Court Opinion

ID: 4287280
Source: CourtListenerOpinion
Date Created: 2018-06-22 15:01:13.18035+00
Date Added: 2024-06-11T17:21:03.642450
License: Public Domain

(Slip Opinion)              OCTOBER TERM, 2017                                       1

                                       Syllabus

         NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
       being done in connection with this case, at the time the opinion is issued.
       The syllabus constitutes no part of the opinion of the Court but has been
       prepared by the Reporter of Decisions for the convenience of the reader.
       See United States v. Detroit Timber & Lumber Co., 200 U.S. 321, 337.

SUPREME COURT OF THE UNITED STATES

                                       Syllabus

   WESTERNGECO LLC v. ION GEOPHYSICAL CORP.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
                THE FEDERAL CIRCUIT

      No. 16–1011. Argued April 16, 2018—Decided June 22, 2018
Petitioner WesternGeco LLC owns patents for a system used to survey
  the ocean floor. Respondent ION Geophysical Corp. began selling a
  competing system that was built from components manufactured in
  the United States, shipped to companies abroad, and assembled there
  into a system indistinguishable from WesternGeco’s. WesternGeco
  sued for patent infringement under 35 U.S. C. §§271(f)(1) and (f)(2).
  The jury found ION liable and awarded WesternGeco damages in
  royalties and lost profits under §284. ION moved to set aside the
  verdict, arguing that WesternGeco could not recover damages for lost
  profits because §271(f) does not apply extraterritorially. The District
  Court denied the motion, but the Federal Circuit reversed. ION was
  liable for infringement under §271(f)(2), the court reasoned, but
  §271(f) does not allow patent owners to recover for lost foreign profits
  On remand from this Court in light of Halo Electronics, Inc. v. Pulse
  Electronics, Inc., 579 U.S. ____, the Federal Circuit reinstated the
  portion of its decision regarding §271(f)’s extraterritoriality.
Held: WesternGeco’s award for lost profits was a permissible domestic
 application of §284 of the Patent Act. Pp. 4–10.
    (a) The presumption against extraterritoriality assumes that fed-
 eral statutes “apply only within the territorial jurisdiction of the
 United States.” Foley Bros., Inc. v. Filardo, 336 U.S. 281, 285. The
 two-step framework for deciding extraterritoriality questions asks,
 first, “whether the presumption . . . has been rebutted.” RJR
 Nabisco, Inc. v. European Community, 579 U.S. ___, ___. If not, the
 second step asks “whether the case involves a domestic application of
 the statute.” Id., at ___. Courts make the second determination by
 identifying “the statute’s ‘focus’ ” and then asking whether the con-
 duct relevant to that focus occurred in United States territory. Ibid.
2         WESTERNGECO LLC v. ION GEOPHYSICAL CORP.

                                  Syllabus

    If so, the case involves a permissible domestic application of the stat-
    ute. It is “usually . . . preferable” to begin with step one, but courts
    have the discretion to begin with step two “in appropriate cases.” Id.,
    at ___, n. 5. The Court exercises that discretion here. Pp. 4–5.
       (b) When determining “the statute’s ‘focus’ ”—i.e., “the objec[t] of
    [its] solicitude,” Morrison v. National Australia Bank Ltd., 561 U.S.
247, 267—the provision at issue is not analyzed in a vacuum. If it
    works in tandem with other provisions, it must be assessed in concert
    with those provisions. 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 focus of that pro-
    vision is “the infringement.” The “overriding purpose” of §284 is to
    “affor[d] patent owners complete compensation” for infringements.
    General Motors Corp. v. Devex Corp., 461 U.S. 648, 655. Section 271
    identifies several ways that a patent can be infringed. Thus, to de-
    termine §284’s focus in a given case, the type of infringement that oc-
    curred must be identified. Here, §271(f)(2) was the basis for West-
    ernGeco’s infringement claim and the lost-profits damages that it
    received. That provision regulates the domestic act of “suppl[ying] in
    or from the United States,” and this Court has acknowledged that it
    vindicates domestic interests, see, e.g., Microsoft Corp. v. AT&T
    Corp., 550 U.S. 437, 457. In sum, the focus of §284 in a case involv-
    ing infringement under §271(f)(2) is on the act of exporting compo-
    nents from the United States. So the conduct in this case that is rel-
    evant to the statutory focus clearly occurred in the United States.
    Pp. 5–8.
       (c) ION’s contrary arguments are unpersuasive. The award of
    damages is not the statutory focus here. The damages themselves
    are merely the means by which the statute achieves its end of reme-
    dying infringements, and the overseas events giving rise to the lost-
    profit damages here were merely incidental to the infringement. In
    asserting that damages awards for foreign injuries are always an ex-
    traterritorial application of a damages provision, ION misreads a
    portion of RJR Nabisco that interpreted a substantive element of a
    cause of action, not a remedial damages provision. See 579 U. S., at
    ___. Pp. 8–9.
837 F.3d 1358, reversed and remanded.

