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Government Authorized Alleged Patent Infringement


 

The government could be held liable for its dredging contractors' patent infringement as a matter of law, according to the Court of Federal Claims, because the government authorized and consented to the allegedly infringing activity. The alleged infringement arose from government contracts to dredge and process contaminated material from navigable waterways. A majority of the contracts contained a provision requiring the contractor to submit a detailed description of its proposed process for treating dredged material, and government approval of the proposed process was required prior to contract award. The remaining contracts required the contractor to use a specified site for processing or to seek government approval of an alternate site. All of the contracts contained the Authorization and Consent clause (FAR 52.227-1), in which the government authorized the use of patented inventions that "necessarily resulted" from compliance with contract specifications or written instructions. A third party alleged the contractors infringed its patents and sought to hold the government liable for their conduct. Seeking partial summary judgment, the government argued it did not authorize the allegedly infringing activity and the court lacked patent infringement jurisdiction (28 USC 1498(a)) over the claim. In its cross-motion for summary judgment, the third party argued the government was fully aware of the processes for treatment of the dredged material, and it therefore could be held liable for its contractors' actions.
 
Work Plans Approved

Sevenson Environmental Services v. U.S. (477 F3d 1361), an infringement case involving an identical clause, was controlling. There, the Court of Appeals for the Federal Circuit held a requirement for the contractor to develop a plan detailing the work to be performed constituted a "specification" forming part of the contract, and the alleged infringement "necessarily resulted" from compliance with the specification. Here, the required contractor submittals for the majority of the contracts also contained specifications or written provisions that formed part of the contracts. The contracts in both cases expressly required the contractor to provide, prior to award, a "detailed description of the proposed technological processing," including "method of treatment, additives used during the processing, mechanical processing used, decontamination methods incorporated, stabilization methods incorporated, and chemical treatment (if any)." Also, the government approved the proposed processing site and the detailed descriptions in both cases. Since the submittals here formed part of the contracts, it was clear the allegedly infringing dredging method "necessarily resulted" from contract compliance. As to the remaining contracts, the government's authorization and consent was "even more clear." The government's requirement to use a specific site necessarily resulted in the contractors' adoption of the processing method offered at that particular site. A contractor's use of a different processing facility would have been a breach of contract. (TDM America, LLC v. U.S., et al., FedCl, 52 CCF 79,005)
 


(The news featured above is a selection from the news covered in the Government Contracts Report Letter, which is published weekly and distributed to subscribers of the Government Contracts Reporter. )

     
  
 

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