WesternGeco LLC v. ION Geophysical Corp. - 138 S. Ct. 2129 (2018)

Rule:

Taken together, 35 U.S.C.S. §§ 271(f)(2) and 284 allow patent owners to recover for lost foreign profits. Under § 284, damages are adequate to compensate for infringement when they place a patent owner in as good a position as he would have been in if the patent had not been infringed. Specifically, a patent owner is entitled to recover the difference between its pecuniary condition after the infringement, and what its condition would have been if the infringement had not occurred. This recovery can include lost profits. And, it can include lost foreign profits when the patent owner proves infringement under § 271(f)(2).

Facts:

Petitioner WesternGeco LLC was the owner of patents for a system used to survey the ocean floor. Respondent ION Geophysical Corp. began selling a competing system that was built from components manufactured in the United States, shipped to companies abroad, and assembled there into a system indistinguishable from WesternGeco's. WesternGeco sued for patent infringement under 35 U. S. C. §§271(f)(1) and (f)(2). The jury found ION liable and awarded WesternGeco damages in royalties and lost profits under §284. ION moved to set aside the verdict, arguing that WesternGeco could not recover damages for lost profits because §271(f) did not apply extraterritorially. The District Court denied the motion, but the Federal Circuit reversed, holding that §271(f) did not allow patent owners to recover for lost foreign profits.

Issue:

Under the circumstances, was petitioner allowed to recover for lost foreign profits?

Answer:

Yes.

Conclusion:

The Court held that the United States Court of Appeals for the Federal Circuit erred when it found that petitioner, which owned four patents relating to a system it developed for surveying the ocean floor, was not allowed under the Patent Act to recover damages from respondent. According to the Court, the case did not involve an extraterritorial application of 35 U.S.C.S. § 284 simply because lost-profits damages occurred extraterritorially and foreign conduct was necessary to give rise to the injury, 35 U.S.C.S. §§ 271(f)(2) and 284, taken together, allowed the petitioner to recover lost foreign profits, and the trial court's award of damages for lost foreign profits was a permissible domestic application of § 284.