by Dennis Crouch
The Supreme Court has granted writ of certiorari in the international-patent-damages case WesternGeco LLC (Schlumberger) v. ION Geophysical Corp., Docket No. 16-1011.
In December I outlined the case:
The lawsuit is related to WesternGeco’s patents on marine seismic surveys. Adjudged infringer ION manufactures components of the system in the US, for assembly and use “on the high seas.” A jury found liability under 271(f) – exporting components of a patented invention for assembly abroad. The jury also awarded the patentee $12.5 million in reasonable royalties in addition to $93.4 million in lost profits based upon specific competitive contracts lost. On appeal though, the Federal Circuit ruled that lost profits were inappropriate here because they were based upon the assembly-abroad and activities outside of the U.S. jurisdiction.
The case raises the following question:
Under 35 U.S.C. § 271(f), it is an act of patent infringement to supply “components of a patented invention,” “from the United States,” knowing or intending that the components be combined “outside of the United States,” in a manner that “would infringe the patent if such combination occurred within the United States.”
Under 35 U.S.C. § 284, patent owners who prevail in litigation are entitled to “damages adequate to compensate for the infringement.”
In this case, despite affirming that Respondent was liable for infringement under § 271(f), the majority of a divided panel of the court of appeals held that Petitioner was not entitled to lost profits caused by the proscribed combination. The court of appeals reasoned
that even when Congress has overridden the
presumption against extraterritorial application of the law in creating liability, the presumption must be applied a second time to restrict damages.
The question presented is:
Whether the court of appeals erred in holding that lost profits arising from prohibited combinations occurring outside of the United States are categorically unavailable in cases where patent infringement is proven under 35 U.S.C. § 271(f).
As rephrased by the respondent, the question is stated:
Whether this Court should overrule Microsoft v. AT&T and eliminate the presumption against extraterritoriality so that infringers are subject to damages under § 284 based on non-infringing foreign use by third parties.
And finally, as stated by the U.S. Government, the question is as follows:
The Patent Act of 1952, 35 U.S.C. 1 et seq., provides that, when a patent owner prevails in an infringement action, “the court shall award the claimant damages adequate to compensate for the infringement.” 35 U.S.C. 284. Such damages may include lost profits that the patent owner would have earned but for the infringement. Yale Lock Mfg. Co. v. Sargent, 117 U.S. 536, 552-553 (1886).
The question presented is as follows:
Whether a patentee that has proved a domestic act of patent infringement may recover lost profits that it would have earned outside of the United States if the infringement had not occurred.