 30’ joint of pipe before proceeding. Once the
drill reaches the seabed, the top drive turns the drill
string to create the borehole. Again, when the drill bit
moves 30’ into the seabed, the rig must add a new joint of
pipe at the surface in order to continue drilling. Once the
drill bit creates a portion of the borehole, the derrick
retracts it to the surface. This means that the rig must
remove each joint of pipe it added during the drill’s de-
scent. This is a time-consuming process.
    Once the drill bit is back on the surface, the derrick
lowers a casing on another drill string, adding joints of
pipe in the same manner. The casing is a metal tube that
creates the wall of the borehole. Once the casing is in
place, cement is pumped down through the drill string
through and around the casing to hold it in place; the rig
then retracts the drill string. This casing forms the first
section of the borehole; the rig must drill through this
casing to greater depth to reach the oil reservoir. Before
the next round of drilling, the rig lowers a BOP on a large
diameter drill string called a riser. The BOP prevents oil
and gas from escaping from the borehole. The rig then
drills through the riser, BOP, and first casing to create a
new portion of the borehole that is smaller in diameter
than the first portion. The casing process occurs for this
new section and this entire process continues until the
TRANSOCEAN   v. MAERSK CONTRACTORS                           4


borehole resembles a telescope of several sections of
decreasing diameter.
     A conventional rig utilized a derrick with a single top
drive and drawworks. Because it could only lower one
element at a time, the rig performed the many steps
involved in drilling a well in series. Transocean at-
tempted to improve the efficiency of this time-consuming
process with the system described in the patents-in-suit.
The patents describe a derrick that includes two sta-
tions—a main advancing station and an auxiliary advanc-
ing station—that can each assemble drill strings and
lower components to the seabed. ’781 patent fig.2; col.3
ll.58-66. Each advancing station includes a top drive for
rotating the drill string and drawworks for raising and
lowering the drill string. The auxiliary advancing station
performs the initial drilling and casing. Id. col.9 l.66-
col.10 l.2. While the auxiliary advancing station cases the
first portion of the borehole, the main advancing station
lowers the BOP. Id. col.9 ll.21-23. Once the casing is
complete, the auxiliary advancing station retracts the
drill string and begins supporting the main advancing
station by preparing lengths of the drill string in advance.
See id. col.9 ll.25-30. For example, the auxiliary advanc-
ing station may take three or four joints of pipe, assemble
them, and set them aside so that while the main advanc-
ing station is lowering a drill bit or casing, it does not
have to connect every joint. Id. While the auxiliary
advancing station is performing this function, the main
advancing station is drilling and casing additional por-
tions of the well. Id. col.9 ll.35-40. This “dual-activity” rig
can significantly decrease the time required to complete a
borehole. Id. col.11 ll.56-67.
   Transocean appeals the district court’s grant of sum-
mary judgment of (1) invalidity of all asserted claims
based on obviousness and lack of enablement, (2) nonin-
5                      TRANSOCEAN      v. MAERSK CONTRACTORS


fringement, and (3) no willfulness. We have jurisdiction
under 28 U.S.C. § 1295(a)(1).
                       DISCUSSION
    We review a district court’s grant of summary judg-
ment de novo. ICU Med., Inc. v. Alaris Med. Sys. Inc., 558
F.3d 1368, 1374 (Fed. Cir. 2009). Summary judgment is
appropriate when, drawing all justifiable inferences in the
nonmovant’s favor, there exists no genuine issue of mate-
rial fact and the movant is entitled to judgment as a
matter of law. Fed. R. Civ. P. 56(c); Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 255 (1986).
                       I. Invalidity
    The district court held that all asserted claims are in-
valid. Claim 17 of the ’069 patent is an example of the
independent claims at issue:
    A multi-activity drilling assembly operable to be
    supported from a position above the surface of a
    body of water for conducting drilling operations to
    the seabed and into the bed of the body of water,
    said multi-activity drilling assembly including:

       a drilling superstructure operable to be
       mounted upon a drilling deck for simulta-
       neously supporting drilling operations for
       a well and operations auxiliary to drilling
       operations for the well;
       a first tubular advancing station con-
       nected to said drilling superstructure for
       advancing tubular members to the seabed
       and into the bed of body of water;
       a second tubular advancing station con-
       nected to said drilling superstructure for
TRANSOCEAN   v. MAERSK CONTRACTORS                        6


       advancing tubular members simultane-
       ously with said first tubular advancing
       station to the seabed and into the body of
       water to the seabed; and
       an assembly positioned adjacent to said
       first and second tubular advancing sta-
       tions operable to transfer tubular assem-
       blies between said first tubular advancing
       station and said second tubular advancing
       station to facilitate simultaneous drilling
       operations auxiliary to said drilling opera-
       tions, wherein drilling activity can be con-
       ducted for the well from said drilling
       superstructure by said first or second tu-
       bular advancing stations and auxiliary
       drilling activity can be simultaneously
       conducted for the well from said drilling
       superstructure by the other of said first or
       second tubular advancing stations.
The district court found the claims obvious under 35
U.S.C. § 103(a) and not enabled under 35 U.S.C.
§ 112 ¶ 1.
                     A. Obviousness

