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Will the Supreme Court Seismically Shift the Patent Damages Landscape in <i>WesternGeco v. ION</i>?
The U.S. Supreme Court recently agreed to consider whether a patentee may recover foreign lost profits resulting from infringement of a United States patent.
In WesternGeco LLC v. ION Geophysical Corp., the Federal Circuit vacated the lost profits portion of a damages award because the profits resulted from activity on the high seas, outside the territorial reach of United States patent law. 791 F.3d 1340, 1349 (Fed. Cir. 2015) [WesternGeco I], vacated on other grounds, 136 S. Ct. 2486 (2016). The majority opinion billed the decision as largely dictated by settled precedent, but the Supreme Court granted certiorari this January to review the holding.
The specific issue is whether profits earned overseas with a patented invention may be recovered by the patentee if components of that invention were exported from the United States in violation of Section 271(f). The Supreme Court's agreement to consider the case could signal an impending expansion of the territorial damages in patent cases. A decision is expected by the end of June.
Statutory Background
Incurring Liability for 'Overseas' Infringement
At the center of a typical patent infringement case usually lie allegations of infringement under 35 U.S.C. §271(a), which provides that making, using, offering to sell, or selling a patented invention within the United States is infringement of a patent. To establish infringement under that commonly invoked provision, a patentee must prove unauthorized products or processes in the United States that meet each element of a patent claim — for example, the sale of a device in California that meets each limitation of an apparatus claim or the use of a process in New York that uses each step of a method claim.
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