Source: http://www.salvisjuribus.it/intellectual-property-patent-damages-and-infringement/
Timestamp: 2019-04-26 12:49:11+00:00

Document:
In the case WESTERNGECO LLC v. ION GEOPHYSICAL CORP. N.16-1011, decided on June 22, 2018, the Supreme Court of The United States gives us its opinion in theme of Intellectual Property and, in particular, about the determination of lost profits damages arising from Patent Infringement.
The questions in this case are two: whether the Patent Act (35 U. S. C.) §271(f)(2) and §284 statutes allow the patent owner to recover for lost foreign profits, and whether the Federal Circuit made a mistake in holding that lost profits arising from prohibited combinations occurring outside of the United States are categorically unavailable in cases where patent infringement is proven under 35 U.S.C.§ 271(f).
Petitioner WesternGeco LLC owns four patents relating to a system that it developed for surveying the ocean floor.
The system uses lateral-steering technology to produce higher quality data than previous survey systems.
For these reasons WesternGeco sued for patent infringement under 35 U. S. C. §§271(f)(1) and (f)(2).
At trial, WesternGeco proved that it had lost 10 specific survey contracts due to ION’s infringement. The jury found ION liable and awarded WesternGeco damages of $12.5 million in royalties and $93.4 million in lost profits.
On appeal, the Court of Appeals for the Federal Circuit reversed the award of lost-profits damages.
The Federal Circuit had previously held that §271(a), the general infringement provision, does not allow patent owners to recover for lost foreign sales.
Under the Patent Act (35 U.S. Code), a company can be liable for patent infringement if it ships components of a patented invention overseas to be assembled there.
A patent owner who proves infringement under this provision is entitled to recover damages.
The Patent Act gives patent owners a “civil action for infringement“.
Section 271 outlines several types of infringement: the general infringement provision covers most infringements that occur “within the United States.” The subsection at issue in this case, §271(f), “expands the definition of infringement to include supplying from the United States a patented invention’s components.”.
The Supreme Court holding that these statutes allow the patent owner to recover for lost foreign profits, reversed the previous decisions.
The Supreme Court observes that these principles, commonly called the presumption against extraterritoriality, has deep roots.
For deciding questions of extraterritoriality, the Supreme Court has established a two-step framework.
The Supreme Courts has made this determination by identifying “the statute’s focus ” and asking itself whether the conduct relevant to that focus occurred in United States territory.
The Supreme Court resolved this case at step two.
After a long and logic reasoning, the Supreme Court has concluded that the conduct relevant to the statutory focus in this particular case is domestic.
The Court has explained that §284 provides a general damages remedy for the various types of patent infringement identified in the Patent Act.
On the basis that portion of §284 at issue here states that “the court shall award the claimant damages adequate to compensate for the infringement.”, the S.C. has concluded that “the infringement” is the focus of this statute.
In the opinion of the Supreme Court, 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 patents. Thus, the lost-profits damages that were awarded to WesternGeco were a domestic application of §284.
The Supreme Court holds that WesternGeco’s damages award for lost profits was a permissible domestic application of §284, and consequently in general patent owners may now recover foreign lost profits tied to domestic acts of infringement under §271(f)(2).
The Judges also observe that because the act of patent infringement must be domestic, a patent owner’s recovery should be restricted to its own domestic activities, not its international activities.
For these reasons the Supreme Court has reversed the judgment of the Federal Circuit and has remanded the case for further proceedings consistent with this opinion.
This important decision on patent damages and infringement gives us an interesting point of view on the legislation concerning the Patent Act and on the ability of a patent owner to recover the appropriate amount damages due to the loss of profits.
The decision provides a remedy tied to the domestic acts of indirect infringement and appears to open up some more chances for a full remedy for infringement, which addresses foreign consequences.
The Supreme Court interpreted 35 U.S.C. § 284 flexibly and the decision is undoubtedly a win for U.S. patent owners that will be able to recover foreign lost profits tied to domestic acts of infringement under § 271(f)(2).
 35 U.S.C. 271 INFRINGEMENT OF PATENT:Whoever without authority supplies or causes to be supplied in or from the United States any component of a patented invention that is especially made or especially adapted for use in the invention and not a staple article or commodity of commerce suitable for substantial noninfringing use, where such component is uncombined in whole or in part, knowing that such component is so made or adapted and intending that such component will be combined outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.
 35 U.S.C. 284 DAMAGES: Upon finding for the claimant the court shall award the claimant damages adequate to compensate for the infringement but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court.
 35 U.S.C. 271(a) INFRINGEMENT OF PATENT: Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States, or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.
 Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., 711 F. 3d 1348 (CA Fed. 2013).
 Microsoft Corp. v. AT&T Corp., 550 U. S. 437, 444-445 (2007).
 (Foley Bros., Inc. v. Filardo, 336 U. S. 281, 285 (1949).

References: v. 
 §271
 §284
 §271
 §271
 §284
 §284
 §284
 §284
 §271
 § 284
 § 271
 v. 
 v. 
 v.