HOUSTON, Jan. 16, 2018 /PRNewswire/ -- ION
Geophysical Corporation (NYSE: IO) today announced that the Supreme
Court granted certiorari in the previously-reported lawsuit of
WesternGeco L.L.C. v. ION Geophysical Corporation, agreeing to
review the lower court's judgment for legal error on whether a
patent holder can obtain lost-profits damages for use of ION's
products outside of the United States. We would like to take
this opportunity to provide information about the case and its
current status.
WesternGeco sued ION and one of ION's customers for patent
infringement in 2009. In 2012, a jury issued a verdict in
favor of WesternGeco and awarded WesternGeco damages for reasonable
royalties and lost profits. The lost-profits damages were
based on the use of ION's products outside of the United
States. On appeal, ION argued that WesternGeco was not
entitled to lost-profits damages for two reasons: one, that under
applicable law, WesternGeco cannot recoup lost profits for the
overseas use of ION's products by ION's customers; two, that
lost-profits can only be recouped from a direct competitor, and
that ION and WesternGeco are not direct competitors in this
market.
The United States Court of
Appeals for the Federal Circuit agreed with ION on the first issue
and, as a result, overturned the award of lost-profits
damages. Since the court decided in favor of ION on this
first issue, it did not decide the second issue, which ION reserved
the right to re-visit in the future.
WesternGeco filed a petition for a writ of certiorari asking the
United States Supreme Court to review the Court of Appeals' ruling,
and on January 12, 2018, the Supreme
Court granted WesternGeco's petition. WesternGeco and ION
will now submit briefs to the Supreme Court on the merits of the
Court of Appeals' ruling. We expect that the Supreme Court
will hold oral argument in April 2018
and will issue a decision by the end of June 2018. ION firmly
believes in its legal position on this issue and that the Federal
Circuit made the correct decision. If the Supreme Court
upholds the Court of Appeals' decision, the case will be over and
ION will owe no further damages.
If the Supreme Court overturns the Federal Circuit's decision,
the case will be remanded back to the Court of Appeals, at which
point ION will present its second argument for eliminating the
award of lost profits.
Other proceedings may have an impact on WesternGeco's ability to
recover lost profits damages even if WesternGeco prevails in the
Supreme Court. ION was a party to a challenge to the validity
of WesternGeco's patents by means of an Inter Partes Review ("IPR")
with the Patent Trial and Appeal Board ("PTAB"). While the
patent infringement lawsuit was pending on appeal, the PTAB
invalidated four of the six patent claims that formed the basis for
the jury verdict in this case. WesternGeco appealed that
decision to the Court of Appeals for the Federal Circuit, which is
scheduled to hear oral argument on January
23, 2018. If the Court of Appeals affirms the PTAB's
invalidation of the patents, that may provide a separate ground for
reducing or vacating any lost-profits award. In addition,
there may be additional bases for challenging the amount of any
lost-profits damages, which remain to be litigated in further
proceedings.
"We understand this is an important area of law for the Supreme
Court to consider and we will continue to defend vigorously against
WesternGeco's claims and the award of lost-profits damages," stated
Brian Hanson, ION's President and
Chief Executive Officer. "We firmly believe our legal
position is correct and we will advocate our position forcefully in
the Supreme Court. While we would like to see closure to this
litigation as soon as possible, if the Supreme Court reverses the
decision, we are confident about re-visiting our second argument at
the Court of Appeals. In addition, we believe the IPR process
underway is also very positive for our legal position. This
is clearly a David and Goliath situation where a company like
Schlumberger has the luxury of unlimited legal expenditure without
having to rationalize the additional expense of continuing these
proceedings. In any case, if the Supreme Court does not put
this issue to rest this year, we expect this lawsuit will continue
for years, potentially beyond 2020."
To learn more about the possible timing of these proceedings,
visit iongeo.com/lawsuit.
About ION
ION is a leading provider of technology-driven solutions to the
global oil and gas industry. ION's offerings are designed to help
companies reduce risk and optimize assets throughout the E&P
lifecycle. For more information, visit iongeo.com.
Contacts
ION (Investor relations)
Executive Vice President and Chief Financial Officer
Steve Bate, +1 281.552.3011
steve.bate@iongeo.com
ION (Legal)
EVP, General Counsel & Corporate Secretary
Matthew Powers, +1 713.366.7226
matt.powers@iongeo.com
The information herein contains certain forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934.
These forward-looking statements may include information and other
statements that are not of historical fact. Actual results may vary
materially from those described in these forward-looking
statements. All forward-looking statements reflect numerous
assumptions and involve a number of risks and uncertainties. These
risks and uncertainties include risks associated with the
WesternGeco litigation and other related proceedings. We cannot
predict the outcome of this litigation or proceedings. For
additional information regarding the WesternGeco litigation see our
Form 10-Q for the quarter ending September
30, 2017, filed on November 2,
2017. Additional risk factors, which could affect actual
results are disclosed by the Company in its fillings with the
Securities and Exchange Commission ("SEC"), including its Form
10-K, Form 10-Qs and Form 8-Ks filed during the year. The Company
expressly disclaims any obligation to revise or update any
forward-looking statements.
View original
content:http://www.prnewswire.com/news-releases/ion-provides-an-update-on-the-westerngeco-litigation-300582891.html
SOURCE ION Geophysical Corporation