this court's decision in deep south and to prohibit a specific domestic act of infringement with foreseeable foreign consequences congress targeted a specific domestic act the supply of components from the united states with a particular intent that the components be combined abroad in a way that if it happened in the united states would constitute infringement congress provided a cause of action for the domestic infringement and provided the damages remed that guaranteed the victim of the infringement damages adequate to compensate for the infringement the plain text of the patent act therefore gives the victim a section two seventy one f infringement and entitlement to adequate damages including lost profits and the presumption against extraterritoriality raises no obstacle to that common sense result there's no case of this court that applies the presumption to a damages provision and there's no case of customer we do justice ginsburg the general rule in a domestic context is that you can sue the party who is guilty of contributory infringement and get lost profits for what they did the foreseeable consequences what they did even if that primarily damages that are caused by their downstream direct infringer so it think it's helpful actually to think about if this whole case happened on lake michigan instead of on the high seas we could sue ion and only ion not its customers who practice the patent on lake michigan and we could recover our lost profits damages now it's true that in the domestic case the parties ions customers who are practicing the patent on lake michigan would also be guilty of direct infringement and that's one difference but that's exactly the difference that congress intended with section two seventy one f they specifically created a form of either contributory or inducement liability understanding that what was being induced was the combination of components outside the united states in a way that would constitute infringement in the united states now i do think it's important to recognize though that what is the infringing conduct is what i and does in the united states what the foreign combiners of the components do on the high seas is not infringement of a u s patent at all which is why i think the presumption against extraterritoriality is really a misfit here and you have to resort to the general principle which is in u s law if somebody is injured domestically by domestic conduct there's no rule that says that in order to calculate the compensatory damages to make them whole if you have to include in your calculation some foreign thing there's no rule against that if i run over a french citizen on my way to court this morning i can't say well i don't have to pay your hospital bills if they're incurred in france because that would be foreign in the presumption against extraterritoriality mr comment though of the difference i wonder and i don't know but wonder might be this that as justice ginsburg indicated under two seventy one f fine you get royalties because it's as if the the bits were manufactured here but you don't have a monopoly a lawful monopoly to use this technology abroad that doesn't belong to you that's outside the patent laws and so why would you get lost profits by it because of a third party's use entirely abroad that the lost profits aspect of the damages that concerns me and the difference with a common law rule for example might be because of the patent laws territorial limits i don't think so just discourse itchin here's how i'd respond which is we're not collecting damages or the combination itself what we're doing is we're collecting damages for the foreseeable consequences of the domestic act of infringement well let's just say we're gate out again the royalties but those aside ok you can just just focus on the profits for me ok ok and that arise from a third party's use over which you have no lawful monopoly your patent doesn't run to the high seas and so your uses are protected there so help me out with that portion of the damages alone sure that the reason that we can collect those damages even though that that conduct is not proscribed by us is because it is the reasonably for seeable result of domestic infringement damages against the canadian wholesaler because of gould's this court says not so fast right because you're suing a wholesaler who did nothing in the united states nothing infringing and they specifically say that gold's is different because they're the party the plant the patent holder sued the right party the party who made the article in the united states and then was guilty of infringement if i could get to your point about reasonable royalty though i think it's very important to show why that's not a way out here and my friends concession on page thirty five of his brief that you can take into account the expected for in use in calculating the rate for the royalty is a very damaging concession because reasonable royalties are not some alternative to damages adequate to compensate for the infringement this is not like the copyright context for statutory damages or an alternative to actual damages reasonable royalties are just a way of calculating adequate damages indeed they're the preferred method when you have a patent holder who voluntarily licenses the technology to third parties then you say ok you voluntarily licensed it for twenty cents of the bit that's what we're going to impose as the reasonable royalty to compensate you for the infringement  happen imagine you have the converse case i mean if we can have a law like this so can every other country you know an american firm makes a part in some other country and that happens more and more they have laboratories all over the world they make a part they bring it back here it doesn't violate the patent law of the other of our country not at all they sued or they sell it all over the place and suddenly a foreign holder in say switzerland takes this american company and obtains an enormous profits on the basis of the sales in the united states where those sales do not violate american law i mean suppose ten countries do this i try to think about that and i see chaos or confusion and at that point i think part of comedy is what happens if everybody does it and then i become uncertain about whether there's no place for our concern with what happens when we apply american law abroad well with the facts abroad a couple of points just prior first of all this has been the rule for basically