  United States Court of Appeals
      for the Federal Circuit
                 ______________________

               WESTERNGECO L.L.C.,
               Plaintiff-Cross-Appellant

                            v.

        ION GEOPHYSICAL CORPORATION,
               Defendant-Appellant
              ______________________

      2013-1527, 2014-1121, 2014-1526, 2014-1528
               ______________________

    Appeals from the United States District Court for the
Southern District of Texas in No. 4:09-cv-01827, Judge
Keith P. Ellison.
                  ______________________

                  Decided: July 2, 2015
                 ______________________

    GREGG F. LOCASCIO, Kirkland & Ellis LLP, Washing-
ton, DC, argued for plaintiff-cross-appellant. Also repre-
sented by WILLIAM H. BURGESS, JOHN C. O’QUINN;
TIMOTHY K. GILMAN, LESLIE M. SCHMIDT, New York, NY;
LEE LANDA KAPLAN, Smyser, Kaplan & Veselka, LLP,
Houston, TX.

   DAVID J. HEALEY, Fish & Richardson, P.C., Houston,
TX, argued for defendant-appellant. Also represented by
FRANK PORCELLI, KEVIN SU, Boston, MA; BAILEY
2              WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.




KATHLEEN HARRIS, JACKOB BEN-EZRA, BRIAN GREGORY
STRAND, Houston, TX; OLGA I. MAY, JUSTIN BARNES,
FRANCIS J. ALBERT, San Diego, CA.
                _____________________

    Before DYK, WALLACH, and HUGHES, Circuit Judges.
     Opinion for the court filed by Circuit Judge DYK.
     Dissenting-in-part opinion filed by Circuit Judge
                        WALLACH.
DYK, Circuit Judge.
    WesternGeco L.L.C. (“WesternGeco”) filed suit against
ION Geophysical Corp. (“ION”) for infringement of, inter
alia, U.S. Patent Nos. 6,691,038 (“the ’038 patent”),
7,080,607 (“the ’607 patent”), 7,162,967 (“the ’967 pa-
tent”), and 7,293,520 (“the ’520 patent”). The jury found
infringement and no invalidity with respect to all asserted
claims for each of the four patents, and awarded
$93,400,000 in lost profits and $12,500,000 in reasonable
royalties.
    ION appeals, arguing that WesternGeco is not the
owner of the ’607, ’967, and ’520 patents and therefore
lacks standing to assert them; that the district court
applied an incorrect standard in granting summary
judgment as to claim 18 of the ’520 patent under 35
U.S.C. § 271(f)(1) and that this ruling infected the trial
with respect to liability for all other claims; and that lost
profits were impermissibly awarded for conduct abroad.
    WesternGeco conditionally cross-appeals, arguing
that, if we find in favor of ION with respect to any of its
appealed issues, we should set aside the damages award
because the district court erred in preventing Western-
Geco’s damages expert from testifying on the issue of a
reasonable royalty. WesternGeco also challenges the
WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.              3




district court’s refusal to award enhanced damages for
willful infringement.
    We affirm in all respects, except that we reverse the
district court’s award of lost profits resulting from conduct
occurring abroad.
                        BACKGROUND
    WesternGeco asserts that it owns the four patents at
issue: the ’038 patent, the ’607 patent, the ’967 patent,
and the ’520 patent. The asserted claims of all four
patents are system claims relating to technologies used to
search for oil and gas beneath the ocean floor. To search
for oil and gas, ships tow a series of long streamers. Each
streamer is equipped with a number of sensors. An
airgun bounces sound waves off of the ocean floor. The
sensors pick up the returning sound waves and, in combi-
nation with each other, create a map of the subsurface
geology. This generated map can aid oil companies in
identifying drilling locations for oil or gas.
    The streamers can be miles in length, and vessel
movements, weather, and other conditions can cause the
streamers to tangle or drift apart. This, in turn, can
cause the sensors on the streamers to generate imperfect
or distorted maps. The patents here relate to two im-
provements to that technology: first, controlling the
streamers and sensors in relation to each other through
the use of winged positioning devices; second, using the
sensors to generate four-dimensional maps—that is, maps
in which it is possible to see changes in the seabed over
time.
    Both parties are involved in this industry. Western-
Geco manufactures its commercial embodiment of the
patented technologies, the Q-Marine, and performs sur-
veys on behalf of oil companies. ION manufactures its
allegedly patent-practicing device, the DigiFIN, and sells
4              WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.




that device to its customers, who perform surveys on
behalf of oil companies.
    On June 12, 2009, WesternGeco filed suit against
ION, accusing ION of willfully infringing various claims
of four patents. WesternGeco’s theory of infringement
was based on, inter alia, 35 U.S.C. § 271(f)(1) and
§ 271(f)(2). Broadly speaking, (f)(1) prohibits supplying a
substantial portion of the components of a patented
system in a manner that actively induces their combina-
tion abroad, and (f)(2) prohibits supplying components
that are especially adapted to work in a patented inven-
tion and intending that the components be combined
abroad in a manner that would infringe if combined
domestically. See 35 U.S.C. § 271(f).
    On June 29, 2012, the court granted summary judg-
ment of infringement in favor of WesternGeco for claim 18
of the ’520 patent under 35 U.S.C. § 271(f)(1). In so
ruling, the court interpreted § 271(f)(1) as requiring that
the “alleged infringer (1) actively induce the combination
of the components in question; and (2) that the combina-
tion of those components would infringe the patent if such
combination occurred within the United States.” J.A. 52.
Section 271(f)(2), the district court concluded, required a
heightened standard: “that the defendant (1) intended the
combination of components; (2) knew that the combina-
tion he intended was patented; and (3) knew that the
combination he intended would be infringing if it occurred
in the United States.” J.A. 55. The court determined that
WesternGeco proved that ION intended that the compo-
nents be combined and therefore infringed under
§ 271(f)(1) with respect to claim 18, but concluded that,
with respect to claim 18 under § 271(f)(2), there was a
genuine issue of material fact as to whether the “Defend-
ants knew that the combination was infringing.” J.A. 56.
WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.             5




    Trial was held in July and August of 2012. On Au-
gust 16, 2012, the jury rendered its verdict, finding that
ION infringed claims 19 and 23 of the ’520 patent, claim
15 of the ’967 patent, claim 15 of the ’607 patent, and
claim 14 of the ’038 patent under §§ 271(f)(1) and (f)(2).
The jury also found that ION infringed claim 18 of the
’520 patent under § 271(f)(2) (infringement under (f)(1) as
to claim 18 having already been decided on summary
judgment). Finally, the jury found that the infringement
was willful (applying the so-called “subjective” prong of In
re Seagate Technology, LLC, 497 F.3d 1360, 1371 (Fed.
Cir. 2007) (en banc)). The jury awarded $93,400,000 in
lost profits and $12,500,000 in reasonable royalties.
     ION filed motions for judgment as a matter of law or
for a new trial. ION also filed a motion to dismiss, for the
first time alleging that WesternGeco did not have stand-
ing to assert the ’607 patent, the ’967 patent, and the ’520
patent because WesternGeco did not own the patents.
WesternGeco filed, inter alia, a motion for enhanced
damages under 35 U.S.C. § 284.
    On June 19, 2013, the district court denied ION’s
JMOLs and motion to dismiss and WesternGeco’s motion
for enhanced damages, finding that ION’s positions were
reasonable and not objectively baseless.
    ION appealed.  WesternGeco conditionally cross-
appealed. We have jurisdiction pursuant to 28 U.S.C.
§ 1295(a)(1).
                        DISCUSSION
                              I
    We first address ION’s contention that WesternGeco
does not own the ’607 patent, the ’967 patent, and the ’520
patent, and therefore lacked standing to assert them. The
question is whether WesternGeco owned the patents
when the suit was filed in 2009. It is uncontroverted that
6              WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.




a sole owner of a patent has standing to assert it and that
an entity that does not own the patent (or is not the
exclusive licensee) does not have standing to sue. See
Rite-Hite Corp. v. Kelley Co., Inc., 56 F.3d 1538, 1551–52
(Fed. Cir. 1995) (en banc).
    Although standing is reviewed de novo, we review fac-
tual determinations relating to standing for clear error.
See Enovsys LLC v. Nextel Commc’ns, Inc., 614 F.3d 1333,
1340–41 (Fed. Cir. 2010). The district court reviewed the
parties’ arguments with respect to the chain-of-title and
concluded that “WesternGeco has presented sufficient
evidence to prove its ownership of the patents” and that
“WesternGeco was assigned the rights.” J.A. 7. We have
reviewed the record relating to the chain of title between
the original inventors and WesternGeco. We conclude
that the district court’s findings are not clearly erroneous.
    The three patents each list two inventors: Oyvind Hil-
lesund and Simon Bittleston. In 1993, Bittleston started
working for a subsidiary of Schlumberger Ltd., and Hil-
lesund started working for a subsidiary of Schlumberger
Ltd. the following year. Schlumberger Ltd. is one of the
world’s largest oil and gas companies, incorporated in
Curacao and with offices throughout the world. Although
the precise Schlumberger corporate structure existing in
the early 1990s is not clear from the record, and it is not
clear precisely for which subsidiaries Bittleston and
Hillesund worked at the time of their invention, ION
admits that Hillesund and Bittleston worked for so-called
“Geco” subsidiaries of Schlumberger Ltd. See Appellant’s
Br. 10 (characterizing Hillesund and Bittleston as having
“originally went to work for Geco in” 1994 and 1993,
respectively).
    Both inventors testified that they transferred their
rights to the inventions they developed to their employers
pursuant to their employment contracts.          Bittleston
WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.             7