   THOMAS, J., delivered the opinion of the Court, in which ROBERTS,
C. J., and KENNEDY, GINSBURG, ALITO, SOTOMAYOR, and KAGAN, JJ.,
joined. GORSUCH, J., filed a dissenting opinion, in which, BREYER, J.,
joined.
                        Cite as: 585 U. S. ____ (2018)                              1

                             Opinion of the Court

     NOTICE: This opinion is subject to formal revision before publication in the
     preliminary print of the United States Reports. Readers are requested to
     notify the Reporter of Decisions, Supreme Court of the United States, Wash-
     ington, D. C. 20543, of any typographical or other formal errors, in order
     that corrections may be made before the preliminary print goes to press.

SUPREME COURT OF THE UNITED STATES
                                   _________________

                                   No. 16–1011
                                   _________________

           WESTERNGECO LLC, PETITIONER v.

           ION GEOPHYSICAL CORPORATION 

 ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF 

           APPEALS FOR THE FEDERAL CIRCUIT

                                 [June 22, 2018] 

  JUSTICE THOMAS delivered the opinion of the Court.
  Under the Patent Act, a company can be liable for pa-
tent infringement if it ships components of a patented
invention overseas to be assembled there. See 35 U.S. C.
§271(f )(2). A patent owner who proves infringement
under this provision is entitled to recover damages. §284.
The question in this case is whether these statutes allow
the patent owner to recover for lost foreign profits. We
hold that they do.
                              I
  The Patent Act gives patent owners a “civil action for
infringement.” §281. Section 271 outlines several types
of infringement. The general infringement provision,
§271(a), 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.” Microsoft Corp. v. AT&T Corp., 550 U.S.
437, 444–445 (2007). It contains two provisions that
“work in tandem” by addressing “different scenarios.” Life
Technologies Corp. v. Promega Corp., 580 U.S. ___, ___
2       WESTERNGECO LLC v. ION GEOPHYSICAL CORP.

                      Opinion of the Court

(2017) (slip op., at 9). Section 271(f )(1) addresses the
act of exporting a substantial portion of an invention’s
components:
      “Whoever without authority supplies or causes to be
      supplied in or from the United States all or a substan-
      tial portion of the components of a patented invention,
      where such components are uncombined in whole or
      in part, in such manner as to actively induce the com-
      bination of such components 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.”
Section 271(f )(2), the provision at issue here, addresses
the act of exporting components that are specially adapted
for an invention:
      “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 es-
      pecially 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.”
Patent owners who prove infringement under §271 are
entitled to relief under §284, which authorizes “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.”
                            II
    Petitioner WesternGeco LLC owns four patents relating
                    Cite as: 585 U. S. ____ (2018)                   3

                         Opinion of the Court

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. Western-
Geco does not sell its technology or license it to compet-
itors. Instead, it uses the technology itself, performing
surveys for oil and gas companies. For several years,
WesternGeco was the only surveyor that used such
lateral-steering technology.
   In late 2007, respondent ION Geophysical Corporation
began selling a competing system. It manufactured the
components for its competing system in the United States
and then shipped them to companies abroad. Those com-
panies combined the components to create a surveying
system indistinguishable from WesternGeco’s and used
the system to compete with WesternGeco.
   WesternGeco sued for patent infringement under
§§271(f )(1) and (f )(2). At trial, WesternGeco proved that it
had lost 10 specific survey contracts due to ION’s in-
fringement. The jury found ION liable and awarded
WesternGeco damages of $12.5 million in royalties and
$93.4 million in lost profits. ION filed a post-trial motion
to set aside the verdict, arguing that WesternGeco could
not recover damages for lost profits because §271(f ) does
not apply extraterritorially. The District Court denied the
motion. 953 F. Supp. 2d 731, 755–756 (SD Tex. 2013).
   On appeal, the Court of Appeals for the Federal Circuit
reversed the award of lost-profits damages. WesternGeco
LLC v. ION Geophysical Corp., 791 F.3d 1340, 1343
(2015).1 The Federal Circuit had previously held that
§271(a), the general infringement provision, does not allow
patent owners to recover for lost foreign sales. See id., at
1350–1351 (citing Power Integrations, Inc. v. Fairchild
——————
  1 The Federal Circuit held that ION was liable for infringement under

§271(f )(2). WesternGeco, 791 F. 3d, at 1347–1349. It did not address
whether ION was liable under §271(f )(1). Id., at 1348.
4      WESTERNGECO LLC v. ION GEOPHYSICAL CORP.