one hundred years i've read the cases and i've read the both sides and and i think you have an excellent case and they also point out that it's simply a different situation or into his passing and they did it is it real you've read those two ok so i'll you out in my mind and but not a total plus because they get a plus two all right so so i accept the argument but i think i know the argument is there anything else the other thing is i mean i would say you know i get a couple of plus it's because th also been the rule this is but this is also been the rule is you have the right context and the world hasn't ended in the liaison text and i think the key is here's the key which is in all of these cases what you need to have before you can have any of this liability is a determination by the legislature that some domestic act of infringement is sufficiently serious that we're going to provide full compensation even if that has some foreseeable increase abroad and if that creates some situation mean there are different views all over the world not what bothering me are not the cases but i can't find that they are in your favor one hundred percent so let's assume that i'm right that they're not clearly on your side they're there may be open what's bothering me is the practical problem that i brought up before of what happened in respect to third party behavior where they are not violating the law and damages are here are calculated on the basis of that what happens if ten countries do that if twenty countries do that i see three possible ways of trying to deal with the problem one way is what they want another way is through the notion of proximate cause is the d c case after m program that takes that route and there may be a third route i don't know i'm posing a practical problem a what if anything you want to respond with i want to respond with two things your honor first of all is if i understand the concern to be double damages i think their way it's not double damages it is the chaos that would ensue if ten countries have the same rule that you are advocating with all due respect there would be no chaos and that is my principle response and we would have seen chaos in some context if this were really a problem and the reason we don't see chaos is because every country in order for there to be the domestic act of infringement has to say look there's something about this that we really don't want to happen in the united states and if it happens in the united states we want to provide damages that make the victim whole and i think it's a little odd to think of every country doing this because my friend on the other side concedes that you can have and injunctive remedy to prohibit this kind of domestic supply and if you've got the injunctive remedy it wouldn't happen at all these foreign combinations would not have happened and so the principle of damages that's been around in the common law forever and hasn't caused international friction is there's no special rule when somebody injure somebody domestically that says you can't possibly look at any foreign evidence in order to evaluate what would it take to put the party back in the position they were i mean it's some of this case is pretty simple because of iran's domestic act of infringement my client has ninety million dollars less in its wallet in houston than it otherwise would have if they had obeyed the law and there's nothing in the presumption of extraterritoriality or concerns about comedy i do think it is telling that unlike epigram unlike she had bell unlike many of the unlike morrison unlike many of these court cases there are no foreign governments filing briefs here telling you boy with this be a problem if this happens and i think that's a cause it's not a problem and in some ways i mean it would be more of a problem is the rule where the other way i think you'd have more comedy i mean if you were to tell me that if i hit the french ambassador with my car in philadelphia that i pay less in damages  otherwise would because he's french and he's probably going to have his medical bills paid by a french hospital i would say i don't think the french are going to be very pleased about that i think they would think you know there was a domestic injury here then you compensated and you take the victim the way you find it which is the other problem with iran's proposition here at times in their brief they seem to say if only my client had a different business model than maybe we could collect our last profit the image i hear that but to the  extent we're talking about the injury here and the poor french ambassador i get that we're supposed to treat the manufacturing as if it took place here but how do we pretend that the use on the high seas took place in lake michigan that's where i'm struggling and i could still use your help so i had the high seas and lake michigan or are just not the same two things your honor one is but i think congress made it about as clear as it could into seventy one f that it wanted you to treat the infringement on the high seas as if it took place on lake michigan the second thing i would say though is it just doesn't matter whether some action by third parties that exacerbates damage is independently lawful or unlawful i mean if in hitting the french ambassador there is then an ambulance service that takes the french ambassador to the most expensive how to help me help me out with this the language of the statute you say it's obvious from the language of the statute what what what would you point me to what's your best argument to show me that the use on the high seas is to be treated as if it took place in lake michigan because the violator of two seventy one f is liable for either contributory or inducing infringement whether it's f one or f two if they induce a combination that if the combination occurred in the united states would violate the patent laws here so as the court said in the limelight you effectively  contest contributory constructive infringement you're supposed to treat that for an infringement even though for reasons of comedy we're not making the foreign combination itself unlawful we're supposed to treat the domestic infringer just like they induced a domestic act infringement course doesn't stop there i mean if you look at two eighty one which is the analog of the cause of action you should r j are it's this for the infringement if you look at the two eighty four the position the provision my friend wants you