Zoltek v. U.S. (Fed. Cir. 2006, en banc denied).
Just last week, Patently-O highlighted Professor Mossoff’s historical analysis of patent-takings jurisprudence. That article took the CAFC to task for its continuation of the untrue myth that “patents were never secured as constitutional private property in the nineteenth century.” In fact, argues Mossoff, “nineteenth-century courts applied the Takings Clause to patents, securing these intangible property rights as constitutional private property.” “It is time to set the historical record straight.”
Mossoff’s article was prompted by the April 2006 decision in Zoltek v. U.S. In that case, the CAFC found itself bound by the 1894 case of Schillinger v. United States where the Supreme Court ruled that a patent holder could not sue the government for patent infringement as a Fifth Amendment taking.
In Schillinger v. United States, 155 U.S. 163 (1894), 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. Schillinger remains the law.
With a petition for rehearing, Zoltek gave the CAFC another shot.
Without opinion (as is usual in denials), the petition for rehearing was denied. However, two opinions were released. Judges Dyk and Gajarsa filed a concurring opinion arguing first that there is no need for a taking claim because private parties already have a right to sue the government for unauthorized patent infringement under 28 U.S.C. § 1498. Second, the two judges argue that because patent rights are created by relatively recent federal statute, it is difficult to characterize limitations of those rights as a “taking of established property rights.”
In dissent, Judge Newman laid out the holding in simple terms:
The panel majority holds that there is no jurisdiction [in any court] of a Takings claim for compensation for unauthorized use by the government of a patented invention. This ruling is contrary to decision, statute, policy, and constitutional right. I must, respectfully, dissent from the court's endorsement of this ruling.
Judge Newman finds that the majority decision only makes sense if we reject the premise that patents are property.
Supreme Court Next: Judge Newman’s set this case up nicely for Supreme Court review on the issue of takings and more broadly what is meant by intellectual property.
Notes:
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Document: En Banc Denial with Opinions
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Document: Panel Decision
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SSRN: Mossoff Article (87 Boston University Law Review ___ (2007)).
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Patently-O: Discussing Original Decision
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Patently-O: Discussing Mossoff Article
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Patent Hawk: Discussing En Banc Denial
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How Appealing: Discusses Dissent
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Professor Barros: Introduces Case
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Journal of IP Law & Practice (Oxford): Patents holders are not protected from US Government infringement by the Fifth Amendment
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Foley Attorneys: Explain how to avoid being trapped by Zoltek
