SCOTUS Permits Lost Foreign Profit Damages

On Friday, in WesternGeco LLC v. ION Geophysical Corp., the Supreme Court held 7-2 that patentees may recover lost foreign profits based on infringement under 35 U.S.C. § 271(f)(2), reversing the Federal Circuit.  Justice Thomas, writing for the majority, concluded that even if the presumption against extraterritoriality applied, the award of damages for lost foreign profits was a permissible domestic application of the statute in the context of a § 271(f)(2) infringement action. In reaching this conclusion, the Court proceeded by identifying the focus of the statute to see if the regulated conduct takes place in the United States. The Court held that § 271(f)(2) creates liability for supplying components of a patented invention “in or from the United States” with the intent that they “will be combined outside the United States,” resulting in conduct that would infringe if performed in the United States. As a result, the focus of § 271(f)(2) is the domestic act of “supplying” these components. Justice Gorsuch issued a dissenting opinion, in which Justice Breyer joined.

Following that decision, Jannsen filed a letter with the court on Friday seeking a conference in the ongoing litigation regarding Celltrion’s infiliximab biosimilar. Janssen stated in its letter that “[a]lthough the Court addressed damages under 35 U.S.C. § 271(f)(2), which is not at issue in this case, we believe that its reasoning necessarily means that foreign lost profits are available under sections 271(a), 271(b), and 271(f)(1), which are at issue here. As a result, Janssen intends to seek leave to amend its damages case to include a claim for foreign lost profits.”