By Jason Rantanen
WesternGeco LLC v. Ion Geophysical Corp. (2018), 2018 U.S. LEXIS 3842 Download Opinion
Majority: Thomas (author), Roberts, Kennedy, Ginsburg, Alito, Sotomayor, and Kagan. Dissent: Gorsuch, joined by Breyer.
In its final patent-related opinion of this term, the Supreme Court held that 35 U.S.C. § 284 permits the award of lost foreign profits. In reaching its conclusion, the Court rejected the position of the Federal Circuit that the presumption against extraterritoriality precluded the award. Full disclosure: I joined an amicus brief written by Emory Professor Timothy Holbrook that argued that the presumption against extraterritoriality applied here.
From pages 7-8 of the majority opinion:
In sum, the focus of §284, in a case involving infringement under §271(f)(2), is on the act of exporting components from the United States. In other words, the domestic infringement is “the objec[t] of the statute’s solicitude” in this context. Morrison, 561 U. S., at 267. The conduct in this case that is relevant to that focus clearly occurred in the United States, as it was ION’s domestic act of supplying the components that infringed WesternGeco’s patents. Thus, the lost-profits damages that were awarded to WesternGeco were a domestic application of §284.
The Court expressly declined to address the issue of proximate causality, which as Tom Cotter points out, would seem to provide an important limitation on the abilities of patent owners to obtain lost profits for § 271(f)(2) infringement. Slip Op. at 9, n. 3 (“In reaching this holding, we do not address the extent to which other doctrines, such as proximate cause, could limit or preclude damages in particular cases.”). Given all this, I expect that parties will now focus heavily on proximate cause issues when arguing about remedies for § 271(f)(2) liability.
Tom Cotter has a detailed post about the decision on his Comparative Patent Remedies blog.