                     Opinion of the Court

Semiconductor Int’l, Inc., 711 F.3d 1348 (CA Fed. 2013)).
Section 271(f ) should be interpreted the same way, the
Federal Circuit reasoned, because it was “designed” to put
patent infringers “in a similar position.” WesternGeco, 791
F. 3d, at 1351. Judge Wallach dissented. See id., at 1354–
1364. WesternGeco petitioned for review in this Court.
We granted the petition, vacated the Federal Circuit’s
judgment, and remanded for further consideration in light
of our decision in Halo Electronics, Inc. v. Pulse Electron-
ics, Inc., 579 U.S. ___ (2016). WesternGeco LLC v. ION
Geophysical Corp., 579 U.S. ___ (2016).
   On remand, the panel majority reinstated the portion of
its decision regarding the extraterritoriality of §271(f).
837 F.3d 1358, 1361, 1364 (CA Fed. 2016). Judge Wallach
dissented again, id., at 1364–1369, and we granted certio-
rari again, 583 U. S. ___ (2018). We now reverse.
                             III
   Courts presume that federal statutes “apply only within
the territorial jurisdiction of the United States.” Foley
Bros., Inc. v. Filardo, 336 U.S. 281, 285 (1949). This
principle, commonly called the presumption against extra-
territoriality, has deep roots. See A. Scalia & B. Garner,
Reading Law: The Interpretation of Legal Texts §43, p.
268 (2012) (tracing it to the medieval maxim Statuta suo
clauduntur territorio, nec ultra territorium disponunt);
e.g., United States v. Palmer, 3 Wheat. 610, 631 (1818)
(Marshall, C. J.) (“[G]eneral words must . . . be limited to
cases within the jurisdiction of the state”). The presump-
tion rests on “the commonsense notion that Congress
generally legislates with domestic concerns in mind.”
Smith v. United States, 507 U.S. 197, 204, n. 5 (1993).
And it prevents “unintended clashes between our laws and
those of other nations which could result in international
discord.” EEOC v. Arabian American Oil Co., 499 U.S.
244, 248 (1991).
                 Cite as: 585 U. S. ____ (2018)            5

                     Opinion of the Court

  This Court has established a two-step framework for
deciding questions of extraterritoriality. The first step
asks “whether the presumption against extraterritoriality
has been rebutted.” RJR Nabisco, Inc. v. European Com-
munity, 579 U.S. ___, ___ (2016) (slip op., at 9). It can be
rebutted only if the text provides a “clear indication of an
extraterritorial application.” Morrison v. National Aus-
tralia Bank Ltd., 561 U.S. 247, 255 (2010). If the pre-
sumption against extraterritoriality has not been rebut-
ted, the second step of our framework asks “whether the
case involves a domestic application of the statute.” RJR
Nabisco, 579 U. S., at ___ (slip op., at 9). Courts make this
determination by identifying “the statute’s ‘focus’ ” and
asking whether the conduct relevant to that focus occurred
in United States territory. Ibid. If it did, then the case
involves a permissible domestic application of the statute.
See ibid.
  We resolve this case at step two. While “it will usually
be preferable” to begin with step one, courts have the
discretion to begin at step two “in appropriate cases.” See
id., at ___, n. 5 (slip op., at 10, n. 5) (citing Pearson v.
Callahan, 555 U.S. 223, 236–243 (2009)). One reason to
exercise that discretion is if addressing step one would
require resolving “difficult questions” that do not change
“the outcome of the case,” but could have far-reaching
effects in future cases. See id., at 236–237. That is true
here. WesternGeco argues that the presumption against
extraterritoriality should never apply to statutes, such as
§284, that merely provide a general damages remedy for
conduct that Congress has declared unlawful. Resolving
that question could implicate many other statutes besides
the Patent Act. We therefore exercise our discretion to
forgo the first step of our extraterritoriality framework.
                           A
  Under the second step of our framework, we must iden-
6      WESTERNGECO LLC v. ION GEOPHYSICAL CORP.

