Military Contractor Forfeits Patent Rights: Company Failed to Properly Disclose Invention


Campbell Plastics v. Les Brownlee, Secretary of the Army (Fed. Cir. November 10, 2004) (03-1512). 

The Case:

In 1992, Campbell Plastics (as it is now known) entered into a cost-plus-fixed-fee contract with the Army to develop components of an aircrew protective mask. Section I of the contract required Campbell to disclose any invention developed pursuant to the government contract and further provided that the government could obtain title if Campbell failed to disclose the invention within two months.

Campbell invented a new type of gas mask, but the company did not disclose the invention to the Government. Campbell then obtained a patent on the invention, noting that the Government has a "paid-up license in this invention." 

The government, however, wanted more than just a license.  In a decision by the Armed Services Board of Contract Appeals, ruled that Campbell had forfeited title to the patent by failing to comply with disclosure requirements of the contract.

The Appeal:

The Federal Circuit Court of Appeals, interpreting both the Bayh-Dole Act and the contract, sided with the Army.

Campbell Plastics failed to comply with the disclosure provisions of the parties’ contract. The contract unambiguously provides that in such a case, the government may obtain title to the subject invention. The decision of the Board to deny Campbell Plastic’ appeal is affirmed.

The Result:

Campbell failed comply with its contract to disclose inventions to the Army.  As a result, the Army may obtain title to the related patents.

Comment: This case should serve as a warning to government contractors. You cannot rely on the friendly face of the Technology Tranfer Office always being there. Contractors should implement a regular practice of documenting engineering work associated with government contracts to ensure that inventions are accurately reported in a timely manner.