9th Circuit Finds Failure to Report Subject Inventions Not a False Claim under False Claims Act

In Cafasso, United States ex rel., v. General Dynamics C4 Systems, Inc., 637 F.3d 1047 (C.A. 9 2011), Mary Angela Cafasso brought a qui tam action in Ninth Circuit Court of Appeals alleging False Claims Acts (“FCA”) violations and retaliation by General Dynamics C4 Systems, Inc. (“GDC4S”).  Ms. Cafasso worked as the chief scientist/technologist at GDC4S, a technology company that services the military. GDC4S was a participant in the Advanced Telecommunications & Information Distribution Research Program (“ATIRP”) and as a result had contracted with the Army to assign to the United States certain rights to “subject inventions” developed in performance of military contracts. These rights included a royalty-free right to use or have used on its behalf subject inventions, as well as the right to allow the Government to take over prosecution of the subject invention should GDC4S not pursue patenting of the subject invention.  ATIRP required from GDC4S timely disclosure of applicable subject inventions to the government to ensure

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Feature Comment: Supreme Court To Decide How Technology Licensing Will Proceed Under Bayh-Dole

By James G. McEwen[1] I.        Brief overview of Bayh-Dole Act The Bayh-Dole Act[2], through Federal Acquisition Regulations and/or 37 CFR 401, applies to the typical government funding agreements: procurement contracts, grants, and cooperative agreements.[3]  While seemingly an obscure act, Bayh-Dole is often held up as one of the most important pieces of legislation governing patent rights resulting from collaborations between private institutions and the Government, and is a model on which other countries have based their attempts to promote technology transfer between Government and the private sector. Under Bayh-Dole, small businesses, universities, and other non-profit organizations may elect to retain title to subject inventions rather than conferring title to the Government.[4]  In return, the Government receives a license right to the subject inventions to use for Government purposes (including procurement).[5]  Pursuant to executive order, these same rights are conferred on large contractors[6] to the extent permitted by law.[7]   Thus, under a normal funding agreement, a contractor is entitled to title

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Feature Comment: The Impact of Uniloc USA, Inc. v. Microsoft Corp. on Patent Damages under 28 U.S.C. §1498(a)

By James G. McEwen[1] While many of the aspects of infringement claims against the Government have seemingly similar elements to actions against private parties under 35 U.S.C. §271, it is important to understand that 28 U.S.C. §1498(a) is not an exact counterpart to 35 U.S.C. §271.  For instance, 28 U.S.C. §1498(a) does not allow for actions against the Government for inducement and contributory infringement, or infringement through infringement of product by process claims.[2]  At the same time, the Government is directly liable for infringement by its contractors if the Government has authorized and consented to such uses of the patented invention, which outside of claims of inducement, contribution, or vicarious liability, does not exist in private party litigation under 35 U.S.C. §271.  The requirement for such authorization and consent claims is to ensure that the Government is able to secure contractor-provided goods and services by extending its immunity to contractors and thereby ensure that the contractors cannot be enjoined.[3] This

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11th Circuit Finds That University Can Be Subjected to Injunction to Prevent Continuing Infringement

In National Association of Boards of Pharmacy v. Board of Regents of the University System of Georgia, 97 U.S.P.Q.2D 1931 (11th Cir. 2011), the National Association of Boards of Pharmacy (hereinafter “NABP”) owns copyrighted tests which it uses to accredit pharmacists.  Professor Flynn Warren of the University of Georgia offered a review course for these tests, and used actual questions from the tests in his review course.  After receiving a tip, the NABP confirmed that Professor Warren was using the actual copyrighted questions, after which Professor Warren and the University of Georgia agreed to cease and desist using the copyrighted questions.  Subsequently, NABP again determined that Professor Warren was again gathering copyrighted test questions for use in his course in violation of agreement previously reached.  To confirm their suspicions, the NABP purchased a copy of Professor Warren’s course materials for $100, and after confirming that 150 questions were copied from the NABP test, the NABP was forced to replace the

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Federal Circuit Finds Declaratory Judgment Not Available Against Field of Use Licensee Where Patent Owner Could Not Be Joined

In A123 Systems, Inc. v. Hydro-Quebec, 626 F.3d 1213 (Fed. Cir. 2010), Hydro-Quebec (HQ) is a licensee of U.S. Patent Nos. 5,910,382 and 6,514,640, which are owned by the Board of Regents for the University of Texas System (UT).  The license gives HQ an exclusive license within a specified field of use.  HQ had threatened suit against A123 for infringement of these patents, whereby A123 filed a Declaratory Judgment against HQ in the District of Massachusetts claiming non-infringement on August 14, 2006.  HQ moved to dismiss alleging that UT was a necessary party and could not be joined due to Eleventh Amendment immunity, and filed its own suit with UT in the Northern District of Texas.  A123 further filed a reexamination request for the patents, which resulted in the Texas action being stayed and the Massachusetts was dismissed without prejudice while the reexamination continued.  On conclusion of the reexamination, A123 motioned to reopen the Massachusetts action, which HQ opposed on

