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District Court Proper for Government-Contractor Patent Dispute

December 10, 2002

Decision icon Decision

Last Month at the Federal Circuit - January 2003

Judges: Clevenger (author), Newman, and Gajarsa

In Toxgon Corporation v. BNFL, Inc., No. 02-1302 (Fed. Cir. Dec. 10, 2002), the Federal Circuit vacated a district court’s decision dismissing a lawsuit by Toxgon Corporation (“Toxgon”) for lack of subjectmatter jurisdiction.

In 1998, BNFL, Inc. (“BNFL”) entered into a fixed-price contract with the Department of Energy (“DOE”) to develop a process for treating and immobilizing certain radioactive waste. GTS Duratek (“Duratek”) was a designated subcontractor to BNFL. The contract provided for a twenty-month period for the development of the technology necessary to remove the radioactive material. BNFL and Duratek then developed a process that included the use of a “pilot melter,” which is a singlechamber vitrification system that converts nuclear waste into glass.

In May 2002, Toxgon filed suit against BNFL and Duratek (collectively the “Defendants”) for infringement of U.S. Patent No. 4,299,611. The Defendants moved to dismiss for lack of subject-matter jurisdiction, claiming that the litigation must proceed in the Court of Federal Claims under 28 U.S.C. § 1498(a).

Citing numerous precedents, the Federal Circuit explained that § 1498(a) acts as a codification of a defense and not as a jurisdictional statute. In other words, the Court stated, § 1498(a) provides an affirmative defense for applicable government contractors, rather than a jurisdictional bar. Thus, the Court ruled, the district court has jurisdiction over this matter, and, if appropriate, a defense arising under § 1498(a) should be resolved by SJ under Fed. R. Civ. P. 56, rather than a motion to dismiss under Rule 12.