ION: Court invalidates WesternGeco streamer patent claim. Lost-profit ruling in June

The United States Court of Appeals for the Federal Circuit has affirmed the invalidation of several of WesternGeco’s marine streamer system patent claims, ION Geophysical has informed.

According to ION Geophysical, four of the six claims, that were based on the District Court’s award of damages to WesternGeco in a case of WesternGeco LLC vs ION Geophysical, were also invalidated.

Geoscience company ION Geophysical said on Monday that the patent claims were invalidated by the Patent Trial and Appeal Board (PTAB) in an administrative proceeding known as an Inter Partes Review.

To remind, WesternGeco sued ION Geophysical for patent infringement related to the use of Westerngeco’s patents used for marine seismic surveys in support of oil and gas exploration operations.

According to court documents, ION Geophysical manufactures components of a similar survey system that, when assembled, embodies WesternGeco’s.
ION Geo manufactured the components of that system in the United States and exported the components to customers abroad, who assembled the system and used it to perform surveys on the high seas in competition with Westerngeco.

ION CEO: David vs Goliath

Following a 2009 lawsuit, a jury found that ION had infringed six different claims from Schlumberger’s subsidiary WesternGeco. The jury then awarded WesternGeco damages of more than $105 million in profits that WesternGeco would’ve made on ten specific survey contracts that it had lost to ION Geo’s customers.

ION then appealed the lost-profits ruling, and a court of appeals affirmed the jury’s verdict of infringement, but reversed the award of lost profits, on the grounds that the contracts that petitioner had lost were for performing seismic surveys “on the high seas, outside the jurisdictional reach of U.S. patent law,” awarding lost profits for these contracts would contravene the presumption against the extraterritorial application of U.S. law.

The court noted that, because the overseas assembly and use of WesternGeco’s invention by ION’s customers was not itself an infringement, and the losses resulted from conduct occurring abroad, Westerngeco could not recover its lost profits.

Westerngeco then appealed the lost-profit decision to the United States Supreme Court, which heard arguments in April and will likely issue a decision by the end of June.

“The Court of Appeals’ affirmation of the PTAB’s decision positions ION well with yet another avenue to challenge WesternGeco’s claims,” the company said.

Brian Hanson, ION’s president, and CEO, said: “This is clearly a David and Goliath situation with Schlumberger’s unlimited resources, but we have been diligently fighting this case for over eight years.

“Today, our patents, which were filed first, remain valid while theirs have been invalidated. While we are hopeful that the Supreme Court will affirm the Federal Circuit Court’s 2015 decision that held foreign lost profits unavailable as a matter of law, if they do not, we now have yet another arrow in our quiver.”

Namely, ION has previously said that the invalidation of WesternGeco’s patents might help it reduce or, again, nullify the lost-profit award, should the Supreme Court rule in favor of WesternGeco.

No more acquisition

Worth noting, WesternGeco’s parent company Schlumberger recently announced WesternGeco would exit the business of marine and land seismic acquisition, as it did not meet return expectations going forward.

Schlumberger said it would turn WesternGeco product line into an asset-light business, “built on our leading position within multiclient, data processing, and geophysical interpretation services.”

Offshore Energy Today Staff