Appeal bond amount decreased in patent infringement case between ION Geophysical, WesternGeco

By Cheyenne Dickerson | Dec 9, 2016

HOUSTON – On Nov. 14, the case judge presiding over the seven-year lawsuit between ION Geophysical Corp. and WesternGeco LLC offered no final judgment on the patent infringement case and decreased the appeal bond amount.

The amount was reduced from $120 million to $65 million. In addition to these changes, the judge also asked the parties to "pay principal and interest on the royalty previously awarded in the amount of approximately $22 million," as noted in ION's press release

Of the patents named in the suit, the court found that only one had been infringed by ION. 

As a result, ION will have to pay $22 million to WesternGeco for the infringed patent. Peter Corcoran, attorney with Corcorcan IP Law, told the Southeast Texas Record that ION's payment will be for "royalty damages, costs, and interest to WesternGeco for infringement of at least one of the six patents asserted in the case."

In addition to this case, WesternGeco is awaiting the decision of an appending appeal in the U.S. court of appeals for the federal circuit for a few of its other patents. 

As this has been a lengthy lawsuit, there is a chance it could go on for a longer period of time if ION appeals the order made by the judge.

"Given ION’s track record at the federal circuit and the Supreme Court in this case, they should seriously consider just paying the damages, or else risk having to pay increased compounded interest and costs to WesternGeco after they lose their appeal," Corcoran said. 

If ION agrees to pay, Corcoran noted the suit should be over within a few months. 

As for the current status of the companies' relationships, the press release published by ION stated: "The relationship between ION and WesternGeco has never been stronger as we both collaborate on projects and support them as a customer of ION."

However, Corcoran noted, "An enhanced damages award may do more harm to ION’s business than it anticipated.

"Businesses are hurt when their competitors misappropriate their intellectual property and earn profits from that intellectual property."

In this suit, intellectual property is the main focus of the litigation. 

For companies such as these that have numerous patents and intellectual property, Corcoran said: "IP is intended to protect a business’s innovation, which is the heart of its success. Without enforceable IP, little incentive exists to innovate when ideas can be misappropriated without any consequences."

On the subject of if this case could potentially be a ploy to control the patent market in the oil and gas sector, Corcoran explained: "These mini-monopolies reward innovation, allow innovators to recoup their research and investment costs, and allow them to make a profit from their patented inventions." 

As noted from him, the only way patents are allowed to be shared or given to others is with the patent owner's approval. 

ION and WesternGeco were both contacted for comments but declined to speak on the matter.

"I look forward to a strong future working relationship together," Brian Hanson, ION CEO, said in regards to the case in a press release.

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