March 22, 2012

Federal Circuit Increases Scope of Government Contractor Immunity for Patent Infringement Suits

Arnold & Porter Advisory

On March 14, 2012, the United States Court of Appeals for the Federal Circuit issued its long-awaited opinion in Zoltek Corp. v. United States. As described in its opinion, this appeal “represent[ed] the continuing saga of the Zoltek Corporation . . . in its effort to obtain compensation for the alleged infringement of its patent” by Lockheed Martin Corporation while Lockheed was performing under a government contract.

Lockheed had practiced a portion of Zoltek’s patented process in Japan, importing a partially-completed product to the United States for sale to the government. Zoltek holds that government contractors’ immunity from patent infringement liability pursuant to 28 U.S.C. § 1498(a) extends to this type of activity, which constitutes patent infringement under 35 U.S.C. § 271(g). In doing so, the Federal Circuit reversed an earlier panel opinion in the same case, which held that government contractors only received immunity for direct infringement under 35 U.S.C. § 271(a)—which would not have created patent infringement liability for Lockheed’s activities. Zoltek ultimately expands the type of work performed on behalf of the United States for which a government contractor is entitled to immunity for patent infringement liability.

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