Can the U.S. Government Infringe a U.S. Patent? (The U.S. Government Says it’s Impossible)

Astornet Technologies Inc. v. BAE Systems, Inc., — F.3d —- (Fed. Cir. 2015)

Although a patentee can sue the U.S. government for unlicensed use of its invention, Congress requires that those cases be filed in the Court of Federal Claims (CFC) rather than in district court. No jury trial is available, and the only remedy is a reasonable royalty.

The statute also protects companies doing work for the U.S. – providing cover by limiting the cause of action.

Whenever an invention described in and covered by a patent of the United States is used or manufactured by or for the United States without license of the owner thereof or lawful right to use or manufacture the same, the owner’s remedy shall be by action against the United States in the United States Court of Federal Claims for the recovery of his reasonable and entire compensation for such use and manufacture.

28 U.S.C. § 1498. The common interpretation of this section is – when the U.S. government is using the invention – that the only action is “against the US.” Here, the patentee sued several private companies for inducing the TSA to infringe its airport vehicular gate control patent. US Patent No. 7,639,844. On appeal, the Federal Circuit confirmed that the inducement theory does not avoid the coverture of 1498.

[T]he statute protects government contractors against infringement liability and remedies where it applies. As indicated by the statute’s use of the definite article in providing “the owner’s remedy” and its statement that the remedy is for payment of the owner’s “entire compensation,” the statute, within its ambit, makes the remedy against the United States exclusive. . . .

The claim of use of the patented invention by the United States is squarely within the statutory terms. The language is not limited to claims that are filed against the United States or its government agencies. And it would cut a substantial hole in the provision, and its intended function, to read it to be limited in that way. Doing so would expose a significant range of government contractors to direct liability (and possible injunctive remedies), namely, those accused of indirect infringement of claims directly infringed by the government. There is no justification for departing from the clear meaning of the text to produce a result that runs counter to the evident, established statutory policy.

The government brief on this point is interesting. The government argues that the U.S. government should never be seen as an “infringer” but rather as a sovereign who has agreed to offer compensation for its use of someone else’s patents. The logical result for this case would be that there cannot be any inducement liability because there was no infringement.

Similarly, this Court need not resolve appellees’ argument that because the United States does not “infringe” when it uses a patented invention without authorization, no party can be liable for inducing or contributing to that use. . . . [T]he plain language of Section 1498(a) encompasses use of a patented invention by the United States. Where a patent owner alleges such use, either directly or indirectly, Section 1498(a) applies by its express terms. There is, consequently, no need for the Court to decide whether the unauthorized use of a patented invention by the United States constitutes “direct infringement” in the sense that would be necessary to support liability for induced or contributory infringement in the absence of Section 1498(a).

Government appellate brief.

The outcome here is that the dismissal is affirmed.

22 thoughts on “Can the U.S. Government Infringe a U.S. Patent? (The U.S. Government Says it’s Impossible)

  1. 8

    The Government’s amicus argument re infringement was not directly addressed by the CAFC. Section 1498 is a conditional waiver of sovereign immunity, which allows patentees to sue the US for unauthorized “use” of their patents. Consequently, it does not shield the US from 271(a), which states that whoever uses (inter alia) a patented invention without authorization “infringes” the patent. Section 1498 also limits a patentee’s remedies for such “use” by excluding non-government parties (for policy reasons) from any action and conferring exclusive jurisdiction on the Court of Claims. Therefore, whether induced infringement may be supported by direct infringement by the US is a moot point.

  2. 7

    “The government argues that the U.S. government should never be seen as an “infringer” but rather as a sovereign who has agreed to offer compensation for its use of someone else’s patents. The logical result for this case would be that there cannot be any inducement liability because there was no infringement.”

    > I believe an analogous argument was also made in the Akamai line of cases: you never get to these other indirect infringements because there’s no underlying infringement.

    1. 7.1

      Yeah, but what about Zoltek? We are talking here about just compensation for the use of the invention. How does one determine that? Clearly the court in Zoltek seems not to want to be confined by 271(a)-(c) and blew right by them in finding the government liable for “direct infringement” when its contractor imported the partially complete components from Japan.

      1. 7.1.1

        Is it just semantics to define the “use” by the sovereign as not infringement?

