Westerngeco L.L.C. v. Ion Geophysical Corp.
791 F.3d 1340
Fed. Cir.2015Background
- WesternGeco sued ION for infringement of four U.S. patents covering marine seismic-survey systems and 4D surveying; jury found infringement, willfulness, and awarded $93.4M lost profits plus $12.5M reasonable royalties.
- WesternGeco manufactures Q‑Marine and performs surveys; ION manufactures DigiFINs, ships them abroad to customers who perform competing surveys.
- District court granted summary judgment that claim 18 of the '520 patent infringed under 35 U.S.C. § 271(f)(1); jury found additional claims infringed under § 271(f)(1) and (f)(2).
- ION appealed ownership/standing, the § 271(f) intent standard, jury instructions, and the award of lost profits for contracts performed abroad; WesternGeco cross‑appealed on exclusion of its royalty expert and denial of enhanced damages for willfulness.
- The Federal Circuit affirmed ownership, affirmed infringement (relying on § 271(f)(2) jury findings), affirmed exclusion of the royalty expert, affirmed denial of enhanced damages, but reversed the award of lost profits for work performed abroad.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing/ownership of three patents | WesternGeco: chain of title (inventor assignments, 1998 cost‑sharing and 2000 transfer to WesternGeco) establishes ownership | ION: gaps/defects in chain of title; employment contracts alone didn’t vest title | Court: substantial evidence supports assignments; WesternGeco owns the patents and had standing |
| § 271(f)(1) intent requirement | WesternGeco: (f)(1) requires active inducement to combine components abroad; summary judgment proper as court instructed | ION: (f)(1) also requires knowledge that the foreign combination would infringe if done in U.S. | Court: did not decide correct (f)(1) standard because jury found liability under § 271(f)(2), which independently supports liability |
| Jury instructions and references to (f)(1) summary judgment | WesternGeco: may refer to summary judgment and prior rulings; no juror confusion | ION: requested limiting instruction and objected to references linking (f)(1) ruling to (f)(2) claims | Court: district court did not err in refusing overbroad limiting instruction; no plain error from unobjected references |
| Lost profits for foreign contracts | WesternGeco: lost contracts abroad resulted from ION’s export of infringing components; should recover lost profits | ION: U.S. patent law presumes against extraterritoriality; damages for foreign use/sales are barred | Court: reversed lost profits for foreign surveys — § 271(f) liability arises from export act but does not permit recovery of lost profits from foreign use; reasonable royalty still permissible |
Key Cases Cited
- Rite‑Hite Corp. v. Kelley Co., 56 F.3d 1538 (Fed. Cir.) (ownership/standing principles for patent suits)
- Microsoft Corp. v. AT & T Corp., 550 U.S. 437 (2007) (presumption against extraterritorial application of U.S. patent law; § 271(f) is a limited exception)
- Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518 (1972) (domestic manufacture then export of uncombined components was not infringement before § 271(f))
- Power Integrations, Inc. v. Fairchild Semiconductor Int’l, Inc., 711 F.3d 1348 (Fed. Cir.) (foreign sales generally cannot form the basis for lost‑profits damages tied to domestic infringement absent sufficient connection)
- Abraxis Bioscience, Inc. v. Navinta LLC, 625 F.3d 1359 (Fed. Cir.) (contracts obligating future assignment do not automatically vest title until assignment executed)
- In re Seagate Tech., LLC, 497 F.3d 1360 (Fed. Cir.) (two‑prong test for willful infringement: objective risk and subjective knowledge)
- Daubert v. Merrell Dow Pharm., 509 U.S. 579 (1993) (trial court gatekeeping of expert testimony)
- Cardiac Pacemakers, Inc. v. St. Jude Med., 576 F.3d 1348 (Fed. Cir.) (limits on § 271(f) application to method claims; relevance of foreign sales to damages where § 271(f) applies)
- Promega Corp. v. Life Techs. Corp., 773 F.3d 1338 (Fed. Cir.) (recognizing jury awards of worldwide sales‑based lost profits under § 271(f) where appropriate)
- Union Carbide Chems. & Plastics Tech. Corp. v. Shell Oil Co., 425 F.3d 1366 (Fed. Cir.) (foreign sales evidence can be relevant to damages under § 271(f))