    A patent shall not issue “if the differences between
the subject matter sought to be patented and the prior art
are such that the subject matter would have been obvious
at the time the invention was made to a person having
ordinary skill in the art to which said subject matter
pertains.” 35 U.S.C. § 103(a); see KSR Int’l Co. v. Teleflex
Inc., 550 U.S. 398, 406-07 (2007). Obviousness is a ques-
tion of law with underlying fact issues. Id. at 427; Denni-
son Mfg. Co. v. Panduit Corp., 475 U.S. 809, 811 (1986).
What a particular reference discloses is a question of fact,
7                       TRANSOCEAN   v. MAERSK CONTRACTORS


see Para-Ordnance Manufacturing, Inc. v. SGS Imports
International, Inc., 73 F.3d 1085, 1088 (Fed. Cir. 1995), as
is the question of whether there was a reason to combine
certain references, see McGinley v. Franklin Sports, Inc.,
262 F.3d 1339, 1352 (Fed. Cir. 2001). Under the four part
test for obviousness detailed in Graham v. John Deere Co.
of Kansas City, 383 U.S. 1, 17-18 (1966), the court must
consider (1) the scope and content of the prior art; (2) the
difference between the prior art and the claimed inven-
tion; (3) the level of ordinary skill in the art; and (4) any
objective evidence of nonobviousness.          The objective
evidence relevant to this appeal includes industry skepti-
cism, long-felt industry need, commercial success, and
copying. See Agrizap, Inc. v. Woodstream Corp., 520 F.3d
1337, 1344 (Fed. Cir. 2008); Iron Grip Barbell Co. v. USA
Sports, Inc., 392 F.3d 1317, 1324 (Fed. Cir. 2005).
    Relevant to this appeal, the asserted claims generally
require (1) a first advancing station capable of advancing
tubular members to the seabed, (2) a second advancing
station also capable of advancing tubular members to the
seabed, and (3) a transfer assembly to move tubular
members between the first advancing station and the
second advancing station.
    The district court held that the claims would have
been obvious over two references: U.K. patent application
GB 2 041 836 to Horn (Horn) and U.S. Patent No.
4,850,439 to Lund (Lund). The parties did not dispute the
teachings of the references below. The district court noted
that Horn discloses a single derrick that supports two
advancing stations that each advance tubular members to
the seabed, but fails to disclose a transfer assembly that
will move tubular members between them. The district
court then noted that Lund discloses this missing ele-
ment. The court pointed to the transfer mechanism of
Lund that transfers pre-assembled pipe sections from a
TRANSOCEAN   v. MAERSK CONTRACTORS                      8


preparation station to an advancing station. The court
held that based on the undisputed teachings of these
references, the asserted claims would have been obvious
to one of ordinary skill in the art.
    Transocean argues on appeal that the combination of
Horn and Lund would not result in the claimed invention,
but in a rig with two advancing stations, two preparation
stations, and two transfer assemblies. Transocean also
argues that the claims would not have been obvious over
any combination with Horn because the claimed invention
must operate on a single well and Horn only discloses two
advancing stations operating on two wells.
    We agree that Horn and Lund establish a prima facie
case that the claims would have been obvious. In combi-
nation, Horn and Lund teach all of the limitations of the
claims, two advancing stations that can advance tubular
members to the seabed as well as a transfer assembly to
move tubular members between the stations. But it is
not enough to simply show that the references disclose the
claim limitations; in addition, “it can be important to
identify a reason that would have prompted a person of
ordinary skill in the art to combine the elements as the
new invention does.” KSR, 550 U.S. at 401. In this case,
the reason to combine comes directly from the Horn
reference. Discussing the benefits of combining two
advancing stations in a single derrick, Horn states “[o]f
other obvious advantages, there is the possibility of
concentrating common auxiliary equipment . . . .” Horn
p.1 ll.119-21. The transfer assembly of Lund is just the
type of “auxiliary” equipment that one could concentrate
for two advancing stations under a single derrick. 1 We

   1   Though it is not clear what the district court in-
tended when it stated: “[t]o be an invention, the combin-
ing of the timesavings element [sic] would need to be
9                      TRANSOCEAN   v. MAERSK CONTRACTORS


hold that the teachings of the references as well as this
reason to combine support a prima facie case that the
claims would have been obvious to one of ordinary skill in
the art.
    Transocean’s first argument that the combination
would result in two advancing stations, two preparation
stations, and two transfer assemblies asks us to improp-
erly turn the person of ordinary skill in the art into an
“automaton” that can only add pieces of prior art. See
KSR, 550 U.S. at 421. Transocean’s second argument
that Horn cannot render these claims obvious in any
combination is similarly unavailing. Horn and Lund in
combination, not individually, support the prima facie
case. It would have been obvious to one of ordinary skill
in the art that the dual well system of Horn could be
combined with the single well system of Lund to result in
two advancing stations operating on a single well with a
transfer assembly moving tubular members between
them.
    Although we hold that Horn in view of Lund present a
prima facie case of obviousness, this is not the end of the
analysis. At the district court, Transocean presented
significant objective evidence of nonobviousness. First,
Transocean presented evidence of industry skepticism. A
Transocean competitor, in an article discussing simulta-
neous drilling operations, stated that dual drill strings
would be a “radical departure” from conventional systems

