District Court Permits Recovery Of Worldwide Damages For Direct Infringement In Decision Certified For Interlocutory Appeal

Author:Mr Brock Wilson, John Wittenzellner and Daniel L. Moffett
Profession:Akin Gump Strauss Hauer & Feld LLP

In Power Integrations, Inc. v. Fairchild Semiconductor International, Inc., et al., Judge Stark ruled that the Supreme Court's holding in WesternGeco LLC v. ION Geophysical Corp., 138 S.Ct. 2129 (2018)—allowing for recovery of lost profits from foreign sales for infringement under 35 U.S.C. § 271(f)(2)—can be applied to sales stemming from run-of-the-mill direct infringement under 35 U.S.C. § 271(a) and should not be limited to only those sales stemming from the specific form of indirect infringement at issue in WesternGeco.

In WesternGeco, the defendant made components of infringing products in the United States, then shipped them outside of the U.S. for assembly. As such, the defendant did not directly infringe within the U.S. The defendant's practice, however, violated a specific and not-often-cited indirect infringement provision, 35 U.S.C. § 271(f)(2), which allows for infringement liability based, in part, on activities occurring outside of the U.S. Under these facts, the Supreme Court awarded lost profit damages, under 35 U.S.C. § 284, resulting from sales that occurred outside of the U.S. after shipping the products extraterritorially. Although the Supreme Court based its decision, in part, on the specific infringement provision concerning actions performed outside of the U.S., it did not foreclose application of its reasoning to infringement generally.

Unlike the products in WesternGeco, the accused products in Power Integrations were fully assembled within the U.S. and, as a result, directly infringed under 35 U.S.C. § 271(a) before they were shipped extraterritorially for sale (some of the products were also sold in the U.S.). Thus, the question at issue in Power Integrations was whether the court should apply the Supreme Court's ruling in WesternGeco broadly to allow for a recovery of lost-profit damages based on worldwide sales of products resulting from direct infringement within the U.S. under 35 U.S.C. § 271(a). The court held that it should, even though—unlike the language of 35 U.S.C. § 271(f)—the language of 35 U.S.C. § 271(a) does not explicitly concern extraterritorial actions.

The Power Integrations litigation overlapped with the Supreme Court's decision in WesternGeco. Thus, a brief discussion of that litigation history helps to frame the procedural context of the Court's decision. Before the WesternGeco decision, in Power Integrations, the plaintiff sought lost-profit damages based on the defendant's direct...

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