Zoltek Corporation, Plaintiff-Cross v. United StatesZoltek Corporation, Plaintiff-Cross v. United States
Lead Opinion
Thе United States appeals the order of the Court of Federal Claims holding that it could assert jurisdiction over Zoltek Corporation’s (“Zoltek”)’s patent infringement allegations by treating the action as a Fifth Amendment taking under the Tucker Act. Zoltek cross-appeals the trial court’s ruling that
We conclude that under
I.
Zoltek Corporation (“Zoltek”) is the as-signee of United States Reissue Patent No. 34,162 (reissued Jan. 19, 1993) to a “Controlled Surface Electrical Resistance Carbon Fiber Sheet Product” (“the Re ’162 patent”). The Re ’162 patent claims certain methods of manufacturing carbon fiber sheets with controlled surface electrical resistivity.
Independent claim 1 is representative. After reissue, it reads:
1. A method of manufacturing a plurality of different value controlled resistivity carbon fiber sheet products employing a carbonizable fiber starting material; said method comprising
selectively partially carbonizing previously oxidized and stabilized fiber starting material
for a predetermined time period in an oxygen free atmosphere within a furnace at selected temperature values within a temperature range from 370 degrees Centigrade to about 1300 degrees Centigrade
by soaking the stabilized fiber starting material at the selected temperature for the predetermined period of time
to provide a preselected known volume electrical resistivity to the partially carbonized fibers corresponding to that volume electrical resistivity value required to provide the preselected desired surface resistance value for the finished sheet products,
and thereafter processing the partially carbonized fibers into homogeneous carbon fiber sheet products having the preselected desired surface electrical resistances.
Re ’162 patent, col. 8,11. 42-66.
The method thus takes a “carbonizable fiber starting material” and requires “partially carbonizing” it. “Carbonization” as used in the Re ’162 patent means “a process which involves heat treatment in an inert atmosphere which eliminates or removes all elements other than carbon.” Zoltek,
Independent claim 11 describes a representative method for making such fibers and weaving them into a fiber sheet. After reissue, it reads:
11. A method of manufacturing a plurality of different value controlled resistivity carbon fiber sheet products employing carbonizable, previously oxidized and stabilized fiber starting material; said method comprising
forming an oxidized and stabilized tow, stretching and breaking the stabilized tow,
forming the stabilized stretched and broken fiber filaments into sliver comprised of,
large bundles of discontinuous filaments in an untwisted condition,
converting the sliver into roving, spinning the roving into a spun yarn, plying or twisting the spun yarn, weaving or knitting the plied and twisted spun yarn into fabric,
and selectively partially carbonizing the fabric thus formed at preselected elevated temperature values for a predetermined time period in an oxygen free atmosphere within a furnace having a continuously increasing temperature profile within the range from about 370 degrees Centigrade to about 1300 degrees Centigrade to provide a known preselected electrical volume resistivity to the partially carbonized fiber filament in the fabric corresponding to that value of electrical volume resistivity required to provide the preselected desired surface resistance for the finished fabric.
Re 162 patent, col. 9, 1. 65—col. 10, 1. 24.
Independent claim 15 describes a method for making and processing the fibers into paper-like sheet products. Id. at col. 10,1. 35—col. 11,1. 8. In short, the steps of the claimed methods are directed to “par
The relevant facts are undisputеd. The United States contracted with Lockheed Martin Corporation (“Lockheed”) to design and build the F-22 fighter. Zoltek,
Zoltek brought suit in the Court of Federal Claims under
The government moved for partial summary judgment that Zoltek’s
The issues before the court are purely questions of law. This court reviews the trial court’s statutory and constitutional analysis without deference. See Shoshone Indian Tribe of Wind River Reservation v. United States,
II.
The federal government is immune from any legal action by its sovereign immunity. See United States v. Sherwood,
Whenever an invention described in and covered by a patent of the United States is used ... 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.
Id. (emphasis added).
This court has held that “direct infringement under section 271(a) is a necessary predicate for government liability under
III.