                      Opinion of the Court

tify “the statute’s ‘focus.’ ” RJR Nabisco, supra, at ___ (slip
op., at 9). The focus of a statute is “the objec[t] of [its]
solicitude,” which can include the conduct it “seeks to
‘regulate,’ ” as well as the parties and interests it “seeks to
‘protec[t]’ ” or vindicate. Morrison, supra, at 267 (quoting
Superintendent of Ins. of N. Y. v. Bankers Life & Casualty
Co., 404 U.S. 6, 12, 10 (1971)). “If the conduct relevant to
the statute’s focus occurred in the United States, then the
case involves a permissible domestic application” of the
statute, “even if other conduct occurred abroad.” RJR
Nabisco, 579 U. S., at ___ (slip op., at 9). But if the rele-
vant conduct occurred in another country, “then the case
involves an impermissible extraterritorial application
regardless of any other conduct that occurred in U. S.
territory.” Ibid.
   When determining the focus of a statute, we do not
analyze the provision at issue in a vacuum. See Morrison,
supra, at 267–269. If the statutory provision at issue
works in tandem with other provisions, it must be as-
sessed in concert with those other provisions. Otherwise,
it would be impossible to accurately determine whether
the application of the statute in the case is a “domestic
application.” RJR Nabisco, 579 U. S., at ___ (slip op., at
9). And determining how the statute has actually been
applied is the whole point of the focus test. See ibid.
   Applying these principles here, we conclude that the
conduct relevant to the statutory focus in this case is
domestic. We begin with §284. It provides a general
damages remedy for the various types of patent infringe-
ment identified in the Patent Act. The portion of §284 at
issue here states that “the court shall award the claimant
damages adequate to compensate for the infringement.”
We conclude that “the infringement” is the focus of this
statute. As this Court has explained, the “overriding
purpose” of §284 is to “affor[d] patent owners complete
compensation” for infringements. General Motors Corp. v.
                    Cite as: 585 U. S. ____ (2018)                  7

                        Opinion of the Court

Devex Corp., 461 U.S. 648, 655 (1983). “The question”
posed by the statute is “ ‘how much ha[s] the Patent Holder
. . . suffered by the infringement.’ ” Aro Mfg. Co. v. Con-
vertible Top Replacement Co., 377 U.S. 476, 507 (1964).
Accordingly, the infringement is plainly the focus of §284.
    But that observation does not fully resolve this case, as
the Patent Act identifies several ways that a patent can be
infringed. See §271. To determine the focus of §284 in a
given case, we must look to the type of infringement that
occurred. We thus turn to §271(f)(2), which was the basis
for WesternGeco’s infringement claim and the lost-profits
damages that it received.2
    Section 271(f )(2) focuses on domestic conduct. It pro-
vides that a company “shall be liable as an infringer” if it
“supplies” certain components of a patented invention “in
or from the United States” with the intent that they “will
be combined outside of the United States in a manner that
would infringe the patent if such combination occurred
within the United States.” The conduct that §271(f )(2)
regulates—i.e., its focus—is the domestic act of
“suppl[ying] in or from the United States.” As this Court
has acknowledged, §271(f ) vindicates domestic interests:
It “was a direct response to a gap in our patent law,”
Microsoft Corp., 550 U. S., at 457, and “reach[es] compo-
nents that are manufactured in the United States but
assembled overseas,” Life Technologies, 580 U. S., at ___
(slip op., at 11). As the Federal Circuit explained,
§271(f )(2) protects against “domestic entities who export
components . . . from the United States.” 791 F. 3d, at
1351.
    In sum, the focus of §284, in a case involving infringe-
ment under §271(f )(2), is on the act of exporting compo-
nents from the United States. In other words, the domes-
——————
  2 Because the Federal Circuit did not address §271(f )(1), see n. 1,

supra, we limit our analysis to §271(f )(2).
8      WESTERNGECO LLC v. ION GEOPHYSICAL CORP.

                      Opinion of the Court

tic infringement is “the objec[t] of the statute’s solicitude”
in this context. Morrison, 561 U. S., at 267. 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 sup-
plying the components that infringed WesternGeco’s pat-
ents. Thus, the lost-profits damages that were awarded
to WesternGeco were a domestic application of §284.
                                B
   ION’s arguments to the contrary are not persuasive.
ION contends that the statutory focus here is “self-
evidently on the award of damages.” Brief for Respondent
22. While §284 does authorize damages, what a statute
authorizes is not necessarily its focus. Rather, the focus is
“the objec[t] of the statute’s solicitude”—which can turn on
the “conduct,” “parties,” or interests that it regulates or
protects. Morrison, supra, at 267. Here, the damages
themselves are merely the means by which the statute
achieves its end of remedying infringements. Similarly,
ION is mistaken to assert that this case involves an extra-
territorial application of §284 simply because “lost-profits
damages occurred extraterritorially, and foreign conduct
subsequent to [ION’s] infringement was necessary to give
rise to the injury.” Brief for Respondent 22. Those over-
seas events were merely incidental to the infringement.
In other words, they do not have “primacy” for purposes of
the extraterritoriality analysis. Morrison, supra, at 267.
   ION also draws on the conclusion in RJR Nabisco that
“RICO damages claims” based “entirely on injury suffered
abroad” involve an extraterritorial application of 18
U.S. C. §1964(c). 579 U. S., at ___ (slip op., at 27). From
this principle, ION extrapolates a general rule that dam-
ages awards for foreign injuries are always an extraterri-
torial application of a damages provision. This argument
misreads RJR Nabisco. That portion of RJR Nabisco
interpreted a substantive element of a cause of action, not
                     Cite as: 585 U. S. ____ (2018)                    9