to look at and nothing else it way in which i think to seventy one a and to seventy one f infringement is different because in the in the mind run case of two seventy one f infringement it's going to be very easy to show damages that are reasonably foreseeable from the four in combination because in order to be damages that are adequate to compensate for the infringement not damages that leave the victim worse off than it would have been if the infringement had never occurred if i could turn to the comedy point in the international relations point there are questions about we're here as the united states and we are supporting petitioner the rule they were advocating of full compensation is already the rule that applies basically everywhere else in u s law and tort and contract and copyright that this court previously assumed applied in patent law as well and it hasn't given rise to any significant foreign relations problems in any of those areas and we don't think that there's any reason to believe that it would here and i think one important piece of that and one of the ways this is different from actually regulat the conduct on the high seas is that if u s law was actually regulated in the third parties on the high seas you'd have a different set of defendants the customers who actually didn't did these surveys they would be here right now before them before the court and they're not the only  is an easy case but what's in the back of my mind it reverse the idea france says this law if you want here right joe smith goes to france one day and he makes a tiny particle which it turns out by led somebody else's fraud about he ships it back to the united states where it forms a very small part of a very large and valuable gizmo and all of a sudden we discover that he's paying the entire profit of the entire gizmo industry to some french company that had a small patent on a small part now all i have to do is generalize from that and i think my god we have a lot of problems here this should be some principle in law that cuts that off so my horrible example becomes just what you think it is a horrible example with no practical bite you know i'm looking for that principle so i think there's two pieces to that i think one is that f it is i think narrower than your describing your hypothetical it doesn't go that far it reaches conduct that is basically tantamount to actually just making the thing in the united states and then export in it is only reaches the supply of all or a substantial portion of the components or a component that is a specially designed and has no other purpose other than other than for use in the invention and of course you need to do it with intent and then the other the the other principle that cuts off and  i recognize the intuition that there may be situations where it seems like the damages are running too far afield from the wrongful conduct that happened in either in the united states or in france in the hypothetical all they were saying is the right way to approach that problem is with the doctrines of causation and fact and proximate cause they were tailor made to answer those kinds of questions d c circuit did with them for graham follow up in a case which you may have not read tom if you haven't read it also i'm not sure if i  there using proximate cause to try to deal with this does that ring a bell forgive it what we do is so we think profit like as in an ordinary tort case in the french tourist hypothetical in order for her to prove a because that is totally irrelevant to the question of the damages stage which is how big an award is the court need to give to the victim to compensate or to get her back into the position that she would have been if that tort had never occurred you do have to prove don't  think that this company would have that i mean that's their problem what happens in a situation where you need a license from a foreign government and there is no evidence that he will necessarily get that license i case on even just on causation in fact there in the j if i have you know i mean this is this is quite detailed and so you have you have that and then you have the proximate cause overlay on top of it i think the other place that i think is helpful to look at this professor yelled armin's amec is grief which is a nice job of walking through the doctor and both of causation in fact and proximate cause in the federal circuit when dealing with problems that are analogous to these these are robust check but more than anything what we're saying is that the right way to approach it is with that through that lens and not through this ham handed rule that basically as soon as you get across the international border the causal chain is automatically severed no matter what no matter how clear the causal link is that rule  frankly just just doesn't make any sense and we're asking the court you rejected my ask about your theory for getting to that result which is different from mr clements theories and they're quite a number of theories over on that side of the table and  some seem to emphasize two seventy one af and how that came to be and what its particular terms are some seem to emphasize that this is a damages provision that where talking about why did you pick the one you picked and why do you think it's better than the one mr than the ones mr clemente picked if you still do you know we absolutely do we're asking the rule affirmatively to adopt this rule as a matter of section two eighty four the general damages provision that applies all throughout the patent act  applies basically everywhere in american law should apply basically everywhere in the patent act as well and not just in the rare cases that come up under two seventy one half i think one piece of that is that really the point of f is to treat the supply of components for assembly abroad the same way as just making it here and then exploiting it but that's in a case and we think the rule of damages should be the same in both of them and then i think in terms of our theory our i think our our principal submission is that when once you get to compensatory damages right you have a plaintiff that is standing in front of the court and has already proven its case under u s law it's proven that it's been wronged by the defendant right and then all the court is trying to do is to compensate the victim to get the victim back into the position that it would have been in if that legal wrong had never occurred and we think the