Lost profits recoverable for foreign use: USSC

The Supreme Court of the United States of America recently clarified that patent owners can recover for lost profits resulting from infringer’s export of the components of a patented invention to its customers outside of USA.

The Supreme Court found that the presumption that federal statutes apply only within the territorial jurisdiction of the United States did not prohibit the award of lost profits to patent owners.

“In sum, the focus of §284 [the Patent Act’s general damages provision] in a case involv­ing infringement under §271(f)(2) is on the act of exporting compo­nents from the United States. So the conduct in this case that is rel­evant to the statutory focus clearly occurred in the United States”, the Court said.

The Court said “The award of damages is not the statutory focus here. The damages themselves are merely the means by which the statute achieves its end of reme­dying infringements, and the overseas events giving rise to the lost-profit damages here were merely incidental to the infringement.”

Petitioner owns patents for a system used to survey the ocean floor. Respondent began selling a competing system that was built from components manufactured in the United States, shipped to companies abroad, and assembled therein to a system indistinguishable from Petitioner’s system. The Federal Circuit held that Respondent was liable for infringement but §271(f) does not allow patent owners to recover for lost foreign profits.

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