We turn to the trial court’s takings analysis. The Court of Federal Claims held that Zoltek could bring its action against the government under the Tucker Act, by alleging that the infringement was a taking of private property for public use under the Fifth Amendment. See Zoltek,
In Schillinger v. United States,
The trial court determined that the Supreme Court “effectively overruled Schil-linger sub silentio ” in Crozier v. Fried. Krupp Aktiengesellschaft,
Crozier involved Army weapons manufacture. Fried. Krupp was a German corporation holding patents relating to improvements in guns and gun carriages. William Crozier was the Army Chief of Ordnance and directed the manufacture of field guns and carriages for the Army. In 1907, Fried. Krupp sued Crozier in the supreme court of the District of Columbia. The company alleged that the Army’s weapons manufacture was infringing Fried. Krupp patents. Although the complaint originally sought preliminary and permanent injunction, and an accounting, the company later dropped the prayer for preliminary injunction and waived the prayer for accounting. Crozier,
Before the Supreme Court heard argument, Congress enacted the Patent Act of 1910. See Pub.L. No. 61-305, 36 Stat. 851 (1910) (later codified as amended at
The contention that Crozier somehow overruled Schillinger, and recognized patent infringement as a Fifth Amendment taking, is flawed. The only question before the Supreme Court was whether the trial court had jurisdiction to enjoin the government from alleged patent infringement. Because Congress, in adopting the 1910 Act, precluded injunctive relief against the government for patent infringement, the Crozier court concluded that the trial court lacked the power to grant Fried. Krupp the injunctive relief it was seeking. Id. at 308,
Indeed, the Supreme Court repeated this characterization of the 1910 Act just eight years later. See William, Cramp & Sons Ship & Engine Bldg. Co. v. Int’l Curtis Marine Turbine Co.,
The Court of Federal Claims reasoned that because Crozier discussed the 1910 Act in terms of eminent domain, the Supreme Court must have reconsidered its analysis in Schillinger. This reasoning is misplaced. It is true that Crozier, and several cases applying the 1910 Act (in its original form and as amended and recodi-fied at
But when interpreting the Constitution “[i]t is emphatically the province and duty of the judicial department to say what the law is.” Marbury v. Madison,
In sum, the trial court’s conclusion that Crozier “effectively overruled Schil-linger sub silentio ” has no merit. The trial court’s remaining conjectures on takings jurisprudence do not require consideration. We simply note that to reach its conclusion the Court of Federal Claims had to read an entire statute,
The dissent argues that we are wrong to conclude that Schillinger remains good
The answer is simple. Unlike regulatory takings and the inverse condemnation of real property, the “taking” of a license to use a patent creates a cause of action under
IV.
For the reasons set forth herein, we affirm the trial court’s conclusion that the infringement allegations at bar are precluded by
AFFIRMED IN PART, REVERSED IN PART, and REMANDED.
Each side will bear its own costs.
Notes
. Although the Re '162 patent also includes various product-by-process and product claims, only the method claims are at issue here. In a March 5, 2001 motion for leave to file a first amended complaint, Zoltek abandoned its allegations that the government had infringed the product claims. See Zoltek,
. As the Supreme Court recognized at least as long ago as 1881, the patentee’s recourse for infringement by the government is limited by the scope of the waiver of sovereign immunity established by the Congressional consent to be sued. “If the jurisdiction of the Court of
. In Ruckelshaus v. Monsanto Co.,
. Oliver W. Holmes, The Common Law 5 (M. Howe ed.1963) (1881).
Concurrence Opinion
concurring.
I agree that we are bound by our panel decision in NTP, Inc. v. Research in Motion, Ltd., in which we held that “direct infringement under section 271(a) is a necessary predicate for government liability under
I.
Before discussing this additional basis for today’s decision, I shall briefly address the ignoble history of the NTP proposition. An examination of the case law reveals that the proposition has its roots in Decca v. United States, in which we held that the United States could be liable under
Section 1498 expressly waives the Government’s sovereign immunity only with respect to governmental direct infringement of a patent. Nowhere in the section is active inducement of infringement or contributory infringement mentioned, either directly or by cross-reference to35 U.S.C. §§ 271(b) and (c) . A waiver of sovereign immunity must be strictly construed. Stated differently, the Government is not to be regarded as having waived its sovereign immunity by implication.
It is important to note, however, the relationship between the phrases “direct infringement,” as used in Decca, id., and the phrase “direct infringement under
Decca, of course, did not require that a
How did such a sweeping generalization evolve from Decca? The answer, unfortunately, is that its evolution owes to this court’s imprecise recharacterization of the Decca holding in our decision in Motorola. See
By equating the specific statutory provision “
Although in Motorola the relationship between
In his concurring opinion, Judge Dyk attempts to find support for the NTP proposition. Citing certain legislative materials which state that the sole purpose of enacting
His reliance on legislative history is misplaced, however, given that the plain language of the text demands a contrary and unambiguous interpretation. As is explained below, the plain language of the statute reveals that
There can be little doubt that
Granted, in creating a new remedy,
Indeed, prior to the passage of
In summary, patentees have the following rights and remedies: (1) a
In fact, not even NTP posited a relationship specifically between
I should explain that the per curiam opinion—which I join—does indeed state that the government’s “liability does not exist pursuant to
The 1918 amendments to
Contrary to Judge Dyk’s reading, the Court did not assert a blanket proposition that
We must presume that Congress in the passage of the Act of 1918 intended to secure to the owner of the patent the exact equivalent of what it was taking away from him. It was taking away his assignable claims against the contractor for the latter’s infringement of his patent. The assignability of such claims was an important element in their value and a matter to be taken into account in providing for their just equivalent.
