CAFC: Patent Rights are Not Protected by the Fifth Amendment

AIPLATalk181Zoltek v. United States (Fed. Cir. 2006, 04–5100).

The US government contracted with Lockheed Martin to design and build F-22 stealth fighters.  Zoltek has argued that manufacture of carbonized sheets used in the aircraft violates its method patents, even though the sheets were partially manufactured in Japan.  The lower court dismissed Zoltek’s federal claims because they “arose in Japan.”  However, the lower court also ruled that the US government’s alleged infringement could be actionable as a Fifth Amendment taking.

On appeal, the CAFC issued a decision per curiam, and three additional opinions.

Process Claims Abroad: Because a process is not infringed unless “each of the steps is performed within this country,” the US has no liability under Section 1498(a).

Patent Infringement as a Taking: In the 1894 case of Schillinger v. United States, the Supreme Court ruled that a patent holder could not sue the government for patent infringement as a Fifth Amendment taking. This case remains good law.

Judge GAJARSA Concurring:

I agree that we are bound by our panel decision in NTP, Inc. v. Research in Motion, Ltd., in which we held that “direct infringement under section 271(a) is a necessary predicate for government liability under section 1498.” However, the NTP proposition is, in my view, the result of an unchecked propagation of error in our case law, and its viability may eventually be challenged. 

Judge DYK Concurring:

I join the court’s per curiam opinion but write separately to express my view that the court correctly held in NTP, Inc. v. Research in Motion, Ltd., that the government can only be liable for infringement under section 1498(a) if the same conduct would render a private party liable for infringement under section 271(a).

Judge PLAGER Dissenting: Patent rights are property rights protected whose taking should be compensable under the Fifth Amendment. . . .

NOTE: There is lots more more here for a law review article.

8 thoughts on “CAFC: Patent Rights are Not Protected by the Fifth Amendment

  1. 8

    “Thus, it could not be interpreted covering infringement other than making or using the invention.”

    Assuming, arguendo, this is correct, then what happens when the infringement involves “sell”, “offer to sell”, or “import” (also keeping in mind the reach of 271(g))? Against whom can suit be brought and for what, where can suit be brought, and what remedies may be sought?

  2. 7

    “is anyone aware of any cogent reason why 28 USC 1498 would/should not embrace conduct arguably within the scope of 35 USC 271(g)?”

    The original COFC opinion addressed this issue. The language of section 1498 is limited to the acts of making and using the invention. The text of 1498 does not include the term “infringement.” Thus, it could not be interpreted covering infringement other than making or using the invention.

  3. 6

    Just a thought, but is anyone aware of any cogent reason why 28 USC 1498 would/should not embrace conduct arguably within the scope of 35 USC 271(g)? At least one of the two products at issue appears to have been made in Japan using the process covered in the US by Zoltek’s patent. As for the second, the process appears to have been practiced in part in Japan and in part in the US.

    Case law regarding the scope of 271(g) is underwhelming to say the least….

  4. 5

    Takings and Patents

    Over at Patently-O, Dennis Crouch has an interesting post on a Fed Circuit case holding that a patent is not a property right protected by the Takings Clause. My own (admittedly somewhat uninformed) comments on the related issue of state

  5. 4

    “There is lots more here for a law review article.”

    …as someone seems to have noticed after the original CFC opinion issued.

    Richard T. Ruzich, Government Patent and Copyright Infringement Overseas Under 28 U.S.C. ยง 1498 (In the Shadow of the RIM Decisions), 15 Fed. Cir. B. J. 401 (2006)

  6. 3

    One last practical observation. Claims Court and CCPA merged to bring stability to Patent Law. Respective jurisprudence of each court adopted at that time. Unfortunately, virtually every prior decision that causes such problems as this arose in the context of Claims Court decisions that almost slavishly, and without any meaningful caselaw support, “assumed” that patents are of the type of interests subject to waiver of sovereign immunity because private infringment sounds in tort. Zoltek per curiam and concurring opinions follow this logic as almost an article of faith.

    Any doubts as to this observation are made only too clear by reference to ABA Public Contract Law Section. It actually has an IP Committee that acts totally independent of the IP Section.

  7. 2

    One of the most unusual decisions I have ever seen come out of the CAFC: one per curiam, two concurrences, and one dissent.

    En banc petition virtually assured, and reversal likely. DOJ, if reversed, will certainly try to get this before the USSC. If upheld, Zoltek likely to try.

    I have heard of “judicial activism”. The concurrences seem to reflect “judicial ossification” with slavish reliance on Schillinger and unwillingness to accept subsequent Supreme Court jurisprudence as best exemplified by Ruckleshaus (sp?).

    Prediction before USSC…unanimous decision of Fifth Amendment taking, rejection of sovereign immunity waiver theory, and, perhaps, Tucker Act applicability.

    Law Review Articles available? More than I can begin to count. How to reconcile make and use in 1498 with all 5 patent rights and provisional rights. Can all of 35 USC 271 be applied to either 1498 or Tucker Act claim? What is meant in 1498 by claim arising in foreign country? What is measure of just compensation…royalty, lost profits, enhanced damages, fees, etc.? How does the phrase “authorization and consent” enter into the picture and what does it actually mean? The list is virtually endless.

    This case represents some of the most fundamental issues I have ever seen concerning IP law, and has an almost infinite number of possibilities on how to use the eventual holding as either a sword of shield from a strategic vantage point.

  8. 1

    link to

    “CAFC: Patent Rights are Not Protected by the Fifth Amendment.” The “Patently-O: Patent Law Blog” today provides this post of Friday’s ruling of the U.S. Court of Appeals for the Federal Circuit. My earlier coverage of that ruling is here….

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