The U.S. Supreme Court may soon add a third patent-related case to its docket, if it follows the advice of the Justice Department to review whether a U.S. patent holder has a right to damages for infringing acts conducted overseas.
The justices will consider a petition in WesternGeco LLC v. ION Geophysical Corp., a case where foreign entities used a U.S. company’s system to infringe patents on searching for oil and gas beneath the ocean floor, at a Jan. 5 conference.
A win by the petitioner at the Supreme Court would give U.S. patent owners a chance to recoup some profits lost because of infringement that occurs outside of the country.
The compensation wouldn’t be for the foreign use alone, but for “reasonably foreseeable consequential damages caused by the unfair competition,” Mark L. Whitaker, a partner in Morrison & Foerster and past president of the American Intellectual Property Law Association, told Bloomberg Law in an email. “Allowing the Federal Circuit’s unduly rigid bar to stand would also ignore the realities of globalization/multinational business operations, and further erode the value of U.S. patents,” Whitaker said.
WesternGeco, a subsidiary of Schlumberger Ltd., is seeking to overturn the appeals court’s decision to reduce a jury’s damages award by $93.4 million, representing lost profits for particular actions taken by ION Geophysical leading to infringement overseas. If the Supreme Court decides to hear the case, which it may announce as early as Jan. 5, it likely would schedule oral argument for April.
The Supreme Court asked the Solicitor General to weigh in on the case, which likely boosts the chances the court will hear it. The court grants less than 3 percent of the petitions filed in civil cases overall, but decides to take cases 75 percent of the time after the solicitor general recommends it do so, according to a 2009 study published in the George Mason Law Review.
The government acknowledged the presumption against extraterritorial application of U.S. law to the foreign entities, to avoid “international discord.” But it supported a patent owner’s ability to use foreign evidence and events to justify a calculation of lost profits for infringing a U.S. patent.
ION Geophysical filed a supplemental brief on Dec. 20 to counter the government’s arguments, complaining that the brief answered a different question than WesternGeco and the case present.
The high court will consider 14 other petitions asking it to hear patent-related cases at its Jan. 5 conference. Companies that lost patent rights are hoping to end the string of Supreme Court denials of petitions complaining about the high court’s standard for patent eligibility. Others present questions on patent challenge proceedings under the America Invents Act of 2011 (AIA), which could be moot if the Supreme Court decides, in Oil States Energy Servs., LLC v. Greene’s Energy Grp., LLC, that the proceedings are unconstitutional.
Patent Eligibility Fights
Patent holders with computer-implemented inventions continue to attack how federal courts have implemented the Supreme Court’s 2014 ruling in Alice Corp. v. CLS Bank Int’l. The high court, which will discuss three such petitions at its Jan. 5 conference, so far has rejected 27 other petitions asking it to clarify its Alice opinion.
RecogniCorp LLC petitioned for review of the Federal Circuit’s decision that its patent on a composite image feature, allegedly infringed by Nintendo Co.'s Mii avatars, did not pass eligibility muster under Alice. Lower courts, including the Federal Circuit, have been unable to grasp Alice‘s teachings, leaving a trail of “indeterminacy and over-restrictiveness,” seven prominent intellectual property law professors wrote in a friend-of-the-court brief.
Prism Technologies LLC is asking the high court to review a Federal Circuit ruling against it in T-Mobile USA’s challenge of patents directed to authenticating access to protected computer resources over the internet. Smartflash LLC is seeking to overturn its loss of a patent on ways to control digital content that it hadasserted against Apple Inc.'s iTunes.
Covered Business Method Challenges
Most of the other pending petitions relate to AIA proceedings at the patent office.
The Supreme Court heard oral argument Nov. 27 in Oil States, on the constitutionality of the AIA’s inter partes review (IPR) proceeding. The court has put on hold 16 petitions that present the same question. It will likely do the same for four more after the Jan. 5 conference.
Petitioners in two other cases—Linkgine, Inc. v. VigLink and Chan v. Yang—argue that other proceedings challenging issued patents at the PTO should also follow any decision on IPRs. Linkgine questions the constitutionality of the “covered business method” (CBM) challenge, which was also enabled by the AIA. The Chan petition asks for a hold in a case featuring a proceeding called an interference—when two parties contest priority for the same invention—which preceded the AIA.
Alphabet Inc.'s Google and a group of banks, including PNC Bank NA and U.S. Bancorp, are asking the court in separate cases—and Google, Inc. v. Unwired Planet, LLC and PNC Bank Nat’l Ass’n v. Secure Axcess, LLC —whether the Federal Circuit has gone too far in limiting what kinds of patents qualify as a CBM. The Clearing House banking association supported PNC Bank, and Google’s petition was backed by a brief filed by Dell Inc., eBay Inc., and others.
To contact the reporter on this story: Tony Dutra in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Mike Wilczek at email@example.com