expressed in a manner that distinguishes, mathematically
or scientifically, the time saved by comparing a Trans-
ocean rig from the time saved using other rigs that also
claim timesaving features,” we note that the focus must
be on whether the claimed invention would have been
obvious to one of skill in the art, not whether it is an
improvement over the prior art. Ryco, Inc. v. Ag-Bag
Corp., 857 F.2d 1418, 1424 (Fed. Cir. 1988).
TRANSOCEAN   v. MAERSK CONTRACTORS                        10


and that there was a high potential for underwater colli-
sion. Others in the field described dual activity as “not
being realistic” for the same reasons. Second, Transocean
presented evidence of industry praise for its dual activity
rig. An industry publication called the invention one of
the top 50 innovations in offshore drilling history. Trans-
ocean also cites other examples of praise from clients and
competitors, including Maersk USA. Third, Transocean
presented evidence that its implementation of the dual
activity invention has been a commercial success. It
showed that its dual activity rigs command a higher
licensing premium than standard rigs. Finally, Trans-
ocean presented evidence that the success of its invention
caused others to copy it, including Maersk USA.
     Maersk USA disputes each of these pieces of evidence
arguing that they do not have a nexus to the claimed
invention. Regarding industry skepticism, Maersk USA
points to several prior art references that described dual
side-by-side drill strings with no concern for collision. On
industry praise, Maersk USA argues that the relevant
articles and statements refer to the entire rig, not to the
dual activity of the invention specifically. On commercial
success, Maersk USA argues that Transocean negotiated
its licenses under threat of litigation and the terms are
not relevant. Finally, Maersk USA argues that there is
no evidence that any party copied the claimed invention,
only that others intended to implement some sort of dual
drilling system.
    In its opinion, the district court ignored this objective
evidence of nonobviousness. Though the court cites
Graham, it indicates that the court is required to consider
only the first three factors. Transocean Offshore Deepwa-
ter Drilling, Inc. v. Maersk Contractors USA, No. 07-2392,
D.I. 148, *16 (S.D. Tex. July 28, 2009) (Noninfringe-
ment/Invalidity Order). Transocean argues that this is
11                      TRANSOCEAN   v. MAERSK CONTRACTORS


reversible error asserting that a district court must con-
sider objective evidence of nonobviousness when a party
presents it. Maersk USA responds that we have consid-
ered this type of evidence for the first time on appeal in
prior cases and should do so here.
    We hold that the district court erred by failing to con-
sider Transocean’s objective evidence of nonobviousness.
Our case law is clear that this type of evidence “must be
considered in evaluating the obviousness of a claimed
invention.” Iron Grip, 392 F.3d at 1323; Ruiz v. A.B.
Chance Co., 234 F.3d 654, 667 (Fed. Cir. 2000); Richard-
son-Vicks, Inc. v. Upjohn Co., 122 F.3d 1476, 1483 (Fed.
Cir. 1997). While it is true that we have held in individ-
ual cases that objective evidence of nonobviousness did
not overcome the strong prima facie case – this is a case-
by-case determination. See Leapfrog Enters., Inc. v.
Fisher-Price, Inc., 485 F.3d 1157, 1162 (Fed. Cir. 2007);
Agrizap, 520 F.3d at 1344. To be clear, a district court
must always consider any objective evidence of nonobvi-
ousness presented in a case. Iron Grip, 392 F.3d at 1323;
Ruiz, 234 F.3d at 667; Richardson-Vicks, 122 F.3d at
1483.
    Maersk USA is correct that in at least one instance,
we considered this type of objective evidence for the first
time on appeal and held that the failure to consider it
below was not reversible error. See Iron Grip, 392 F.3d at
1324. But in the context of summary judgment, this is
only proper if, drawing all justifiable inferences in favor of
the patent owner, the objective evidence cannot rebut the
prima facie case. We decline to make that holding in this
case. If all of the factual disputes regarding the objective
evidence resolve in favor of Transocean, it has presented a
strong basis for rebutting the prima facie case. Viewing
the objective evidence of nonobviousness in a light most
TRANSOCEAN   v. MAERSK CONTRACTORS                       12


favorable to Transocean, we cannot hold that the claims
would have been obvious as a matter of law.
    Because of the failure to consider the objective evi-
dence of nonobviousness and because there are genuine
issues of material fact remaining, we reverse the grant of
summary judgment of invalidity based on obviousness.
                     B. Enablement

    Whether a claim satisfies the enablement require-
ment is a question of law that we review de novo. Sitrick
v. Dreamworks, LLC, 516 F.3d 993, 999 (Fed. Cir. 2008).
A patent specification must “contain a written description
of the invention . . . to enable any person skilled in the
art . . . to make and use the same.” 35 U.S.C. § 112, ¶1.
The specification must “enable one of ordinary skill in the
art to practice the claimed invention without undue
experimentation.” Nat’l Recovery Techs., Inc. v. Magnetic
Separation Sys., Inc., 166 F.3d 1190, 1196 (Fed. Cir.
1999). Enablement under § 112 is a question of law with
underlying questions of fact regarding undue experimen-
tation. Liebel-Flarsheim Co. v. Medrad, Inc., 481 F.3d
1371, 1377 (Fed. Cir. 2007); CFMT, Inc. v. Yieldup Int’l
Corp., 349 F.3d 1333, 1338 (Fed Cir. 2003).
    On summary judgment, the district court held that
the asserted claims did not satisfy the enablement re-
quirement because the specification does not include
sufficient description of the “assembly . . . operable to
transfer tubular assemblies” or “means . . . for transfer-
ring tubular assemblies.” It determined that one of
ordinary skill in the art could not practice the invention
without    undue      experimentation.          Noninfringe-
ment/Invalidity Order at *9. It relied on evidence regard-
ing Transocean’s difficulty in building its first commercial
embodiment of the claimed invention holding that “the
13                      TRANSOCEAN   v. MAERSK CONTRACTORS