focus of that inquiry of compensatory damages that's always domestic because the victim is just standing right there in front of the u s calls just to follow up on this would you agree that th e other alternative creates a potential income groody because if we were to rely on to seventy one f we might be in a situation where we're permitting greater damages for someone who only partially manufactured only partially completed the patent infringement in this country as compared to someone under a who did the entire act here yes i i think that's right and i think actually the sort of the quintessential the easiest case are these  that was gould's and as this court understood it and which is that there was a manufacturer here followed by a sale abroad or a manufacturer for export i think is the easiest example of this we use in our brief is that that acme and copycat example but of course it could also arise in africa is is and i agree with petitioner that it's particularly likely to arise in africa is because every f case has this intent element where you're intending it will be combined  abroad that happens in some cases but but not in all of mr clemente has another theory which just says the presumption against territoriality doesn't apply at all to damages provisions is there a real difference between that and what you are so i mean can you imagine a damages provision where you would say yes the presumption against territory territoriality applies and this is an extra territorial application so i don't think there's a significant difference between the two we're talking about compensatory damages here and i think all that we're saying is i think you could look at it either way you would basically get to the same place either say that's in a political or apply and just say that it doesn't change that it's not something special about this damages provision you're saying as to any damages provision i think our rule would apply to any general compensatory damages provision i've not been able to think of any situation where the focus of compensatory damages would be doing anything other than comments it in the victim and we think that is always going to involve a domestic application of the statute you could come at that and just say that it's in a political in that context i think it basically gets the same results we don't it would never problem with that what is the what is the domestic injury i mean the domestic legal wrong here is the infringement on legal wrong and that this is what makes this case difficult because there's such a gap between the legal injury which is you know iffy moral and the practical injury which occurs completely in broad know so i think two responses to that so first the patent is a property right and we often think of the invasion of a property right as being something significant even if it doesn't have additional temple harm but also more fundamentally it's quite common to hold a response responsible for the harm that it causes when it sets into motion a series of events by which the victim will be will be hurt even if they're not hurt at the time so in the french tourist hypothetical that they would that we've been discussing imagine that what happened that she brings her car to the shop the brakes are broken and the shop doesn't repair the brakes the torturously don't do anything and send her back out on the road with a car with no brakes of course she could recover for her lost wages that were were caused by that tort and it would not here they're on the hook for the whole thing thank you counsel sham again thank you mr chief justice and may have please the court the presumption against extraterritoriality applies with particular force to the patent act and as the government recognized at least in its brief the presumption applies independently to remedial provisions as well as substantive ones because remedial provisions can create a similar risk of conflict with foreign law now in our view this case involves the extraterritorial application of the remedial provision in the patent act section two eighty four which by its terms has no extra territorial reach and while the act of infringement here all of the parties now agree was conceivably domestic our submission is that the damages here were in fact foreign and indeed petitioner repeatedly describes those damages suppose there were different business model and what the petitioner did was did to sell the device to others rather than to conduct the operation itself and it's about ready to sell to x for income the company and then ion sells the same device and takes the sale away would the petitioner be entitled to the lost profits from that sale yes the answer would be different in that circumstance because the situs of the injury in that circumstance would be the united states at least absent any additional facts because i think you could add facts to alter the analysis in our view that hypothetical justice kennedy is basically the fact pattern of gould's and there is an established body of law for determining the situs of the sale of a product and where you are exporting a product from the united states to a foreign country at least arguably the situs of the sale is the united states but this is a side is of the contract here you have the contract to conduct the sweep so there is importantly no evidence in the record to that effect in fact if you take a look at page forty one any of the petition appendix the federal circuit says that there is no contention that the service contracts were entered into in the united states the only thing that you have to mystically here and we all agree that this is true is the initial out of infringement and indeed there is an immediate factual injury that takes place at the point of infringement the patentee at that point could potentially lose sales of a component if the patentee in fact sold a competing version of the component that is not the fact pattern here and there is also the loss of royalties at that point and that's where the reasonable royalty remedy comes in to compensate that immediate factual injury i'm sorry i didn't think damages were  there are awarded for what you lose and since this company didn't sell its products it only used them why should it only get the value of a grill since that's not it business its business was to sell products to sell its services your point abroad or anywhere in the world where cooed and it wasn't going to ship the port wasn't going to permit someone