Patents

How Far Does a U.S. Patent Reach? WesternGeco v. ION and Foreign Lost Profits

The Supreme Court held that a patent owner can recover lost foreign profits flowing from a domestic act of infringement under 35 U.S.C. § 271(f)(2).

February 28, 2026
Marine seismic survey vessel on the open ocean
WesternGeco's lost profits arose from offshore surveys performed abroad with systems assembled from U.S.-made components. Shutterstock
Educational content, not legal advice. This article explains general legal concepts. It does not create an attorney–client relationship. For your specific situation, consult a licensed attorney.

In WesternGeco LLC v. ION Geophysical Corp., No. 16-1011, the Supreme Court of the United States held on June 22, 2018, that the Patent Act’s damages provision, 35 U.S.C. § 284, permits a patent owner to recover lost foreign profits when those profits flow from a domestic act of infringement under 35 U.S.C. § 271(f)(2). Writing for a 7-2 Court, Justice Thomas concluded that awarding such damages is a permissible domestic application of § 284, not a forbidden extraterritorial one. Justice Gorsuch dissented, joined by Justice Breyer. The decision reversed the Federal Circuit and restored a $93.4 million lost-profits award that the jury had returned alongside $12.5 million in reasonable royalties.

The case is deceptively narrow on its facts and surprisingly broad in its consequences. It is the rare patent decision that turns almost entirely on a statute outside Title 35’s infringement provisions — the damages section — and on the canon of statutory interpretation known as the presumption against extraterritoriality. Eight years later, it remains the controlling authority on how far the financial reach of a U.S. patent extends beyond U.S. borders, and the lower courts are still working out its limits.

At a glance

  • Case: WesternGeco LLC v. ION Geophysical Corp., No. 16-1011 (U.S. June 22, 2018).
  • Court: Supreme Court of the United States; Justice Thomas writing for a 7-2 majority; Justice Gorsuch dissenting, joined by Justice Breyer.
  • Holding: Section 284 permits recovery of lost foreign profits proximately caused by a domestic violation of § 271(f)(2).
  • Mechanism of infringement: ION shipped components of an infringing ocean-floor survey system from the United States to customers abroad, who assembled them and performed competing surveys overseas.
  • Damages restored: $93.4 million in lost profits (the foreign-survey contracts) plus $12.5 million in royalties.
  • Key reservation: The Court expressly declined to decide whether ordinary doctrines such as proximate cause might limit such awards in particular cases.

The territorial limits of U.S. patent law

A patent is a creature of national sovereignty. Section 154(a)(1) grants the patentee the right to exclude others from making, using, selling, offering to sell, or importing the invention “throughout the United States” — and nowhere else. There is no global patent. A company that wants protection in Norway or Singapore must obtain a Norwegian or Singaporean patent and enforce it under that nation’s law. This territoriality principle is foundational, and the Supreme Court has repeatedly invoked it to cabin the reach of the Patent Act, most prominently in Microsoft Corp. v. AT&T Corp. (2007), where it declined to treat software copied abroad as “supplied” from the United States.

Layered on top of territoriality is the presumption against extraterritoriality, a default rule of statutory interpretation: federal statutes are presumed to apply only domestically unless Congress clearly indicates otherwise. In RJR Nabisco, Inc. v. European Community (2016), the Court formalized a two-step inquiry. Step one asks whether the statute gives a clear, affirmative indication that it applies extraterritorially. If not, step two asks whether the case nonetheless involves a permissible domestic application — which turns on identifying the statute’s “focus” and asking whether the conduct relevant to that focus occurred in the United States.

The tension in WesternGeco is obvious. The infringing surveys were performed abroad. The lost contracts were foreign contracts. If a U.S. patent reaches only domestic conduct, how can damages compensate for what happened on the open ocean off the coast of another country?

Section 271(f) and the conduct Congress chose to police

The answer begins with the unusual infringement provision at issue. Congress enacted 35 U.S.C. § 271(f) in 1984 to close a loophole exposed by Deepsouth Packing Co. v. Laitram Corp. (1972), in which a defendant escaped liability by shipping the unassembled components of a patented machine abroad for final assembly. Section 271(f)(2) makes it an act of infringement to “suppl[y] or caus[e] to be supplied in or from the United States” a component of a patented invention, knowing it is especially made for use in the invention, intending that it be combined outside the United States in a manner that would infringe if done domestically.

The critical point is where the prohibited act occurs. The supplying happens in or from the United States. ION manufactured the components of its DigiFIN lateral-steering system domestically and shipped them to foreign customers, who assembled complete survey systems and used them to compete with WesternGeco for marine seismic survey contracts. The act Congress chose to treat as infringement — the export of specially adapted components — was a domestic act, even though the resulting assembly and use were foreign.

Recovery of foreign lost profits under § 284

Justice Thomas resolved the case at step two of the RJR Nabisco framework, and notably did not decide step one — whether § 271(f) is itself extraterritorial. He assumed the presumption applied and asked instead whether awarding these damages was a permissible domestic application of § 284.

