WesternGeco LLC v. ION Geophysical Corp.

Damages for lost foreign profits are recoverable under §284 of the Patent Act if the domestic nature of the infringement is proven under §271(f)(2).

Respondent manufactured, within the United States, components of an ocean surveying system and sold them abroad. When the components were combined, they created a surveying system identical to a system for which Petitioner held several patents. Petitioner prevailed in a suit against Respondent for patent infringement and received an award for damages, including lost foreign profits. The Court of Appeals for the Federal Circuit reversed the award and reinstated its decision upon remand for further consideration from the Supreme Court. The Supreme Court reversed holding that damages for lost foreign profits are recoverable under §284 of the Patent Act if infringement is proven under §271(f)(2). In determining whether the damages were permissible or extraterritorial, the Court identified that the focus of §284 was “the infringement” and the focus of §271(f)(2) was “the act of exporting components from the United States.”  The Court reasoned that Respondent’s conduct relevant to the focus of the statutes occurred domestically, so the damages awarded were a domestic application of §284. The Court explained that §271(f) was created to close this type of gap in patent law. The Court further reasoned that damages are “adequate” when they put the patent owner in the position they would have been in had the infringement not taken place. REVERSED and REMANDED.