Overview

Collateral (secondary) sales are either sales made with a patented device or sales made subsequent to the initial purchase of a patented device.

The expression convoyed sales should preferably be limited to sales made simultaneously with a basic item; the spare parts here should best be called derivative sales.

— Carborundum Co. v. Molten Metal Equipment Innovations, Inc., 72 F.3d 872, 881 n.8 (Fed. Cir. 1995).

Collateral sales that are sold with the patented item are also called convoyed sales. For example, parts that are packaged with a patented device may be convoyed sales.

Of the infringing VPRo I sales, $387,931 was allocated to lost profits from diverted sales of American Seating's patented tie-down restraint system, and $971,681 was allocated to lost profits from diverted collateral sales of accompanying passenger seats.

— American Seating Co. v. USSC Group, Inc., 514 F. 3d 1262, 1266 (Fed. Cir. 2008).

Collateral sales that are sold after an initial sale are called derivative sales. For example, replacement parts may be derivative sales.

In addition to selling pumps, Metaullics sells replacement parts for its pumps. Because a portion of the pump is submerged in molten metal, certain parts of the pump must be made of a nonmetallic material, such as graphite or ceramic. Although these parts are more durable in molten metal than metal parts, they still require frequent replacement.”

— Carborundum v. Molten Metal Equipment Innovations, 72 F. 3d 872, 876 (Fed. Cir. 1995).