The U.S. Court of Appeals for the Federal Circuit, in four separate opinions from a three-judge panel, has affirmed long-standing precedent that 28 U.S.C. § 1498 allows a patent infringement action against the United States only if the alleged infringement takes place entirely within the United States; and a patent owner cannot do an end-run around section § 1498 by pleading the infringement as a taking in violation of the Fifth Amendment to the Constitution. Zoltek Corp. v. United States, Case Nos. 04-5100,-5102 (Fed. Cir. Mar. 31, 2006) (per curiam; Gajarsa, concurring; Dyk, J, concurring; Plager, J., dissenting).
Zoltek owns patents on "a method of manufacturing a plurality of different value controlled resistivity carbon fiber sheet products." Zoltek accuses the United States (and its contractor, Lockheed) of infringing its patents through a method in which some of the infringing steps take place in Japan. The Court of Claims held that Zoltek’s claim was barred under §1498(a) because not all steps of a patented process are performed in the United States, and thus there is no direct infringement. On this point, citing to its recent decision in the RIM (Blackberry) case, the Federal Circuit affirmed.
Having decided the United States had not waived its sovereign immunity under section 1498(a), however, the Court of Claims invited Zoltek to recast its claim as a takings claim under the Fifth Amendment and held it would have jurisdiction to hear such a claim.
On this point, the Federal Circuit reversed. Unlike regulatory takings and the inverse condemnation of real property, the Court held the "taking" of a license to use a patent creates a cause of action under §1498(a). In 1984, in Schillinger v. United States, 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. According to the Federal Circuit, that remains the law to this day.
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