WesternGeco LLC v. ION Geophysical Corp.

WesternGeco LLC held patents on technology for marine seismic surveying. It sued ION Geophysical Corp., alleging that ION manufactured components in the United States and shipped them overseas for assembly into a competing system, infringing under 35 U.S.C. §271(f)(2). A jury awarded WesternGeco lost profits and reasonable royalties. The Court of Appeals for the Federal Circuit reversed the lost-profits award for foreign uses, holding that patent damages could not extend extraterritorially. The Supreme Court reversed, holding 7-2 that the lost profits from foreign uses were a permissible domestic application of §271(f) because the infringing act—exporting components from the US—occurred domestically. The decision allowed WesternGeco to recover over $90 million in damages.

The Supreme Court reversed the Federal Circuit’s judgment, holding that WesternGeco could recover lost profits for foreign uses, as the relevant conduct was the domestic act of supplying components. The case was remanded for further proceedings consistent with this opinion, reinstating the damages award.

Whether a patent holder who proves infringement under 35 U.S.C. §271(f)(2) can recover lost profits resulting from the foreign use of the patented invention assembled from components supplied from the United States.

The ruling significantly strengthened patent protections for US innovators by clarifying that damages for infringement under §271(f) can include profits lost to foreign competitors. It encourages companies to maintain their supply chains in compliance with patent law and expands the financial risk for those exporting components that infringe. The decision has been cited as a key precedent on the extraterritorial reach of US patent statutes and has influenced international patent strategy and enforcement.