testified: “[W]hen [Hillesund and I] joined the company
[one of the Geco companies], we signed something saying
that any inventions we made were going to be owned by
the company, not by us, so they’re the owners.” J.A. 1504.
Hillesund’s testimony is similar. When asked: “Mr.
Hillesund, as an employee of Geco and later WesternGeco,
did you assign your rights of the intellectual property to
the company?”, Hillesund responded: “Yes. Part of the—
my contract was that intellectual property—there was
also something in the contract that I was to be given
reasonable coverage of—in the form of a bonus, all in
accordance to the significance of the patent.” J.A. 12805.
    If, in fact, Geco subsidiaries of Schlumberger, Ltd. ac-
quired those rights in the early 1990s, they were trans-
ferred to Schlumberger Technology Corporation (“STC”)
pursuant to a 1998 agreement. In 1998, four Schlum-
berger companies, Schlumberger Holdings Limited, STC,
Schlumberger Canada Limited, and Services Petroliers
Schlumberger S.A., entered into a cost-sharing agree-
ment. As a part of that agreement, the parties assigned
intellectual property rights to each other to consolidate
those rights on a geographical basis:
   [O]wnership of the Patent Rights, Proprietary
   Technical Information and Copyrights which are
   subject to this Agreement shall be vested in the
   Participants in their Respective Areas . . . .
J.A. 12828–29. STC’s “respective area” was the United
States. J.A. 12820. The agreement defined “Patent
Rights” to include “any and all patents and patent appli-
cations, certificates of invention and the like, throughout
the world, and interests therein, based upon inventions
relating to seismic oil field services or equipment which
are obtained by or for the Geco Prakla companies.” J.A.
8              WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.




12824. 1 Thus, there is substantial evidence to conclude
that the agreement here assigned the intellectual proper-
ty in the Geco companies (originally assigned from the
inventors) to STC in 1998.
    The next event in the chain-of-title occurred in 2000,
when Schlumberger and Baker-Hughes formed a joint
venture, WesternGeco, to which STC assigned its intellec-
tual property rights “primarily related to the Seismic
Business in the U.S.” 2 J.A. 12780. And there is substan-



1    “Geco Prakla” was defined to mean:
     SHL; STC and specifically its Geco Prakla engi-
     neering, manufacturing and operating divisions
     and research centers; SCL and specifically its
     Geco Prakla seismic operating division; SPS; and
     any other seismic service and/or data processing
     oil field corporation, firm, partnership or other en-
     tity (“entities”) which may, directly or indirectly,
     be wholly or majority owned by Schlumberger
     Limited (SL); and successors of such entities so
     long as each remains a wholly or majority-owned
     subsidiary of SL or a successor of SL.
J.A. 12820.
     2    The agreement defined “Transferred IP” to refer
to, inter alia, “Schlumberger Transferred IP,” which is in
turn defined to mean “Intellectual Property that (i) is
owned by Schlumberger or its Affiliates or to which
Schlumberger or its Affiliates otherwise have rights, (ii) is
used or held for use primarily in connection with or oth-
erwise primarily related to the Schlumberger Seismic
Business, and (iii) exists as of the Closing Date, including
the Schlumberger Proprietary Rights that are identified
by Schedule 4.18(a) to the Schlumberger Disclosure
Letter.” J.A. 12711; 12713. The contract defined “Intel-
lectual Property” to mean:
WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.            9




tial evidence to conclude that the intellectual property at
issue in this case is “primarily related to the Seismic
Business” because a British application and Patent Coop-
eration Treaty (“PCT”) application, from which the three
patents at issue derive, were expressly included in a list
of IP used primarily for the Seismic Business. 3 As a


    patents, patent applications (filed, unfiled or being
    prepared), records of invention, invention disclo-
    sures, trademarks (registered or unregistered),
    trademark applications (filed, unfiled or being
    prepared), trade names, copyrights (registered or
    unregistered), copyright applications (filed, un-
    filed or being prepared), service marks (registered
    or unregistered), service mark applications (filed,
    unfiled or being prepared), database rights (regis-
    tered or unregistered), all together with the good-
    will associated with such marks or names, trade
    secrets, shop and royalty rights, technology, in-
    ventions, know-how, processes and confidential
    and proprietary information, including any being
    developed (including but not limited to designs,
    manufacturing data, design data, test data, opera-
    tional data, and formulae), whether or not record-
    ed in tangible form through drawings, software,
    reports, manuals or other tangible expressions,
    whether or not subject to statutory registration,
    whether foreign or domestic, and all rights to any
    of the foregoing.
J.A. 12706 (emphases added).
    3    The three patents at issue here are all continua-
tions of U.S. Patent No. 6,932,017, which was itself based
on the PCT application expressly transferred in the 2000
merger. The ’017 patent application was initiated under
35 U.S.C. § 371, which provides for the national filing of
PCT applications. The three patents at issue could not
10              WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.




result of this series of transfers, it appears that the inven-
tors’ patent rights were transferred first to the Geco
companies, then in 1998 to STC, and then in 2000 to
WesternGeco, the plaintiff in this case.
    However, ION argues that there is a defect in this
chain of title. It contends that the inventors, while per-
haps obligated to transfer rights in the invention to their
employers (Geco subsidiaries) under their employment
agreements, failed to testify that such a transfer in fact
occurred. It is well-established that employment con-
tracts do not necessarily automatically assign patent
rights to the employer. See Abraxis Bioscience, Inc. v.
Navinta LLC, 625 F.3d 1359, 1364 (Fed. Cir. 2010).
“[C]ontracts that obligate the owner to grant rights in the
future do not vest legal title to the patents in the assign-
ee.” Id. at 1364–65. In such circumstances, the employee
must still formally assign the rights to the patent to the
employer in order to convert the employer’s contractual
right to the technology into a vested ownership interest.
    The simple answer is that even if the inventors still
owned the rights to the invention after the 2000 merger
agreement, the inventors transferred their interests in
the pending patent applications to STC in 2001. The 2001
assignment forms executed by each of the two inventors
provided that “[STC] is desirous of acquiring or confirm-
ing its ownership of the entire right, title and interest in
and to [the invention]” and confirmed that the inventors
“have sold, assigned, transferred and conveyed, and by
this assignment, do sell, assign, transfer and convey, unto
Assignee, its successors and assigns, the entire right, title
and interest throughout the United States . . . in and to
my invention . . . .” J.A. 12195–98. These 2001 assign-


have been listed in the 2000 agreement because they had
not yet been filed.
WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.            11




ments were filed as to U.S. Patent Application No.
09/787,723 (“App. No. ’723”) and PCTIB99/01590. As
noted above, the three patents for which ION challenges
ownership were all continuations of the patent resulting
from App. No. ’723. ION admits that STC was assigned
the patents in 2001, and argues that STC is the patent
owner.
     No further transfer instrument from STC to West-
ernGeco was required to vest these patents in Western-
Geco after the rights were transferred to STC in 2001.
The transfer from STC to WesternGeco occurred automat-
ically under the previously executed 2000 agreement. It
is well-established that when an agreement provides for
the transfer of an interest in a patent and the transfer-
ring party later receives formal title, the formal title is
automatically transferred by operation of the prior
agreement to the transferee party. See Abraxis, 625 F.3d
at 1364 (“If [a] “contract expressly conveys rights in
future inventions, no further act is required once an
invention comes into being, and the transfer of title occurs
by operation of law.”); SiRF Tech., Inc. v. Int’l Trade
Comm’n, 601 F.3d 1319, 1326 (Fed. Cir. 2010) (same). 4
    Here, the 2000 merger agreement was a present as-
signment of STC’s rights to the intellectual property at
issue. The merger agreement provided: “STC assigns to
[WesternGeco] in accordance with Article 2 all right, title,


   4     Indeed, 35 U.S.C. §§ 118 and 261 contemplate as-
signment of a right to receive a patent. Section 261
provides in part: “Applications for patent, patents, or any
interest therein, shall be assignable in law by an instru-
ment in writing.” Similarly, § 118 provides in part: “A
person to whom the inventor has assigned or is under an
obligation to assign the invention may make an applica-
tion for patent.”
12              WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.




