The U.S. Supreme Court on Jan. 12 agreed to review a bid by Schlumberger Ltd. (NYSE: SLB), the world's largest oilfield services provider, to allow companies to recoup profits lost due to patent infringement when patented technology is used overseas.
The case involves a fight over how much rival ION Geophysical Corp. (NYSE: IO) must pay for infringing Schlumberger technology that helps search for oil and gas beneath the ocean floor. The justices will hear Schlumberger's appeal of a lower court ruling that barred it from recovering more than $93 million stemming from foreign contracts the company said it lost as a result of the infringement.
The case involves four patents owned by Schlumberger subsidiary WesternGeco Ltd. related to an invention that more efficiently completes marine seismic surveys to help identify oil and gas drilling locations.
ION developed a competing system and sold it to surveying companies abroad. WesternGeco sued in 2009, and a federal jury in Houston, where both firms are based, found that ION infringed the patents and caused the company to lose contracts. The jury awarded $12.5 million in royalties and $93.4 million in lost profits.
In 2015, the Washington-based U.S. Court of Appeals for the Federal Circuit, which specializes in patent disputes, ruled that Schlumberger could not recoup the lost profits portion, saying U.S. patent law does not apply outside the country.
Schlumberger appealed to the Supreme Court. The company said the ruling will harm innovation by allowing companies to infringe competitors' patents while risking minimal punishment.
President Donald Trump's administration, backing Schlumberger, urged the court to take the case.
The court is likely to decide the case by the end of June, when its current term ends.
Recommended Reading
Mighty Midland Still Beckons Dealmakers
2024-04-05 - The Midland Basin is the center of U.S. oil drilling activity. But only those with the biggest balance sheets can afford to buy in the basin's core, following a historic consolidation trend.
Life on the Edge: Surge of Activity Ignites the Northern Midland Basin
2024-04-03 - Once a company with low outside expectations, Surge Energy is now a premier private producer in one of the world’s top shale plays.
Mesa III Reloads in Haynesville with Mineral, Royalty Acquisition
2024-04-03 - After Mesa II sold its Haynesville Shale portfolio to Franco-Nevada for $125 million late last year, Mesa Royalties III is jumping back into Louisiana and East Texas, as well as the Permian Basin.
EIA: Permian, Bakken Associated Gas Growth Pressures NatGas Producers
2024-04-18 - Near-record associated gas volumes from U.S. oil basins continue to put pressure on dry gas producers, which are curtailing output and cutting rigs.
CEO Darren Woods: What’s Driving Permian M&A for Exxon, Other E&Ps
2024-03-18 - Since acquiring XTO for $36 billion in 2010, Exxon Mobil has gotten better at drilling unconventional shale plays. But it needed Pioneer’s high-quality acreage to keep running in the Permian Basin, CEO Darren Woods said at CERAWeek by S&P Global.