Patent Damages Without Borders
41 Pages Posted: 18 Aug 2016 Last revised: 16 Jan 2018
Date Written: August 9, 2017
The presumption against extraterritoriality is a deceptively straightforward principle: that U.S. law applies only inside the United States. But there is confusion regarding whether the presumption applies when a court calculates patent damages. In WesternGeco L.L.C. v. Ion Geophysical Corp., the Federal Circuit held that patent holders who show infringement under § 271(f) of the Patent Act cannot recover foreign lost profits. The court maintained that allowing recovery of such damages would result in the Patent Act applying extraterritorially, which cannot be done without Congress’s clear intent. This interpretation severely limits the ability of district courts to make patent infringement victims whole. This Article maintains that the Federal Circuit’s reliance on the presumption is misplaced. The presumption was established to prevent U.S. law from applying to extraterritorial conduct; it was not intended to cover situations where foreign harm flows directly from an act of domestic patent infringement. The presumption has been rebutted under the Supreme Court’s two-step extraterritoriality test. By creating this bright-line rule, the Federal Circuit has unduly restricted the ability of patent holders to recover damages, including in cases where there is no other applicable law. This Article proposes that the Federal Circuit adopt a flexible test that balances prescriptive comity concerns with the United State’s interest in making victims of domestic patent infringement whole.
Keywords: 271(f); extraterritoriality, damages, westerngeco
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