Supreme Court Backs Award of Overseas Patent Damages (reuters.com)

schwit1 quotes a report from Reuters: The U.S. Supreme Court ruled on Friday that companies can recover profits lost because of the unauthorized use of their patented technology abroad in a victory for Schlumberger NV, the world's largest oilfield services provider. The decision expands the ability of patent owners to recover foreign-based damages, increasing the threat posed by certain infringement lawsuits in the United States.

Internet-based companies and others had expressed concern that extending patent damages beyond national borders would expose U.S. high-technology firms to greater patent-related risks abroad. U.S. patent law generally applies only domestically, but Schlumberger said that since the law protects against infringement that occurs when components of a patented invention are supplied from the U.S. for assembly abroad, it should be fully compensated for the infringement, including any lost foreign sales. The high court agreed.

Comments

Globalization is great

[rsilvergun]

if you're a player on the global stage. Not so sure about us regular chaps though. I mean, I'm unlikely to ever have the resources to run an international lawsuit to enforce patent law but I could see getting sued by a mega corp who does. It'd be a great way to keep any upstart competitors from popping up. Let's not forget how Hollywood was founded.

Re:Globalization is great

[Anonymous Coward]

I used to think patents were a good thing. And, maybe once, they were. These days however they are nothing but an essential step on the road to lawsuit profits.

Re:Globalization is great

[currently_awake]

The NSA runs a global phone/internet spying ring, and some people have suggested they occasionally hand over technology they intercept to American companies. If this is true, then American companies can steal tech, patent it, and sue the inventors to prevent them from using it.

Re:Globalization is great

[alvinrod]

The problem with removing them entirely is that it's going to be quite hard for any inventor to function independently. Without any protection by law, someone's ability to sell an invention for profit lasts only until some big player can take it apart and build it for far less due to their existing manufacturing capability and the scale of their operations.

This isn't entirely bad as it means that costs for existing goods and products will drop as there's nothing to stop anyone who thinks they can manufacture something for less from attempting to do so. However, these manufacturers don't have a lot of incentive to spend resources on new inventions since they only have a very short window to recoup that investment before a competitor starts producing it as well and they may figure that they can just wait for the competition to invent some new thing. Investment in reducing the cost of manufacturing is where money would be directed since it makes a company more competitive, and improvements in manufacturing techniques or tools can naturally be hidden from competitors.

The same goes for other fields as well. Creating a medicine becomes essentially worthless since it can be easily replicated once the chemical composition is discovered, but a surgical technique or procedure may be less difficult to emulate as the knowledge of precisely how it works is not disseminated so easily merely by the acquisition of it. Goods of all kinds become less valuable compared to services. You're probably only likely to see new types of goods, medicines, etc. arise as a result of crowd funding of some form or perhaps someone extremely wealthy wishing to cure themselves of some affliction. There will probably always be some people who will invent for the hell of it, simply because it excites them, but these people are rare.

I don't know if one of these worlds is better than another, but a lack of patents does suggest a certain tendency to hoard knowledge. Patents reward those individuals or companies that can create something new and novel (that in reality we fall short of this quite often is another matter) and there's less value in hoarding the knowledge since a lack of one means the competition can make your product should they figure out how. If it's really successful, they might even find different methods of achieving a similar outcome. Regardless, the patent eventually expires and anyone can produce the invention.

I'd be somewhat remiss to throw out the entire idea because the implementation has become horribly broken. Especially considering that there are several practical (and rather simple) steps that could be taken to fix a great deal of the problem with the patent system. I wouldn't necessary shed a tear to see it go either, but that would introduce massive amounts of change into a system that's grown up around a certain set of laws. Maybe you could argue that the longterm benefits outweigh the short term chaos, but that's not a pool I'd like to jump into without sticking a few toes in first in order to test the water.

Re:Globalization is great

[Actually, I do RTFA]

Let's not forget how Hollywood was founded.

How?

Re: Globalization is great

[Anonymous Coward]

Jews smelled pork.