Id. at 345,
The NTP court should not have articulated such a relationship, especially not through reliance on logically flawed dicta, and I can see neither the need nor the clear basis for us—at least in this case—to attempt to support through logic, post hoc, what the NTP court has wrought through folly. Perhaps the NTP proposition will in the future gain recognition as a useful exрedient against the backdrop of a more thoroughly interpreted
II.
I believe that this case poses two substantial questions of statutory interpretation. First, when is a patented method “used” under
I conclude that a party “uses” a method claim within
Whenever an invention described in and covered by a patent of the United States is used ... 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____ For the purposes of this section, the use ... of an invention described in and covered by a patent of the United States by a contractor, a subcontractor, or any person, firm, or corporation for the Government and with the authorization or consent of the Government, shall be construed as use ... for the United States.
The provisions of this section shall not apply to any claim arising in a foreign country.
Both sections require interpretation. First, the court must determine the meaning of a “use,” as applied to a method claim, in
The court’s statutory analysis must give effect to Congress’s intent when enacting the statute. See Nat’l Labor Relations Bd. v. Lion Oil Co.,
In this case the text of
At the outset I note that it is well-settled, as a matter of patent law, that an infringing use of a patented method requires practicing every step claimed in the method.
Because
B.
Assuming Zoltek alleges an infringing use, the question becomes where the
In addressing this question, it is useful to imagine four factual scenarios. The first and easiest scenario is where all of the steps of the process were performed in this country—a situation in which there is no question that a claim, if any, must arise in the United States. The second scenario is where all of the steps were performed abroad, as is true in this case with the alleged infringement of the Nicalon fiber claims. (I address these claims in the next section.) Later in the opinion, I will address the meaning of 1498(c) in the context of the third and fourth scenarios, in which some, but not all steps were performed abroad; in the third scenario, the last step of the process is practiced abroad, and in the fourth scenario (as with the Tyranno fiber claims), the last step is practiced in the United States.
1.
I shall start with the Nicalon fiber claims, in which all of the infringing steps were performed abroad. Clearly the infringing activity is entirely outside the United States from a geographical perspective. Therefore, it does not occur “within” the United States as required by
Congress enacted
In construing statutory language, it is prudent to be cognizant of constructions that courts have accorded to identical language, where it occurs in other statutes. Here I recognize that Congress took the language of
Plainly, many determinants of the borrowed statute canon are satisfied here. The statutes serve similar purposes. Both provisions limit the potential government liability occurring abroad by curtailing Congress’s sovereign immunity waiver for tort liability. Moreover, during Senate sub-committee hearings, the testimony made clear that
In Sosa v. Alvarez-Machain,
Though patent infringement claims may be viewed as species of tort claims, they are subject to a territoriality restriction unknown in general tort law. Determining the liabilities of the United States for patent infringement under
Allowing recovery for foreign injury where the causative acts occurred in the United States thus raised the specter that the liability of the United States would be governed by foreign law. No similar problem exists under the patent laws because United States law will apply to the infringing acts occurring in the United States. Under thesе circumstances, construing the “arising in” language of
Although Zoltek urges the court to read
This analysis precludes Zoltek’s Nicalon fiber allegations. Where all the steps of a process patent are performed abroad, the claim “arises in a foreign country,” and the action is barred by
2.
The infringement allegations concerning the Tyranno fiber products, however, cannot be tethered to any single location. This presents the difficult question. Although the fibers were made overseas, the record shows that the final products were made in the United States. According to Zoltek’s infringement allegations, some of the claimed method steps were practiced in Japan, and some in the United States. The allegedly infringing conduct, in short, was not confined within national boundaries.
Does such conduct “arise in a foreign country” within the meaning of
Two longstanding interpretative principles support the conclusion that the language at
Second, this view comports with the narrow construction that a court must afford sovereign immunity waivers. A court must resolve textual ambiguity in a statutory waiver in favor of immunity. As noted above, the waiver must be clear, and ambiguities resolved in favor of immunity. Since the waiver must be construed narrowly, the
Although this court has never decided how
To understand why, it bears reviewing the case in detail. Decca involved the Omega long range radio navigation system. Certain components of the system— broadcast stations—were located overseas. The plaintiff, Decca, owned U.S. Patent No. 2,844,816, which claimed radio navigation systems.
