10/30/2014

Iris Corp. v. Japan Airlines Corp.: Exception to Infringement Under § 1498(a), Use for the benefit of the US


Category: Infringement 
 
 
 
By: Jesus Hernandez, Blog Editor/Contributor  
 
TitleIris Corp. v. Japan Airlines Corp., No. 2010-1051 (Fed. Cir. Oct. 21, 2014).
IssueAL moved to dismiss IRIS’s suit for failure to state a claim upon which relief can be granted. See Fed. R. Civ. P. 12(b)(6). […] JAL argued that federal laws requiring the examination of passports conflict with the patent laws and therefore exempt JAL from infringement liability.
Iris Corp. at *3.
HoldingAccordingly, because JAL’s allegedly infringing acts are carried out “for the United States” under 28 U.S.C. § 1498(a), we affirm the district court’s decision to dismiss IRIS’s suit.
Id. at *6.
 
 
 
 
Procedural HistoryIRIS Corporation brought suit in district court, alleging that Japan Airlines Corporation committed patent infringement by examining the electronic passports of its passengers within the United States.
Iris Corp., at *2.
 
 
 
 
Legal Reasoning (Prost, Newman, HUGHES)
Background
'506 PatentThe ’506 patent discloses methods for making a secure identification document containing an embedded computer chip that stores biographical or biometric data. ’506 patent col. 20 ll. 11–64.
Iris Corp., at *2.
28 U.S.C. § 1498(a) The statute 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 . . . the owner’s remedy shall be by action against the United States in the United States Court of Federal Claims . . . .

28 U.S.C. § 1498(a) (2012) (emphasis added). The statute further clarifies that an accused activity is “for the United States” if two requirements are met: (1) it is conducted “for the Government,” and (2) it is conducted “with the authorization or consent of the Government.” Id.; accord Advanced Software Design Co. v. Fed. Reserve Bank of St. Louis, 583 F.3d 1371, 1375–76 (Fed. Cir. 2009).

Id. at *4.
Analysis
ConsentThe government’s authorization or consent may be either express or implied. TVI Energy Corp. v. Blane, 806 F.2d 1057, 1060 (Fed. Cir. 1986). In this case, the government has clearly provided its authorization or consent because—as the parties and the United States agree— JAL cannot comply with its legal obligations without engaging in the allegedly infringing activities.
Iris Corp., at *4.
For benefit of US
But, standing alone, a governmental grant of authorization or consent does not mean that the alleged use or manufacture is done “for the United States” under § 1498(a). To qualify, the alleged use or manufacture must also be done “for the benefit of the government.” Advanced Software, 583 F.3d at 1378; see also Madey v. Duke Univ., 413 F. Supp. 2d 601, 607 (M.D.N.C. 2006) (“A use is ‘for the Government’ if it is ‘in furtherance and fulfillment of a stated Government policy’ which serves the Government’s interests and which is ‘for the Government’s benefit.’” (quoting Riles v. Amerada Hess Corp., 999 F. Supp. 938, 940 (S.D. Tex. 1998))). “[I]ncidental benefit to the government is insufficient,” but “[i]t is not necessary [for the Government] to be the sole beneficiary . . . .” Advanced Software, 583 F.3d at 1378.
Id. at *5.
[T]he government benefits here because JAL’s examination of passports improves the detection of fraudulent passports and reduces demands on government resources. This, in turn, directly enhances border security and improves the government’s ability to monitor the flow of people into and out of the country. When the government requires private parties to perform quasi- governmental functions, such as this one, there can be no question that those actions are undertaken “for the benefit of the government.” […]
Id. at *6 (internal citations omitted).
Conclusion
Accordingly, because JAL’s allegedly infringing acts are carried out “for the United States” under 28 U.S.C. § 1498(a), we affirm the district court’s decision to dismiss IRIS’s suit.
Iris Corp., at *6.
 
 
 
 
 
 
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