                          Opinion of the Court

a remedial damages provision. See id., at ___ (slip op., at
18). It explained that a plaintiff could not bring a damages
claim under §1964(c) unless he could prove that he was
“ ‘injured in his business or property,’ ” which required
proof of “a domestic injury.” Ibid. Thus, RJR Nabisco was
applying the presumption against extraterritoriality to
interpret the scope of §1964(c)’s injury requirement; it did
not make any statements about damages—a separate
legal concept.
    Two of our colleagues contend that the Patent Act does
not permit damages awards for lost foreign profits. Post,
at 1 (GORSUCH, J., joined by BREYER, J., dissenting).
Their position wrongly conflates legal injury with the
damages arising from that injury. See post, at 2–3. And it
is not the better reading of “the plain text of the Patent
Act.” Post, at 9. Taken together, §271(f )(2) and §284
allow the patent owner to recover for lost foreign profits.
Under §284, damages are “adequate” to compensate for
infringement when they “plac[e] [the patent owner] in as
good a position as he would have been in” if the patent had
not been infringed. General Motors Corp., supra, at 655.
Specifically, a patent owner is entitled to recover “ ‘the
difference between [its] pecuniary condition after the
infringement, and what [its] condition would have been if
the infringement had not occurred.’ ” Aro Mfg. Co., supra,
at 507. This recovery can include lost profits. See Yale
Lock Mfg. Co. v. Sargent, 117 U.S. 536, 552–553 (1886).
And, as we hold today, it can include lost foreign profits
when the patent owner proves infringement under
§271(f )(2).3
                    *   *     *
  We hold that WesternGeco’s damages award for lost
——————
  3 In reaching this holding, we do not address the extent to which other

doctrines, such as proximate cause, could limit or preclude damages in
particular cases.
10    WESTERNGECO LLC v. ION GEOPHYSICAL CORP.

                    Opinion of the Court

profits was a permissible domestic application of §284.
The judgment of the Federal Circuit is reversed, and the
case is remanded for further proceedings consistent with
this opinion.
                                         It is so ordered.
                 Cite as: 585 U. S. ____ (2018)           1

                    Opinion
                    G ORSUCHof GORSUCH
                            , J.,        , J.
                                  dissenting

SUPREME COURT OF THE UNITED STATES
                          _________________

                         No. 16–1011
                          _________________

         WESTERNGECO LLC, PETITIONER v.
         ION GEOPHYSICAL CORPORATION
 ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
           APPEALS FOR THE FEDERAL CIRCUIT
                        [June 22, 2018]

  JUSTICE GORSUCH, with whom JUSTICE BREYER joins,
dissenting.
  The Court holds that WesternGeco’s lost profits claim
does not offend the judicially created presumption against
the extraterritorial application of statutes. With that
much, I agree. But I cannot subscribe to the Court’s fur-
ther holding that the terms of the Patent Act permit
awards of this kind. In my view the Act’s terms prohibit
the lost profits sought in this case, whatever the general
presumption against extraterritoriality applicable to all
statutes might allow. So while the Federal Circuit may
have relied in part on a mistaken extraterritoriality anal-
ysis, I respectfully submit it reached the right result in
concluding that the Patent Act forecloses WesternGeco’s
claim for lost profits.
  The reason is straightforward. A U. S. patent provides a
lawful monopoly over the manufacture, use, and sale of an
invention within this country only. Meanwhile, Western-
Geco seeks lost profits for uses of its invention beyond our
borders. Specifically, the company complains that it lost
lucrative foreign surveying contracts because ION’s cus-
tomers used its invention overseas to steal that business.
In measuring its damages, WesternGeco assumes it could
have charged monopoly rents abroad premised on a U. S.
patent that has no legal force there. Permitting damages
2      WESTERNGECO LLC v. ION GEOPHYSICAL CORP.

                    Opinion
                    G ORSUCHof GORSUCH
                            , J.,        , J.
                                  dissenting