That's not the metaphor you are looking for.

Re:Globalization is great

[technosaurus]

Many sources say they went to Hollywood to escape Edison's patent trolls. Though that seems to need some clarification.

Re:Globalization is great

[thegarbz]

I mean, I'm unlikely to ever have the resources to run an international lawsuit to enforce patent law but I could see getting sued by a mega corp who does.

Unless you're a company which runs a business internationally and has a presence in the USA while selectively infringing USA patents elsewhere I don't think this story or ruling has any implication for you.

The way I see it this is just rich large corporations suing each other. Small corporations wouldn't be in a position to infringe in this way and would likely get sued locally under local law or simply have their products blocked from import.

Re:Globalization is great

[turbidostato]

"The problem with removing them entirely is that it's going to be quite hard for any inventor to function independently."

While your argument seems to make sense, let's check it against reality.

Back in the early days of XX century, the ability to enforce patents was much less than it is today, both domestically and abroad, still, it was a period of franctic innovation in all kind of business.

Back in the 50's, business process were not patent-encumbered, but USA companies grew orders of magnitude out of better comprehension on who to optimize them.

Back in the 80's 90's software development was practically not patent-encumbered (certainly much less than today). And yet, the 80's 90's made some of the richest men on earth, at the quickest pace we've ever seen, out of humble garage investments.

So, it seems, something along your argument doesn't hold water, after all.

Re:Globalization is great

[alvinrod]

As I said, I don't think that a lack of patents necessarily changes the overall amount of innovation, merely what form that innovation takes. If you can make a new pill, there's incentive to do so as patents ensure that you can attempt to recoup investment from it. A lack of patents means that it's rather pointless to invest millions developing the pill when anyone can reproduce it as soon as they learn what's in the pill and how to make it. Maybe you could try to prevent this by only administering it to people who come to your facility and stay in it, but that's cumbersome. Instead, there will be a great pressure to find innovations in making existing pills for less money. If you're a business that can make anything you want, then your ability to profit is only constrained by your own costs relative to those of your competitors.

This isn't necessarily worse, just different. Although I also suspect that it may have problems in the long run as it could limit the ability for new competitors to emerge. We can already easily observe that success breeds success (i.e., once you've got a bit of capital, it's a lot easier to get a bit more and perpetuate the cycle further), and I'm worried that a lack of patents would lead to runaway success on the manufacturing side that creates an oligopoly that survives beyond the lifetime of a particular industry. For example, suppose someone manages to develop some kind of teleportation technology. This destroys the automotive industry just as they once destroyed the horse and buggy industry.

I understand your point that any government system invariably invites some form of corruption in order to attempt to control it and I won't dispute that's where we find the patent system now. Once again though, I don't think it's a good idea to throw the baby out with the bathwater when we haven't even attempted to fix the dysfunction in the system. If after trying that to no practical avail, then sure, why not. But let's try to fix it first.

Re:Globalization is great

[alvinrod]

I'm not sure I necessarily agree with you on your points. Hollywood is a good example of an early 20th century industry that sprung up around avoiding patents. You could point to Jobs and Apple taking from Xerox PARC (though they weren't the innovators of many of their ideas either) as well. In both cases those groups or companies certainly enriched themselves, but at the expense of the people who did most of the original leg work and innovation.

My argument isn't that this will result in a loss of wealth, productivity, etc., merely that it will shift where the wealth is realized. You no longer reward the person who is best able to develop a new idea, but the person who is best able to execute on an idea. There were surely always be new ideas (if only because someone is good at coming up with them, but terrible at executing on them and doesn't mind someone else doing so if it means getting a concrete product for themselves) but the economic pressure will drive most innovation towards being able to execute on existing or new ideas at less expense.