to get a royalty to pay room justice sotomayor petition or in fact did get a reasonable royalty to the tune of twenty two million dollars which compensates for the act of infringement that is to say the initial factual entry from supplying the infringing component from the united states and that is hypothetical only in the sense that the way a reasonable royalty is calculated because obviously there was no license and no actual royalty looks at a hypothetical negotiation it looks at the negotiation that the patentee and the infringer would have conducted for a license for what turns out to be the active and friends if the jury was different well in fact in this case the jury awarded both they awarded lost profits on top of the reasonable royalty which as my friend recognizes is the traditional default remedy to provide for full compensation but i do want to address very briefly petitioner's suggestion in the reply brief and it oral argument that somehow the recognition that the calculation of the royalty could take into account expected foreign use is somehow contrary to our fundamental submission concerning the lost profits damages here i would refer the court to judge toronto's very thoughtful opinion in the carnegie mellon case on this point that's the opinion that we cite on the page of the brief that mr clement cited but i think that in calculating the reasonable royalty you naturally look to the commercial value of the component that's being supplied from the united states and engaging in that but for analysis of course one of the things that makes the component lucrative is the fact that ions customers would value it for its subsequent use but they're not taking into account actual foreign use or taking into account the expected foreign use as a way of determining the commercial value of goods you don't it seems to me that you're confining the right of the petitioner to decide how it's going to use it so it's not up to the patent over to decide how it's going to capitalize on its patent the right that is conferred by section two seventy one f justice kennedy is a limited right we agree with petitioner and the government the two seventy one af was enacted to fill a gap to essentially overrule this court's holding in the deep south but congress in doing that acted in a restrained and limited fashion consistent with the traditional territorial scope of the patent laws as this court recognized in its opinion in microsoft congress acted narrowly to regulate only the act  supply from the united states this might be a different case if congress had acted more broadly if congress had prohibited the foreign combination or if congress had amended section two eighty four to make broader damages available but it's important i think to keep in mind the deep south itself didn't involve this type of damages if you go back and look at the court's opinion in deep south it is clear that late term the patent holder in that case was seeking an injunction and it was also seeking lost profit i think you would justice alito for the reasons given in your opinion for the court in our g r nabisco in other words the analysis doesn't end simply because the underlying substantive provision has extra territorial reach you do have to go on and conduct an independent analysis of the remedial provision i think there would be a question about whether the remedial provision say sufficiently incorporates the substantive vision such that the remedial provision should be read to reach extraterritoriality as well was the debate between the majority and the dissent well there are differences between this case and our jr nabisco which i would go into but if if you have a liability provisions as there is liability for accident committed abroad what sense does it make to say well although congress thinks there should be liability for these acts committed abroad we have to analyze the remedial provisions separately to see whether they wanted any remedy for these acts that were committed abroad i do think  that was an aspect of the scheme at issue and rico and so far as in the first part of the court's opinion the court essentially construed section one thousand nine hundred sixty two to reach extra territorially because certain predi sense is to conclude that congress in regulating only domestic substantive conduct intended to make foreign damages available as well and again in deep self this sort of lost profits damages for downstream foreign use was certainly not at issue is not seeking to obtain lost profits for the use of developing equipment and mostly we're seeking lost profits for the lost sales but with your leave let me say just one thing about our g r nabisco having been told to forget it i do want to address just one aspect of it which is the effort to distinguish it by petitioner in its reply i think petitioner attempts to draw a distinction between a provision that merely creates a private right of action on the one hand and a damages provision on the other but as you will recall in the latter part of the court's opinion the court addressed section one thousand nine hundred sixty four see that provision both creates the private right of action and provides for treble damages and in the court's discussion of the risk to comedy from that provision the court discussed not only the fact that you'd be creating a private right of action in contexts where foreign governments might not do likewise but for the proposition the damages provisions no less than substantive provisions can give rise to comedy concerns what would ordinary well that's that's who i'm having trouble to be actually to be specific i can imagine a problem if a large british or french or swiss company which makes items sold all over the world farms out through a through a branch in north carolina and makes a tiny part which it turns out infringes someone else's american pod and as a result for the of the out that french or british or spanish company must pay to the north carolina for its profits from billions of dollars of sales across the world now that's not just hypothetical because in a mike is brief cites to us the marvel case that really happened ok see how that would in fact upset foreign countries a lot because after all it wasn't even a violation of any foreign patentable and i can imagine them having similar statutes which then cause more problems and that's all in your favor yeah but there is a principle of law that should deal with that and it's called proximate