of this sort would effectively allow U. S. patent owners to
use American courts to extend their monopolies to foreign
markets. That, in turn, would invite other countries to
use their own patent laws and courts to assert control over
our economy. Nothing in the terms of the Patent Act
supports that result and much militates against it.
  Start with the key statutory language. Under the Pa-
tent Act, a patent owner enjoys “the right to exclude oth-
ers from making, using, offering for sale, or selling the
invention throughout the United States.” 35 U.S. C.
§154(a)(1) (emphasis added). Emphasizing the point, the
Act proceeds to explain that to “infring[e] the patent”
someone must “without authority mak[e], us[e], offe[r] to
sell, or sel[l] [the] patented invention, within the United
States.” §271(a) (emphasis added). So making, using, or
selling a patented invention inside the United States
invites a claim for infringement. But those same acts
outside the United States do not infringe a U. S. patent
right.
  These principles work their way into the statutory
measure of damages too. A patent owner who proves
infringement is entitled to receive “damages adequate to
compensate for the infringement.” §284 (emphasis added).
Because an infringement must occur within the United
States, that means a plaintiff can recover damages for the
making, using, or selling of its invention within the United
States, but not for the making, using, or selling of its
invention elsewhere.
  What’s the upshot for our case? The jury was free to
award WesternGeco royalties for the infringing products
ION produced in this country; indeed, ION has not chal-
lenged that award either here or before the Federal Cir-
cuit. If ION’s infringement had cost WesternGeco sales in
this country, it could have recovered for that harm too. At
the same time, WesternGeco is not entitled to lost profits
caused by the use of its invention outside the United
                     Cite as: 585 U. S. ____ (2018)                    3

                        Opinion
                        G ORSUCHof GORSUCH
                                , J.,        , J.
                                      dissenting

States. That foreign conduct isn’t “infringement” and so
under §284’s plain terms isn’t a proper basis for awarding
“compensat[ion].” No doubt WesternGeco thinks it unfair
that its invention was used to compete against it overseas.
But that’s simply not the kind of harm for which our pa-
tent laws provide compensation because a U. S. patent
does not protect its owner from competition beyond our
borders.
   This Court’s precedents confirm what the statutory text
indicates. In Brown v. Duchesne, 19 How. 183 (1857), the
Court considered whether the use of an American inven-
tion on the high seas could support a damages claim under
the U. S. patent laws. It said no. The Court explained
that “the use of [an invention] outside of the jurisdiction of
the United States is not an infringement of [the patent
owner’s] rights,” and so the patent owner “has no claim to
any compensation for” that foreign use. Id., at 195–196. A
defendant must “compensate the patentee,” the Court
continued, only to the extent that it has “com[e] in compe-
tition with the [patent owner] where the [patent owner]
was entitled to the exclusive use” of his invention—
namely, within the United States. Id., at 196. What held
true there must hold true here. ION must compensate
WesternGeco for its intrusion on WesternGeco’s exclusive
right to make, use, and sell its invention in the United
States. But WesternGeco “has no claim to any compensa-
tion for” noninfringing uses of its invention “outside of the
jurisdiction of the United States.” Id., at 195–196.1
——————
  1 The  Solicitor General disputes this reading of Duchesne. In his
view, the Court indicated that, if a defendant “committed domestic
infringement” by making the invention in the United States, the patent
owner would have been entitled to recover for any subsequent use of
the invention, including “ ‘the use of this improvement . . . on the high
seas.’ ” Brief for United States as Amicus Curiae 17 (quoting Duchesne,
19 How., at 196). I am unpersuaded. The Court proceeded to explain
that the “only use” of the invention that might require compensation
4       WESTERNGECO LLC v. ION GEOPHYSICAL CORP.

                        Opinion
                        G ORSUCHof GORSUCH
                                , J.,        , J.
                                      dissenting

   Other precedents offer similar teachings. In Birdsall v.
Coolidge, 93 U.S. 64 (1876), the Court explained that
damages are supposed to compensate a patent owner for
“the unlawful acts of the defendant.” Ibid. To that end,
the Court held, damages “shall be precisely commensurate
with the injury suffered, neither more nor less.” Ibid.
(emphasis added). It’s undisputed that the only injury
WesternGeco suffered here came from ION’s infringing
activity within the United States. A damages award that
sweeps much more broadly to cover third parties’ nonin-
fringing foreign uses can hardly be called “precisely com-
mensurate” with that injury.
   This Court’s leading case on lost profit damages points
the same way. In Yale Lock Mfg. Co. v. Sargent, 117 U.S.
536 (1886), the patent owner “availed himself of his exclu-
sive right by keeping his patent a monopoly” and selling
the invention himself. Id., at 552. As damages for a com-
petitor’s infringement of the patent, the patent owner
could recover “the difference between his pecuniary condi-
tion after the infringement, and what his condition would
have been if the infringement had not occurred.” Ibid.
And that difference, the Court held, “is to be measured” by
the additional profits the patent owner “would have real-
ized from such sales if the infringement had not interfered
with such monopoly.” Id., at 552–553. So, again, the
Court tied the measure of damages to the degree of inter-
ference with the patent owner’s exclusive right to make,
use, and sell its invention. And, again, that much is miss-
ing here because foreign uses of WesternGeco’s invention