specifications fail to inform as to how this new arrange-
ment works such that a person skilled in the art may take
advantage of the objective of the invention – timesaving.”
Id. The district court specifically faulted Transocean’s
failure to include the “programming” of the transport
mechanism and any required modifications to prior art
transfer mechanisms in the specification. Noninfringe-
ment/Invalidity Order at *10.
    Transocean argues that the court erred because there
is a genuine issue of material fact regarding undue ex-
perimentation. Transocean first argues that the state of
the prior art is relevant to enablement and affects the
level of experimentation that we will consider undue. See
In re Wands, 858 F.2d 731, 736-37 (Fed. Cir. 1988). It
argues that pipe transferring equipment was well-known
prior to filing the patent application as evidenced by
Maersk USA’s own expert, George Boyadjieff. 2             Mr.
Boyadjieff admitted that it would not be “complex,” nor
would it “take a lot of time” or “engineering effort” to alter
a prior art transfer assembly to transfer between two
advancing stations, as claimed, rather than an advancing
station and a storage area. J.A. 4897. Mr. Boyadjieff
agreed that it would be “trivial.” Id. Transocean argues
that this shows that rail-mounted transport was well-
known in the art and this should have precluded sum-
mary judgment of nonenablement.
    Transocean also argues that the district court erred
by requiring it to enable a commercial embodiment rather
than the claimed invention. CFMT, Inc., 349 F.3d at

     2 Mr. Boyadjieff testified in reference to his own
patent that disclosed a rail-mounted transfer assembly
between an advancing station and a storage area. Mr.
Boyadjieff is the former CEO of Varco International, Inc.,
the company that designed the pipe handling system for
Transocean’s own implementation of the patented system.
TRANSOCEAN   v. MAERSK CONTRACTORS                       14


1338. It claims that 35 U.S.C. § 112 only requires that it
enable “any mode of making and using the claimed inven-
tion.” Engel Indus., Inc. v. Lockformer Co., 946 F.2d 1528,
1533 (Fed. Cir. 1991).
     Maersk USA argues that the district court is correct
and that the invention is not enabled because it would
require one of ordinary skill in the art to engage in undue
experimentation to practice the invention as a matter of
law. Nat’l Recovery Techs., 166 F.3d at 1196. Maersk
USA relies heavily on Transocean’s attempts to build the
first commercial embodiment of the claimed invention.
Maersk USA argues that Transocean contracted with
Varco International, Inc. (Varco) to build this embodiment
because the inventors did not know how to construct the
transferring equipment. Maersk USA points to inventor
testimony that the embodiment included “software they
had never done before,” and open issues such as “the
weight it could handle,” “the speed it could travel,” “the
hoisting range we needed,” “the size of the tubular it could
handle,” and “the capability to rotate without friction.”
J.A. 3999.
     We agree with Transocean that factual issues regard-
ing undue experimentation remain in this case that
preclude summary judgment of no enablement. As an
initial matter, the district court erred in requiring Trans-
ocean to enable the invention to allow a person of ordi-
nary skill in the art to take advantage of the “timesaving”
aspect of the invention. A patent specification only must
enable one of ordinary skill in the art “to practice the
claimed invention without undue experimentation.” Nat’l
Recovery Techs., 166 F.3d at 1196. It is not required to
enable the most optimized configuration, unless this is an
explicit part of the claims. In the present case, transfer-
ring tubular members from one location to another may
be enabled by simply disclosing the use of a crane or a
15                      TRANSOCEAN   v. MAERSK CONTRACTORS


rail-mounted system. It is irrelevant whether the ena-
bling disclosure would provide the most efficient transfer.
In requiring disclosure of “programming” and relying on
the difficulty of constructing Transocean’s first dual
activity rig, the district court erroneously required Trans-
ocean to enable the most efficient commercial embodi-
ment, rather than the claims. CFMT, Inc., 349 F.3d at
1338.
    The court also erred in its determination that there is
no genuine issue of material fact regarding undue ex-
perimentation. The parties do not dispute that the specifi-
cation discloses two different types of transfer
mechanism: a rail-mounted system and a crane. ’781
patent, col.7 ll.21-26, 53-55; fig.7. But the parties heavily
dispute whether the development of the transfer equip-
ment would be “trivial,” or a much more complex task
based on the evidence presented below. Drawing all
justifiable inferences in favor of Transocean, we cannot
agree with the district court that these claims are not
enabled as a matter of law. Therefore, we reverse the
grant of summary judgment.
                     II. Infringement
    The infringement issues in this case are unusual and
require a discussion of the factual background. Trans-
ocean accused Maersk USA’s DSS-21 rig of infringement.
Maersk USA’s Danish parent company, Maersk A/S,
contracted with Keppel FELS Ltd. in 2005 to build the
accused rig in Singapore. Later, Maersk A/S negotiated
with Statoil ASA (a Norwegian company) for Statoil’s use
of the accused rig. The companies came to an agreement
for use of the rig and Maersk USA and Statoil Gulf of
Mexico LLC (Statoil), a Texas Corporation, signed a
contract in Norway. The contract specified that the
“Operating Area” for the rig was the U.S. Gulf of Mexico
TRANSOCEAN   v. MAERSK CONTRACTORS                       16


