Westerngeco L.L.C. v. Ion Geophysical Corp.
913 F.3d 1067
Fed. Cir.2019Background
- WesternGeco sued ION for patent infringement of several patents covering lateral-steering technology for marine seismic survey streamers; jury found infringement and awarded a $12.5M reasonable royalty and $93.4M in lost profits.
- ION sold steering devices (DigiFin) to survey contractors; WesternGeco used its device (Q‑Marine) to perform surveys (WesternGeco did not sell devices).
- The jury based lost profits on 10 surveys WesternGeco claimed it would have won but for ION’s sales.
- The PTAB (and later this court) invalidated four of the six asserted claims; only one dependent claim (’520 claim 23) remains able to support lost profits.
- The Supreme Court in WesternGeco III held that lost-profits damages under 35 U.S.C. § 284 for § 271(f)(2) infringement were a permissible domestic application of the statute and remanded for further proceedings, noting proximate-cause and other limits not addressed.
- On remand this court: (1) declined to reopen the fully paid and unappealed reasonable-royalty judgment despite intervening claim invalidations, and (2) remanded to the district court to decide whether the lost-profits award must be retried because the jury’s single damages verdict may have rested on now-invalid claims (unless undisputed evidence shows the surviving claim alone necessarily supported the surveys).
Issues
| Issue | Plaintiff's Argument (WesternGeco) | Defendant's Argument (ION) | Held |
|---|---|---|---|
| Can the fully paid reasonable-royalty judgment be reopened after intervening invalidation of asserted claims? | The reasonable-royalty award should stand as a final, paid judgment. | Invalidation of claims that supported the award requires reopening or a new trial per Fresenius. | Affirmed: judgment was final, paid, and stipulated; Fresenius does not permit reopening of a satisfied, unappealable final judgment. |
| Are lost profits recoverable when patentee and infringer do not directly sell the same end product (device vs. survey service)? | Lost profits are recoverable under Panduit where consumers viewed devices as substitutes; direct seller-seller competition is not required. | Panduit requires direct competition; WesternGeco and ION are not in same market (device seller vs. service provider). | Rejected ION’s direct-competition argument: sufficient evidence existed that devices competed for survey work; apportionment may be required but argument was waived on appeal. |
| Does intervening invalidation of multiple asserted claims that supported a single damages verdict automatically require a new trial on lost profits? | Lost-profits award can stand if the surviving claim (’520 claim 23) alone was necessarily essential to perform the surveys. | The jury may have relied on invalid claims; single verdict on damages requires a new trial. | Remanded: new trial not automatic. District court must determine whether undisputed evidence shows claim 23 alone was necessary for the 10 surveys; if not, new trial required. |
| Were the parties’ experts’ trial statements sufficient to show the jury necessarily relied on the surviving claim alone? | Expert testimony showed any one asserted Bittleston claim would support full lost-profits award. | Experts’ testimony was assumption-based and not dispositive on the technical necessity of claim 23. | Court found expert testimony insufficiently specific; remanded for district court to decide on the record whether evidence was undisputed that claim 23 alone was necessary. |
Key Cases Cited
- WesternGeco LLC v. ION Geophysical Corp., 138 S. Ct. 2129 (2018) (Supreme Court held lost-profits under §271(f)(2) can be a permissible domestic application of §284)
- Halo Elecs., Inc. v. Pulse Elecs., Inc., 136 S. Ct. 1923 (2016) (standard for awarding enhanced damages)
- Fresenius USA, Inc. v. Baxter Int’l, Inc., 721 F.3d 1330 (Fed. Cir. 2013) (limits reopening final judgments following intervening patent invalidations)
- Rite‑Hite Corp. v. Kelley Co., 56 F.3d 1538 (Fed. Cir. 1995) (explaining Panduit but not imposing a categorical direct-competition requirement)
- BIC Leisure Prods., Inc. v. Windsurfing Int’l Inc., 1 F.3d 1214 (Fed. Cir. 1993) (Panduit analysis assumes products are substitutes in the relevant market)
- i4i Ltd. P’ship v. Microsoft Corp., 598 F.3d 831 (Fed. Cir. 2010) (general-verdict rule: verdict must be set aside if based on at least one defective legal theory)
- Verizon Servs. Corp. v. Vonage Holdings Corp., 503 F.3d 1295 (Fed. Cir. 2007) (single damages verdict with multiple patents; new trial may be required if some patents invalidated)
- Avid Tech., Inc. v. Harmonic, Inc., 812 F.3d 1040 (Fed. Cir. 2016) (harmlessness analysis for erroneous jury instructions and when error does not require retrial)