cause and that's why i brought up the ground case below they didn't seem your opponents here did not seem very willing to embrace it but doesn't why doesn't that work i mean the problem is one of proximate cause and knowing where to cut it off and take comedy into account when you apply proximate cause i don't have an absolute rule i thought that would be a fallback position for them so i have several responses to the various aspects of your question so let me attempt at least four of them if i can get them out the first is that while  there is a substantial cleavage between petitioner and the government i think that if you look at petitioners reply brief in particular it is clear that petitioner like the government thinks that the same rule should apply to section two seventy one af as to section two seventy one a and indeed if you look at the first ten pages of the reply brief in this argument annex cursus about legal injury the implication would be the same in the two seventy one a context or to the extent that you cite perhaps a simpler hypothetical  the two seventy one a context the rule i think would have to be the same and that's why this case is so important i think second your hypothetical earlier was exactly on point at page forty nine of our brief we give the example of computer software and as this court will be aware from the alice case there are very real limitations under american law on the patent ability of computer software but other countries such as japan have a different rule and so you could have the very same comedy concern  laid out twenty minutes ago where you have a foreign country that say because an american company engages in testing in that country seeks to impose liability for the downstream production of the same product or downstream hold us secondarily why a ball for what would be or what might not be an act of foreign direct infringement but i think that the concern that this case presents is exactly the concern that your honor stated in the opinion for the court in the microsoft case namely in the court's own words converting a single act of supply from the united states into a springboard for what would effect to be world wide damages and the court were citing the brief filed by my cuomo on behalf of the united states when it said that that is exactly what is going on here and the last point i wanted to make in response to your point justice prior is the one thing that we haven't heard anything about in any of petitioners filings or at oral argument is the fact that petitioner and its many many corporate affiliates hold patents in numerous countries around the world and that is the remedy in this circumstance where what you're talking about is a downstream for a news or downstream for infringement and yes this case arises in the context of the high seas but as we point out and as the amicus brief on behalf of the technology industry points out as well even in the high seas context you do have a remedy you can go  to countries where the ships are flagged and prosecutor patents and as we point out in our brief petition and its affiliates have patents in all these countries now i will say that those countries could reach different judgments in fact and this is not in the briefs but i  think this is established on the facts of this case petitioners corporate affiliates sought patents elsewhere they sought patents from the european community and they actually abandoned the patent that is the equivalent to the primary patent issue in this case the five twenty patent and i just think that reflects the fact that there could be different judgments in different countries and what petitioner is really trying to do in this case is precisely what this court ought to be compensation for its injury that your position petitioner is not entitled to compensation for foreign damage would in other words compensation for its injury your whole position is that this petitioner is not entitled to full compensation for his injury yes or no yes as a consequence of the application of the presumption against extraterritoriality and i really do think that this court established in our chair into biscoe that provisions that afford really are no different from substantive provisions jurisdictional provisions and other types of provisions to which this court has applied the presumption now i will say justice kennedy that our submission here is a modest one i think you can have reassurance that a rule in our favor in this case is not going to create problems for other statutes and it may leave the door open for damages of the sort we were discussing earlier damages of the type that were at issue in the group's case where you have for instance the shipment of a product from the united states abroad our test is quite simple in determining whether damages are foreign or domestic you should look to the scientists of the factual injury and you should also look to whether there is subsequent substantial foreign conduct after the act of infringement that gives rise to the injury and this case is a very straightforward case on the facts to apply that principle because everything relevant after the international initial act of infringement took place same yes and no justice ginsburg in the copyright context the reason why you can obtain profits for things that take place abroad is because the copyright law makes infringers profits available and as a judge hand explained in the original opinion on this issue infringers profits are are an equitable remedy they are a form of discouragement and they rely on the legal fiction that you impose a constructive process on infringing articles so that whatever happens to those articles you have a constructive trust on the profits as well in one thousand nine hundred six congress amended the predecessor to section two eighty four to eliminate  that form of profit to eliminate infringers profits and what you can't get even under the copyright act is the sort of lost profits that are at issue here the lost profits of the copyright holder and i would refer this court to judge opinion for the ninth circuit in the los angeles news service case which draws this distinction and makes that distinction clear again we come back to the sort of fundamental proposition that this court has taught in our chair in the biscoe that you have to apply the presumption to remedial provisions there is no indication on the face of section two eighty four that it in that it provides for extra