but that Statoil had the right to use the rig outside the
Operating Area with certain limitations. J.A. 7167; 7211.
    The contract also included mention of Transocean’s
U.S. patents. Maersk USA specifically retained the right
to make “alterations” to the accused rig “in view of court
or administrative determinations throughout the world.”
J.A. 7190. One of these “determinations” came when
Transocean asserted the same patent claims in this case
against another competitor, GlobalSantaFe Corp. (GSF).
Transocean prevailed in that case and the court issued an
injunction requiring GSF to install a “casing sleeve” on
one of its two advancing stations. Transocean Offshore
Deepwater Drilling, Inc. v. GlobalSantaFe Corp., No. H-
03-2910, 2006 U.S. Dist. LEXIS 93408 (S.D. Tex. Dec. 27,
2006). This casing sleeve prevents the auxiliary advanc-
ing station from lowering a drill string into the water. Id.
at *32-34. The district court in GSF held that this avoids
infringement because the cased advancing station can no
longer advance tubes to the seabed as the independent
claims require. Before delivering the rig to the U.S.,
Maersk USA learned of the injunction against GSF and
modified the accused rig with the same casing sleeve to
prevent one of the stations from advancing pipes to the
seabed.
    The district court granted summary judgment of non-
infringement after determining that there was no sale or
offer to sell under 35 U.S.C. § 271(a). 3 Transocean Off-
shore Deepwater Drilling, Inc. v. Maersk Contractors USA,

   3   The district court addressed infringement in two
orders. First, it determined that the contract between
Maersk USA and Statoil was not a sale or offer to sell
under § 271(a) in its order granting summary judgment of
no willfulness entered May 15, 2009. It resolved all
remaining infringement issues in an order entered July
28, 2009.
17                      TRANSOCEAN   v. MAERSK CONTRACTORS


No. 07-2392, D.I. 148, *8-9 (S.D. Tex. May 15, 2009)
(Willfulness Order). The court relied on the undisputed
facts that the negotiation and signing of the contract took
place outside the U.S. and that the contract gave Maersk
the option to alter the rig to avoid infringement. Id. The
district court also held that Transocean was collaterally
estopped from arguing that the modified rig that Maersk
USA delivered to Statoil (that included the casing sleeve
to prevent advancing tubular members to the seabed)
infringed the patent claims because this design was
adjudicated as noninfringing in the GSF litigation.
Noninfringement/Invalidity Order at *12.
                         A. Offer to Sell

    Section 271(a) defines infringing conduct: “whoever
without authority makes, uses, offers to sell, or sells any
patented invention, within the United States. . . infringes
the patent.” 35 U.S.C. § 271(a). An offer to sell is a
distinct act of infringement separate from an actual sale.
An offer to sell differs from a sale in that an offer to sell
need not be accepted to constitute an act of infringement.
See MEMC Elec. Materials, Inc. v. Mitsubishi Materials
Silicon Corp., 420 F.3d 1369, 1376 (Fed. Cir. 2005).
Moreover, the damages that would flow from an unac-
cepted offer to sell and an actual sale would likely be
quite different. See Timothy R. Holbrook, Liability for the
“Threat of Sale”: Assessing Patent Infringement for Offer-
ing to Sell an Invention and Implications for the On-Sale
Patentability Bar and other Forms of Infringement, 43
Santa Clara L. Rev. 751, 791-92 (2003). We analyze an
offer to sell under § 271(a) using traditional contract
principles. Rotec Indus., Inc. v. Mitsubishi Corp., 215
F.3d 1246 (Fed. Cir. 2000). There is no dispute that there
was an offer to sell in this case, but Maersk USA argues
TRANSOCEAN   v. MAERSK CONTRACTORS                         18