I'd even buy the argument that this is preferable for those who are the least well off as it naturally means a reduction in their costs. I just don't know what it necessarily means for the pace of innovation in other sectors (especially those where once the idea exists it's trivial to understand and copy) and what that means for humanity in the long term. It's perhaps better for us to do that, but I can't say that for a certainty, hence my caution. It took thousands of years to arrive at the current social order and while there's no doubt that in another thousand years it will have improved more, I'm hesitant to go around tearing it up on supposition without some trials or empirical evidence first.

Re:Globalization is great

[turbidostato]

"You no longer reward the person who is best able to develop a new idea, but the person who is best able to execute on an idea"

You see that you are making my point, right?

Patents are NOT, and NEVER were meant to reward ideas but the abililty to execute ideas.

The trend to protect mere ideas (like granting too generic patents, or granting patents on pure ideal fields, like maths) is a recent one, and one against what patents are for, both technically (it is not about ideas) and in spirit (they are coercing innovation, not promoting it).

"I just don't know what it necessarily means for the pace of innovation in other sectors (especially those where once the idea exists it's trivial to understand and copy) and what that means for humanity in the long term."

Just look and see. Whatever your model of patent/copyright is, you know something for certain: it is a recent addition to human History. But then, humankind seemingly went just OK without them for more of its History, so maybe the coolaid that without patents we can't go nowhere (or even, well, yeah, but at a much slower pace) is nothing but that: coolaid. Of course I don't have here the time and inclination to go for a long essay, but the more you look at patents/copyright evolution the more clear it becomes something smells (very) rotten there. Just for an example:

Bill Gates (1991): "If people had understood how patents would be granted when most of today's ideas were invented, and had taken out patents, the industry would be at a complete standstill today." No need to say how dear to patents Microsoft came less than a decade later. So, when Microsoft was an innovative company, his leader was very skeptic on patents; once his company was a behemoth, he was strongly in favour (oh, and now that he's pushing his charity, he changed his mind again and now, violating patents when fits his interests is not that bad again).

But you can think Bill Gates is "just" an individual... now go and look at USA History and its stance on copyright/patents: they were against them, when USA needed to advance itself, but strongly in favour once it was others which reclaimed the same right.

Judgment all you want

[DatbeDank]

If you don't have the means to enforce it or collect abroad, it's effectively useless.

Re:Judgment all you want

[thegarbz]

If you don't have the means to enforce it or collect abroad, it's effectively useless.

This isn't about collecting abroad. It's about collecting locally from US companies doing business abroad. This is about you and me going about our business in the USA. It's about you having a patent. It's about me creating a product that violates that patent and in an attempt to skirt your law selling that product somewhere else in the world but not in the USA. ... Then you suing me for it.

There Goes Chinas Business Model

[Crashmarik]

Tariffs just became moot, just sue them over stolen tech.

Re:There Goes Chinas Business Model

[scottragen]

Until other countries follow suit. Imagine if China or EU went after US companies for infringing on their patents in the US, there would be an almighty uproar about infringing on US sovereignty.

Re:There Goes Chinas Business Model

[Crashmarik]

We have reciprocal agreements with most countries. China has a legal system where it's good chance getting a judgment if you aren't a party member.

The current idea is...

[davecb]

If you do business with someone in Londinium, you're subject to the laws which the city of London, England, had agreed are common with other cities on the Hanseatic League. The league has expanded somewhat over time, and includes pretty much everyone who agrees with the Rule of Law. Outlaw states like North Korea, somewhat less so.

So...

[dicobalt]

Does this mean people can sue a company for their overseas employment practices too?

Both companies are in Houston. Why collect elsewhe

[raymorris]

Why would a company in Houston go abroad to collect a judgement from another company in Houston? ION is six miles from Schlumberger.

You mean China expecting Chinese co to follow Chin

[raymorris]

It would be more like China expecting Chinese companies to follow the laws of China when they export stuff to the US.

"Texas, it's like a whole other country" is slogan

[raymorris]

It's not technically another nation anymore. A few years ago, in 1845, Texas was admitted to the union. "It's like a whole other country" is just a tourism marketing slogan.