        There is a quote by Abraham Lincoln about the relative position of the people and their government that might be worth keeping in mind in this context.

        One particularly apt for Ned at that…

        1. 7.1.1.1

          The State is not stealing from, enslaving, or murdering an individual, etc. if the isolated act of violating any particular individual’s rights is in the “interests” of the “public”… after all so called rights are really just “permissions” of the State, “granted” to the individual, in the name of the at the whim of the greatest Mob of the hour.

          1. 7.1.1.1.1

            anon2, but patents are the property of their owners, not a permission or privilege granted by the state that can be cancelled at will. The Supreme Court repeatedly made that very clear, including just a couple of months ago.

            From US v. American Bell Telephone (1888):

            “But whatever may have been the course of procedure usual or requisite in the English jurisprudence, to enable the king to repeal, revoke or nullify his own patents, issued under his prerogative right, it can have but little force in limiting or restricting the measures by which the government of the United States shall have a remedy for an imposition upon it or its officers in the procurement or issue of a patent. We have no king in this country; we have here no prerogative right of the crown; and letters patent, whether for inventions or for grants of land, issue not from the President but from the United States.

            “This only expresses the necessary effect of the acts of Congress. The authority by which the patent issues is that of the United States of America. The seal which is used is the seal of the Patent Office, and that was created by Congressional enactment. It is signed by the Secretary of the Interior, and the Commissioner of Patents, who also countersigns it, is an officer of that department. The patent, then, is not the exercise of any prerogative power or discretion by the President or by any other officer of the government, but it is the result of a course of proceeding, quasi judicial in its character, and is not subject to be repealed or revoked by the President, the Secretary of the Interior, or the Commissioner of Patents, when once issued.

            “The only authority competent to set a patent aside, or to annul it, or to correct it, for any reason whatever, is vested in the judicial department of the government, and this can only be effected by proper proceedings taken in the courts of the United States.”

            “A patent is the highest evidence of title, and is conclusive as against the Government, and all claiming under junior patents or titles, until it is set aside or annulled by some judicial tribunal. In England this was originally done by scire facias …”

            “Patents are sometimes issued unadvisedly or by mistake, where the officer has no authority in law to grant them, or where another party has a higher equity and should have received the patent. In such cases courts of law will pronounce them void. The patent is but evidence of a grant, and the officer who issues it acts ministerially and not judicially. If he issues a patent for land reserved from sale by law, such patent is void for want of authority. But one officer of the Land Office is not competent to cancel or annul the act of his predecessor. That is a judicial act, and requires the judgment of a court. ”

            United States v. American Bell Telephone Co., 128 US 315, 363-368 Supreme Court 1888

            From the Supreme Court this June:

            As this Court summed up in James v. Campbell, 104 U. S. 356, 358 (1882), a case concerning the alleged appropriation of a patent by the Government:
            “[A patent] confers upon the patentee an exclusive property in the patented invention which cannot be appropriated or used by the government itself, without just compensation, any more than it can appropriate or use without compensation land which has been patented to a private purchaser.”

            HORNE v. DEPARTMENT OF AGRICULTURE, Slip * 6, No. 14-275, Decided June 22, 2015, United States Supreme Court.

          2. 7.1.1.1.2

            Anon2,

            You doubly miss.

            First, as Ned comments (and as his Federal Case makes), patents really are property.

            Second, the atrocities you mention do not lessen the impropriety of an unconstitutional taking (even eminent domain has its safeguards). Do not be so quick or cavalier to dismiss the topic of patents just because no one is losing their life.

            1. 7.1.1.1.2.1

              Once again my sarcasm was too subtle?

              Of course patents really are property and individuals really have rights… Statism is NOT something I have ever advocated except in parody (or feeble attempts thereof).

              I hold as true the opposite of what I stated above…

              Yes, it’s another interjection by THIS Anon2.

              1. 7.1.1.1.2.1.1

                Yes, Anon2, too subtle.

                The problem of course is that you faked me out, as W A Y too many people who post here would nod their heads in vigorous agreement with your “fake” view.

                You will need a bigger sarcasm sign.

                ;-)

    2. 7.2

      mmm, consider that the government is paying just compensation for its “use” of the invention. Use is not contributory infringement by sale. Use is not inducement of someone else to infringe. It is the use of the government itself.

