Supreme Court patent case has major implications for international relations

Author: Shannon Roddel

Stephen Yelderman

The Supreme Court of the United States hears arguments Monday (April 16) in a patent case that one University of Notre Dame law professor says has major implications for international relations, pitting the U.S. interest in rewarding patent owners for their inventions against the sovereignty of other nations.

At issue in WesternGeco v. ION Geophysical is whether a U.S. patent owner can recover damages for business losses it suffered abroad as a direct result of patent infringement that occurred in the United Sates.

Stephen Yelderman, associate professor at the Notre Dame Law School who specializes in intellectual property, patent law and copyrights, filed an amicus brief in the case, and says the legal question before the court can be reduced to a simple hypothetical.

“Suppose a defendant manufactures infringing products in Texas, but sells them in Mexico,” he says. “Can the patent plaintiff recover for lost sales of that product in the Mexican market? The court of appeals and the defendant in this case say the answer is no. Citing the sovereignty interest of foreign nations, ION says that U.S. patent law only compensates for harms that are suffered in the United States. So if a defendant manufactures its infringing products in Texas but sells them worldwide, the patent owner could recover only for the portion of lost sales in the United States.

“To rule otherwise, the defendant argues, would risk turning the U.S. into a worldwide patent system, thereby interfering with the rights of other nations to style patent protection as they see fit.”

WesternGeco and Yelderman disagree.

“There is an extremely long history of U.S. courts looking to foreign consequences of domestic actions for purposes of assessing damages,” he says. “The Court of Appeals’ rule places artificial blinders on judges when fashioning remedies and could leave some patent owners with effectively no remedy at all. Taking notice of foreign consequences would not turn the U.S. into a ‘worldwide patent system,’ because the patent holder would still have to show some act of domestic infringement as a predicate to damages for any foreign harms. Courts have been including foreign harm in damages for approximately 150 years and the sky hasn’t fallen.”

Yelderman previously served in the telecommunication and media section of the U.S. Department of Justice Antitrust Division, where he investigated and litigated a variety of cases in the cable and wireless industries. He also worked as a patent agent in Silicon Valley, representing inventors from Google, Apple, Cisco and Honda’s humanoid robotics laboratory before the U.S. Patent and Trademark Office.

Originally published by Shannon Roddel at on April 13, 2018.