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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF NEW YORK
`
`Civil Action No.
`06-6336(CBA)(JO)
`
`) ) ) ) ) ) ) ) ) ) ) ) )
`
`IRIS CORPORATION,
`
`Plaintiff,
`
`v.
`
`JAPAN AIRLINES INTERNATIONAL CO.,
`LTD.,
`
`Defendant.
`
`STATEMENT OF INTEREST OF THE UNITED STATES
`
`GREGORY G. KATSAS
`Assistant Attorney General
`
`BENTON J. CAMPBELL
`United States Attorney
`
`
`
`ELLIOT M. SCHACHNER
`Assistant United States Attorney
`Eastern District of New York
`(718) 254-6053
`
`JOHN FARGO
`Director, Commercial Litigation Branch
`
`CHRISTOPHER L. CRUMBLEY
`Attorney, Commercial Litigation Branch
`Civil Division
`Washington, DC
`(202) 307-0415
`
`
`
`August 7, 2008
`
`Attorneys for the United States
`
`PROTECTIVE ORDER MATERIAL
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`IRIS
`EXHIBIT 2038 PAGE 1
`DOJ v. IRIS
`IPR 2016-00497
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`Case 1:06-cv-06336-CBA-ALC Document 45 Filed 08/07/08 Page 2 of 25 PageID #: 608
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF NEW YORK
`
`Civil Action No.
`06-6336(CBA)(JO)
`
`) ) ) ) ) ) ) ) ) ) ) ) )
`
`IRIS CORPORATION,
`
`Plaintiff,
`
`v.
`
`JAPAN AIRLINES INTERNATIONAL CO.,
`LTD.,
`
`Defendant.
`
`STATEMENT OF INTEREST OF THE UNITED STATES
`
`Pursuant to this Court’s Order of May 12, 2008, and with the authority granted in 28
`
`1
`U.S.C. § 517, the United States of America (hereinafter, the government), on behalf of its
`
`agencies, files this Statement of Interest to advise the Court of the government’s views on the
`
`five issues raised in the Order. As the government is not a party to the present action, this
`
`Statement takes no position on the merits of the underlying claim of patent infringement. Nor do
`
`we express any opinion as to the validity of the patent-in-suit.
`
`1 S
`
`28 U.S.C. § 517 authorizes the Attorney General to attend to the interests of the United
`
`tates in any suit pending in state or federal court that may affect the government’s interests. It
`provides:
`
`The Solicitor General, or any officer of the Department of Justice, may be sent by
`the Attorney General to any State or district in the United States to attend to the
`interests of the United States in a suit pending in a court of the United States, or in
`a court of a state, or to attend to any other interest of the United States.
`
`PROTECTIVE ORDER MATERIAL
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`EXHIBIT 2038 PAGE 2
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`I.
`
`PROCEDURAL HISTORY
`
`Plaintiff IRIS Corporation (hereinafter, IRIS) filed the present suit on November 28,
`
`2006, alleging that the activities of defendant Japan Airlines International Co., Ltd. (hereinafter,
`
`JAL) infringe U.S. Patent No. 6,111,506 (the ‘506 patent). According to the Amended
`
`2
`Complaint, JAL “use[s] . . . electronic passports in the processing and/or boarding of passengers
`
`at JFK International Aiport,” in addition to other facilities. Amended Complaint at 4. IRIS
`
`alleged that this “use” infringes the ‘506 patent, citing 35 U.S.C. § 271(g).
`
`The next day, November 29, 2006, IRIS filed suit against the government in the United
`
`States Court of Federal Claims. See IRIS Corp. v. United States, Ct. Fed. Cl. Case No. 06-801C.
`
`In that currently pending related case, IRIS alleged that the government’s purchase and use of
`
`electronic passport readers infringed its related U.S. Patent No. 6,041,412 that, like the ‘506
`
`patent at issue in this case, pertains to electronic passports and readers. Ct. Fed. Cl. Amended
`
`Complaint at 3-5. Although IRIS referred to the ‘506 patent in its Complaint against the
`
`government, the ‘506 patent has never been asserted as a basis for liability in the Court of Federal
`
`Claims case. Id. at 2.
`
`On January 14, 2008, the Magistrate Judge issued a Report and Recommendation
`
`recommending that this Court grant JAL’s June 1, 2007 Motion to Dismiss pursuant to Rule
`
`12(b)(6) of the Federal Rules of Civil Procedure. Because she found that the allegedly infringing
`
`passports are “products” that fell within § 271(g), and that JAL allegedly made “use” of these
`
`2
`
`
`
`IRIS filed its Amended Complaint on December 12, 2006.
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`3
`passports as that term is used in § 271(g), the Magistrate Judge recommended that the Court rule
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`that IRIS has sufficiently alleged a claim for patent infringement.
`
`Nevertheless, the Magistrate Judge accepted JAL’s argument that IRIS’ assertion of its
`
`patent under 35 U.S.C. § 271(g) conflicted with the purposes of the Enhanced Border Security
`
`Act, 8 U.S.C. § 1221 et. seq., which requires JAL to create passenger manifests for all flights
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`entering and departing airports within the United States. Analogizing the present situation to that
`
`confronted by the Second Circuit in SmithKline Beecham Consumer Healthcare, L.P. v. Watson
`
`Pharms., Inc., 211 F.3d 21 (2000), the Magistrate Judge reasoned that the national security
`
`interests addressed by the Enhanced Border Security Act should take precedence over IRIS’
`
`patent rights under Title 35. The Magistrate Judge therefore concluded that JAL’s Motion to
`
`Dismiss should be granted.
