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Supreme Court Opens Door for Overseas Infringement of U.S. Patents

  • Jun 22 2018

By: Drew Berweger

In a 7-2 decision (Gorsuch and Breyer dissenting), the U.S. Supreme Court ruled on June 22, 2018 that a company can recover profits it lost outside the U.S. due to a rival’s infringement of its U.S. patents, overturning precedent holding that such foreign damages cannot be awarded based on overseas conduct. In Westerngeco LLC v. Ion Geophysical Corp, No. 16-1011 (2018), ION began selling a competing system that was built from components manufactured in the U.S., shipped to companies abroad, and assembled there into a system that infringed WesternGeco’s U.S. patent. Subsequently, WesternGeco sued for patent infringement under 35 U. S. C. §§271(f)(1) and (f)(2).

Section 284, the Patent Act’s general damages provision, states that “the court shall award the claimant damages adequate to compensate for the infringement.” The “overriding purpose” of §284 is to “affor[d] patent owners complete compensation” for infringements. The conduct in this case that is relevant to that focus clearly occurred in the United States, as it was ION’s domestic act of supplying the components that infringed WesternGeco’s U.S. patent. Thus, the Supreme Court held that WesternGeco’s damages award for lost profits was permissible based on infringing acts occurring overseas.

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