Term: 2017
Docket: 16-1011
Westerngeco Llc v. Ion Geophysical Corp.
- Pro
16-1011 WESTERNGECO LLC V. ION GEOPHYSICAL CORP. DECISION BELOW: 837 F.3d 1358 JUSTICE ALITO TOOK NO PART. MARCH 28, 2018: JUSTICE ALITO IS NO LONGER RECUSED IN THIS CASE. CERT. GRANTED 1/12/2018 QUESTION PRESENTED: 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). LOWER COURT CASE NUMBER: 2013-1527, 2014-1121, 2014-1526, 2014-1528
In the case of WesternGeco LLC v. Ion Geophysical Corp., 2017, WesternGeco sued Ion for patent infringement related to technology used in oil and gas exploration on the high seas. The jury found that Ion had infringed upon four patents owned by WesternGeco and awarded $93 million in lost profits damages based on foreign contracts that were lost due to ION's infringing activities. However, an appellate court reversed this decision stating U.S law does not apply outside its borders (extraterritorial application). This led to a dispute over whether these damages could be recovered under Section 271(f) of the Patent Act which prohibits supplying components from United States with intent they will be combined outside of it in a manner that would infringe the patent if such combination occurred within United States. In June 2018, Supreme Court ruled in favor of WesternGeco allowing recovery of lost profits for use abroad arguing Section 271(f) was not about domestic infringement but focuses on domestic act considered infringement if combined overseas.
In the dissenting opinion for WESTERNGECO LLC v. ION GEOPHYSICAL CORP., Justice Gorsuch, joined by Justice Breyer, argued that U.S. patent law does not apply outside of the United States and therefore should not award damages for lost profits due to infringement abroad. They contended that extending the reach of American patent laws internationally could potentially infringe on other countries' ability to regulate their own economies and may lead to conflicts with foreign laws or international treaties. The dissenters also expressed concern about potential double recovery if a company can sue in both U.S courts and foreign jurisdictions for the same infringement act.
