Preliminary Negotiation or Commercial Offer for Sale?

LARRY G. JUNKER V. MEDICAL COMPONENTS, INC.

Before Dyk, Reyna, and Stoll. Appeal from United States District Court for the Eastern District of Pennsylvania.

Summary: A letter containing specific delivery conditions, risk allocations, and payment terms may constitute a commercial offer for sale despite being sent in response to a “request for quotation.”

Larry Junker sued Medical Components, Inc. for infringement of a design patent related to a catheter sheath. The parties filed cross-motions for summary judgment as to the issue of whether a letter sent before the critical date of the patent was a commercial offer for sale. In granting Mr. Junker’s motion for summary judgement of no invalidity, the district court determined that the letter was not a definite offer based on the multiple uses of the term “quotation.” After a bench trial, the court found infringement and awarded Mr. Junker damages.

The Federal Circuit reversed the district court’s grant of summary judgment of no invalidity. While acknowledging that the term “quote” can support a finding that a communication is not a definite offer, the Federal Circuit held that the mere presence of the term is not dispositive. The terms of a communication must be considered in their entirety when determining if the communication constitutes an offer for sale or merely an invitation to negotiate. In this case, the Federal Circuit found that the letter constituted an offer for sale because it contained pricing, delivery condition, and risk allocation terms—all terms necessary for an offer. The Court also noted that the letter was addressed specifically to one recipient, signaling that it was not an unsolicited price quotation. The presence of the necessary terms for an offer outweighed that the letter used the word “quote” on multiple occasions, was missing some quantity and product terms, and was sent in response to a “request for quotation.”

Editor: Paul Stewart

Written by: Timothy A. Trost & Nicole R. Townes