Grüneberg and Myers - Intellectual Property Law


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Lost Profits Under §271(f) apply Extraterritorially


In WesternGeco LLC v. Ion Geophysical Corp, in a 7-2 decision the Supreme Court held that award for lost profits was a permissible domestic application of §284 of the Patent Act.  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.  The Court identified “the statute’s ‘focus’ ” then asked whether the conduct relevant to that focus occurred in United States territory.   §271(f)(2) was the basis for the lost-profits damages which regulates the domestic act of "supply[ing] ... in or from the United States."  The focus of §284 in a case involving infringement under §271(f)(2) is on the act of exporting components from the United States.  So, the conduct in this case that is relevant to the statutory focus clearly occurred in the United States, justifying the recovery of lost foreign profits.

Richard Chinn