and interest in and to the Schlumberger Transferred IP
primarily related to the Seismic Business in the U.S.”
J.A. 12780. Intellectual Property was defined to include:
“patents, patent applications (filed, unfiled or being
prepared),” and “inventions,” “including any being devel-
oped.” J.A. 12706. The 2000 assignment here included
the rights to future patents resulting from the existence of
a previous invention.
    There is thus substantial evidence to conclude that
WesternGeco owns the patents at issue and has standing
to sue, regardless of whether the inventors transferred
their rights to the inventions to the Geco companies by
operation of their employment agreements or whether
they merely agreed to a future transfer in the early 1990s
and then formally transferred their rights to STC in 2001.
The district court did not err in ruling that WesternGeco
was the owner of the patents-in-suit and had standing to
sue.
                              II
    We next turn to ION’s challenges to the determination
of infringement. As stated earlier, the district court
granted summary judgment of infringement on claim 18
of the ’520 patent under § 271(f)(1). The jury determined
that ION infringed the other asserted claims under
§ 271(f)(1), and the jury separately determined that ION
infringed all of the asserted claims (including claim 18)
under § 271(f)(2) as well.
     Section 271(f)(1) provides:
     Whoever without authority supplies or causes to
     be supplied in or from the United States all or a
     substantial portion of the components of a patent-
     ed invention, where such components are uncom-
     bined in whole or in part, in such manner as to
     actively induce the combination of such compo-
WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.           13




   nents outside of the United States in a manner
   that would infringe the patent if such combination
   occurred within the United States, shall be liable
   as an infringer.
35 U.S.C. § 271(f)(1) (emphasis added). Section 271(f)(2)
provides:
   Whoever without authority supplies or causes to
   be supplied in or from the United States any com-
   ponent of a patented invention that is especially
   made or especially adapted for use in the inven-
   tion and not a staple article or commodity of
   commerce suitable for substantial noninfringing
   use, where such component is uncombined in
   whole or in part, knowing that such component is
   so made or adapted and intending that such com-
   ponent will be combined outside of the United
   States in a manner that would infringe the patent
   if such combination occurred within the United
   States, shall be liable as an infringer.
35 U.S.C. § 271(f)(2) (emphasis added).
    ION contends that three errors by the district court
require reversal. First, ION contends that the district
court misconstrued (f)(1)’s “actively induce” intent re-
quirement in granting summary judgment for claim 18 of
the ’520 patent and in instructing the jury as to (f)(1)
infringement for the other asserted claims. The parties
dispute the meaning of the following language of (f)(1):
“actively induce the combination of such components
outside of the United States in a manner that would
infringe the patent if such combination occurred within
the United States.” 35 U.S.C. § 271(f)(1). The district
court held that this requirement was satisfied if the
alleged infringer “actively induce[d]” the combination
abroad, irrespective of whether the infringer had
knowledge that there would be infringement if combined
14              WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.




domestically. J.A. 52. ION disagrees with that reading,
arguing that the language of (f)(1) requires that ION
knew the intended combination would be infringing if
done domestically.
     We need not reach the question whether the district
court applied the correct standard under § 271(f)(1). The
verdict was clear that the jury found liability under
§ 271(f)(2) for all asserted claims. The district court
expressly instructed the jury to “determine infringe-
ment . . . on a claim-by-claim basis” for both § 271(f)(1)
and (f)(2) and instructed them to determine infringement
as to claim 18 of the ’520 patent under § 271(f)(2). Be-
cause there was no contention raised before the district
court that the (f)(2) instruction as to the standard of
intent was erroneous, 5 and, as discussed below, there
were no other errors with respect to the (f)(2) instruction,
the correctness of the infringement finding with respect to
(f)(2) forms an adequate basis for liability.
    ION’s second challenge is to the lack of limiting in-
structions to the jury with respect to (f)(2). ION proposed
that the jury be instructed:
     I    have        previously     determined      that
     ION . . . infringe[s] Claim 18 of the ’520 Patent by
     supplying DigiFIN and the Lateral Controller
     from the United States intending the two compo-
     nents be combined into a system that infringes



     5  On appeal, ION argues that the (f)(2) jury instruc-
tion was incorrect in light of Commil USA, LLC v. Cisco
Sys., Inc., 720 F.3d 1361 (Fed. Cir. 2013), which was
decided six days after the district court’s JMOL order.
This argument is mooted by the Supreme Court’s recent
decision in Commil USA, LLC v. Cisco Systems, Inc., 135
S. Ct. 1920 (2015).
WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.            15




   Claim 18 utilizing the streamer separation mode.
   You must accept my finding on infringement as it
   relates to Claim 18 of the ’520 Patent under
   § 271(f)(1). You should not consider this finding
   in deciding the question of infringement as to any
   other claim or when deciding infringement under
   § 271(f)(2).
J.A. 10913 (emphasis added). The district court did not
err in rejecting this proposed instruction. The district
court held that, for both (f)(1) and (f)(2), WesternGeco was
required to prove that ION intended that the components
be combined abroad (quite apart from other intent re-
quirements). In granting summary judgment on claim 18,
the district court resolved this issue in favor of Western-
Geco. The jury was entitled to be advised that this is-
sue—applicable to both (f)(1) and (f)(2)—had been
resolved against ION. Because ION’s proposed instruc-
tion would have precluded that, it was overly broad, and
the district court did not err in refusing to give the in-
struction. See Bettcher Indus., Inc. v. Bunzl USA, Inc.,
661 F.3d 629, 638–39 (Fed. Cir. 2011); Biodex Corp. v.
Loredan Biomedical, Inc., 946 F.2d 850, 862 (Fed. Cir.
1991) (“In order to prevail on the jury instruction issue in
this case, [the appellant] must demonstrate both that the
jury instructions actually given were fatally flawed and
that the requested instruction was proper and could have
corrected the flaw.”). 6




   6    ION’s denied motions in limine were equally over-
broad. For example, ION requested that WesternGeco be
precluded from making “[a]ny mention of or reference to
this Court’s Orders denying or granting motions for
summary judgment.” J.A. 10653; see also J.A. 10793
(refusing to give the instruction).
16             WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.




    Finally, ION complains that WesternGeco during trial
made improper references to the (f)(1) summary judgment
order when arguing that the jury should find (f)(2) in-
fringement. ION did not object to the references when
they were made, and ION fails to demonstrate that they
constituted plain error requiring reversal in the absence
of an objection. See Minks v. Polaris Indus., Inc., 546 F.3d
1364, 1379–80 (Fed. Cir. 2008) (plain error reversible only
where substantial rights are affected).
                            III
    Although ION does not challenge the reasonable
royalty award, ION challenges the award of lost profits
resulting from lost contracts for services to be performed
abroad. We hold that lost profits cannot be awarded for
damages resulting from these lost contracts.
    WesternGeco makes the Q-Marine domestically and
performs the surveys abroad on behalf of its customers—
oil companies looking to extract oil from the sea floor.
ION makes the DigiFINs domestically and then ships
them overseas to its customers, who, in competition with
WesternGeco, perform surveys abroad on behalf of oil
companies. WesternGeco identified ten surveys for which
it believes that, but for ION’s supplying of DigiFINs to
ION’s customers, WesternGeco would have been awarded
the contract. These ten surveys allegedly would have
generated over $90,000,000 in profit. According to West-
ernGeco, ION’s customers would not have been able to
win the contracts if they did not have access to the
DigiFINs. Thus, according to WesternGeco, but for ION’s
sales to its customers, WesternGeco would have earned
over $90 million in profit from the ten lucrative services
contracts performed abroad.
    ION argues that WesternGeco cannot receive lost
profits resulting from the failure to win these contracts.
The service contracts were all to be performed on the high
WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.            17




seas, outside the jurisdictional reach of U.S. patent law.
There is also no contention that the service contracts were
entered into in the United States.
     The presumption against extraterritoriality is well-
established and undisputed. As the Supreme Court ruled
in Microsoft Corp. v. AT&T Corp., 550 U.S. 437 (2007),
“[t]he presumption that United States law governs do-
mestically but does not rule the world applies with par-
ticular force in patent law. The traditional understanding
that our patent law operates only domestically and does
not extend to foreign activities is embedded in the Patent
Act itself, which provides that a patent confers exclusive
rights in an invention within the United States.” Id. at
454–55 (citation, alterations, and internal quotation
marks omitted). See also Deepsouth Packing Co. v.
Laitram Corp., 406 U.S. 518, 531 (1972) (“Our patent
system makes no claim to extraterritorial effect; ‘these
acts of Congress do not, and were not intended to, operate
beyond the limits of the United States.’” (quoting Brown
v. Duchesne, 60 U.S. 183, 195 (1856))); Equal Emp’t
Opportunity Comm’n v. Arabian Am. Oil Co., 499 U.S.
244, 248 (1991) (“It is a longstanding principle of Ameri-
can law ‘that legislation of Congress, unless a contrary
intent appears, is meant to apply only within the territo-
rial jurisdiction of the United States.’” (quoting Foley
Bros. v. Filardo, 336 U.S. 281, 285 (1949))).
    Here, the enactment of § 271(f) expanded the territo-
rial scope of the patent laws to treat the export of compo-
nents of patented systems abroad (with the requisite
intent) just like the export of the finished systems abroad.
The genesis of Congressional action lay in the Supreme
Court’s decision in Deepsouth. In Deepsouth, the Supreme
Court determined that a domestic manufacturer who
manufactured components of an infringing product and
then exported those components abroad without first
combining them was not an infringer under § 271(a). 406
18             WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.