The analytical move was to locate the “focus” of the damages statute as applied to this conduct. Section 284 provides that a court “shall award the claimant damages adequate to compensate for the infringement.” Its focus, the Court reasoned, is “the infringement.” To identify the relevant conduct, one must look to the type of infringement at issue. Under § 271(f)(2), that conduct is the domestic act of supplying components from the United States. Because the infringement that § 284 remedies occurred domestically, the damages award — even one measuring profits lost on foreign surveys — was a domestic application of the statute. As the Court put it, the foreign lost profits “were merely the means by which the statute is fulfilling its objective” of compensating for the domestic infringement.

This reframing is the heart of the opinion. The lost foreign profits are not the focus; they are the measure of harm caused by domestic conduct. Damages frequently arise from events outside the country — a stolen design used overseas, lost sales in foreign markets — without converting a domestic cause of action into an extraterritorial one.

Critically, the Court added footnote 3, expressly reserving a major question: “In reaching this holding, we do not address the extent to which other doctrines, such as proximate cause, could limit or preclude damages in particular cases.” In other words, the Court opened the door to foreign damages but left the gatekeeping doctrine of causation for another day.

The dissent and the international friction

Justice Gorsuch, joined by Justice Breyer, agreed that the presumption against extraterritoriality did not bar the award but argued that the Patent Act’s own substantive terms did. Because § 154 grants exclusivity only “throughout the United States,” he reasoned, a patentee has no statutory entitlement to compensation for uses occurring outside U.S. jurisdiction; foreign use is something only a foreign patent can reach. The dissent warned of practical consequences: allowing U.S. courts to award damages for foreign exploitation effectively lets domestic patents project monopoly power worldwide and invites foreign nations to retaliate against U.S. firms through their own courts. That comity concern — the prospect of conflicting national patent regimes — is the strongest counterweight to the majority’s reasoning and animates much of the academic criticism of the decision.

Open questions

  • How far does the holding extend beyond § 271(f)(2)? The opinion was framed around the export provision. Whether the same logic reaches lost profits or royalties tied to ordinary domestic infringement under § 271(a) was not decided by the Supreme Court.
  • What role does proximate cause play? Footnote 3 left the limiting principle undefined. How attenuated can the chain from domestic act to foreign profit become before it is too remote to support recovery?
  • Does the analysis differ for reasonable royalties versus lost profits? The Court addressed a lost-profits award; the treatment of foreign-derived royalty bases was left for the lower courts.
  • What happens to international comity in practice? The dissent’s retaliation concern remains untested as foreign jurisdictions react.

The Federal Circuit has begun filling these gaps. In Brumfield v. IBG LLC, decided March 27, 2024, the court extended WesternGeco’s framework to reasonable-royalty damages premised on § 271(a) infringement and held that it displaced the narrower rule of Power Integrations. At the same time, the court enforced footnote 3’s reservation with teeth, holding that proximate causation — but-for causation “plus more, including the absence of remoteness” — must be proven; the patent owner there lost on the foreign damages because its expert failed to establish that causal link.

Implications

  • Plead domestic conduct precisely. The reach of foreign damages tracks the statutory “focus” of the infringement theory. A complaint built on § 271(f)(2) supply-from-the-U.S. conduct (or, post-Brumfield, a well-supported § 271(a) theory) supports a foreign-profits claim; a purely foreign-conduct theory does not.
  • Causation is the real battleground. With the extraterritoriality question resolved, damages disputes have migrated to proximate cause. Expert testimony must connect the domestic infringing act to the specific foreign revenue claimed.
  • Damages exposure can dwarf the domestic footprint. A modest volume of U.S.-origin components can anchor a nine-figure foreign lost-profits award, as the $93.4 million figure illustrates.
  • Global manufacturers should reassess supply chains. Shipping specially adapted components from the United States carries materially greater damages risk than sourcing them abroad.
  • Comity considerations persist. Counsel should anticipate that large foreign-damages awards may draw scrutiny abroad and inform settlement strategy.

Frequently asked questions

Does WesternGeco mean a U.S. patent is enforceable worldwide? No. Patents remain strictly territorial. The decision concerns damages for a domestic act of infringement, not the geographic scope of the right to exclude. The infringing conduct — supplying components from the United States — still had to occur domestically.

Why did the Court rely on the damages statute rather than the infringement statute? Because the dispute was about the scope of recoverable damages. The Court assumed the presumption against extraterritoriality applied and asked whether awarding these damages was a domestic application of § 284. It located the statute’s focus in the domestic infringement and treated the foreign lost profits as the measure, not the target, of the remedy.

Can a patent owner now recover foreign damages for any kind of infringement? Not automatically. The Supreme Court addressed § 271(f)(2). The Federal Circuit later extended the framework to § 271(a) royalties in Brumfield v. IBG (2024), but it also required rigorous proof of proximate cause, which remains the decisive hurdle in most cases.

Authorities and sources