The court disagreed. The Court of Claims defined the “location” of the Omega system to be “in United States territory,” implicitly reasoning that an infringing use “within the United States,” a fortiori, does not give rise to an infringement claim “arising in a foreign country” under
There are, however, no “use of device” claims at issue in this action, and Decca is therefore inapposite. In Decca, the elements of a patented device were assembled, one by one and in different countries, and the device was therefore made. Likewise, in this case, the steps of a patented process were practiced, one by one and in different countries, and the process was therefore performed. However, these cases are not analogous, because the concept of the “use” of a device is fundamentally different from the use of a process. Whereas utility can be extracted from a device only after it has been “made,” utility is extracted from a process concurrent with its being “practiced.” See NTP,
Consequently, I would decline any invitation to extend Decca’s rationale beyond its intended context of device claims to practicing the steps of a claimed method. In particular, the Decca rationale for characterizing the accused Omega radio navi
Were a court to extend Decca’s reasoning here, it could conclude that where the government, or a contractor acting at the government’s direction, commissions or directs the conduct later accused of infringing a method patent, the resulting claim for infringing use under
III.
In sum, the infringing use of a patented method under
The dissent argues that I must be careful to construe
IV.
For the aforegoing reasons, I believe that there exists an additional, and independent, basis for reaching the decision of the court today that
. In a
. The Court of Federal Claims ultimately concluded that
. See
. Although NTP merges the question of conduct (the use) and location (within the United States) in this explanation of
. The State Department comments were directed to H.R. 8419, a predecessor bill to H.R. 4059. H.R. 4059 was enacted on September 8, 1960. See Pub.L. No. 86-726, 74 Stat. 855 (1960) (codified at
. The Federal Tort Claims Act ("FTCA”) waives sovereign immunity for certain tort claims against the United States. See
. See Infringement of Copyrights: Hearings on H.R. 4059 Before the Senate Subcommittee On Patents, Trademarks, and Copyrights of the Senate Committee on the Judiciary, 86th Cong. 12-13 (1960) (statement of Arthur Fisher, U.S. Registrant of Copyrights) ("[I]t was originally felt that [
. Our cases concerning personal jurisdiction in patent cases, which look to "the location ... at which the infringing activity directly impacts on the interests of the patentee,” Beverly Hills Fan Co. v. Sovereign Corp.,
. The dissent suggests that we have ignored the Fifth Amendment in determining the proper jurisdictional scope provided by
. While not a basis for my interpretation of
. Indeed, although the United States briefed the issue in conjunction with a motion to dismiss, the trial division of the Court of Claims specifically noted in its pretrial order that ''[jjuriscliction is not disputed and is hereby determined to be present.” Decca, No. 299-70, Pre-Trial Order ¶1 (Ct.Cl. Mar. 20, 1975).
. The trial court found the government liable for an infringing use of claim 11, which claimed a hyperbolic radio navigation system. See '816 patent, col. 12, 1. 63—col. 13, 1. 34 (claim 11); Decca,
. See Lynch v. United States,
. Indeed, before the passage of the Tucker Act, ch. 359, § 1, 24 Stat. 505 (1887) (codified as amended at
Concurrence Opinion
concurring.
I join the court’s per curiam opinion but write separately to express my view that
I
Whenever an invention described in and covered by a patent of the United States is used or manufactured by or fоr 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.
In my view, the purpose of
Patent rights are nothing more than the rights to exclude others. See
The omission of the “within the United States” language (appearing in
Legislation in 1910 first conferred the right to sue the United States for infringement. Pub.L. No. 61-305, 36 Stat. 851 (1910). That legislation was simply designed to waive the sovereign immunity of the United States for preexisting causes of action conferred by the patent statute
The 1918 amendments, Pub.L. No. 65-182, 40 Stat. 704, 705 (1918), similarly confirm that the purpose of the statute was simply to obligate the United States to the same extent as private parties. Congress was concerned that when patented inventions were used or manufactured by others for the United States, suit was being brought against government employees or contractors individually. Thus in 1918, Congress changed the language of the 1910 statute to read:
That whenever an invention described in and covered by a patent of the United States shall hereafter be used or manufactured by or for the United States without license of the owner thereof or lawful right to use or manufacture the same, such owner’s remedy shall be by suit against the United States in the Court of Claims for the recovery of his reasonable and entire compensation for such use and manufacture.
Id. (emphasis added).