territorial damages all it provides is justice kennedy pointed out is that you're allowed to obtain damages adequate to compensate for the infringement that language while brought on its terms does not overcome the presumption against extraterritoriality and so then you have to proceed to the second step and again is this court laid out in our jr nabisco at the second step what you do is you look at the focus of the relevant provision the focus of section two eighty four is damages and you determine whether the damages are foreign or domestic no different from what the court did at the second step in r g r nabisco which was to determine whether the factual injury because that strict statute was worded in terms of injury is foreign or domestic and again in this case it is very easy to conceive of why the damages are foreign because there really are two distinct factual injuries here and since we're talking about the car crashes this morning let me give you an example if for instance i was driving to the court this morning i was driving over the roosevelt bridge and i crashed into somebody on a motorcycle and that individual was concussed the individual then got off the motorcycle and wandered down the bridge perhaps across the potomac and across the state line into the district of columbia and then got hit by another car you would say that that person had two injuries the person had the immediate injury the concussion and then had the downstream injury having say their foot run over by another driver and here our argument is that the downstream injury is entirely foreign and again critically it relies on the intervening conduct of third parties that would constitute an act of direct infringement suppose that the ships in question were all norwegian ships at least one of them  norway flagged ship and assume that norway had coterminous patent laws to the united states in this case norway would have the ability to impose liability for direct infringement on our customers the ones who engaged in not just the combination but the downstream use and norway would be able to go after us under its equivalence to section two seventy one b and two seventy one c i think about your hypo but it seems to me that the back in the car and then hit him again when he went on the bridge and well critically that would be more like what happened in this if we did nothing further justice kennedy keep in mind that section two seventy one f regulates only the act of supply and indeed there is no further requirement under section two seventy one now that the combination actually occur i heard my friend mr comment suggest at one point in his argument that section two seventy one aft has as an element some additional act of inducement he referred to whether the parties induced a combination of broad all that the relevant provision here to seventy one f two does is to regulate the supply with intent that a combination occur indeed in this case as to a percentage of the digit fans at issue there was no ultimate subsequent combination and so again all that we are saying and i think that this is a submission that flows directly from the language of section two seventy one f is all congress did was to regulate the domestic act of supply consistent with the traditionally territorial nature of the patent office and so all you get is damages for that act of supply for the initial  struck me about your hypo is that it's a classic law school proximate cause i know i mean that's what that hypo is and it suggests that if there is a problem here it's a problem about where you draw the causal line it's not a problem about some categorical extraterritoriality rule so i do want to address that justice kagan i think that in my hypothetical i'm willing to concede that for purposes of proximate cause ation and going back to paul's graf and all those wonderful cases that i could be held liable for both of those injuries and to be sure this analysis is not entirely disconnected from causation because as i indicated earlier the fact that there is subsequent foreign conduct matters to the two yes what makes this case different from the earlier french ambassador a hypothetical is that the injury is immediate it may very well be that you need to have further treatment but there is not subsequent conduct i will  but i do want to address any suggestion that causation is somehow the solution here by making a couple of points the first is that with regard to proximate prosecution the federal circuit has adopted a quite expansive task which requires only m foreseeability i would refer the court to an end bank opinion called the right height which sets out that test there is no proximate cause ation argument in this case professor yelled or meant in his amicus brief suggest that this is an easy case for proximate cause ation so i don't know the proximate cause ation at least under the existing state of the law unless this court wants to address that down the road is going to provide much solace to companies like my client we do have an argument that justice sotomayor adverted to that there is not sufficient but for  causation here that is an issue that remains to be resolved henri man and in the event that this court were to reverse it certainly should remain on to the federal circuit so that it can address that issue doesn't quite in through because the your client i don't want to produce for client but it did seem to me he was the strongest case for your argument i mean the damages here are pretty closely related i think but there i can easily imagine cases where it's not and so it's come the proximate cause yes it's true if you have a tough proximate cause law toff you will stop people from being fully compensated but the reason you do it is because you're afraid with ninety two district courts and juries and so forth it will get out of control and be a kind of major problem with other countries that argument the other way and that's argument bruce a just cut it off the argument the other way is there are cases that will deserve it deserve the damages and not anything you want to say about i would like to say two things about that justice prior i mean the first is that this court has crossed that bridge and i would cite this court's opinion in e for the proposition the modest proposition that these sorts of damages awards can create comedy concerns and yes we're not necessarily dealing with treble damages of course enhanced damages are available in patent cases and we're