The general rule in patent law is that each country has its own patent system. If you want damages for sales in the United States, you need a U.S. patent. If you want damages for sales in New Zealand, you need to get a New Zealand patent, and so on. A case currently before the U.S. Supreme Court threatens to disrupt this system by allowing worldwide damages for infringement of U.S. patents. Together with the R Street Institute, EFF has filed an amicus brief [PDF] in the case explaining that extraterritorial damages are inconsistent with the Patent Act and would hurt U.S. innovation.
The case, called WesternGeco LLC v. ION Geophysical Corp., involves damages for overseas patent infringement. Literally. WesternGeco owns a patent that covers a method of conducting marine seismic surveys. ION exported components that, when combined, were used to infringe the patent. Under Section 271(f) of the Patent Act, exporting components of a patented invention for assembly abroad is considered infringement. Accordingly, WesternGeco received damages for the sales of the components. The question in the case is whether WesternGeco should also receive lost profits for the use of the invention overseas (even though that use is not itself infringement under U.S. law).
Our amicus brief explains that Section 271(f) was enacted to close a loophole relating to certain exports but was not intended to expand patent remedies to regulate international use. If that was the only issue, however, the case might not have much impact. Section 271(f) cases are fairly rare. But a much bigger question is lurking in the background. The Solicitor General argued that overseas damages should be available in all patent cases if domestic infringement can be seen as a cause of overseas sales or uses. Thanks to today’s global supply chains, this could radically expand the scope of U.S. patent law and inflate damage awards.
Read the full post at EFF.