U.S. at 527–29. In response, Congress enacted § 271(f),
which overruled Deepsouth to impose liability on domestic
entities shipping components abroad (with the requisite
intent), just as if they had manufactured the infringing
product itself in the United States. See Microsoft, 550
U.S. at 442–45 (explaining that Congress enacted § 271(f)
to hold manufacturers of exported components liable as
infringers). There is no indication that in doing so, Con-
gress intended to extend the United States patent law to
cover uses abroad of the articles created from the exported
components.
     It is clear that under § 271(a) the export of a finished
product cannot create liability for extraterritorial use of
that product. The leading case on lost profits for foreign
conduct is Power Integrations, Inc. v. Fairchild Semicon-
ductor Int’l, Inc., 711 F.3d 1348 (Fed. Cir. 2013). There,
the patentee, a chip supplier, lost contracts to supply a
prospective customer with computer chips in the United
States and abroad because the accused infringer became a
competitor for such contracts as a result of the U.S. in-
fringing sales. If the accused infringer had been preclud-
ed from U.S. infringement, the patentee alleged that the
accused infringer could not have competed for the con-
tracts which necessarily involved supplying chips both in
the United States and abroad. The patentee argued that
it should recover world-wide lost profits.
     We rejected that argument: “[Our patent laws] do not
thereby provide compensation for a defendant’s foreign
exploitation of a patented invention, which is not in-
fringement at all.” Power Integrations, 711 F.3d at 1371.
Rather, “we find neither compelling facts nor a reasonable
justification for finding that [the patentee] is entitled to
‘full compensation’ in the form of damages based on loss of
sales in foreign markets which it claims were a foreseea-
ble result of infringing conduct in the United States.” Id.
at 1372. “[T]he entirely extraterritorial production, use,
WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.             19




or sale of an invention patented in the United States is an
independent, intervening act that, under almost all
circumstances, cuts off the chain of causation initiated by
an act of domestic infringement.” Id. at 1371–72.
    Under Power Integrations, WesternGeco cannot recov-
er lost profits resulting from its failure to win foreign
service contracts, the failure of which allegedly resulted
from ION’s supplying infringing products to Western-
Geco’s competitors. See also Duchesne, 60 U.S. at 195–96
(“And the use of [the patented technology] outside of the
jurisdiction of the United States is not an infringement of
[the patentee’s] rights, and [the patentee] has no claim to
any compensation for the profit or advantage the party
may derive from it.”); Halo Elecs., Inc., v. Pulse Elecs.,
Inc., 769 F.3d 1371, 1380 (Fed. Cir. 2014) (“Following
Halo’s logic, a foreign sale of goods covered by a U.S.
patent that harms the business interest of a U.S. patent
holder would incur infringement liability under § 271(a).
Such an extension of the geographical scope of § 271(a) in
effect would confer a worldwide exclusive right to a U.S.
patent holder, which is contrary to the statute and case
law.”).
    WesternGeco argues that Power Integrations applies
to infringement under § 271(a)–(b), not infringement
under § 271(f). WesternGeco’s argument misunderstands
the role of § 271(f) in our patent law. Section 271(f) does
not eliminate the presumption against extraterritoriality.
Instead, it creates a limited exception. Microsoft, 550
U.S. at 442, 455–56. As we have discussed, by its terms,
§ 271(f) operates to attach liability to domestic entities
who export components they know and intend to be
combined in a would-be infringing manner abroad. But
the liability attaches in the United States. It is the act of
exporting the components from the United States which
creates the liability. A construction that would allow
recovery of foreign profits would make § 271(f), relating to
20             WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.




components, broader than § 271(a), which covers finished
products. In fact, § 271(f) was designed to put domestic
entities who export components to be assembled into a
final product in a similar position to domestic manufac-
turers who sell the final product domestically or export
the final product. Just as the United States seller or
exporter of a final product cannot be liable for use abroad,
so too the United States exporter of the component parts
cannot be liable for use of the infringing article abroad.
    Of course, the fact that WesternGeco is not entitled
under United States patent law to lost profits from the
foreign uses of its patented invention does not mean that
it is entitled to no compensation. Patentees are still
entitled to a reasonable royalty, and WesternGeco re-
ceived such a royalty here. 7
    The dissent raises three principal arguments in favor
of allowing WesternGeco to recover lost profits resulting
from failing to win the contracts to perform the seismic
surveys on the high seas.
     First, the dissent identifies Supreme Court cases it
believes approved awards of lost profits for foreign sales,
citing Goulds’ Manufacturing Co. v. Cowing, 105 U.S. 253
(1881), Dowagiac Manufacturing, Co. v. Minnesota Moline
Plow Co., 235 U.S. 641 (1915), and Duchesne, 60 U.S. 183.
None of these cases is remotely similar to this one. To be



     7  The extent to which these royalties may be affect-
ed by lost profits suffered abroad is an issue not presented
here. See Union Carbide Chems. & Plastics Tech. Corp. v.
Shell Oil Co., 425 F.3d 1366, 1378 (Fed. Cir. 2005), over-
ruled on other grounds, Cardiac Pacemakers, Inc. v. St.
Jude Med., Inc., 576 F.3d 1348, 1365 (Fed. Cir. 2009) (en
banc); see also Warsaw Orthopedic, Inc. v. NuVasive, Inc.,
778 F.3d 1365, 1378 n.7 (Fed. Cir. 2015).
WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.            21




sure, they suggest that profits for foreign sales of the
patented items themselves are recoverable when the
items in question were manufactured in the United States
and sold to foreign buyers by the U.S. manufacturer. See
Goulds’ Mfg., 105 U.S. at 254; Dowagiac Mfg., 235 U.S. at
642–43; Duchesne, 60 U.S. at 196. There is no such claim
here. Rather, the claim is for lost profits from the use
abroad of the items in question. The dissent’s own au-
thority, Dowagiac Manufacturing, makes clear that
absent sales to foreign buyers by the U.S. manufacturer,
there can be no recovery of lost profits for foreign sales:
   Some of the drills, about 261, sold by the defend-
   ants, were sold in Canada, no part of the transac-
   tion occurring within the United States, and as to
   them there could be no recovery of either profits
   or damages. The right conferred by a patentee
   under our law is confined to the United States and
   its Territories and infringement of this right can-
   not be predicated of acts wholly done in a foreign
   country.
235 U.S. at 650.
    Second, the dissent argues that the surveys should be
recoverable as “convoyed sales” of the domestically manu-
factured components of the infringing DigiFINs. But,
WesternGeco did not raise this argument before the
district court or this court. And, the dissent points to no
case extending the convoyed sales doctrine to cover sales
of related products or services abroad. See, e.g., State
Indus., Inc. v. Mor-Flo Indus., Inc., 883 F.2d 1573, 1575
(Fed. Cir. 1989) (making no mention of foreign sales or
uses); Minco, Inc. v. Combustion Eng’g, Inc., 95 F.3d 1109,
1118 (Fed. Cir. 1996) (same). We see no basis for extend-
ing § 271(f)(2) to cover lost profits resulting from the use
abroad of U.S. manufactured goods or components thereof
in light of the “particular force” of the presumption
22             WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.




against extraterritoriality in our patent laws. See Mi-
crosoft Corp., 550 U.S. at 454–55. Certainly in drafting
271(f)(2) Congress did not provide for liability in con-
voyed-sales situations.
     Third, the dissent expresses concern that our ruling
today might effectively prevent WesternGeco from recov-
ering lost profits at all, as the surveys were conducted on
the high seas and were outside of the territorial reach of
any patent jurisdiction in the world. This may or may not
be the case. Indeed, WesternGeco does not contend that it
is barred from recovering in the jurisdiction in which the
services contracted was negotiated and signed, nor does it
contend that it is barred from recovering in the jurisdic-
tion from which the ship performing the seismic surveys
is flagged. In any event, the possible failure of liability
provides no basis for ignoring the presumption against
extraterritoriality.
                            IV
    Because we reverse the district court’s lost profits
decision, we turn next to WesternGeco’s conditional cross-
appeal.
    WesternGeco first challenges the district court’s grant
of ION’s motion to exclude WesternGeco’s expert from
testifying as to a reasonable royalty. WesternGeco’s
damages expert, Raymond Sims, submitted an expert
report in which he determined that the reasonable royalty
rate for ION’s alleged infringement was 10% of the reve-
nue of ION’s customers. In support of this, he explained
that ION’s customers had received $3.3 billion in revenue
for performing surveys with the DigiFINs, and that they
would not have been able to receive that revenue without
the DigiFINs.
    The district court excluded Sims from testifying as to
a reasonable royalty. The district court reasoned “that
WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.              23




ION, in a hypothetical negotiation with [WesternGeco],
would [not] have . . . agreed to a huge, profit-eliminating
(and even revenue eliminating) royalty obligation for
itself. As a matter of law, no such risk can be taken in a
hypothetical negotiation in which infringement is deemed
known. With knowledge of validity and infringement,
such a financially catastrophic agreement would have
been totally unreasonable.” J.A. 62.
    District courts are tasked with the gatekeeping func-
tion of determining whether to allow an expert to testify.
See Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579,
592 (1993). “Faced with a proffer of expert scientific
testimony, then, the trial judge must determine at the
outset, pursuant to Rule 104(a), whether the expert is
proposing to testify to (1) scientific knowledge that (2) will
assist the trier of fact to understand or determine a fact in
issue.” Id. (footnote omitted). We review the district
court’s decision to exclude an expert for an abuse of dis-
cretion. Gen. Elec. Co. v. Joiner, 522 U.S. 136, 146 (1997).
     WesternGeco argues that the court improperly adopt-
ed a rule that a profit-eliminating royalty was per se
unreasonable. It is true that there is no legal rule that
caps the reasonable royalty by the amount of the infring-
er’s profit. 8
   We conclude that the district court adopted no such
absolute rule and did not abuse its discretion in excluding



