Patent Damages for Overseas Lost Profits

The U.S. Supreme Court's WesternGeco decision doesn't quite flip the script on overseas patent damages, attorneys say

The U.S. Supreme Court had a chance last month to vastly broaden the amount of damages that global companies could recover for sales that infringe on their patents. While its decision did favor a nearly $100 million award a patent owner won for foreign lost profits, WesternGeco v. ION Geophysical Corp. might not see use from many plaintiffs to grab for higher damages.

On June 22, the court ruled 7-2 that a patent owner can recover lost profits earned overseas using a patented device whose components were made in the U.S. Companies and patent attorneys watched the WesternGeco case to see how far the court might go in letting patent owners reap damages from extraterritorial sales. But as it concerns a single, uncommon type of infringement, the decision’s impact is narrow.

ION manufactured components for a rig that attaches to ships, which then use it to survey the ocean floor for oil and gas drilling sites. It sent those components overseas to be assembled by other companies, which then used it to perform the surveying service in contracts. But WesternGeco, which manufactured and used an identical rig, claimed the assembled rig infringed on five of its patents under 35 U.S. Code section 271(f)(2). 271(f) prohibits making components of a patented invention and shipping them out of the U.S. with the intent that they be assembled for a purpose that would infringe on the patent.

To read this story and other complete articles featured in the July 16, 2018 print edition of Law Week Colorado, copies are available for purchase online.