in fact awarded here  but what we are dealing with is the very real risk that american juries and patent cases award much bigger damages awards then courts do in other countries and so even leaving aside the fact that other countries could have totally different substantive patent laws the risk of runaway jury awards here certainly does present substantial comedy concerns and i think that that is really you know fundamentally the reason why the presumption should apply and i think that the problem that the other side has which was illustrated by justice course which is question is that it can't point to anything that overcomes the presumption sure congress was thinking about the possibility of eventual foreign combinations when it enacted section two seventy one f but what it didn't do was to attempt to regulate abroad and this court in morrison and our jr has made clear that it is not sufficient to overcome the presumption simply that congress might have contemplated the possibility of downstream for an activity congress has to give a clear and unmistakable indication of its desire to have extra territorial reach it doesn't have to necessarily do so in the language of the statute though this court made was manufactured and sold from the united states to someone abroad you the infringer would be liable for that sale correct so the yeah it's all right so if the infringer knows that the only way that this product is going to be sold is tied to services why they are why aren't they responsible for that deprivation of the use of the product because the damages are foreign and to be sure it is an element of liability that you have to have this foreign oriented intent under section two seventy one after you have to have an intent that the terms regulates only domestic content the court invoked the presumption but it invoked the presumption to reject the reading that would have given section two seventy one off effectively extraterritorial effect but again just to be clear i don't think that petitioners argument ultimately depends on section two seventy one off i think the petitioners bottom line is that not only the federal circuit's decision in this case but also its earlier decisions in cases such as power integrations and carnegie mellon a case where a jury awarded one point one seven billion dollars in a reasonable royalty for foreign sales those decisions would also have to come out the other way to the extent that petitioner is relying on section two seventy one aft that's really window dressing on its argument because at bottom the rule would be the same under petitioners interpretation and the two seventy one f or the two seventy one eight contacts uncritically we all agree that two seventy one f was designed to overturn this court's decision in deep south but the way that congress did that was to regulate a form of domestic conduct a form of to mess the contacts cut domestic conduct that as a result of this court's decision in deep south did not of itself constitute infringement congress was certainly not thinking about making available this sort of downstream damages and to get back to what i think was really sort of driving your question with respect justice and mining or the answer to all of this is that petitioner can go to foreign courts and obtain damages if petitioner has foreign patent rights and if the law of those respective jurisdictions permits it and there is a mechanism in place that w i p o process that streamlines and makes it easier for companies in petitioners position to obtain those patents and to enforce them abroad we've asked the judgment be affirmed thank you counsel three minutes mr clement thank you mr chief justice i just like to clarify two details and make a couple of points one detail my friend mistakenly referred to this case being brought in the eastern district of texas was in fact brought in the southern district of texas where both of these companies are located maybe a pedantic point but the eastern district texas has a certain implication to it that i wanted to clarify the second point is that just to be crystal clear and my friend concedes this in footnote three of the red brief but there were not royalties and lost profits on the the same components the lost profits damages for those particular components we got only lost profit damages and the reasonable royalties are only calculated on other units and i think the concession that you can take into account the expected foreign use for calculating the royalty really gives the game away because calculating reasonable royalties is just another counterfactual exercise determined that the whole point of which is to determine how what would my client's position be in the absence of the infringement in the united states there's no reason to treat those two situations differently i'm of course happy to win this case on any of the three theories we present in our brief we're on the government's theory i would say though the justice alito is question he is the reason that i do think the better way to resolve this case is to say cleanly once and for all the presumption does not apply to damages provisions because if you walk to my friend's theory through and applied the extraterritoriality principles woodenly to a generic damages provision that compliment it and express extraterritorial liability provision it would you'd end up saying well this is a foreign application and i guess i can't give damages even though congress made this express the extraterritorial and that's not a trivial concern i mean congress acted to overturn this court's aramco and it applied title seven abroad and it supplements it with a with a generic damages provision would be really weird if you can get damages for that expressly extraterritorial application and i think it would be just as weird with all due respect to say that you could get compensatory damages for the full amount of the lost in a two seventy one f case because the four in combination occurred abroad congress understood what it was doing it was imposing liability on a domestic actor for combinations that intentionally took place abroad and i do think proximate cause is to solution to a lot of the problems but proximate cause isn't going to be a lot of help to defendants in two seventy one f cases because if you have to intend or induce the four in combination i would say it's reasonably foreseeable so we think you should reverse the decision thank you thank you console the case is submitted