    8   See, e.g., Aqua Shield v. Inter Pool Cover Team,
774 F.3d 766, 770–71 (Fed. Cir. 2014); Mars, Inc. v. Coin
Acceptors, Inc., 527 F.3d 1359, 1374 (Fed. Cir. 2008),
modified on other grounds, 577 F.3d 1377 (Fed. Cir. 2009);
Monsanto Co. v. Ralph, 382 F.3d 1374, 1384 (Fed. Cir.
2004); State Indus., Inc. v. Mor-Flo Indus., Inc., 883 F.2d
1573, 1580 (Fed. Cir. 1989).
24              WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.




the expert. The district court expressly based its ruling
on two facts—that the royalty was profit eliminating and
that it was revenue eliminating. Indeed, the proposed
royalty was so high that it would have exceeded ION’s
revenue by four times. WesternGeco cites no case, and we
are aware of none, in which we have held that a reasona-
ble royalty can exceed, by a factor of four, the market
price for the patented invention. As such, we see no error
in the district court exercising its discretion to exclude the
expert from testifying as to a reasonable royalty. 9
                              V
    Finally, WesternGeco challenges the district court’s
refusal to award enhanced damages for willful infringe-
ment.
    In In re Seagate, we announced a two-prong test for
willfulness:
     [T]o establish willful infringement, a patentee
     must show by clear and convincing evidence that
     the infringer acted despite an objectively high


     9   Although not expressly articulated by the district
court, it is also worth noting that there were other rea-
sons to exclude the expert’s testimony. For example, after
determining that the patented technology was worth 10%
of total revenue, the expert used the revenue generated by
ION’s customers resulting from performing the oceanic
surveys as the base for that 10% number, rather than the
revenue generated by ION resulting from selling the
infringing products. This increased, by more than ten-
fold, the estimated reasonable royalty. Again, we are
aware of no case in which the plaintiff has used the de-
fendant’s customer’s revenue as the revenue base for
calculating a reasonable royalty, and WesternGeco does
not identify one.
WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.              25




   likelihood that its actions constituted infringe-
   ment of a valid patent. . . . The state of mind of
   the accused infringer is not relevant to this objec-
   tive inquiry. If this threshold objective standard is
   satisfied, the patentee must also demonstrate that
   this objectively-defined risk (determined by the
   record developed in the infringement proceeding)
   was either known or so obvious that it should
   have been known to the accused infringer.
497 F.3d at 1371. In Bard Peripheral Vascular, Inc. v.
W.L. Gore & Associates, Inc., we explained that the objec-
tive inquiry is a legal question, to be answered by the
judge and reviewed de novo. 682 F.3d 1003, 1007 (Fed.
Cir. 2012).
    The jury determined that WesternGeco demonstrated,
“by clear and convincing evidence[,] that ION actually
knew, or it was so obvious that ION should have known,
that its actions constituted infringement of a valid patent
claim[.]” J.A. 77. WesternGeco subsequently sought
enhanced damages in light of the jury’s finding. The
district court denied WesternGeco’s motion. The court
noted that the jury already determined that the subjective
prong was satisfied, but that it was the responsibility of
the court to determine if the objective prong had been
satisfied.     After carefully reviewing ION’s non-
infringement and invalidity defenses, the district court
concluded that they were “not unreasonable by clear and
convincing evidence,” “not objectively baseless,” and
“reasonable.” J.A. 26–28.
    WesternGeco has not established that the district
court erred in concluding that ION’s defenses were rea-
sonable and indeed gives relatively little attention to this
issue. Instead, WesternGeco argues that ION was not
successful with any of its defenses and that ION did not
raise any of those defenses on appeal. But unreasonable-
26              WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.




ness, not a lack of success, determines whether enhanced
damages are awarded. See Spine Solutions, Inc. v. Med-
tronic Sofamor Danek USA, Inc., 620 F.3d 1305, 1319
(Fed. Cir. 2010) (“Th[e] ‘objective’ prong of Seagate tends
not to be met where an accused infringer relies on a
reasonable defense to a charge of infringement.”).
    WesternGeco also argues that ION’s customers
brought the patents to ION’s attention and voiced their
concerns regarding possible infringement, and that ION
was so concerned about the possibility of infringement
that it hesitated to enter into indemnity agreements with
its customers. These arguments bear on the subjective
inquiry, not the objective inquiry—whether WesternGeco
had objectively reasonable defenses. Whether our review
is de novo or deferential, we see no error in the district
court’s determination.
                        CONCLUSION
    We affirm in all respects, except that we reverse the
district court’s refusal to grant JMOL eliminating the lost
profits component of the jury award.
 AFFIRMED-IN-PART, REVERSED-IN-PART, AND
               REMANDED
                           COSTS
     Costs to neither party.
   States Court of Appeals for the
          Federal Circuit
                 ______________________

                 WESTERNGECO L.L.C.,
                 Plaintiff-Cross-Appellant

                            v.

         ION GEOPHYSICAL CORPORATION,
                Defendant-Appellant
                 ______________________

      2013-1527, 2014-1121, 2014-1526, 2014-1528
               ______________________

    Appeals from the United States District Court for the
Southern District of Texas in No. 4:09-cv-01827, Judge
Keith P. Ellison.
                  ______________________

WALLACH, Circuit Judge, dissenting-in-part.
    I agree with the majority’s holdings with respect to
standing, infringement, and willfulness. However, in an
effort to respect the presumption against the
extraterritorial application of United States law, the
majority erroneously declines to consider WesternGeco
L.L.C.’s (“WesternGeco”) lost foreign sales when
determining damages for infringement under 35 U.S.C.
§ 271(f) (2012). Because, under this court’s precedents
and those of the United States Supreme Court, the patent
statute requires consideration of such sales as part of the
damages calculation, I respectfully dissent.
2              WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.




     It is beyond question that patent rights granted by
the United States are geographically limited. As the
Supreme Court long ago explained, “[t]he power . . .
granted [by the Constitution to promote the progress
of . . . useful arts] is domestic in its character, and
necessarily confined within the limits of the United
States.” Brown v. Duchesne, 60 U.S. (19 How.) 183, 195
(1856); see also Deepsouth Packing Co. v. Laitram Corp.,
406 U.S. 518, 531 (1972) (“Our patent system makes no
claim to extraterritorial effect; ‘these acts of Congress do
not, and were not intended to, operate beyond the limits
of the United States’; and we correspondingly reject the
claims of others to such control over our markets.”
(quoting Duchesne, 60 U.S. at 189)), superseded in part by
statute, Patent Law Amendments Act of 1984, Pub. L. No.
98-622, 98 Stat. 3383.
    Consistent with this approach, Congress has
conferred on patentees “the right to exclude others from
making, using, offering for sale, or selling the invention
throughout the United States.” 35 U.S.C. § 154(a)(1)
(emphasis added). Although “[t]he presumption that
United States law governs domestically but does not rule
the world” is not unique to the patent context, it “applies
with particular force in patent law.” Microsoft Corp. v.
AT&T Corp., 550 U.S. 437, 454–55 (2007).
    Nevertheless, the limited geographic reach of United
States patent law does not mean activities occurring
outside the United States are categorically disregarded
when determining issues of patent infringement. For
example, 35 U.S.C. § 271(g) imposes liability based upon
an underlying foreign use of a patented process, if the
product made by that process is imported into the United
States. Similarly, and relevant to the present matter, by
enacting § 271(f) Congress imposed liability on those
supplying from the United States components of a
patented invention “in such manner as to actively induce
WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.              3




the combination of such components outside of the United
States in a manner that would infringe the patent if such
combination occurred within the United States.” 35
U.S.C. § 271(f)(1) (emphasis added).
     The Supreme Court has described § 271(f) as “an
exception to the general rule that our patent law does not
apply extraterritorially.” Microsoft, 550 U.S. at 442; see
also Limelight Networks, Inc. v. Akamai Techs., Inc., 134
S. Ct. 2111, 2118 (2014) (Section 271(f)(1) “illustrates
[that] when Congress wishes to impose liability for
inducing activity that does not itself constitute direct
infringement, it knows precisely how to do so.”); Promega
Corp. v. Life Techs. Corp., 773 F.3d 1338, 1351 (Fed. Cir.
2014) (“Under 35 U.S.C. § 271(f)(1), a party may infringe
a patent based on its participation in activity that occurs
both inside and outside the United States.”) (emphasis
added);     Power    Integrations,   Inc.   v.    Fairchild
Semiconductor Int’l, Inc., 711 F.3d 1348, 1371 (Fed. Cir.
2013) (“[I]ndirect infringement, which can encompass
conduct occurring elsewhere, requires underlying direct
infringement in the United States.”) (emphasis added)
(citations omitted).
    The relevance of foreign activities is not limited to the
underlying issue of liability for infringement, but also
relates to the associated issue of damages. It is on the
issue of damages that the majority errs.
    In general, a patentee is entitled to full compensatory
damages where infringement is found. Gen. Motors Corp.
v. Devex Corp., 461 U.S. 648, 654–55 (1983) (By enacting
§ 284, “Congress sought to ensure that the patent owner
would in fact receive full compensation for ‘any damages’
he suffered as a result of the infringement.”) (citation
omitted); Carborundum Co. v. Molten Metal Equip.
Innovations, Inc., 72 F.3d 872, 881 (Fed. Cir. 1995) (“The
primary purpose of compensatory damages is to return
4              WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.