that the offer was made in Norway, not the United States,
thereby absolving it of § 271(a) liability.
    Maersk A/S (a Danish company) and Statoil ASA (a
Norwegian company) negotiated the contract that is the
subject of this alleged offer to sell. Their U.S. affiliates,
Maersk USA and Statoil executed the contract in Norway.
The contract included an “Operating Area” of the U.S.
Gulf of Mexico. The district court held that because the
negotiations and execution took place outside the U.S.,
this could not be an offer to sell within the United States
under § 271(a).
    Transocean argues that to hold that this contract be-
tween two U.S. companies for performance in the U.S. is
not an offer to sell within the U.S. simply because the
contract was negotiated and executed abroad would be
inconsistent with Lightcubes, LLC v. Northern Light
Products, Inc., 523 F.3d 1353 (Fed. Cir. 2008) (holding
that a foreign company cannot avoid liability for a sale by
delivering the product outside the U.S. to a U.S. customer
for importation). Transocean argues that a contract
between two U.S. companies for delivery or performance
in the U.S. must be an offer to sell within the United
States under § 271(a).
    Maersk USA argues that Rotec, 215 F.3d 1246 and
MEMC, 420 F.3d 1369 require that, for there to be an
offer to sell within the U.S., the offer activities must occur
within the U.S. It argues that the negotiations and
execution outside the U.S. preclude offer to sell liability in
this case.
    This case presents the question whether an offer
which is made in Norway by a U.S. company to a U.S.
company to sell a product within the U.S., for delivery
and use within the U.S. constitutes an offer to sell within
the U.S. under § 271(a). We conclude that it does. Sec-
19                      TRANSOCEAN   v. MAERSK CONTRACTORS


tion 271(a) states that “whoever . . . offers to sell . . .
within the United States any patented invention . . .
infringes.” In order for an offer to sell to constitute in-
fringement, the offer must be to sell a patented invention
within the United States. The focus should not be on the
location of the offer, but rather the location of the future
sale that would occur pursuant to the offer.
    The offer to sell liability was added to the patent stat-
ute to conform to the April 1994 Uruguay Round’s Trade-
Related Aspects of Intellectual Property Agreement
(TRIPS). The underlying purpose of holding someone who
offers to sell liable for infringement is to prevent “generat-
ing interest in a potential infringing product to the com-
mercial detriment of the rightful patentee.” 3D Sys., Inc.
v. Aarotech Labs., Inc., 160 F.3d 1373, 1379 (Fed. Cir.
1998). The offer must be for a potentially infringing
article. Id. We are mindful of the presumption against
extraterritoriality. Microsoft Corp. v. AT&T Corp., 550
U.S. 437, 441 (2007). “It is the general rule under United
States patent law that no infringement occurs when a
patented product is made and sold in another country.”
Id. This presumption has guided other courts to conclude
that the contemplated sale would occur within the United
States in order for an offer to sell to constitute infringe-
ment. See, e.g., Semiconductor Energy Lab. Co. v. Chi Mei
Optoelectronics Corp., 531 F. Supp. 2d 1084, 1110-11
(N.D. Cal. 2007). We agree that the location of the con-
templated sale controls whether there is an offer to sell
within the United States.
    The statute precludes “offers to sell . . . within the
United States.” To adopt Maersk USA’s position would
have us read the statute as “offers made within the
United States to sell” or “offers made within the United
States to sell within the United States.” First, this is not
the statutory language. Second, this interpretation would
TRANSOCEAN   v. MAERSK CONTRACTORS                           20


exalt form over substance by allowing a U.S. company to
travel abroad to make offers to sell back into the U.S.
without any liability for infringement. See 3D Sys., 160
F.3d at 1379. This company would generate interest in its
product in the U.S. to the detriment of the U.S. patent
owner, the type of harm that offer to sell within the U.S.
liability is meant to remedy. Id. These acts create a real
harm in the U.S. to a U.S. patentee.
    Neither Rotec nor MEMC preclude our determination
that an offer by a U.S. company to sell a patented inven-
tion to another U.S. company for delivery and use in the
U.S. constitutes an offer to sell within the U.S. First,
SEB S.A. v. Montgomery Ward & Co., 594 F.3d 1360, 1375
(Fed. Cir. 2010) contemplated whether the territorial
reach of the offer to sell language had been decided by
Rotec and concluded that it had not. The defendants in
Rotec did argue that because the offer was made in China,
not the U.S., they did not infringe. Rotec, 215 F.3d at
1251. And the Rotec court discussed the evidence regard-
ing meetings and communications made in the United
States. Id. at 1255. The Rotec court held that there was
no offer to sell, not because of the location of the offer or of
the ultimate sale, but rather because there was no evi-
dence that an offer was communicated or conveyed by the
defendants. Id. at 1255 (“None of this evidence, however,
establishes any communication by Defendants with any
third party.”). In concurrence, Judge Newman indicates
that she would have instead decided the case on the
ground that there was no offer which contemplated a sale
within the U.S. Id. at 1259 (Newman, J., concurring).
The MEMC case is even further attenuated as it did not
even consider location of the offer or the contemplated
sale, but instead held there was no offer to sell because
the emails at issue, which contained only technical data
and no price terms, cannot constitute an offer that could
21                      TRANSOCEAN   v. MAERSK CONTRACTORS


be made into a binding contract by acceptance. 420 F.3d
at 1376.
    We conclude that neither Rotec nor MEMC control
this case. We hold that the district court erred because a
contract between two U.S. companies for performance in
the U.S. may constitute an offer to sell within the U.S.
under § 271(a). The fact that the offer was negotiated or a
contract signed while the two U.S. companies were abroad
does not remove this case from statutory liability. We
therefore vacate the district court’s summary judgment of
noninfringement. 4
                              B. Sale

    The parties begin with the same territoriality argu-
ment presented in the context of an offer to sell. Trans-
ocean argues that a contract between two U.S. companies
for performance in the U.S. constitutes a sale under
§ 271(a). Maersk USA responds that this cannot be a sale
within the U.S. because all negotiations and execution of
the contract took place in Norway and the contract did not
provide for performance only in the U.S.



