Supreme Court Upholds Award of Lost Foreign Profits For Patent Infringement

The Supreme Court expanded the territorial reach of patent damages in WesternGeco LLC v. ION Geophysical Corp., No. 16-1011, 2018 U.S. LEXIS 3842 (June 22, 2018), holding that, in cases involving the infringing exportation of components for assembly abroad, "§271(f)(2) and §284 allow the patent owner to recover for lost foreign profits."

WesternGeco's competitor, ION Geophysical Corporation, had created an infringing ocean floor surveying system by manufacturing components in the United States and shipping them to companies abroad, where they were combined. As a result, WesternGeco lost foreign survey contracts that amounted to over $90 million dollars. In finding that WesternGeco could recover for these foreign losses, the Court emphasized that the infringing conduct at issue under Section 271(f)(2) was purely domestic, even if the harm arising from the infringing exportation occurred abroad.

It remains to be seen whether lower courts will limit the reach of this holding to Section 271(f), which prohibits the infringing exportation of components, or will apply its principles to permit extraterritorial damage awards in other scenarios.