Congress intended the 1918 amendment “to relieve the contractor entirely from liability of every kind for the infringement of patents in manufacturing anything for the government, and to limit the owner of the patent ... to suit against the United States in the Court of Claims for the recovery of his reasonable and entire compensation ....”
is an attempt to take away from a private citizen his lawful claim for damage to his property by another private person which but for this act he would have against the privаte wrongdoer.... We must presume that Congress in the passage of the act of 1918 intended to secure to the owner of the patent the exact equivalent of what it was taking away from him.
Id. at 345,
The “exact equivalent” of
II
Finally, I note that Judge Plager’s interesting discourse on takings jurisprudence completely fails to explain how taking of a property right could possibly have occurred here. Patent rights are creatures of federal statute.
. Under
. The 1910 enactment provided: "That whenever an invention described in and covered by a patent of the United States shall hereafter be used by the United States without license of the owner thereof or lawful right to use the same, such owner may recover reasonable compensation for such use by suit in the Court of Claims.” Pub.L. No. 61-305, 36 Stat. 851.
. What is now the second paragraph of
. There is no occasion here to determine whether claims for infringement liability under 271(f) and 271(g) may be brought in suits against the government.
. Unlike the situation in Ruckelshaus v. Monsanto Co.,
Dissenting Opinion
dissenting.
There are two separate though related issues in this case, both matters of first impression. One is of major significance to our understanding of the constitutional obligations of the United States (“United States” or “Government”); both relate as well to important rights of patent owners.
The second issue, dealing with a cause of action for infringement of a United States patent, is raised in the context of a method or process patent claim involving multiple steps. When an owner of such a patent sues the United States for infringement under the provisions of
I. Introduction
Plaintiff invented and patented a process for manufacturing a carbon fiber sheet product, a product that is used in making military aircraft with a low radar signature, the so-called ‘stealth’ aircraft. Defendant, the United States, so plaintiff alleges, caused the use of plaintiffs patented invention in the course of having a new fighter plane, the F22, built, and, according to plaintiff, did it without permission and in violation of plaintiffs rights. For this plaintiff seeks damages.
In the trial court, the United States argued that, on the undisputed facts, plaintiff did not have a cause of action against the Government under either the statutes of the United States or under the Constitution. The argument before the trial court, and again on appeal, largely focused on
The trial court concluded that, because of the limitations imposed by
Although my panel colleagues cannot agree why, they do agree that (1) an owner of a United States patent can be denied the basic protections of the Constitution, and that (2) if any one step of a multi-step patented process occurs outside the United States, the Government is immune from liability under
II. Overview
As there are three other opinions in this case, I begin by summarizing the problems I have with my colleagues’ collective and separate views. First, in their per curiam opinion, my colleagues’ analysis of the
In his concurring opinion, Judge Gajarsa acknowledges the problem with trying to incorporate the terms of
Because of the way the majority in their per curiam opinion resolve the issues in this case, applying the magical incorporation doctrine to
Since I do not dispose of plaintiffs infringement claim by rewriting
Second, regarding the takings issue, the per curiam opinion does provide somewhat more analysis, but the analysis is on the wrong subject. According to the per curiam opinion, the takings issue in this case turns on the meaning of an 1894 Supreme Court case, Schillinger v. United States,
III. The Fifth Amendment Taking Issue
The Fifth Amendment to the Constitution provides a series of protections for the individual against governmental abuses, and concludes: “nor shall private property be taken for public use, without just compensation.” This provision has a long and noble history of protecting and preserving property rights against unfettered Governmental seizure, and in so doing of protecting individual freedom and personal integrity from undue government authority.
It is well understood that this constitutional provision does not preclude the Government from taking private property for public use. Rather, the Constitution guarantees that the citizen will be fully compensated for such a taking. By requiring just compensation the Constitution makes the property owner whole, and it also places a constraint on government action by imposing the cost of such action on the Government’s fisc, thus subjecting administrative action to the discipline of public decision-making and legislative authorization. In recent years the Supreme Court has extended the salutary protection of the Fifth Amendment to excessive governmen
In the case before us, the matter falls into the traditional acquisition area. Plaintiff alleges that the Government took its property—its government-granted patent right—when the Government’s subcontractors used the patented method in the production of certain products employed in the F-22 production.
One of the property attributes of a patent grant is the right to exclude all others, including the Government, from “making, using, offering for sale, or selling” the patented invention without the patentee’s consent.
