What happens if the government directs a company to infringe on my patent?

What happens if the government directs a company to infringe on my patent?

A patent is a set of exclusive rights granted to the inventor of an invention, by a government.  The public policy behind patent law is, in exchange for teaching the public how to make and use the invention, an inventor is granted a monopoly for a limited period of time on the invention.  Patents are not automatically granted.  To be granted a patent an inventor must file a patent application with the relevant government office that reviews and grants patents.  The United States Patent and Trademark Office is the agency in the United States that grants patents and many other nations have their own patent offices.  A patent office will only approve a patent application if the inventor can demonstrate that the patent is novel, not obvious and useful.   If someone besides a patent owner makes, uses or sells a patented invention that can be considered patent infringement.

Pharmaceuticals are an incredibly important aspect of patent law.  The COVID-19 pandemic has spurred a flurry of research info finding a cure for the disease. Developing a new drug takes years of research and development, many experiments will fail before a new drug is discovered, however each failure is one step closer to success.  Pharmaceutical companies use patents to protect their successful drugs so that they can recoup the research cost of drugs that were unsuccessful.  The price of a drug not only includes the production cost to make the drug, but all the research that lead to the development of the drug.

Research related to COVID-19 will no doubt result in dozens of patents related to the prevention, diagnosis and treatment of the disease.  It is unlikely that a single firm will be able to meet the demand for these patented products.  There is a strong likelihood that governments will ask several different companies to produce products to meet the demand. The question then becomes what is a patent owner’s remedy if United States federal government directs someone to infringe a patent?

This situation is covered in 28 U.S.C. § 1498(a) which 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 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.

Companies that are accused of patent infringement can use  Section 1498 as a defense and request summary judgement in their favor.  Further, cases brought in courts other than the Federal Claims court can be dismissed.

A patent owner can recover the same damages as they would in a normal patent infringement case.  Reasonable royalties are the best that a patent owner can hope for.  In certain circumstances a patent owner can be awarded attorneys  fees and costs related to bringing the suit.  Those circumstances are limited to cases where the patent owner has fewer than 500 employees and the government fails to show the infringement was justified.

Section 1498 is drafted broadly enough that companies who are not government contractors, but merely working at the direction of the government might be shielded from liability.  Court precedent has held that Section 1498 does not require express authorization from the government, in some circumstances government authorization can be implied.  The purpose of Section 1498 is to relieve government contractors from liability for patent infringement in order to incentivize the production of products needed to fight an enemy.  There is no doubt that  Section 1498 will be cited in the battle against COVID-19.

If you have questions or comments for the authors of this blog please email us at: admin@uspatentlaw.cn