- 28 USC 1498,
concerning uses of patents or copyrights, when the use is by or for the government.
Under this statute the US government does not have to seek a license or
negotiate for use of a patent or copyright. Any federal employee can use or authorize
the use of a patent or a copyright. The rightowner is entitled to compensation, but
cannot enjoin the government or a third party authorized by the government, to prevent
the use. Any contractor, subcontractor, person, firm, or corporation
who receives authorization from the federal government to use patents
or copyrights is construed
as use by the federal government, and cannot be sued for infringement.
- October 25, 1999. Nasa office of Technology Commercialization
Note on Government Use as Eminent Domain.
- June 4, 1998.
Report of the National Institutes of Health (NIH) Working Group on Research Tools.
"Rights of government agencies: As a government agency, NIH may use and
manufacture any patented invention, whether or not developed with
federal funds, and authorize its use and manufacture by others for the
United States, without a license, subject to liability for "reasonable
and entire compensation" under 28 U.S.C. §1498."
- Crater Corporation v. Lucent Technologies
- June 6, 2001. Decision by the US Court of Appeals for the Federal Circuit,
in the Crater Corporation V. Lucent Technologies. Docket No. 00-1125. Lucent
argued that it was not liable for patent infringement because any work it
performed with respect to the Crater coupler was done under a government project
and was authorized by the United States. Pursuant to § 1498(a), a private
party cannot be held liable for infringement for any goods "used or manufactured
by or for the United States." The court upheld the lower court's ruling that
Lucent was not liable for infringement.
- Hughes Aircraft and the Wiliams patent.
- June 19, 1996. Decision by the US Court of Appeals for the Federal Circuit,
in Hughes Aircraft Company v. The United States, 94-5149,95-5001. (86 F.3d 1566).
Kenneth Starr represented Hughes in an unsuccessful appeal, where Hughes was
seeking a higher royalty rate on a compulsory license of US Patent No. 3,758,051
(the Williams Patent). The Williams patent "relates to an apparatus for
controlling the orientation of the spin axis of spin-stabilized space vehicles
such as satellites positioned in orbit around the earth." The US Court of Federal
Claims set a royalty rate of 1 percent in a 1994 decision (31 Fed. Cl. 481).
Worth noting was the appeals court observation that "Because recovery is based
on eminent domain, the proper measure is 'what the owner has lost, not what the
taker has gained,'" quoting Leesona (599 F.2d at 969).
- Brunswick Corporation and the 606 patent.
- March 31, 1998. Decision by the US Court of Appeals for the Federal Circuit
in Brunswick Corporation v. the United States, 97-5017, 97-5021. The case
involves US patent 3,733,606 (the 606 patent), and the government's purchase of
camouflage screens, some of which were held to infringe on the 606 patent.
Brunswick appealed an earlier US Federal Court of Claims case setting
compensation for a compulsory license of the 606 patent. Brunswick sought "lost
profits" for its license, while the court awarded a "reasonable royalty." In
its decision, the court indicated that the US Congress directed the Army to
"expand its industrial base for the production of camouflage screens in order
to maintain a reliable industrial mobilization capacity," and noted that "This
type of outside policy making and political influence is peculiar to the federal
government and is properly taken into account when considering whether a reasonable
royalty would adequately compensate an aggrieved patentee." The court further
indicated that the number of units purchased by the government was greater than
would have been the case in the absence of the compulsory license, and that this
supported a lower amount of compensation than that sought by Brunswick. Here is
- Gargoyles patent for protective eyewear.
May 20, 1997, decision of the United States Court of Appeals for the Federal
Circuit, in Gargoyles, Inc. and Pro-Tec, Inc. v. the United States,
96-5089,-5094 (113 F.3d 1572). This is another case where the private plaintiff
sought "lost profits" rather than a "reasonable royalty" as compensation. The
royalty set by the Court of Federal Claims was 10 percent. The government
considered this excessive and sought a reduction (of half or more). The dispute
involves US patent 4.741,611 (the 611 patent), for protective eyewear. Gargoyles,
a company that sells commercial eyewear, was seeking compensation for a
compulsory license of the patent, which had been used by American Optical to
provide the US Army with several thousand pairs of ballistic/laser protective
spectacles. The Appeals court upheld the lower court decision. Again, the court
quoted Leesona (599 F.2d at 969), "Because recovery is based on eminent domain,
the proper measure is 'what the owner has lost, not what the taker has gained.'"
Here is a link to the
Appeals Court Ruling.
- Carter-Wallace and the patent on the drug Meprobamate.
IP and Healthcare
CPT Compulsory Licensing Index