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.