Defense to Patent Infringement if Acts Were Performed in a “Quasigovernmental” Capacity Pursuant to a Legal Obligation

by Foley & Lardner LLP
Contact

A recent Federal Circuit opinion highlights a defense that is available to defendants whose alleged infringement occurred through activities that were undertaken for the United States. In particular, where the United States Government requires private parties to perform quasigovernmental functions pursuant to a legal obligation, a patent owner’s exclusive remedy is to bring a claim against the United States in the U.S. Court of Federal Claims, rather than against the private party in a U.S. District Court.

In IRIS Corp. v. Japan Airlines Corp., _ F.3d _, No. 2010-1051 (Fed. Cir. 2014), the patent owner (“IRIS”) accused Japan Airlines Corporation (“JAL”) of infringing U.S. Patent No. 6,111,506, titled “Method of Making an Improved Security Identification Document Including Contactless Communication Insert Unit.” According to IRIS, certain passports that JAL examined during pre-flight procedures were made using the ’506 Patent’s method, and, therefore, JAL was liable for infringement pursuant to 35 U.S.C. § 271(g). Notably, however, JAL examined the passports pursuant to federal law, “including the Enhanced Border Security Act, 8 U.S.C. § 1221 et seq., the Visa Entry Reform Act of 2002, 19 C.F.R. § 122.75a(d), and certain international treaties.”

In the district court, JAL successfully moved to dismiss, arguing, among other things, that the United States had assumed liability pursuant to 28 U.S.C. § 1498(a). That statute states:

Whenever an invention described in and covered by a patent of the United States is used or manufactured by or for the United States... 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(a) (emphasis added). For alleged infringing activities to be considered “for the United States,” two requirements must be met: 1) the activity “is conducted for the Government,” and 2) the activity “is conducted with the authorization or consent of the Government.” The district court found that, in JAL’s case, both these criteria were satisfied. On appeal, the Federal Circuit agreed.

As to the first criteria, the Federal Circuit reasoned (emphasis added):

[T]he government benefits here because JAL’s examination of passports improves the detection of fraudulent passports and reduces demands on government resources. This, in turn, directly enhances border security and improves the government’s ability to monitor the flow of people into and out of the country. When the government requires private parties to perform quasigovernmental functions, such as this one, there can be no question that those actions are undertaken “for the benefit of the government.”

Addressing the second criteria, the Federal Circuit noted that all the parties, as well as the United States, agreed that JAL could not perform its obligations under federal law without engaging in the allegedly infringing acts. The Federal Circuit found that “[u]nder such circumstances, the government has expressly authorized or consented to those activities.”

Ultimately concluding that JAL’s alleged infringement occurred “for the United States” under 28 U.S.C. § 1498(a), the Federal Circuit affirmed the dismissal of IRIS’s infringement claims.

As the Federal Circuit’s decision illustrates, when confronted with patent infringement allegations, defendants in highly regulated industries should consider whether their alleged infringing activity was performed in a quasigovernmental capacity or pursuant to a legal obligation under federal law. Where the alleged infringing conduct occurred for the United States, the defendant may be able to exit the litigation at the motion to dismiss stage and avoid protracted litigation.

View This Blog

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Foley & Lardner LLP | Attorney Advertising

Written by:

Foley & Lardner LLP
Contact
more
less

Foley & Lardner LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.