Nevertheless, when the Government chooses to acquire a patent right without prior permission of the owner, there is a way, unrelated to infringement law and unique to the Government, through which a patentee’s right to exclude others may be obtained. The Government can exercise its power of eminent domain and simply seize or, as we say, ‘take’ the property it needs for a public use. In effect, the Government forcibly acquires a license to use the invention. However, because of the Constitution, the Government may do this only if it pays the just compensation demanded by the Fifth Amendment. The trial court examined the question of whether there could be such a taking independent of the terms of
On appeal, the panel majority in its per curiam opinion disagrees with the trial court. The opinion relies on its understanding of the Schillinger case, in which, according to the per curiam opinion, “the Supreme Court rejected an argument that a patentee could sue the government for patent infringement as a Fifth Amendment taking under the Tucker Act,” per curiam op. at 1350, and, we are told, Schillinger remains good law. That statement is essentially the entire explanation offered for the opinion’s slavish reliance on Schilling-er.
The problem with the majority’s statement of Schillinger is that it misconstrues the holding in Schillinger, and equates the taking claim with an infringement action, when as a matter of law these are two separate legal claims founded on separate legal bases. The tort of patent infringement is statutorily based and defined, and exists at the discretion of Congress; the right to just compensation for a taking is constitutional, it is not a tort, and it requires no legislative blessing. Furthermore, Schillinger, on which the majority bases its result, was not a taking case at all.
Schillinger filed a petition in the Court of Claims for damages for alleged unauthorized use of his patent by the Government. At the time (1894), it was understood that the jurisdiction of the Court of Claims for suits against the United States lay in contract, but not in tort. The Court of Claims held that since Schillinger’s suit did not involve a contract, either expressed or implied, on the part of the Government for the use of the patent, the petition was outside of the jurisdiction of that court. The Supreme Court agreed.
The Supreme Court said “[t]hat this action is one sounding in tort is clear.”
In dissent, Justice Harlan first asked the question, “Can a suit be maintained against the United States in the court of claims, as upon contract, for the reasonable value of such use of the patentee’s improvement?” Id. at 173,
He further noted that “[tjhere is another view of the case which is independent of mere contract.” Id. at 179,
What is critical to appreciate is that when Schillinger was decided in 1894, the judicial treatment of the then-new Tucker Act provision cited by Justice Harlan was still in its early stages of development. It was not until some years later, and the Supreme Court’s decision in Jacobs v. United States,
In Jacobs the Supreme Court left no doubt that a constitutional ‘taking’ claim was not simply another version of the typical Tucker Act suit against the Government. The narrow issue before the Court was whether plaintiff, whose Fifth Amendment taking claim against the Government for flooding of its land had already been adjudicated in its favor, was entitled to interest on its award. If the taking suit against the Government was limited to traditional statutory remedies, the answer was no, as no statutory provision for interest had been provided. The Court of Appeals had so held. The Supreme Court reversed, and awarded interest, stating that claims for just compensation are grounded in the Constitution itself:
The suits were based on the right to recover just compensation for property taken by the United States for public use in the exercise of its power of eminent domain. That right was guaranteed by the Constitution. The fact that condemnation proceedings were not instituted and that the right was asserted in suits by the owners did not change the essential nature of the claim. The form of the remedy did not qualify the right. It rested upon the Fifth Amendment. Statutory recognition was not necessary. A promise to pay was not necessary. Such a promise was implied because of the duty to pay imposed by the amendment. The suits were thus founded upon the Constitution of the United States.
Id. at 16,
That has been the law at least since 1933. Today a cause of action under the Fifth Amendment’s taking clause is understood to be neither a tort claim nor a contract claim, but a separate cause arising out of the self-executing language of the Fifth Amendment. As the Supreme Court recently explained in First English Evangelical Lutheran Church of Glendale v. County of Los Angeles:
[Gjovernment action that works a taking of property rights necessarily implicates the “constitutional obligation to pay just compensation.” We have recognized that a landowner is entitled to bring an action in inverse condemnation as a result of “ ‘the self-executing character of the constitutional provision with respect to compensation.’ ” ... Jacobs, moreover, does not stand alone, for the Court has frequently repeated the view that, in the event of a taking, the compensation remedy is required by the Constitution.
