Gov’t Urges High Court to Rule on Overseas Patent Infringement

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By Tony Dutra

The Department of Justice asked the U.S. Supreme Court to take up WesternGeco LLC’s petition seeking $93.4 million in profits lost to patent infringing acts conducted overseas.

The high court is weighing whether to hear an infringement case in which the U.S. Court of Appeals for the Federal Circuit removed a portion of damages awarded to WesternGeco by a federal district court jury related to infringement outside the U.S.

“The damages-calculation question presented here is an important and recurring one,” the department said in its brief docketed Dec. 6.

WesternGeco, a subsidiary of Schlumberger Ltd., asserted four patents on searching for oil and gas beneath the ocean floor against ION Geophysical Corp. A jury found that ION’s DigiFin system infringed and awarded $106 million in lost profits for 10 DigiFin contracts that WesternGeco would otherwise have made. However, some of the ION licenses were to overseas companies that conducted the searches. The Federal Circuit took away the portion of the damages that were earned in foreign settings.

Lost profits are intended to restore patentees to where they would have been absent infringement, and the Federal Circuit’s approach under-compensates those patentees, the department said in its brief.

The high court took briefing from both sides and decided in May to seek the government’s views before deciding whether to take the case.

Courts generally shouldn’t violate the presumption against extraterritorial application of U.S. law, the department said in its brief. The presumption avoids “international discord” and reflects the understanding that Congress makes laws for domestic purposes, the department said.

However, such concerns aren’t relevant when a court is “taking account of foreign evidence and events in imposing liability for domestic conduct,” the department said in its brief. WesternGeco used the evidence of infringing surveys conducted on the high seas to show how much better off it would have been if ION hadn’t engaged in domestic infringement, the department said.

WesternGeco LLC v. ION Geophysical Corp. , U.S., No. 16-1011, gov’t brief filed 12/6/17

To contact the reporter on this story: Tony Dutra in Washington at adutra@bloomberglaw.com

To contact the editor responsible for this story: Mike Wilczek at mwilczek@bloomberglaw.com

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