the patent owner to the financial position he would have
occupied but for the infringement.”); H.R. Rep. No. 1587,
79th Cong., 2d Sess. (1946) (“The object of the bill is to
make the basis of recovery in patent infringement suits
general damages, that is, any damages the complainant
can prove . . . .”) (emphasis added). This general approach
is rooted in the patent statute, which provides: “Upon
finding for the claimant the court shall award the
claimant damages adequate to compensate for the
infringement, but in no event less than a reasonable
royalty.” 35 U.S.C. § 284 (emphasis added). Section 284
is a particular variation of the more general principle
that, “‘when a wrong has been done, and the law gives a
remedy,’” “‘[t]he injured party is to be placed, as near as
may be, in the situation he would have occupied if the
wrong had not been committed.’” Albemarle Paper Co. v.
Moody, 422 U.S. 405, 418–19 (1975) (quoting Wicker v.
Hoppock, 73 U.S. (6 Wall.) 94, 99 (1867)).
    These general principles of full compensation, of
course, do not directly address the question of whether
foreign activities may be considered when calculating
such compensation. The Supreme Court, however, has
answered this question in the affirmative, looking to non-
infringing foreign sales to calculate lost profits where the
patented product is manufactured in the United States.
For example, in Goulds’ Manufacturing Co. v. Cowing, the
defendant manufactured 298 pumps “specially designed
for drawing off the gas from oil-wells,” for which “there
was no market . . . except in the oil-producing regions of
Pennsylvania and Canada.” 105 U.S. 253, 254–55 (1881)
(internal quotation marks omitted). Without excluding
the pumps sold in Canada, the Supreme Court found “a
reasonable allowance for profits will be fifteen dollars on
each pump, or $4,470 [i.e., 298 multiplied by $15 equals
$4,470] in all.” Id. at 258. The Court thus relied in part
on foreign sales to calculate lost profits, explaining the
WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.              5




appellant “could easily, and with reasonable promptness,
[have filled] every order that was made.” Id. at 256.
    In Dowagiac Manufacturing Co. v. Minnesota Moline
Plow Co., the Court reviewed “an accounting of profits
and an assessment of damages resulting from the
infringement of a patent granted . . . for certain new and
useful improvements in grain drills, commonly known as
shoe drills.” 235 U.S. 641, 642–43 (1915) (internal
quotation marks omitted).        The defendants included
wholesale dealers who purchased from manufacturers
(who also infringed the patent). Id. at 643. Some of the
drills were sold in Canada by the defendants. Id. at 650.
The Court held the plaintiff was unable to recover “either
profits or damages” as to these sales, specifically
distinguishing Goulds’ on the basis that “while [the
infringing drills] were made in the United States, they
were not made by the defendants.” Id. By implication,
had the defendants manufactured within the United
States the infringing articles that were the subject of the
foreign sales, those sales could have been used in the
calculation of profits and therefore damages.
    Consistent with Supreme Court precedent, this court
has previously considered lost foreign sales to inform
patent damages calculations. In Railroad Dynamics, Inc.
v. A. Stucki Co., the district court awarded $2,182,986 in
damages based upon 52,183.5 infringing carsets
multiplied by a royalty of $35 per carset, plus 6%
compound interest. 727 F.2d 1506, 1510 n.1 (Fed. Cir.
1984). In upholding the award, this court noted:
   The award includes royalties for 1,671 carsets sold
   to foreign customers . . . . When it made the 1,671
   carsets in this country, it infringed . . . . Whether
   those carsets were sold in the U.S. or elsewhere is
   therefore irrelevant, and no error occurred in
6              WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.




    including those carsets among the infringing
    products on which royalty was due.
Id. at 1519 (emphasis added).
     The use of non-infringing foreign sales, following
infringing domestic manufacture, as part of the base on
which royalties or lost profits are calculated is only one
example of reliance on non-infringing activity to arrive at
an appropriate damages figure. Where method patents
are involved, non-infringing domestic sales of products
resulting from domestic infringement of the patent have
been held relevant to the damages calculation. In State
Industries, Inc. v. Mor-Flo Industries, Inc., for example,
the plaintiff held a patent on “a method of insulating the
tank of a water heater by using polyurethane foam.” 883
F.2d 1573, 1575 (Fed. Cir. 1989). “The district court
awarded [the plaintiff] its incremental profit on [the non-
infringing] foam-insulated gas water heaters reflecting
the percentage of sales revenue [the plaintiff] lost because
of [the defendant’s] infringement that would have been its
profit,” and this court affirmed. Id. at 1579–80; see also
Soverain Software LLC v. J.C. Penney Corp., 899 F. Supp.
2d 574, 583 (E.D. Tex. 2012) (upholding a damages
calculation that relied on “the value of [non-infringing]
products sold via the infringing websites as the royalty
base,” considering in particular “the profit earned on
these [non-infringing] products”), rev’d on other grounds,
778 F.3d 1311 (Fed. Cir. 2015). Similarly, where a
patented device is used to manufacture unpatented
products that are later sold, the non-infringing sales can
be used to calculate lost profits or reasonable royalties.
See Minco, Inc. v. Combustion Eng’g, Inc., 95 F.3d 1109,
1118 (Fed. Cir. 1996) (“In awarding both lost profits and a
reasonable royalty, the trial court used the sale of [non-
infringing] fused silica [produced using a patented kiln] as
the baseline for measuring damages.”).
WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.            7




     In this case, the foreign sales of unpatented seismic
surveys were made not by defendant-appellant ION
Geophysical Corporation (“ION”), but by its customers.
Maj. Op. at 3–4, 16. WesternGeco’s lost profits might
therefore be distinguished from those at issue in Goulds’,
Dowagiac, and Railroad Dynamics on two separate bases:
first, the foreign sales were not of a patented product but
of an unpatented service in which a patent-practicing
device was used; and second, the foreign sales in the
present matter were not made by the defendant. 1
    With respect to the first difference, this court has
previously allowed recovery of lost profits based on the
recognition that “the economic value of a patent may be
greater than the value of the sales of the patented part
alone.” King Instruments Corp. v. Perego, 65 F.3d 941,
950 n.4 (Fed. Cir. 1995). For example, under the doctrine
of “convoyed sales,” a patentee may recover lost profits
based on lost sales of unpatented products if they are
“sufficiently related to the patented product.” Warsaw
Orthopedic, Inc. v. NuVasive, Inc., 778 F.3d 1365, 1375
(Fed. Cir. 2015). Similarly, “when claims are drawn to an
individual component of a multi-component product” a
patentee may recover “damages based on the entire



   1   The majority overreads Dowagiac. Maj. Op. at 20–
21. Dowagiac declined to impose liability for downstream
foreign sales because the defendant was the downstream
seller rather than the U.S. manufacturer and its
“infringement consisted only in selling the drills after
they passed out of the makers’ hands.” 235 U.S. at 650.
That is, the defendant—who was comparable not to ION
but to ION’s customers—did not infringe as to the
products sold to foreign buyers. In the present action,
WesternGeco is not bringing suit against the downstream
sellers, and the issue is not infringement, but damages.
8              WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.




market value of the accused product” so long as “the
patented feature creates the basis for customer demand or
substantially creates the value of the component parts.”
VirnetX, Inc. v. Cisco Sys., Inc., 767 F.3d 1308, 1326 (Fed.
Cir. 2014) (internal quotation marks and citation
omitted); see also Westinghouse Elec. & Mfg. Co. v.
Wagner Elec. & Mfg. Co., 225 U.S. 604, 615 (1912) (Upon
a sufficient showing, a patentee may recover “the profits
and damages . . . on the whole machine” if “the entire
value of the whole machine, as a marketable article, is
properly and legally attributable to the patented
feature.”) (internal quotation marks and citation omitted).
    Although discussions of convoyed sales and the entire
market value rule are generally addressed to products,
there is no statutory or doctrinal reason to exclude
functionally related services, as this court has
acknowledged. See State Contracting & Eng’g Corp. v.
Condotte Am., Inc., 346 F.3d 1057, 1074 (Fed. Cir. 2003)
(quoting with approval a jury instruction that “if . . . an
entire construction job is functionally a part of the
patented inventions used on the job, then . . . lost profits”
may be awarded “for that entire construction job”).
Moreover, the sale of the patented and unpatented
products or services need not occur simultaneously. See
DePuy Spine, Inc. v. Medtronic Sofamor Danek, Inc., 567
F.3d 1314, 1333 (Fed. Cir. 2009) (Whether patented and
unpatented products are sold together or in separate
transactions “is a distinction without a difference.”); see
also Carborundum, 72 F.3d at 881–82 (affirming the
district court’s holding that the patentee was “clearly
entitled to lost profits on all [unpatented] spare parts
sales,” and finding, absent an injunction, it would have
been entitled to lost profits on “future lost sales of repair
parts”). Here, where it appears WesternGeco “could
[have] easily, and with reasonable promptness, fill[ed]
every order that was made” for marine surveys, Goulds’,
WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.            9




105 U.S. at 256, where the patent-practicing devices
“were made in the United States” and were made “by the
defendants,” Dowagiac, 235 U.S. at 650, and where “the
patented feature creates the basis for customer demand”
of the marine surveys, VirnetX, 767 F.3d at 1326, recovery
should not be precluded.
    With respect to the second difference—that ION did
not itself make the downstream sales—there is no reason
to allow ION to escape liability for lost profits simply
based upon the business model it chose to employ. Under
§ 284, damages are based not on the infringer’s profits but
on harm suffered by the patentee. See Robert Bosch, LLC
v. Pylon Mfg. Corp., 719 F.3d 1305, 1315–16 (Fed. Cir.
2013). In this case, damages to WesternGeco are the
same whether ION competes directly or indirectly.
Moreover, had ION chosen to compete against
WesternGeco directly by manufacturing components in
the United States, assembling them abroad, and then
underbidding WesternGeco to win and perform seismic
survey contracts, there would be no sales of patent-
practicing devices (or components thereof) on which to
base a reasonable royalty. This case would then resemble
Minco in that “[b]oth [the defendant] and [the patentee]
used the invention to compete in [the same] market.”
Minco, 95 F.3d at 1118. That is, Minco upheld a
calculation of lost profits based on a downstream, non-
infringing sale of something other than the patented
product. The court should do so here. 2



   2  The majority
   see[s] no basis for extending § 271(f)(2) to cover
   lost profits resulting from the use abroad of U.S.
   manufactured goods or components thereof in
   light of the ‘particular force’ of the presumption
   against extraterritoriality in our patent laws.
10             WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.