——————
was “in navigating the vessel into and out of [Boston] harbor, . . . while
she was within the jurisdiction of the United States.” Id., at 196 (em-
phasis added). With respect to uses outside the United States, the
Court made clear that “compensation” was unavailable. Id., at 195–
196. Tellingly, WesternGeco does not adopt the Solicitor General’s
reading of Duchesne—or even cite the case.
                     Cite as: 585 U. S. ____ (2018)                    5

                        Opinion
                        G ORSUCHof GORSUCH
                                , J.,        , J.
                                      dissenting

could not have interfered with its U. S. patent monopoly.2
   You might wonder whether §271(f )(2) calls for a special
exception to these general principles. WesternGeco cer-
tainly thinks it does. It’s true, too, that §271(f )(2) expressly
refers to foreign conduct. The statute says that some-
one who exports a specialized component, “intending that
[it] 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.”    From this language, you might wonder
whether §271(f )(2) seeks to protect patent owners from
the foreign conduct that occurred in this case.
   It does not. Section 271(f )(2) modifies the circumstances
when the law will treat an invention as having been made
within the United States. It permits an infringement
claim—and the damages that come with it—not only when
someone produces the complete invention in this country
for export, but also when someone exports key components
of the invention for assembly aboard. A person who ships
components from the United States intending they be
assembled across the border is “liable” to the patent owner
for royalties and lost profits the same as if he made the
entire invention here. §271(f )(2). But none of this changes
——————
  2 WesternGeco claims this Court permitted recovery based on foreign

sales of an invention in Manufacturing Co. v. Cowing, 105 U.S. 253
(1882), but the Court never mentioned, much less decided, the issue. It
merely observed, in passing, that the only markets for the invention at
issue were “the oil-producing regions of Pennsylvania and Canada.”
Id., at 256. The Court did not even say whether the Canada-bound
products were actually sold in Canada (as opposed, say, to Canadian
buyers in the United States). Meanwhile, in Dowagiac Mfg. Co. v.
Minnesota Moline Plow Co., 235 U.S. 641 (1915), the Court rejected
“recovery of either profits or damages” for products sold in Canada. Id.,
at 650. And while it distinguished Cowing on the ground that the
defendants there had made the infringing articles in the United States,
that hardly elevated Cowing’s failure to address the foreign sales issue
into a reasoned decision on the question.
6      WESTERNGECO LLC v. ION GEOPHYSICAL CORP.

                    Opinion
                    G ORSUCHof GORSUCH
                            , J.,        , J.
                                  dissenting

the bedrock rule that foreign uses of an invention (even an
invention made in this country) do not infringe a U. S.
patent. Nor could it. For after §271(f )(2)’s adoption, as
before, patent rights exclude others from making, using,
and selling an invention only “throughout the United
States.” §154(a)(1).
   The history of the statute underscores the point. In
Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518
(1972), the Court held that a defendant did not “make” an
invention within the United States when it produced the
invention’s components here but sold them to foreign
buyers for final assembly abroad. Id., at 527–528. The
Court recognized that, if the defendant had assembled the
parts in this country and then sold them to the foreign
buyers, it would have unlawfully made and sold the inven-
tion within the United States. Id., at 527. But because
what it made and sold in this country “fell short” of the
complete invention, the Court held, the patent laws did
not prohibit its conduct. Ibid. The dissent, by contrast,
argued that for all practical purposes the invention “was
made in the United States” since “everything was accom-
plished in this country except putting the pieces together.”
Id., at 533 (opinion of Blackmun, J.). Apparently Congress
agreed, for it then added §271(f )(2) and made clear that
someone who almost makes an invention in this country
may be held liable as if he made the complete invention in
this country. As the Solicitor General has explained, the
new statute “effectively treat[ed] the domestic supply of
the components of a patented invention for assembly
abroad as tantamount to the domestic manufacture of the
completed invention for export.” Brief for United States as
Amicus Curiae 22 (emphasis added). Section 271(f )(2)
thus expands what qualifies as making an invention in
this country but does nothing to suggest that U. S. patents
protect against—much less guarantee compensation for—
uses abroad.
                 Cite as: 585 U. S. ____ (2018)           7

                    Opinion
                    G ORSUCHof GORSUCH
                            , J.,        , J.
                                  dissenting

