Government Contract Infringement Must Be Pursued in Federal Claims Court

Sevenson Environmental v. Shaw Environmental (Fed. Cir. 2007)

Colonie NY has a lead-contamination problem. The site is owned by the US Government, and Shaw was hired to help with the remediation. Sevenson holds several patents on methos for cleaning up waste by applying phosphoric acid. Sevenson sued Shaw for infringement, but the district court dismissed the case -- finding that the US Gov't is the proper defendant.

Shaw's contract with the US Gov't authorize shaw to "all use and manufacture" of any patented invention whose use is necessary to comply with the contract. The contract dovetails with 28 USC 1498, which provides that a patent holder's claims arising out of a a contractor's infringement accure against the US and must be brought in US Court of Federal Claims. (So long as the contractor's infringement was "for the United States" was authorized by the US).

Government Authorization: Although Gov't authorization is generally narrowly construed, the appellate panel agree that the Government had authorized use of Sevenson's patented method because Shaw's written specifications called for use of those methods and those specs formed part of Shaw's binding contract.

Holding: The lower court properly dismissed Sevenson's claims. If Sevenson wants an award, it must pursue the US Gov't in the Court of Federal Claims.

Comments

[Michael L. Slonecker]

Actually, Authorization and Consent is broadly construed. It must be provided in virtually all circumstances. What is narrowly construed are USG attempts to deflect liability to contractors and subcontractors by either trying to withhold Authorization and Consent or via the use of infringement indemnification.

See: FAR 52.227-1

[Michael L. Slonecker]

One last point. I am shocked that this case was filed in 2002, a decision by the district court was rendered in 2006, and that an appeal was taken. Any lawyer well versed in the vagaries of government contract and patent law would have told the plaintiff/patentee at their initial conference that his action was governed by 1498. Pure and simple, four years of client funds down the drain for naught.