Scarinci Hollenbeck, LLC, LLCScarinci Hollenbeck, LLC, LLC

Firm Insights

Supreme Court to Address International Patent Damages

Author: Scarinci Hollenbeck, LLC

Date: April 11, 2018

Key Contacts

Back

SCOTUS To Address International Patent Damages in WesternGeco LLC (Schlumberger) v. ION Geophysical Corp.

The U.S. Supreme Court recently granted certiorari in WesternGeco LLC (Schlumberger) v. ION Geophysical Corp. The key question before the Court is whether lost profits incurred outside of the United States are recoverable in patent infringement cases.

SCOTUS To Address International Patent Damages
Photo courtesy of Matteo Bernardis (Unsplash.com)

Recovering Patent Damages 

Under the Patent Act of 1952, when a patent owner prevails in an infringement action, “the court shall award the claimant damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer.” 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).

Issues in WesternGeco LLC (Schlumberger) v. ION Geophysical Corp.

WesternGeco developed and patented technology used in geological surveys to search for oil and gas under the ocean floor. In late 2007, ION Geophysical Corp. began selling a competing survey system. ION shipped components of its system from its Louisiana warehouse to surveying companies abroad for those companies to combine the components into a surveying system. Equipped with ION’s system, ION’s customers would compete directly with WesternGeco for survey contracts.

WesternGeco sued ION for infringement under 35 U.S.C. §§ 271(f). 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.”

The jury found ION liable for patent infringement and awarded damages, which included a $12.5 million royalty component and a $93.4 million lost profits component. The district court upheld the verdict.

Despite affirming ION was liable for infringement under § 271(f), the majority of a divided panel of Federal Circuit held that WesternGeco was not entitled to lost profits. 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 dissenters disagreed with the interpretation, arguing that it created a “near-absolute bar to the consideration of a patentee’s foreign lost profits [that] is contrary to the precedent both of this court and was rejected by the Federal Circuit of the Supreme Court.”

After WesternGeco’s petition for rehearing en banc was rejected by the Federal Circuit, it appealed to the U.S. Supreme Court. The specific question the Court has agreed to consider is:

Whether the U.S. Court of Appeals for the Federal Circuit erred in holding that lost profits arising from prohibited combinations occurring outside of the United States are categorically unavailable in cases in which patent infringement is proven under 35 U.S.C. § 271(f)?

The Court has scheduled oral arguments in this case for April 16, 2018(with Justice Alito being recused). A decision is expected before the term ends in June. We will continue to track the progress of this case and will post updates as they become available.

If you have any questions about the case, please contact us

Do you have any questions? Would you like to discuss the matter further? If so, please contact me, David Einhorn, or the Scarinci Hollenbeck attorney with whom you work at 201-806-3364.

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Scarinci Hollenbeck, LLC, LLC

Related Posts

See all
Crypto Enforcement: A Former Prosecutor’s Warning to Criminals and the Public post image

Crypto Enforcement: A Former Prosecutor’s Warning to Criminals and the Public

Cryptocurrency intimidates most people. The reason is straightforward. People fear what they do not understand. When confusion sets in, the common reaction is either to ignore the subject entirely or to mistrust it. For years, that is exactly how most of the public and even many in law enforcement treated cryptocurrency. However, such apprehension changed […]

Author: Bryce S. Robins

Link to post with title - "Crypto Enforcement: A Former Prosecutor’s Warning to Criminals and the Public"
Understanding Chattel Paper: A Key Component in Secured Transactions post image

Understanding Chattel Paper: A Key Component in Secured Transactions

Using chattel paper to obtain a security interest in personal property is a powerful tool. It can ensure lenders have a legal claim on collateral ranging from inventory to intellectual property. To reduce risk and protect your legal rights, businesses and lenders should understand the legal framework. This framework governs the creation, sale, and enforcement […]

Author: Dan Brecher

Link to post with title - "Understanding Chattel Paper: A Key Component in Secured Transactions"
Crypto Compliance: A Comprehensive Guide post image

Crypto Compliance: A Comprehensive Guide

For years, digital assets operated in a legal gray area, a frontier where innovation outpaced the reach of regulators and law enforcement. In this early “Wild West” phase of finance, crypto startups thrived under minimal oversight. That era, however, is coming to an end. The importance of crypto compliance has become paramount as cryptocurrency has […]

Author: Bryce S. Robins

Link to post with title - "Crypto Compliance: A Comprehensive Guide"
Supreme Court and Title VII: Implications for Reverse Discrimination post image

Supreme Court and Title VII: Implications for Reverse Discrimination

Earlier this month, the U.S. Supreme Court issued a decision in Ames v. Ohio Department of Youth Services vitiating the so-called “background circumstances” test required by half of federal circuit courts.1 The background circumstances test required majority group plaintiffs pleading discrimination under Title VII of the Civil Rights Act to meet a heightened pleading standard […]

Author: Matthew F. Mimnaugh

Link to post with title - "Supreme Court and Title VII: Implications for Reverse Discrimination"
SPACs Are Back, What You Need to Know post image

SPACs Are Back, What You Need to Know

Special purpose acquisition companies (better known as SPACs) appear to be making a comeback. SPAC offerings for 2025 have already nearly surpassed last year’s totals, with additional transactions in the pipeline. SPACs last experienced a boom between 2020–2021, with approximately 600 U.S. companies raising a record $163 billion in 2021. Notable companies that went public […]

Author: Dan Brecher

Link to post with title - "SPACs Are Back, What You Need to Know"
Short Form Merger: Streamlining the Process for Businesses post image

Short Form Merger: Streamlining the Process for Businesses

Merging two companies is a complex legal and business transaction. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process that involves important corporate governance considerations. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process. However, […]

Author: Dan Brecher

Link to post with title - "Short Form Merger: Streamlining the Process for Businesses"

No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.

Sign up to get the latest from our attorneys!

Explore What Matters Most to You.

Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.

Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.

Let`s get in touch!

* The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!