     4   We note that because the district court held that
the location of the offer in this case removed it from the
statute as a matter of law, it never reached the factual
issue of whether the subject of the offer to sell was of a
“patented invention” by analyzing the design of the rig.
Of course, in this analysis, the district court must deter-
mine what was offered for sale, not what was ultimately
delivered. See Holbrook, supra, at 753. In other words, it
does not affect this analysis that Maersk USA eventually
altered the design prior to delivery; the subject of the offer
to sell was the unmodified rig. The district court must
determine whether this unmodified rig was “the patented
invention.” We decline to perform this analysis in the
first instance on appeal.
TRANSOCEAN   v. MAERSK CONTRACTORS                        22


    The parties further dispute whether the device that
was sold was “the patented invention.” Transocean
argues that we should analyze infringement based on the
schematics that accompanied the contract. Maersk USA
argues that this was not an infringing sale because it
reserved the right to alter the rig to avoid infringement.
Finally, Maersk USA argues this cannot be a sale under
§ 271(a) because the rig was not complete at the time of
contracting. It argues that “in order for there to have
been a sale within the meaning of 35 U.S.C. § 271(a), the
entire apparatus must have been constructed and ready
for use,” citing Ecodyne Corp. v. Croll-Reynolds Engineer-
ing, 491 F. Supp. 194, 197 (D. Conn. 1979).
    As with the offer to sell, we hold that a contract be-
tween two U.S. companies for the sale of the patented
invention with delivery and performance in the U.S.
constitutes a sale under § 271(a) as a matter of law.
Maersk USA’s first argument, that the location of nego-
tiation and contracting should control is contrary to our
precedent in Lightcubes. There, we held that a sale does
not only occur at a “single point where some legally opera-
tive act took place.” Lightcubes, 523 F.3d at 1369-70. We
may also consider other factors such as the place of per-
formance. Id. at 1371. Maersk USA’s argument that
Statoil could use the rig outside the U.S. ignores the plain
language of the contract, which includes an “Operating
Area” of the U.S. Gulf of Mexico. J.A. 7167. It also ig-
nores the fact that Maersk did in fact deliver the rig to
U.S. waters. Maersk USA’s remaining arguments regard-
ing the right to alter the final design and the fact that the
rig was not complete at the time of contracting do not
change the result. Maersk USA and Statoil signed a
contract and the schematics that accompanied that con-
tract could support a finding that the sale was of an
infringing article under § 271(a). The fact that Maersk
23                     TRANSOCEAN   v. MAERSK CONTRACTORS


USA, after the execution of the contract, altered the rig in
response to the GSF injunction is irrelevant to this in-
fringement analysis. The potentially infringing article is
the rig sold in the contract, not the altered rig that
Maersk USA delivered to the U.S.
    Finally, we reject Maersk USA’s claim that the entire
apparatus must have been constructed and ready for use
in order to have been sold. Our precedent establishes
that a contract can constitute a sale to trigger infringe-
ment liability. See NTP, Inc. v. Research in Motion, Ltd.,
418 F.3d 1282, 1319 (Fed. Cir. 2005). A “sale” is not
limited to the transfer of tangible property; a sale may
also be the agreement by which such a transfer takes
place. Id. In this case, there was a contract to sell a rig
that included schematics. On summary judgment, we
must draw all justifiable inferences in favor of the non-
movant, Transocean.       Transocean argues that these
schematics show sale of the patented invention. This is a
genuine issue of material fact sufficient to withstand
summary judgment.
    We conclude that the district court erred in granting
summary judgment that there was no sale within the U.S.
in this case. As with the offer to sell, there remains a
dispute over whether the unmodified rig that was sold
was the patented invention, a question not reached by the
district court thus far.
                  C. Collateral Estoppel

    We analyze collateral estoppel under the law of the
regional circuit. Applied Med. Res., Corp. v. U.S. Surgical
Corp., 435 F.3d 1356, 1359-60 (Fed. Cir. 2006). To apply
collateral estoppel to an issue, it must 1) be identical in
the two actions, 2) have been actually litigated in the
prior action, and 3) have been necessary to the judgment
TRANSOCEAN   v. MAERSK CONTRACTORS                        24


in the prior action. Next Level Commc’ns LP v. DSC
Commc’ns Corp., 179 F.3d 244, 250 (5th Cir. 1999). The
parties only dispute the first element, that the two issues
are identical in the two actions.
    Transocean argues that the issues are not identical in
this case and the GSF litigation because there are differ-
ences in the facts and the legal standards. It argues that
there is a factual distinction between the cases because
Maersk USA is not implementing all parts of the injunc-
tion. Specifically, while Maersk USA installed the casing
sleeve that the GSF court found to avoid infringement, it
refuses to abide by other requirements of the injunction
such as the limited circumstances in which GSF could
remove the casing sleeve and periodic reporting to Trans-
ocean regarding the use of the rig. Transocean also
argues that the legal standards are different in an injunc-
tion determination and a determination of infringement.
    Maersk USA responds that these differences are ir-
relevant because they do not relate to the holding by the
GSF court that the modified rig does not infringe. It
argues that the only facts relevant to collateral estoppel
in this case relate to the GSF court’s holding on infringe-
ment. Specifically, the court in the GSF litigation held
that this modification avoids infringement. Transocean
Offshore Deepwater Drilling, Inc., 2006 U.S. Dist. LEXIS
93408, at *34. Maersk USA argues that this is the identi-
cal issue in this case and that Transocean cannot now
argue that this modified design infringes.
    We agree with Maersk USA that the infringement is-
sue in this case is identical to the one in GSF. Although
Transocean is correct that Maersk USA does not conform
to all aspects of the injunction, it does conform to the only
relevant condition, the noninfringing design. The other
portions of the injunction do not relate to infringement
25                     TRANSOCEAN   v. MAERSK CONTRACTORS