    This court’s en banc decision in Cardiac Pacemakers,
cited by ION in support of its argument that
extraterritorial sales cannot be considered, is not
contrary. See Cardiac Pacemakers, Inc. v. St. Jude Med.,
Inc., 576 F.3d 1348, 1362 (Fed. Cir. 2009) (en banc). In
that case, this court “[held] that Section 271(f) does not
cover method claims.” Id. at 1359. The export of non-
infringing implantable cardioverter defibrillators that
were then used abroad to practice a patented method
could not give rise to liability under § 271(f) because “a
component of a method or process is a step in that method


     Certainly in drafting 271(f)(2), Congress did not
     provide for liability in convoyed-sales situations.
Maj. Op. at 21–22 (emphases added) (citation omitted). In
so stating, the majority elides three important issues.
First, by categorizing the damages as “resulting from . . .
use abroad,” it assumes without analysis that there is an
insufficient     connection      between     ION’s     proven
infringement in the United States and damages (see
discussion of Power Integrations, infra). Second, it fails to
consider that the Supreme Court in Goulds’ did not rely
on an explicit authorization of Congress to award
damages based upon activities occurring overseas. Third,
by using the term “liability,” the majority’s statement
ignores the critical distinction between whether a
defendant is liable and the amount for which a defendant
is liable. In any event, Congress stated whoever violates
§ 271(f) “shall be liable as an infringer.” 35 U.S.C.
§ 271(f)(1) & (2). Under this court’s precedents, the extent
of liability for infringement, in appropriate cases, is
determined by considering the sale of non-infringing
products or services. See generally King Instruments, 65
F.3d at 947 (“Section 284 imposes no limitation on the
types of harm resulting from infringement that the
statute will redress.”).
WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.            11




or process,” id. at 1362, but “one cannot supply the step of
a method,” id. at 1364.         In simple terms, Cardiac
Pacemakers held that because method claims are
intangible, they cannot be exported (“supplie[d]”) within
the meaning of § 271(f). The point of law with respect to
infringement under § 271(f) in Cardiac Pacemakers,
however, is inapposite to the issue of damages the court
now decides.         Unlike the defendant in Cardiac
Pacemakers, who shipped non-infringing implantable
cardioverter defibrillators, there is no question that ION
shipped components of a patented invention for
combination abroad and that infringement liability under
§ 271(f) is proper. See Maj. Op. at 12–14.
    Most significantly, this court’s decision in Power
Integrations does not support the majority’s view of
damages.    It is true that case stated damages for
infringement under § 271(a) cannot be based on foreign
sales simply “because those foreign sales were the direct,
foreseeable result of . . . domestic infringement.” See
Power Integrations, 711 F.3d at 1371. Read in isolation,
this statement is inconsistent with Goulds’, Dowagiac,
and Railroad Dynamics.
    However, despite its use of the word “direct,” the court
in Power Integrations was clearly concerned with the
sufficiency of the connection between the foreign activity
and the domestic infringement.         Power Integrations
explained the plaintiffs had cited no case law supporting
the use of “sales consummated in foreign markets,
regardless of any connection to infringing activity in the
United States,” when calculating damages. Id. at 1371
(emphasis added). It noted the “estimate [of the plaintiff’s
expert witness] of $30 million in damages was not rooted
in [the defendant’s] activity in the United States.” Id. at
1372 (emphasis added) (internal quotation marks and
citation omitted). Similarly, the district court decision
expressed concern that the “estimate [of the plaintiff’s
12              WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.




expert witness] of $30 million in damages was not related
to parts that were manufactured, used, or sold in the
United States by [the defendant].” Power Integrations,
Inc. v. Fairchild Semiconductor Int’l, Inc., 589 F. Supp. 2d
505, 511 (D. Del. 2008).
    Although the record in Power Integrations does not
clearly describe the nature of the infringing conduct (e.g.,
sale, manufacture, or sample testing as part of the design
process) in relation to the foreign sales activities, see, e.g.,
711 F.3d at 1370–71, what is clear is that both the district
court and this court found the connection insufficient.
Such an approach merely applies the sensible
requirement that there be an appropriate connection
between the infringing activity and the resulting lost
sales. See Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538,
1546 & n.5 (Fed. Cir. 1995) (en banc) (explaining that
damages      for    “remote      consequences”    of    patent
infringement “are not compensable,” and noting
disagreement with the dissent on “where those lines are
to be drawn”); cf. F. Hoffmann–La Roche Ltd. v.
Empagran S.A., 542 U.S. 155, 166 (2004) (indicating it is
not “reasonable to apply [American antitrust] laws to
foreign conduct insofar as that conduct causes
independent foreign harm and that foreign harm alone
gives rise to the plaintiff’s claim”) (emphasis modified). In
contrast to the tenuous connection between infringement
and harm in Power Integrations, see 711 F.3d at 1371–72,
the majority does not question WesternGeco’s assertion
that “but for ION’s sales to its customers, WesternGeco
would have earned over $90 million dollars in profit from
the ten lucrative services contracts performed abroad.”
Maj. Op. at 16.
    In any event, Power Integrations is distinguishable
because the patentee in that case could presumably have
protected itself from the foreign manufacture, sale, and
use by obtaining patents abroad. See Deepsouth Packing,
WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.             13




406 U.S. at 531 (“[T]he wording of 35 U.S.C. §§ 154 and
271 reveals a congressional intent to have [the patentee]
seek [protection] abroad through patents secured in
countries where his goods are being used.”); see also
Microsoft, 550 U.S. at 456 (“If AT&T desires to prevent
copying in foreign countries, its remedy today lies in
obtaining and enforcing foreign patents.”).             Such
reasoning loses much of its force where the
extraterritorial activity takes place or could take place
entirely on the high seas. See Maj. Op. at 16–17 (“The
service contracts were all to be performed on the high
seas, outside the jurisdictional reach of U.S. patent law.”);
see also J.A. 10151 (“international waters”); id. at 1182
(“high seas”). See generally United States v. Louisiana
(The Louisiana Boundary Case), 394 U.S. 11, 23 (1969)
(“Outside the territorial sea are the high seas, which are
international waters not subject to the dominion of any
single nation.”); WesternGeco L.L.C. v. ION Geophysical
Corp., 776 F. Supp. 2d 342, 370 (S.D. Tex. 2011)
(“[A]ctivities in the [Exclusive Economic Zone] do not
occur within the territory of the United States for
purposes of U.S. patent law.”).
    For similar reasons, concerns that extraterritorial
application of U.S. patent law could result in double
recovery (e.g., by parallel suits brought under the patent
laws of more than one country based on the same
infringing act) or possibly interfere with foreign
sovereignty are of minimal relevance here.             Where
components of a patented invention are supplied from one
country and used exclusively on the high seas, it may be
that no country’s patent laws reach the conduct occurring
in international waters absent a provision such as
§ 271(f). See, e.g., Duchesne, 60 U.S. (19 How.) at 196
(“[T]he high seas [are] out of the jurisdiction of the United
States.”); Ocean Sci. & Eng’g, Inc. v. United States, 595
F.2d 572, 574 (Ct. Cl. 1979) (It is uncertain whether
14             WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.