It depends. Discrimination law, yes

[raymorris]

If ION were violating the Civil Rights Act of 1964, the ADA, or some other discrimination laws in overseas offices, yes employees could sue for the overseas discrimination if they are US citizens working abroad.

The Fair Labor Standards Act does NOT apply overseas.

Much of employment law is at the state level. I don't know off hand which Texas employment laws apply to Texas companies like ION regarding employment outside of Texas.

Just curious how you figure that

[raymorris]

Just curious how you come to the conclusion that federal law doesn't have jurisdiction over Houston companies?

Both are headquartered in Houston, so yeah

[raymorris]

> Sort of, but if those companies have any assets in neutral countries the US can aggressively grab those lawfully.

In this case, the two companies are both based in Houston, a few miles apart, so collecting the judgement isn't an issue.

Here is the opinion.

[BitterOak]

The article didn't provide a link to the SCOTUS opinion, so here it is. It is an interesting split. Thomas wrote for the majority and was joined by Roberts, Kennedy, Ginsburg, Alito, Sotomayor, and Kagen. Gorsuch wrote the dissent, joined by Breyer.

Amazing America

[hyades1]

"Schlumberger said that since the law protects against infringement that occurs when components of a patented invention are supplied from the U.S. for assembly abroad, it should be fully compensated for the infringement, including any lost foreign sales. The high court agreed."

Russia, China, India: "Take a long, hard suck on our boners. And thanks for all the tech.

The US middle class, which provided most of the purchasing power that made the US such a great place to sell basic merchandise into, is being gutted by its corporate-controlled government. Without that kind of purchasing power, the US is just a country with armed forces that can capture any objective, but have no hope of holding it...truly Chairman Mao's "paper tiger". Who gives a crap what the US wants. We'll just buy whatever we want from China at a third the price.

Bye bye Miss American Pie...

Welcome to wish that. Personal jurisdiction

[raymorris]

I can take no issue with you wishing that were true.

The fact is, in a great number of cases which jurisdiction applies is based on what's called "personal jurisdiction". That's the term to Google if you want more information. The basic idea is that US companies have to follow US law, such as anti-bribery laws. Even when they send someone across the border to perform the illegal act for them.

You can say "that's not fair" and I won't bother arguing with you; I'll just point out people do in fact go to prison for that shit.

Patent law in US != EU and rest of world

[AntisocialNetworker]

Patents in the US are "first to invent" ultimately as discovered by examining the inventor's notebooks. Almost everywhere else, it's "first to file", i.e. when the patent office receives the application. Which means US patents can claim to precede valid earlier patents elsewhere. That was "sort of" OK when the two patent systems didn't overlap - a US company gets an EU patent when its application is received by Albert Einstein or similar. But extending US patent jurisdiction outside the US can lead to a conflict over validity. There's a historical precedent here - AFAIK my father was awarded a patent during WW-II, but wasn't allowed to publish it then because of national security. After the war, a US partner patented the same idea, and claimed damages from the UK company for its production during the war.

Re:Patent law in US != EU and rest of world

[Anonymous Coward]

AFAIK the US switched to some form of first-to-file a few years back.

First inventor to file

[raymorris]

The US switched to 'first inventor to file".

So for example if you approached a company about making or marketing your invention, before you patented it, and they wrote you an email saying "wow, that's a neat idea. We would have never thought of that", then they tried to patent it, their patent would not take precedence, because they admitted they didn't invent it.

The US now also has provisional patents, which allows small inventors to file inexpensively right away, then they have a year to figure out if it's worth the expense of filing a regular patent.

Re:Make Failure Great Again.

[turbidostato]

"Yeah, I see laws abused every time there's a crime and I think, "maybe we should cancel those laws, they don't work, and it would make the criminal's lives easier"."

For a proper comparation you should say "The *current* laws pretending to stop crime doesn't seem to stop the crimes they say because back when those laws weren't in place there were less of those crimes they pretend to avoid". And yes, if that were the case, I would question their value and I would want them repelled.