Appeals from the United States District Court for the
Southern District of Texas in No. 4:09-cv-01827, Judge Keith
C. O'Quinn, Kirkland & Ellis LLP, Washington, DC,
argued for plaintiff-cross-appellant. Also represented by
Gregg F. LoCascio, William H. Burgess; Timothy Gilman, Leslie
M. Schmidt, New York, NY; Lee Landa Kaplan, Smyser, Kaplan
& Veselka, LLP, Houston, TX.
I. Berl, Williams & Connolly LLP, Washington, DC, argued
for defendant-appellant. Also represented by Kannon K.
Shanmugam, Masha Hansford, Andrew Charles McBride, James
Matthew Rice; Frank Porcelli, Kevin Su, Fish &
Richardson, PC, Boston, MA; Jackob Ben-Ezra, Bailey Kathleen
Harris, Danielle J.
Healey, Brian Gregory Strand, Houston, TX; Francis J. Albert,
Olga I. May, San Diego, CA; Justin Barnes, Troutman Sanders
LLP, San Diego, CA.
Dyk, Wallach, and Hughes, Circuit Judges.
case returns to us from the Supreme Court. WesternGeco
LLC v. ION Geophysical Corp., 138 S.Ct. 2129 (2018)
("WesternGeco III"). The sole claim
remanded to us by the Supreme Court is the lost profits
award. The Supreme Court held "that WesternGeco's
damages award for lost profits was a permissible domestic
application of [35 U.S.C.] § 284," id. at
2139, reversing our decision in WesternGeco LLC v. ION
Geophysical Corp., 791 F.3d 1340, 1349-52 (Fed. Cir.
2015), ("WesternGeco I"). But the Supreme
Court did not decide other challenges to the lost profits
award. In light of the Supreme Court's decision and the
intervening invalidation of four of the five asserted patent
claims that could support the lost profits award, we remand
to the district court.
case involves a patent infringement suit brought by
WesternGeco L.L.C. ("WesternGeco") against ION
Geophysical Corp. ("ION") for infringement of
claims 18, 19, and 23 of U.S. Patent No. 7, 293, 520, claim
15 of U.S. Patent No. 7, 162, 967, and claim 15 of U.S.
Patent No. 7, 080, 607 ("Bittleston patents"), as
well as claim 14 of U.S. Patent No. 6, 691, 038 ("Zajac
patented technology in this case relates to marine seismic
surveys for discovering oil and gas deposits beneath the
ocean floor. The patent claims are directed to technology for
controlling the movement and positioning of long streamers
towed by a ship. Sensors are located along the length of
these streamers, and they detect returning sound waves that
are bounced off of the ocean floor by an airgun. The
collected data is then used to create a map of the
ocean's subsurface geology. Controlling the positioning
of the various streamers in the array is important to the
quality of the maps generated, which, in turn, is important
to identifying drilling locations for oil or gas.
WesternGeco and ION domestically manufacture devices, the
Q-Marine and DigiFin respectively, for steering streamers in
marine seismic surveys. Western-Geco does not sell its
device, instead using it to perform surveys abroad for oil
companies. ION does not perform surveys, instead supplying
its device to customers who perform the surveys abroad. This
case does not involve any question as to lost profits from
2009, WesternGeco sued ION for patent infringement based on
ION's sales of its DigiFin devices to West-ernGeco's
competitors in the marine seismic survey market. After a jury
trial, the asserted patent claims were found to be not
invalid, and ION was found to have infringed all of the
asserted patent claims under 35 U.S.C. §§ 271(f)(1)
and (2). The jury awarded WesternGeco a reasonable royalty of
$ 12.5 million and lost profits of $ 93.4 million, but
declined to award WesternGeco enhanced damages for willful
infringement. The lost profits award was based on 10 surveys,
which, according to WesternGeco, it would have won
"but-for" ION's sales of its DigiFin device to
WesternGeco's competitors. West- ernGeco argues that
without the patented technology embodied in the device,
ION's customers would not have been able to win the bids
for the 10 surveys at issue.
WesternGeco I we reversed the lost profits award as
being based on an unauthorized extraterritorial application
of the patent laws. Judge Wallach dissented on this point.
791 F.3d at 1349-52, 1354-64. We unanimously affirmed the
district court's refusal to award enhanced damages for
willful infringement. WesternGeco I, 791 F.3d at
1353-54. WesternGeco petitioned for certiorari, which the
Supreme Court granted, vacated our original decision in
WesternGeco I, and remanded for further proceedings
consistent with its decision in Halo Elecs., Inc. v.
Pulse Elecs., Inc., 136 S.Ct. 1923, 1935-36 (2016). We
reinstated our earlier opinion, including reversal of the
lost profits award, but we vacated the district court's
denial of enhanced damages and remanded for further
consideration in light of Halo. WesternGeco
II, 837 F.3d at 1361-64.
remand, WesternGeco sought $ 43.6 million in enhanced
damages, and the district court awarded West-ernGeco $ 5
million in enhanced damages. The parties then entered into a
stipulated "Final Judgment pursuant to Fed.R.Civ.P.
58." The stipulation noted that the parties had agreed
to the reasonable royalty amount and that ION had paid the
full amount on November 25, 2016. Both parties agreed not to
appeal the enhanced damages award and provided a schedule for
payment of the enhanced damages award. The only item exempt
from the stipulation was the lost profits award, which
Western-Geco had petitioned for certiorari, requesting review
of our decision on the lost profits award. Neither party
appealed the stipulated final judgment.
petition was granted with respect to the lost profits award,
and in WesternGeco III, the Supreme Court reversed
our decision on lost profits, holding that
"West-ernGeco's damages award for lost profits
[under 35 U.S.C. § 271(f)(2)] was a permissible domestic
application of § 284," 138 S.Ct. at 2139, "as
it was ION's domestic act of supplying the components
that infringed WesternGeco's patents," id.
at 2138. The Supreme Court also noted that "[i]n
reaching this holding, we do not address the extent to which
other doctrines, such as proximate cause, could limit or
preclude damages in particular ...