Summary Judgment Against Infringement Where All Accused Devices Manufactured for Government
June 06, 2001
Last Month at the Federal Circuit - July 2001
Judges: Schall (author), Mayer, and Newman
In Crater Corp. v. Lucent Technologies, Inc., No. 00-1125 (Fed. Cir. June 6, 2001), the Federal Circuit affirmed in-part, vacated in-part, and remanded a district court’s dismissal of a patent infringement claim for lack of jurisdiction. The Federal Circuit so held because pursuant to 28 U.S.C. § 1498(a), a private party cannot be held liable for patent infringement for any goods “used or manufactured by or for the United States.” The Federal Circuit concluded that a dismissal of a lawsuit against a private party pursuant to § 1498(a) is a dismissal because of the successful assertion of an affirmative defense rather than a dismissal because the district court lacked subject-matter jurisdiction over the patent infringement claim. Therefore, the Court concluded that although the district court had erred in dismissing the complaint for lack of jurisdiction, SJ was properly granted on the affirmative defense that all the accused devices were manufactured by or for the United States government with its authorization and consent.
Crater Corporation (“Crater”) brought suit against Lucent Technologies, Inc. (“Lucent”) for infringement of U.S. Patent No. 5,286,129 (“the ‘129 patent”), which is directed toward an underwater coupling device. Crater also alleged state-law claims against Lucent for breach of contract and for misappropriation of trade secrets.
Lucent moved to dismiss Crater’s complaint for lack of subject-matter jurisdiction under Fed. R. Civ. P. 12(b)(1) and, in the alternative, for failure to state a claim upon which relief could be granted under Fed. R. Civ. P. 12(b)(6). Citing 28 U.S.C. § 1498(a), Lucent argued that it was not liable for patent infringement because any work it performed with respect to the Crater coupler was done under a government project and was authorized by the United States.
Shortly after Lucent’s motion was filed, Crater requested an evidentiary hearing on Lucent’s motion along with leave to conduct discovery in support of its opposition. The district court allowed the discovery. After over a year of discovery, Crater filed its opposition to Lucent’s motion to dismiss.
In granting Lucent’s motion to dismiss, the district court noted that Crater had failed to produce any evidence indicating that Lucent had performed any relevant work for any entity or individual other than the government or without the government’s authorization or consent. Thus, the district court concluded that the Court of Federal Claims, not the district court, had exclusive jurisdiction over this case. The district court therefore granted Lucent’s motion to dismiss and entered judgment against Crater.
The Federal Circuit first reviewed the law regarding § 1498(a), which grants the United States Court of Federal Claims exclusive jurisdiction over patent infringement suits against the government. Additionally, the Court referred to Federal Circuit case law holding that § 1498(a) provides an affirmative defense for applicable government contractors. Specifically, the Court referred to case law holding that if a patented invention is used or manufactured for the government by a private party, that private party cannot be held liable for patent infringement. Thus, the Court reasoned, a dismissal of a lawsuit against a private party pursuant to § 1498(a) is a dismissal because of the successful assertion of an affirmative defense rather than a dismissal for lack of subject-matter jurisdiction over the patent infringement claim.
In turning to the case at hand, the Court stated that Crater had failed to come forward with any evidence that raised a genuine issue of material fact so as to defeat SJ, even though it had the opportunity to develop relevant testimony in discovery. The Court therefore concluded that there was no genuine issue of material fact that Lucent’s work on the coupler was done solely for the government.
As such, the Court held that, although the district court had erred in dismissing Crater’s complaint for lack of subject-matter jurisdiction, SJ was properly granted in favor of Lucent on its affirmative defense under § 1498(a). The Court further concluded that the district court, therefore, had original jurisdiction over the case by reason of Crater’s patent claims and, thus, the district court had supplemental jurisdiction over Crater’s state-law claims. As a result, although Crater’s patent infringement claims were properly dismissed, the district court still has the discretion to exercise supplemental jurisdiction over the state-law claims.