Lost profits case awaiting Supreme Court decision

The United States Supreme Court has agreed to review a patent infringement case on the scope of damages. The issue is whether a patent holder may obtain lost profits for actions that occurred outside the United States, where the patentee has proven a domestic act of infringement.

Under the presumption against extraterritoriality, there is no infringement when a patented product is made and sold in another country.

The petitioner is Western Geco LLC, a subsidiary of Schlumberger Limited, the world’s largest oilfield services company. The defendant, ION Geophysical Corp., describes itself as “a small company based in Houston,” perhaps in an effort to frame the present standoff as a David-and-Goliath situation. 

The parties’ legal dispute, which has been going on since 2009, turns on the Federal Circuit’s interpretation of a provision of the Patent Act related to actions outside the United States (35 U.S.C. § 271(f)) and revolves around Western Geco’s proprietary ocean floor surveying technique. Section 271(f) holds liable for infringement anyone that supplies in or from the United States components of a patented invention knowing or intending that the components be combined outside the U.S. in a way that would be considered infringement had the combining occurred in the United States.