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Northern District of Illinois Finds That Declaratory Judgment Action Available Against Private Sector Owner of Patent Owned in Common with Government

In Sourceone Global Partners LLC. V. KGK Synergize, Inc., Civ. Case No. 08 C 7403 (N.D. Il. May 13, 2009), KGK Synergize (“KGK) is an assignee of U.S. Patent No. 6,987,125 (the ‘125 patent), which generally relates to a nutritional supplement for lowering cholesterol.  The ‘125 patent was invented by Najla Guthrie, Elzbieta Kurowska, John Manthey, and Robert Horowitz pursuant to a partnership between the Department of Agriculture and KGK.  Pursuant to the partnership agreement, Mr. Mathaney and Mr. Horowtiz assigned their rights to the Federal Government, and Ms. Guthrie and Ms. Kurowska assigned their rights to the KGK.  KGK later exclusively licensed their interest in the ‘125 patent to Sourceone Global Partners (Sourceone) for the purpose of making and selling Sytrinol.  The Government is not a signatory to this license. Subsequently, Sourceone developed on its own Cholesstrinol, which Sourceone believed did not infringe the ‘125 patent and therefore was not subject to the royalty provisions of the license.  KGK

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Court of Federal Claims Indicates Contractor Liable Where Government is Immune

Federal Claims Allows Transfer To Allow Patent Infringement Suit Against Contractor Where Government Immune from Infringement In Zoltek Corp. v. United States, No. 96-166 C (Fed.Cl. Jan. 23, 2009), Zoltek Corporation owns Patent No. Re. 34,162 (“the ‘162 patent).  Originally, Zoltek asserted the ‘162 patent against the Federal Government under 28 U.S.C. § 1498(a).  28 U.S.C. §1498(a) sets forth a remedy for patentees whose patents are “used or manufactured” by government contractors acting with the “authorization or consent” of the Government. Zoltek has alleged that the Government caused the manufacture of carbon fiber products according to processes covered by the ‘162 patent and that these products were incorporated into Lockheed Martin Corporation’s F-22 Fighter Planes.  In 2001, the Government moved for partial summary judgment, raising 28 U.S.C. § 1498(c) as an affirmative defense to liability under 28 U.S.C. § 1498(a).  Specifically, the Government asserted that 28 U.S.C. §1498(c) provides that “[t]he provisions of this section shall not apply to any

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Federal Circuit Finds No Waiver of Sovereign Immunity under DMCA

In Blueport Co. v. United States, 533 F.3d 1374, 87 USPQ2d 1512 (Fed. Cir. 2008), Mark Davenport, a Technical Sergeant with the Air Force, worked with the Air Force’s Manpower Data System (MDS).  Through working with the MDS, Davenport concluded that the software used to run the MDS program was inefficient and began to seek ways of improving the software.  Davenport sought training in computer programming from the Air Force, but was denied.  As such, Davenport learned how to program on his own time, and subsequently wrote a new program called “the AUMD” program, also on his own time at his home. Davenport used the AUMD program at work and began sharing it with coworkers.  Based on his experiences using the AUMD program at work, Davenport made changes from time to time to improve the program.  At no time did Davenport bring the source code to work or copy it onto Air Force computers. The AUMD program began to catch

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Feature Comment: Traps for the Unwary: An Overview of Patent Issues For The Commercial Company Entering Into Federally Sponsored Research and Development Projects

By James G. McEwen[1] Background For the uninitiated, contracts and agreements with the Federal Government present a dizzying array of acronyms and terms which seemingly add a layer of confusion above the already-complex subject of patent rights for parties under research and development agreements.   However, it is important to realize that, generally, contracts with the Federal Government are similar to commercial contracts (i.e., consideration, offer, and acceptance).  Thus, while generally similar in terms of appearance, the difference in a government contact becomes apparent when you realize one important fact: the contract is with the rule maker who may or may not have consented to suit according to the particular circumstance.   As a result, a Government contract can be thought of in terms of a controlled taking since the Government creates laws that govern all contracts, and is therefore in a better position as a contracting party to create mandatory clauses, and to ensure their inclusion in all contracts. For instance,

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Feature Comment: New Laws and Procedures Affecting IP Management Strategies

By James G. McEwen[1] Legislation Affecting Trade Secret Owners Enacted Federal Legislation Affecting Trade Secret Ownership and Rights Among other laws affecting trade secret ownership passed in 2007, Congress passed public law 110-175.  Entitled the Openness Promotes Effectiveness in our National Government (OPEN) Act of 2007, the OPEN Act has the potential to cause problems for trade secret owners who rely on the trade secret exemption to the Freedom of Information Act (FOIA), 5 U.S.C. §552(b)(4), to prevent release of trade secrets held by the Government.  By way of background, 5 U.S.C. §552(b)(4) allows the Government to prevent release of trade secret information which would otherwise have to be released under FOIA.  However, in order to prevent release, trade secret owners are generally required, pursuant to Executive Order 12600, to aid the Government to support an assertion that the 5 U.S.C. §552(b)(4) exemption applies to a requested record and in particular to help show that the disclosure would cause competitive

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