Furthermore, there is no longer any question that the opening clause of the amended Tucker Act covering “all claims founded upon the constitution of the United States” provides the Court of Federal Claims with jurisdiction over such claims. How else could Fifth Amendment actions be brought today in the Court of Federal Claims for inverse condemnation, see, e.g., Hendler v. United States,
In the case of inverse condemnation takings, such as is the case here, the Government has not used its eminent domain power affirmatively, but is alleged by a plaintiff to have committed by Government action a taking of private property without the just compensation required by the Fifth Amendment. If these cases are considered to be based on tort, the Court of Federal Claims would be without jurisdiction as it remains well established that that court has no general tort jurisdiction. And, as in regulatory takings cases as well, there is no element of contractual or consensual understanding between the owner whose property is taken and the Government that takes it. If traditional contract-based jurisdiction were required under the Tucker Act, the Court of Federal Claims would be without jurisdiction becаuse there is no contract. Nevertheless, for the reasons explained by the Supreme Court in First English, the Court of Federal Claims today under the Tucker Act hears and decides both inverse condemnation and regulatory takings cases, and we review them on appeal. Whatever relevance the argument in Schillinger may have had to constitutional takings back in 1894 regarding contract and tort jurisdiction in the Court of Claims, it has none now.
In the case before us, in response to the trial court’s instructions plaintiff amended its pleading to make clear that its Fifth Amendment takings claim was separate and distinct from the statutory infringement claim. It is established law that the Constitution creates its own remedy, and the Tucker Act expressly gives jurisdiction over such constitutional claims to the Court of Federal Claims. Plaintiff has alleged a property interest in its patent, and a taking of that interest by the United States. As the trial court correctly concluded, plaintiffs non-frivolous allegation of a constitutional taking claim comes within the jurisdiction of the Court of Federal Claims and entitles plaintiff to a trial on the merits. Summary judgment in favor of the Government as the majority dictates is wrong as a matter of law, and is a denial of plaintiffs constitutional rights.
In response to this explanation of established law, the per curiam opinion simply repeats its confusion over statutory remedy and constitutional right. The answer to the takings issue, we are told, “is simple. Unlike regulatory takings and the inverse condemnation of real property, the ‘taking’ of a license to use a patent creates a cause of action under
This is a remarkable view of the Constitution. Can it be that Congress, by a stroke of the legislative pen, may withhold the remedies and revoke the protections given to the citizenry by the Fifth Amendment, not to mention the other Articles of the Bill of Rights to the Constitution? Fortunately no authority exists for such a radical doctrine of legislative preemption over constitutional right. Wisely, Congress has never attempted to establish one, and in fact Congress in the Tucker Act expressly provides for the courts’ jurisdiction over these takings claims. To argue that Congress in enacting
Judge Dyk in his concurring opinion concludes that, since under his view of the case the Government’s conduct was non-infringing (i.e.,
In my view, the existence of a proper takings claim is an issue wholly independent of whether under
IV. The
The second issue before us is whether plaintiff has stated a separate cause of action under
In his concurring opinion, Judge Gajarsa acknowledges the problem with the incorporation theory, and therefore he presents
1.
The per curiam opinion concludes that, for the Government to be liable under
I do agree with one premise relied on by the majority—that under either
The per curiam opinion, rather than interpreting the relevant statutes, relies on what Judge Gajarsa refers to in his concurring opinion as the “NTP proposition,” to the effect that infringement under
Where I part company with Judge Ga-jarsa is in the next evolutionary step, in which he concludes that the relationship between
In NTP, the accused system consisted of many components, one of which was a relay component located in Canada. In determining whether the accused infringer used the system “within the United States,” as required for infringement under
In Decca, the accused infringer was the Government, and the suit was under
It is not surprising that the NTP panel found the Decca decision “instructive” because of the similarity in fact patterns. The result in NTP could have been justified without any formal ‘linkmg’ of the Decca statute and the NTP statute. The precise ‘linking’ statement in NTP is: “Although Decca was decided within the context of
Judge Dyk in his concurring opinion argues for making the dictum in NTP con
2.