Congress intended the patent laws to apply “to processes
carried out on U.S. flag ships and planes at sea.”). See
generally Equal Emp’t Opportunity Comm’n v. Arabian
Am. Oil Co., 499 U.S. 244, 265 (1991) (Marshall, J.,
dissenting) (“[T]he law of the flag state ordinarily governs
the internal affairs of a ship.”) (emphasis added) (internal
quotation marks and citation omitted), superseded by
statute on other grounds, Civil Rights Act of 1991, Pub. L.
No. 102-166, § 109, 105 Stat. 1071, 1077, as recognized in
Arbaugh v. Y&H Corp., 546 U.S. 500, 513 n.8 (2006);
Gardiner v. Howe, 9 F. Cas. 1157, 1158 (C.C.D. Mass.
1865) (No. 5219) (“[Patent] jurisdiction extends to the
decks of American vessels on the high seas . . . .”)
(emphasis added); Restatement (Third) of Foreign
Relations Law § 502(2) (1987) (“The flag state may
exercise jurisdiction to prescribe, to adjudicate, and to
enforce, with respect to the ship or any conduct that takes
place on the ship.”) (emphasis added).
    The greater concern, therefore, is not the possibility of
recovering too much, but the possibility that patent
owners will be unable to obtain full compensation, as may
well be the import of the majority’s holding today. Under
the majority’s view of damages, plaintiffs such as
WesternGeco who are the victims of proven infringement
and who have sustained damages caused by the
defendant’s activity in the United States may not be able
to fully recover even if they obtain patent rights abroad. 3



     3 Even if every country applies the law of the flag to
prohibit vessel-based activities in international waters
that are claimed in a patent issued by that country, it
may be difficult for United States patentees to predict, at
the time of patenting, either the flag that future vessels
are likely to fly or the countries in which future contracts
are likely to be “negotiated and signed.” Maj. Op. at 22.
WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.             15




No legislative history shows Congress intended to leave
such patentees with an incomplete remedy.
     The majority points out that § 271(f) is not broader
than § 271(a), 4 that “liability attaches in the United
States,” and that “[i]t is the act of exporting the
component from the United States which creates the
liability.” Maj. Op. at 19; see also 35 U.S.C. § 271(b),
(f)(1), (f)(2) & (g) (indicating who “shall be liable as an
infringer”). The question here, however, is not whether
“the export of a finished product can[] create liability for
extraterritorial use of that product,” Maj. Op. at 18, but
instead, what is the proper measure of damages given a
finding of liability. Infringement has been consistently
addressed at the various stages of the proceeding, and the
majority acknowledges the role of foreign activities in the
infringement determination under the statute. Id. at 12–
13. The jury found ION infringed under § 271(f)(1) and
(2), and that it did so willfully. The district court denied



This difficulty in prediction distinguishes patents related
to activities on the high seas from those obtained in the
more common situation where businesses can attempt to
predict the need for patenting in a given country based
upon factors such as population size or historical market
demand. See Deepsouth Packing, 406 U.S. at 531 (“[T]he
wording of 35 U.S.C. [§ 271] reveals a congressional intent
to have [the patentee] seek [protection] abroad through
patents secured in countries where his goods are being
used.”) (emphasis added).
     4 Of course, § 271(f) is broader than § 271(a) in that

it reaches the supply of “all or a substantial portion of the
components of a patented invention.”             35 U.S.C.
§ 271(f)(1) (emphasis added); see also Microsoft, 550 U.S.
at 458 n.18 (explaining how § 271(f), “in one respect,
reach[es] past the facts of Deepsouth”).
16             WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.




ION’s Renewed Motion for Judgment as a Matter of Law
and Alternative Motion for New Trial Regarding Non-
Infringement, and this court now affirms “the
infringement finding with respect to (f)(2) [as] an
adequate basis for liability.” Id. at 14. The question of
whether ION is liable for infringement has been answered
in the affirmative.
     The majority states “§ 271(f) was designed to put
domestic manufacturers who export components to be
assembled into a final product in a similar position to
domestic manufacturers who sell the final product
domestically.” Id. at 20; see also S. Rep. No. 98-663, 98th
Cong., 2d Sess., at 3 (1984) (“The bill simply amends the
patent law so that when components are supplied for
assembly abroad to circumvent a patent, the situation will
be treated the same as when the invention is ‘made’ or
‘sold’ in the United States.”). It asserts “[j]ust as the
United States seller or exporter of a final product cannot
be liable for use abroad, so too the United States exporter
of the component parts cannot be liable for use abroad.”
Maj. Op. at 20.
    However, the cases from which the majority
apparently draws this conclusion do not hold that foreign
use can never be considered when calculating damages
resulting from domestic infringement. In Microsoft, 550
U.S. 437, see Maj. Op. at 17, the Court found no
infringement under § 271(f); it did not address the issue of
damages. Similarly, in Halo Electronics, Inc. v. Pulse
Electronics, Inc., 769 F.3d 1371, 1380 (Fed. Cir. 2014), see
Maj. Op. at 19, this court found the defendant’s “activities
in the United States were insufficient to constitute a sale
within the United States to support direct infringement,”
and did not reach the issue of damages with respect to
those non-sales. Finally, the Supreme Court in Duchesne,
60 U.S. (19 How.) at 193–94, 198, see Maj. Op. at 19,
found no infringement based on the extraterritorial use of
WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.            17




an improved gaff on a foreign sailing vessel that was
temporarily present in Boston harbor.
    Duchesne actually undermines the majority’s
assertion that damages for domestic manufacture cannot
take into account value from use on the high seas. The
Duchesne Court specifically stated that if the patented
invention “had been manufactured on [the vessel’s] deck
while she was lying in the port of Boston, or if the captain
had sold it there, he would undoubtedly have trespassed
upon the rights of the plaintiff, and would have been
justly answerable for the profit and advantage he thereby
obtained.” Duchesne, 60 U.S. (19 How.) at 196 (emphasis
added). Significantly, the Court noted “[t]he chief and
almost only advantage which the defendant derived from
the use of this improvement was on the high seas.” Id.
The Court thus concluded that where domestic
manufacture leads to “profit and advantage” on the high
seas, the defendant is answerable for that profit. Id.
     Unsurprisingly, this court has indicated damages
under § 271(f) may be based on lost foreign sales. In
Union Carbide Chemicals & Plastics Technology Corp. v.
Shell Oil Co., this court held the district court “was in
error” when it “prohibited Union Carbide from submitting
evidence of Shell’s foreign sales for the purpose of
recovering additional damages under 35 U.S.C.
§ 271(f)(2).”   425 F.3d 1366, 1378 (Fed. Cir. 2005),
overruled on other grounds by Cardiac Pacemakers, 576
F.3d 1348. Although this court sitting en banc overruled
Union Carbide, it did so on the basis that the export of a
catalyst for use abroad in a patented method did not
infringe under § 271(f) because the catalyst was not a
“component” as required by the statute, and because
“[§] 271(f) does not apply to method patents.” Cardiac
Pacemakers, 576 F.3d at 1363 n.4, 1365.            It left
undisturbed Cardiac Pacemakers’ holding that evidence of
foreign sales is relevant to the damages determination
18             WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.




where infringement is found under § 271(f). See id. at
1365 (“We therefore overrule [Union Carbide] to the extent
that it conflicts with our holding today . . . .”) (emphasis
added).
     In Promega, decided after Cardiac Pacemakers, this
court confirmed that worldwide sales are relevant to the
damages determination under § 271(f), i.e., that Union
Carbide’s holding with respect to the relevance of foreign
sales remains good law. 773 F.3d at 1350–51. This court
noted the “jury awarded lost profits . . . based on
worldwide sales . . . under 35 U.S.C. § 271(f)(1).” Id.; see
also W.R. Grace & Co. v. Intercat, Inc., 60 F. Supp. 2d 316,
321 (D. Del. 1999) (“[P]laintiff is entitled to damages
[under § 271(f)] based on Intercat’s international sales.”).
Although this court vacated the damages award because
“the challenged claims of four of the five asserted patents
on which the jury based its damages verdict are invalid,”
it did not preclude the district court on remand from
again considering worldwide sales as part of a renewed
damages calculation. Promega Corp., 773 F.3d at 1358.
To the contrary, Promega acknowledged the presumption
“against the extraterritorial application” of the patent
laws, but found that “Congress’ chosen language [in
§ 271(f)] assigns liability to [the defendant’s] conduct
within the United States, based on its extraterritorial
effect.” Id. at 1353 n.10 (emphasis added). The majority
does not attempt to distinguish Cardiac Pacemakers or
Promega. 5



     5 The majority distinguishes Union Carbide on the
basis that it addressed “[t]he extent to which . . . royalties
may be affected by lost profits suffered abroad,” while the
present matter does not. Maj. Op. at 20 n.7. The majority
offers no explanation as to why lost foreign sales should
be relevant when calculating damages based on a
WESTERNGECO L.L.C.   v. ION GEOPHYSICAL CORP.            19




     It is true some Federal Circuit decisions have stated
lost profits are unavailable where the patentee does not
sell its product in the United States. See, e.g., Lindemann
Maschinenfabrik GmbH v. Am. Hoist & Derrick Co., 895
F.2d 1403, 1406 n.2 (Fed. Cir. 1990) (“Because Lindemann
did not compete in the sale of its invention in the United
States, it did not, as it could not, seek damages on the
basis of lost profits.”); Trell v. Marlee Elecs. Corp., 912
F.2d 1443, 1445 (Fed. Cir. 1990) (“Because Trell did not
sell its invention in the United States, he could not seek
damages on the basis of lost profits.”). In these cases,
however, the defendants’ conduct appears to have taken
place in the United States and no exports were at issue.
They therefore stand only for the proposition that there
can be no lost profits where the patentee would not have
made sales in any event. See King Instruments, 65 F.3d
at 951 n.5 (“In Trell and Lindemann . . . the record does
not show that the patentee sold any product in the United
States. The patentee had no possible basis for a lost
profits claim. These cases, like others, reflect the general
rule that lost profits are recoverable only if demonstrated
by adequate evidence in the record.”). In this case, the
district court found “WesternGeco presented sufficient
evidence for the jury reasonably to find that it had the
capability to exploit the demand,” i.e., that but for the
infringement, WesternGeco would have made additional
sales. J.A. 34.
    For these reasons, the majority’s near-absolute bar to
the consideration of a patentee’s foreign lost profits is
contrary to the precedent both of this court and of the
Supreme Court. I therefore respectfully dissent in part.




reasonable royalty, but not when calculating damages
based on lost profits.