      The government must directly infringe by use. I do not believe it can even be liable for “making or sale.”

      1. 7.2.1

        Interesting distinction Ned:

        But the patent right which is being violated (and for which payment is due) is not limited to mere use.

        Otherwise, the government could simply step around the issue and “direct” others to do the “use” part, while it orchestrates everything for its benefit.

        I think instead that it would be more clear to say that the government is paying for (otherwise) violating the property right that is a patent (and that property right is expressed in more than just straight use). I think that you have to look at it this way, at least in part because the patent right (and the property thereof) is NOT a positive right to make anything, and is only a negative right.

        Such is a real and nuanced point that should not be forgotten.

        1. 7.2.1.1

          No doubt, anon, that the government may authorize a contractor to use an invention. But under the statute, that use is attributable to the government so that the lawsuit must be against the government itself.

          To be liable, the contractor must “use” the invention.

          1. 7.2.1.1.1

            I see your point about the liability from still pulling the strings, but your answer largely missed my point that the property (the patent right) is just not an affirmative thing, thus the transgression MUST take into account both the “negative” nature of the actual right as well as the full meaning (scope) of what that property entails.

            This does require a certain level of sophistication in your thinking (your tendency to think in “hard goods” categories works against you).

  3. 6

    Even if the government must only pay compensation for its use of an invention under eminent domain, and the original cases requiring just compensation are eminent domain cases, the government theory here seems to neatly avoid the en banc case of Zoltek Corp. v. US, 672 F.3d 1309 (Fed. Cir. 2012) that held that in the case of an action against the government for just compensation the sale of a partially completed component (here the TSA scanners) to the government for its use in a process patent where the partially completed component embodies the invention is a direct infringement.

  4. 5

    Re: “The government argues that the U.S. government should never be seen as an “infringer” but rather as a sovereign who has agreed to offer compensation for its use of someone else’s patents.” That is a not unreasonable statement of the “doctrine of sovereign immunity” which has always been the case, inherited from England.

    1. 5.1

      Paul, indeed, the original cases awarding just compensation for the government use of an invention were under the constitutional requirement to provide just compensation when taking property. Just this summer, the Supreme Court affirmed that just compensation extends to personal property, relying on these early Supreme Court cases involving patents.

      HORNE v. DEPARTMENT OF AGRICULTURE, No. 14–275. Argued April 22, 2015—Decided June 22, 2015

      Nothing in this history suggests that personal property was any less protected against physical appropriation than real property. As this Court summed up in James v. Campbell, 104 U. S. 356, 358 (1882), a case concerning the alleged appropriation of a patent by the Government:

      “[A patent] confers upon the patentee an exclusive property in the patented invention which cannot be appropriated or used by the government itself, without just compensation, any more than it can appropriate or use without compensation land which has been patented to a private purchaser.”

      1. 5.1.1

        To paraphrase Forrest Gump,

        Property is as property does.

        (funny that neither personal not real property is a public right, eh?)

  5. 4

    What happens if the government contract makes in the US but sells the technology abroad?

    e.g.: contractor A makes electronics device which is patented to B. The device goes into a tank made for the US government by company C.

    The US government sells tanks (directly or just licenses the sale) to another country.

    A makes the device in the US, B make the tank in the US, and only US client is the US government. Because it is arms, the true seller of the tank is the US.

    Who does B get to sue? The government? A? B?

  6. 2

    You may wish to look back at the Hovercraft suit in the late 1980’s. The Dept of Defense had ordered hovercraft from Bell Textron and indemnified them against patent suits. The then UK government-owned National Research Development Corporation (NRDC – trading as the British Technology Group – BTG) then sued the US Government (Dept of Defense) for infringing Sir Christopher Cockerel’s Hovercraft patents. The Dept of Justice was the defendant in court. Although the US government appealed the NRDC won and the US Government paid about $6m in damages – 6 checks for $999,999 and 1 check for the balancing $6. I was the Chief Executive of BTG at the time.
    You can find more at link to books.google.co.uk

  7. 1

    It could be worse: if it were a state rather than the federal government that was infringing, the patentee would have no means to obtain compensation.

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