Brumfield  and Its Wake: Extraterritorial Sales in Reasonable Royalty Damages

Co-authored by: Celyn Jacobs, Summer Associate 

In 2024, the Federal Circuit set forth a standard for determining whether extraterritorial sales activity could be considered in a reasonable royalty award for patent infringement. Here, we summarize the court’s opinion in that case, Brumfield, Tr. for Ascent Tr. v. IBG LLC, 97 F.4th 854 (Fed. Cir. 2024), cert. denied sub nom., Brumfield Tr. for Ascent Tr. v. IBG LLC, 145 S. Ct. 1922 (2025). We also examine subsequent district court decisions to shed light on how courts may apply Brumfield in the future in cases where patentees seek reasonable royalty damages.  

Brumfield v. IBG  

In WesternGeco LLC v. ION Geophysical Corp., 585 U.S. 407 (2018), the Supreme Court held that an award of lost profits for patent infringement under 35 U.S.C. § 271(f) can include extraterritorial sales if they stem from domestic infringement. See id. at 415. This holding begged the question of whether a reasonable royalty award — the alternative metric of patent damages — could also account for extraterritorial activities that stem from domestic infringement.  

In Brumfield, the Federal Circuit answered that question affirmatively: “We also conclude that the WesternGeco framework applies to a reasonable-royalty award, not just a lost-profits award, under [35 U.S.C.] § 284, though its application must reflect the established differences in standards for the two types of awards.” Brumfield, 97 F.4th at 875. In doing so, the Federal Circuit concluded that WesternGeco “superseded” Power Integrations, Inc. v. Fairchild Semiconductor International, Inc., 711 F.3d 1348 (Fed. Cir. 2013), which previously prohibited inclusion of extraterritorial activity in patent infringement damage awards. Brumfield, 97 F.4th at 871. After a detailed analysis of WesternGeco, the Federal Circuit held that the WesternGeco framework for including extraterritorial activity in damages also applies to infringement under 35 U.S.C. § 271(a) and reasonable royalty awards. See Brumfield, 97 F.4th at 875–76.  

The Federal Circuit then clarified the test for including extraterritorial activities in an infringement damages award. The court recognized, per WesternGeco, “that a causation requirement is part of the [35 U.S.C.] § 284 standard” for patent infringement damages. Id. at 874. For a reasonable royalty damages award based on a hypothetical license negotiation, the court expressed this requirement as follows: “[T]he hypothetical negotiation must turn on the amount the hypothetical infringer would agree to pay to be permitted to engage in the domestic acts constituting ‘the infringement.’ If the patentee seeks to increase that amount by pointing to foreign conduct that is not itself infringing, the patentee must, at the least, show why that foreign conduct increases the value of the domestic infringement itself — because, for example, the domestic infringement enables and is needed to enable otherwise unavailable profits from conduct abroad — while respecting the apportionment limit that excludes values beyond that of practicing the patent.” Brumfield, 97 F.4th at 877.  

The court noted that while proof of causation was necessary, it may not always be sufficient. It reasoned “that ‘proximate’ causation is required and that proximate causation requires but-for causation plus more, including the absence of remoteness.” Id. The court acknowledged that “in the lost profits setting, . . . reasonable, objective foreseeability is generally sufficient for proximate causation.” Id. (internal quotation marks omitted). However, the court did not explicitly resolve the question of whether “reasonable, objective foreseeability” is the appropriate standard for proximate cause in the context of a reasonable royalty. Id. at 878. The court ultimately held that the patentee had not satisfied the causation requirement because the patentee’s damages expert failed to tie the asserted foreign damages to the alleged acts of domestic infringement.  

