In Law360, Rachael Bacha Examines Federal Circuit Decision Implications on Foreign Patent Damages

In a Law360 article, IP litigation counsel Rachael Bacha discussed the implications in the Brumfield v. IBG LLC foreign patent damages case. The Federal Circuit decision clarified that patent owners may be able to obtain damages, including under a reasonable royalty theory of recovery, based on wholly foreign sales if an act of infringement occurs domestically—the “making, using, selling, offering for sale, or importing”—and the domestic act of infringement was the proximate cause of the foreign sales.  

Although important questions remain about the level of causation required to collect those damages in certain circumstances, the March decision clarified that recovery of damages based on foreign sales that result from direct infringement in the United States may now be attainable under WesternGeco v. Ion Geophysical.

In WesternGeco, the U.S. Supreme Court allowed recovery of certain foreign lost profits damages under the Patent Act's damages provision where a specific type of indirect infringement had occurred, but the Federal Circuit has now extended that allowance to the act's direct infringement provision, including under a reasonable royalty theory of recovery.

“Reasonable royalties are the floor for damages, which means practically, they're a little bit easier to obtain [than lost profits]. Global extraterritorial damages are often very large. The fact that [direct infringement under the Patent Act] is now in play — that's a pretty big deal. I think you'll see many more discovery rulings on these issues and potentially increases in damages awards,” said Rachael.