and do not change the fact that the modified rig does not
infringe. For example, the GSF injunction requires GSF
to report periodically on its use of the rig. Whether GSF
provides these reports only goes to its compliance with the
injunction, not whether the rig is infringing. In other
words, if GSF keeps the casing sleeve in place, but fails to
report, it will not change the noninfringing design to an
infringing one. By implementing this design, Maersk
USA is not infringing with the delivered rig. Trans-
ocean’s argument regarding the legal standards is simi-
larly unavailing. Although it is true that the GSF court
performed its analysis in the context of an injunction, it
determined that the modified rig did not infringe.
    We hold that the district court did not err in holding
that Transocean is collaterally estopped from arguing
that the rig modified in accordance with the GSF injunc-
tion infringes any of the asserted claims. On remand,
Transocean may argue that the unmodified design (with-
out the casing sleeve) was the subject of the Maersk
USA/Statoil contract and that therefore there is infringe-
ment of the asserted claims based on both a sale and offer
to sell. Transocean, however, is estopped from arguing
infringement by the modified rig that Maersk USA actu-
ally delivered to the U.S.
                      D. Willfulness

    “Proof of willful infringement . . . requires at least a
showing of objective recklessness.” In re Seagate Tech.,
LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007) (en banc). The
patent owner “must show by clear and convincing evi-
dence that the infringer acted despite an objectively high
likelihood that its actions constituted infringement of a
valid patent.” Id. (citing Safeco Ins. Co. of Am. v. Burr,
551 U.S. 47 (2007)). This objective standard is a thresh-
old. Once met, the patentee must show that the infringer
TRANSOCEAN   v. MAERSK CONTRACTORS                     26


knew or should have known of the objectively high risk.
Seagate, 497 F.3d at 1371.
    The district court granted summary judgment of no
willfulness. The court held that because Maersk USA
modified its design to conform to the GSF injunction, it
could not be “objectively reckless,” and thus could not be
willful as a matter of law. Willfulness Order at *9.
    Transocean argues that the district court erred by
looking only to Maersk USA’s conduct after the modifica-
tion to conform to the GSF injunction. It asserts that at
the time of the contract between Statoil and Maersk USA,
Maersk USA knew of the patents-in-suit and acted objec-
tively recklessly by proceeding with the contract. It
points to the contract that allowed Maersk USA to make
changes to the rig pending the outcome of any “court or
administrative determinations that favour the validity or
infringement arguments of Transocean” related to Trans-
ocean’s patents, including the patents-in-suit. J.A. 7190-
91. Transocean argues that this shows that Maersk USA
knew of the patents-in-suit and ignored an objectively
high likelihood that it infringed. Transocean also argues
that an internal Maersk memorandum that discusses the
Transocean dual activity rig is evidence of copying that
supports its case for willful infringement.
    Maersk USA argues that its decision to modify the rig
according to the GSF injunction shows that Maersk USA
purposely avoided any potential infringement and this
should preclude a finding of willfulness as a matter of
law. Regarding copying, Maersk USA argues that there is
no evidence that it copied a design that it knew was
patented and that, regardless, it took steps to avoid
infringement with the modified rig once the GSF court
entered its injunction.
27                     TRANSOCEAN   v. MAERSK CONTRACTORS


     We agree with the district court that, as a matter of
law, there is no willfulness. Although the contract does
show that Maersk USA knew of Transocean’s patents, it
also shows intent to avoid infringement. Maersk USA
reserved the right to modify the rig in response to any
court proceeding that favored “the validity or infringe-
ment arguments of Transocean.” J.A. 7190. In fact,
Maersk USA did modify its rig once the court in the GSF
litigation issued an injunction defining a noninfringing
alternative. We hold, as a matter of law, that Maersk's
actions were not objectively reckless and thus affirm the
district court’s holding of no willfulness.
                      CONCLUSION
    Because there remain genuine issues of material fact
regarding objective evidence of nonobviousness and undue
experimentation, the grant of summary judgment relating
to obviousness and enablement is reversed. Because the
contract between Statoil and Maersk USA is both an offer
to sell and a sale, we vacate the district court’s summary
judgment of noninfringement and remand for further
findings on infringement based on the rig that was the
subject of this contract. We affirm the district court’s
holding of summary judgment of no willfulness.
     REVERSED-IN-PART, VACATED-IN-PART,
      AFFIRMED-IN-PART, and REMANDED
