## Facts

- WesternGeco owned U.S. patents covering technology for controlling marine seismic survey streamers to produce more accurate ocean-floor maps.
- WesternGeco primarily used the patented technology to provide surveying services, rather than selling the system.
- ION manufactured components in the United States and supplied them to foreign entities for assembly abroad into survey systems that competed with WesternGeco’s technology.
- WesternGeco alleged that ION’s foreign customers used the assembled systems to perform offshore surveys and captured contracts WesternGeco otherwise would have won.
- A jury found ION liable for infringement under 35 U.S.C. § 271(f)(2) and awarded reasonable royalties plus lost profits based on 10 identified foreign survey contracts.
- The Federal Circuit set aside the lost-profits award, holding that lost foreign profits were unavailable for § 271(f)(2) infringement.
- The Supreme Court granted review limited to whether § 284 allows recovery of lost foreign profits for domestic infringement under § 271(f)(2).

## Issues

1. Whether awarding lost profits tied to foreign contracts, when infringement is proven under 35 U.S.C. § 271(f)(2), is a permissible domestic application of 35 U.S.C. § 284 under the presumption against extraterritoriality.
2. How to identify the “focus” of § 284 for extraterritoriality analysis when § 284 operates with an infringement provision such as § 271(f)(2).

## Decision

- The Supreme Court reversed the Federal Circuit and remanded.
- The Court held that awarding WesternGeco lost profits reflecting foreign contracts was a permissible domestic application of § 284 in a case of § 271(f)(2) infringement.
- Applying the extraterritoriality framework, the Court resolved the case at step two by identifying the statutory “focus” and locating the conduct relevant to that focus.
- The Court concluded that, in this setting, the relevant conduct was the domestic act of supplying components “in or from the United States,” and foreign downstream effects did not make the award extraterritorial.
- Justice Gorsuch, joined by Justice Breyer, dissented, arguing that permitting foreign lost profits improperly extends U.S. patent remedies into foreign markets.

## Legal Principles

- Under the presumption against extraterritoriality, a court asks whether the application of a statute in the case is domestic by identifying the statute’s “focus” and determining where the conduct relevant to that focus occurred.
- Section 284’s damages command (“damages adequate to compensate for the infringement”) must be read with the infringement provision that defines the actionable conduct; its focus is on remedying the particular type of infringement proven.
- For infringement under § 271(f)(2), the conduct relevant to the focus is the domestic supply of specially made or adapted components from the United States with intent that they be combined abroad in an infringing manner.
- Damages may include foreign economic consequences (such as lost profits on foreign contracts) when those losses are proximately tied to, and serve to compensate for, a domestic act of infringement that is the focus of the statutory scheme as applied.

## Conclusion

The Court held that a patentee who proves infringement under § 271(f)(2) may recover lost profits based on foreign contracts under § 284, because the statutes’ focus in that context is the domestic act of supplying components from the United States, making the damages award a domestic application of U.S. patent law.


WesternGeco LLC v. ION Geophysical Corp., 138 S. Ct. 2129 (2018)