Reasonable royalties post-Brumfield  

Since Brumfield was decided, several district courts have issued opinions interpreting it in various contexts where plaintiffs sought reasonable royalty damages. Several courts have found that the plaintiff sufficiently established — or created a factual question as to — the causal link between domestic infringement and extraterritorial activities to warrant consideration of extraterritorial damages per Brumfield. See Vidstream, LLC v. Twitter, Inc., 2025 WL 624514 (N.D. Tex. Feb. 25, 2025); IPA Techs., Inc. v. Microsoft Corp., 2024 WL 1962070, at *2 (D. Del. May 2, 2024). At least one court has found that the requisite causal link was not established. See Synopsys, Inc. v. Siemens Indus. Software Inc., 2024 WL 1683637 (N.D. Cal. Apr. 17, 2024). These holdings are summarized in greater detail below.  

The court in Vidstream, LLC v. Twitter, Inc., 2025 WL 624514 (N.D. Tex. Feb. 25, 2025), denied a Daubert motion to exclude the plaintiff’s damages expert’s opinion that included “worldwide damages” in his reasonable royalty estimate. The court held that the plaintiff’s expert sufficiently alleged that the defendant’s foreign conduct increased the value of its domestic infringement. Id. at *4. The court reasoned that the plaintiff established the requisite causal relationship by alleging that the defendant “made infringing computer storage media domestically . . . as part of its process of developing its software, and such development directly led to revenue of its infringing apps for its worldwide user base.” Id.  

Meanwhile, the court in Synopsys, Inc. v. Siemens Indus. Software Inc., 2024 WL 1683637 (N.D. Cal. Apr. 17, 2024), granted a motion for summary judgment to prohibit the patentee from including extraterritorial activities in its reasonable royalty damages calculation. The court held, based on Brumfield, that the patentee was not entitled to extraterritorial damages because it failed to show a causal connection between those damages and the domestic production of the infringing product. See id. at *14, n. 17. Specifically, the court noted the causation requirement from Brumfield, decided just a month prior, and held that the parties had not pointed to any evidence in the record that satisfied that requirement. Id. The court held that the fact that the accused product was developed in the United States, “standing alone, is insufficient for foreign-sales damages before and after Brumfield.” Id.  

At least one court has also applied Brumfield to damages for the domestic sale of non-infringing products, rather than extraterritorial activities. In IPA Techs., Inc. v. Microsoft Corp., 2024 WL 1962070, at *2 (D. Del. May 2, 2024), the court held that the plaintiff could include sales of a non-accused product in its reasonable royalty calculations because that product provided an interface to trigger accused server code (Cortana), and the defendant used that interface to boost sales of the non-accused product (Windows 10). The court interpreted Brumfield as follows:  

Brumfield makes clear that no categorical bar exists prohibiting consideration of non-infringing activities. The Federal Circuit instead suggests the correct approach to applying AstraZeneca [AB v. Apotex Corp., 782 F.3d 1324 (Fed. Cir. 2015)] involves examining the relationship between the non-infringing and infringing activities. It further provides an example of one sufficient relationship that permits consideration of non-infringing activities: when the infringing activity ‘enables and is needed to enable otherwise-unavailable profits’ from the non-infringing activity. Id (footnote omitted).  

The court concluded that “[t]he relationship between Windows 10 and the servers running the infringing code presents the type of situation contemplated by the example provided in Brumfield.” Id.  

Courts have also applied Brumfield in the context of discovery, compelling production of documents related to extraterritorial damages 

Takeaways and unanswered questions 

While these cases shed some light on Brumfield’s implications, unanswered questions remain. For example, while these cases demonstrate ways for plaintiffs to create a factual question of causation, they do not yet clarify how plaintiffs must tie that chain of causation to hypothetical license negotiations for a reasonable royalty. See Brumfield, 97 F.4th at 877. Similarly, the cases leave room for subsequent courts to clarify the scope of discovery that plaintiffs will be permitted with respect to extraterritorial activities of accused infringers. 

Despite these open questions, Brumfield appears to open doors for damages theories that include extraterritorial activities or sales of non-infringing products that are enabled by domestic infringement and may broaden the scope of relevant discovery.