Because
As noted above, I agree with Judge Gajarsa’s answer to the first question he poses in Part II of his concurring opinion: a patented method is used within the meaning of
The next question then is how does subsection (c) of
Looking across the range of choices, there are three. The first and easiest case is when each and all of the steps are completed within the United States. Here there is no foreign entanglement whatsoever, so subsection (c) has no application and the Government is subject to the requirements of
The interpretive problem becomes more difficult in the third case, in which some of the steps of the method patent are practiced abroad, and some in the United States. That is the situation with the sili-cide fiber mats made from Tyranno fibers, since the Tyranno fibers are manufactured in Japan and then processed into mats in the United States, allegedly requiring use of one or more of the steps of the patented method in both places. In dealing with this fact pattern, Judge Gajarsa in his concurring opinion tells us that each, i.e., all, of the steps must be performed within the United States in order for a cause of action to avoid the arising-in-a-foreign-eountry exception. Put another way, if any one step occurs outside the United States, it is a cause of action that arises in a foreign country, and thus is barred by
That cannot be the law. A cause of action does not ‘arise’ in a place just because any one step of a multi-step process patent occurs there. Beyond that, Judge Gajarsa’s position cannot be reconciled with the proposition that all steps must be completed before a compensable use, i.e., infringement of a method patent, occurs under
I understand my colleague’s dilemma— there is no guidance in the statute, in the legislative history, or in prior cases as to what to make of this provision when the steps of a method patent have been performed both in and out of the country. But that is no reason to abandon logical analysis in preference for a policy-rooted and result-driven conclusion. The logic of the statute and what seems to me to be the basic policy underlying
This case involves patent claims utilizing numerous steps in the manufacture of a speсialized high-technology material of unique interest to the Government. There is no basis in law or policy for absolving the Government from liability, now and forever, for the wrongful conduct of its agents just because any one step of a multi-step patented method can be found to have occurred outside the United States—that is an invitation to strategic conduct if ever there was one. I conclude that the Government is liable under
Finally, because the per curiam opinion and at least one of the concurring opinions devotes so much time to the cases construing
That, however, was not the way the Supreme Court initially viewed the statute when it came before the Court two years later in the ease of Crozier v. Fried. Krupp Aktiengesellschaft,
The Supreme Court, after reviewing the history of infringement suits against the Government up to and including Schilling-er, turned to the new statute:
In substance, therefore, in this case, in view of the public nature of the subjects with which the patents in question are concerned and the undoubted authority of the United States as to such subjects to exert the power of eminent domain, the statute, looking at the substance of things, provides for the appropriation of a license to use the inventions, the appropriation thus made being sanctioned by the means of compensation for which the statute provides.
Working through the prolix language, it seems that the Court chose not to read the new statute as a simple authorization for suits for the tort of patent infringement against the Government, but instead read the statute as an illustration of the Government’s obligations under the Fifth Amendment. Why the Court thought the statute was the one and not the other is not explained. Perhaps it was the longstanding rule, which the Court had only recently reiterated in Schillinger, that the Court of Claims did not have jurisdiction over torts. Perhaps it was discomfort with the permanent injunction being sought against the Army’s efforts to modernize its guns—after all Fried. Krupp was a German corporation and the drums of war, though still distant, were beating. Perhaps it was a bow to Justice Harlan’s dissent in Schillinger arguing for using the Fifth Amendment to allow a recovery, though if the statute authorized a tort action, a power Congress clearly has,
Does it matter which of these underlying theories—tort or constitution—supports a plaintiffs suit under
If either the majority’s incorporation theory or Judge Gajarsa’s alternative theory prevails, it will certainly matter. To the extent
Judge Gajarsa responds to my concerns about the takings issue, and his merger of the constitutional requirement for just compensation with
In sum, plaintiff alleges inter alia that the Government has infringed its United States patent under the terms of United States patent law; on appeal, the issue is whether plaintiff has stated a cause of action under
. The term "patent owner” as used throughout this opinion includes assignees of a patent.
. "[N]or shall private property be taken for public use, without just compensation.”
. The relevant portion of
Whenever an invention described in аnd 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.
. The trial court and the majority opinion both treat the problem of the taking claim as one of establishing jurisdiction in the Court of Federal Claims. This is incorrect, since a
.
[T]he only dependable foundation of personal liberty is the personal economic security of private property.... There is no surer way to give men the courage to be free than to insure them a competence upon which they can rely. Men cannot be made free by laws unless they are in fact free because no man can buy and no man can coerce them. That is why the Englishman’s belief that his home is his castle and that the king cannot enter it ... [is] the very essence of the free man’s way of life.
Walter Lippmann, The Method of Freedom 101-02 (1934).
. See, e.g., Lucas v. S.C. Coastal Council,
.
For the purposes of this section, the use or manufacture of an invention described in and covered by a patent of the United States by a contractor, a subcontractor, or any person, firm, or corporation for the Government and with the authorization or consent of the Government, shall be construed as use or manufacture for the United States.
. Act of March 3, 1887, 24 Stat. 505.
. Since Schillinger is not relevant to the question of whether plaintiff has a taking claim, the per curiam’s discourse regarding whether Crozier v. Fried. Krupp Aktiengesellschaft,
. Note that there are two Decca decisions, one in 1976 addressing the liability phase of the case,
. Act of June 25, 1910, ch. 423, 36 Stat. 851.
. See Federal Tort Claims Act,
. Thomas F. Cotter, Do Federal Uses of Intellectual Property Implicate the Fifth Amendment?, 50 Fla. L.Rev. 529, 555 (1998) (”[T]he habit, in which both the Federal Circuit and the Court of Federal Claims continue to indulge, of invoking the takings mantra when discussing
. Lynch v. United States,