   Any suggestion that §271(f )(2) provides protection
against foreign uses would also invite anomalous results.
It would allow greater recovery when a defendant exports
a component of an invention in violation of §271(f )(2) than
when a defendant exports the entire invention in violation
of §271(a). And it would threaten to “ ‘conver[t] a single
act of supply from the United States into a springboard for
liability.’ ” Microsoft Corp. v. AT&T Corp., 550 U.S. 437,
456 (2007). Here, for example, supplying a single infring-
ing product from the United States would make ION
responsible for any foreseeable harm its customers cause
by using the product to compete against WesternGeco
worldwide, even though WesternGeco’s U. S. patent
doesn’t protect it from such competition. It’s some spring-
board, too. The harm flowing from foreign uses in this
case appears to outstrip wildly the harm inflicted by ION’s
domestic production: the jury awarded $93.4 million in
lost profits from uses in 10 foreign surveys but only $12.5
million in royalties for 2,500 U. S.-made products.
   Even more dramatic examples are not hard to imagine.
Suppose a company develops a prototype microchip in a
U. S. lab with the intention of manufacturing and selling
the chip in a foreign country as part of a new smartphone.
Suppose too that the chip infringes a U. S. patent and that
the patent owner sells its own phone with its own chip
overseas. Under the terms of the Patent Act, the developer
commits an act of infringement by creating the proto-
type here, but the additional chips it makes and sells
outside the United States do not qualify as infringement.
Under WesternGeco’s approach, however, the patent
owner could recover any profits it lost to that foreign
competition—or even three times as much, see §284—
effectively giving the patent owner a monopoly over for-
eign markets through its U. S. patent. That’s a very odd
role for U. S. patent law to play in foreign markets, as
“foreign law alone, not United States law,” is supposed to
8      WESTERNGECO LLC v. ION GEOPHYSICAL CORP.

                    Opinion
                    G ORSUCHof GORSUCH
                            , J.,        , J.
                                  dissenting

govern the manufacture, use, and sale “of patented inven-
tions in foreign countries.” Microsoft, supra, at 456.
   Worse yet, the tables easily could be turned. If our
courts award compensation to U. S. patent owners for
foreign uses where our patents don’t run, what happens
when foreign courts return the favor? Suppose our hypo-
thetical microchip developer infringed a foreign patent in
the course of developing its new chip abroad, but then
mass produced and sold the chip in the United States. A
foreign court might reasonably hold the U. S. company
liable for infringing the foreign patent in the foreign coun-
try. But if it followed WesternGeco’s theory, the court
might then award monopoly rent damages reflecting a
right to control the market for the chip in this country—
even though the foreign patent lacks any legal force here.
It is doubtful Congress would accept that kind of foreign
“control over our markets.” Deepsouth, supra, at 531. And
principles of comity counsel against an interpretation of
our patent laws that would interfere so dramatically with
the rights of other nations to regulate their own econo-
mies. While Congress may seek to extend U. S. patent
rights beyond our borders if it chooses, cf. §105 (address-
ing inventions made, used, and sold in outer space), noth-
ing in the Patent Act fairly suggests that it has taken that
step here.
   Today’s decision unfortunately forecloses further consid-
eration of these points. Although its opinion focuses al-
most entirely on why the presumption against extraterri-
toriality applicable to all statutes does not forbid the
damages sought here, the Court asserts in a few cursory
sentences that the Patent Act by its terms allows recovery
for foreign uses in cases like this. See ante, at 9. In doing
so, the Court does not address the textual or doctrinal
analysis offered here. It does not explain why “damages
adequate to compensate for the infringement” should
include damages for harm from noninfringing uses. §284
                  Cite as: 585 U. S. ____ (2018)             9

                     Opinion
                     G ORSUCHof GORSUCH
                             , J.,        , J.
                                   dissenting

(emphasis added). It does not try to reconcile its holding
with the teachings of Duchesne, Birdsall, and Yale Lock.
And it ignores Microsoft’s admonition that §271(f )(2)
should not be read to create springboards for liability
based on foreign conduct. Instead, the Court relies on two
cases that do not come close to supporting its broad hold-
ing. In General Motors Corp. v. Devex Corp., 461 U.S. 648
(1983), the Court held that prejudgment interest should
normally be awarded so as to place the patent owner “in as
good a position as [it] would have been in had the in-
fringer” not infringed. Id., at 655. Allowing recovery for for-
eign uses, however, puts the patent owner in a better
position than it was before by allowing it to demand mo-
nopoly rents outside the United States as well as within.
In Aro Mfg. Co. v. Convertible Top Replacement Co., 377
U.S. 476 (1964), meanwhile, the Court simply applied
Yale Lock’s rule that a patent owner may recover “ ‘the
difference between his pecuniary condition after the in-
fringement, and what his condition would have been if the
infringement had not occurred.’ ” Id., at 507 (quoting Yale
Lock, 117 U. S., at 552). As we’ve seen, that test seeks to
measure the interference with the patent owner’s lawful
monopoly over U. S. markets alone.
   By failing to heed the plain text of the Patent Act and
the lessons of our precedents, the Court ends up assuming
that patent damages run (literally) to the ends of the
earth. It allows U. S. patent owners to extend their patent
monopolies far beyond anything Congress has authorized
and shields them from foreign competition U. S. patents
were never meant to reach. Because I cannot agree that
the Patent Act requires that result, I respectfully dissent.