`
`The Magistrate Judge declined to address JAL’s argument that IRIS’ suit is barred under
`
`the doctrine of foreign sovereign compulsion. The Magistrate Judge also declined to address
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`JAL’s argument that 28 U.S.C. § 1498 bars the present action.
`
`In an Order dated May 12, 2008, the District Court requested the views of the government
`
`on certain issues, and ordered that IRIS serve a copy of the Order on the government. Service
`
`was completed on May 12, 2008.
`
`Specifically, the Court has requested the government’s views on the following issues:
`
`(1)
`
`Does an airline’s inspection of an electronic passport pursuant to 8 U.S.C. § 1221
`et. seq. (which requires an airline to examine passengers’ passports) conflict with
`the patent rights afforded by 35 U.S.C. § 271(g) (which protects process patent
`
`3 “
`
`The government has not been asked to comment on the Magistrate Judge’s finding that a
`
`use” under § 271(g) occurred in this case. While we therefore will not address this issue, the
`government does not concede that JAL’s inspection of passports is such a “use.”
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`holders) where the passport has been manufactured according to the claims of a
`valid U.S. method patent? If so, what is the view of the United States as to how
`the two statutes should be reconciled?
`
`(2)
`
`(3)
`
`Does an airline’s examination of an electronic passport, as required by the
`Enhanced Border Security Act, 8 U.S.C. § 1221 et. seq., constitute a
`“commercial” or “noncommercial” “use” for the purposes of 35 U.S.C. § 271(g)?
`
`If United States passports are manufactured according to IRIS’s patented
`technology (U.S. Patent No. 6,111,506), has IRIS been compensated by the United
`States for that use?
`
`(4) What is the view of the United States regarding defendant’s assertion that, to the
`extent Japan Airlines’s use of United States passports constitutes an infringing use
`of U.S. Patent No. 6,111,506 under 35 U.S.C. § 271(g), plaintiff’s sole remedy is
`against the United States government in the United States Court of Federal Claims
`pursuant to 28 U.S.C. § 1498?
`
`(5)
`
`If an airline was found to be liable for infringement of a United States patent,
`pursuant to 35 U.S.C. § 271 (g), for the act of inspecting a passport at the
`direction of a foreign government, what view does the United States take with
`respect to the availability of the foreign sovereign compulsion doctrine as a
`defense?
`
`The government hereby submits this Statement of Interest to provide its views on these
`
`
`
`issues.
`
`II.
`
`LEGAL BACKGROUND
`
`As recognized by the Magistrate Judge, the present case involves the intersection of
`
`private patent rights with government interests, an intersection governed by federal statute.
`
`Therefore, before addressing the Court’s questions individually, a summary of the legal
`
`background of the pertinent statute, 28 U.S.C. § 1498, as well as the applicable standard of
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`review, would be useful.
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`A.
`
`Standard of Review
`
`In evaluating the merits of JAL’s Motion to Dismiss pursuant to Federal Rule of Civil
`
`Procedure 12(b)(6), the parties and this Court must, as the Magistrate Judge noted, “accept as
`
`true all factual statements alleged in the complaint and draw all reasonable inferences in favor of
`
`the non-moving party.” Report at 7 (citing McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184,
`
`191 (2d Cir. 2007)). Therefore, for the purposes of this Statement of Interest, the government
`
`will assume arguendo that the passports examined by JAL, both United States and foreign, are
`
`made overseas by the process claimed in the ‘506 patent.
`
`To the extent that the Court’s decision is grounded on the applicability of 28 U.S.C. §
`
`1498, however, it may be more appropriate to consider JAL’s Motion to Dismiss under a
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`summary judgment standard. As will be discussed in the following section, in suits between
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`private parties, § 1498 acts as an affirmative defense to claims of infringement. As such, “a
`
`defense arising under section 1498(a) should be resolved by summary judgment under Rule 56
`
`rather than a motion to dismiss under Rule 12.” Toxgon Corp. v. BNFL, Inc., 312 F.3d 1379,
`
`4
`1381 (Fed. Cir. 2002). With respect to the § 1498 issue, this court may therefore consider
`
`materials submitted by the parties outside the Complaint, in deciding whether JAL has
`
`“establish[ed] the absence of any genuine issue of material fact and entitlement to judgment as a
`
`matter of law.” See Crater Corp. v. Lucent Techs., Inc., 255 F.3d 1361, 1366 (Fed. Cir. 2001).
`
`4 c
`
`In cases involving § 1498(a), both in the Court of Federal Claims and in the district
`
`ourts, Federal Circuit law is applicable and controlling. See Madey v. Duke University, 307
`F.3d 1351, 1359 (Fed. Cir. 2002).
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`B.
`
`The Purpose and Effect of 28 U.S.C. § 1498
`
`In 1918, faced with the prospect that patent suits against the government’s suppliers
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`might prevent the government from acting in the best interests of the nation, Congress amended
`
`the statute that granted patent holders the right to sue the government for patent infringement:
`
`The purpose of the amendment was to relieve the contractor entirely from liability
`of every kind for the infringement of patents in manufacturing anything for the
`government, and to limit the owner of the patent and his assigns and all claiming
`through or under him to suit against the United States in the Court of Claims for
`the recovery of his reasonable and entire compensation for such use and
`manufacture.
`
`Richmond Screw Anchor Co. v. United States, 275 U.S. 331, 343 (1927); see also Windsurfing
`
`Int’l Inc. v. Ostermann, 534 F. Supp. 581, 587 (S.D.N.Y. 1982) (noting that § 1498 “was
`
`intended primarily to permit the government to purchase goods or services for the performance of
`
`governmental functions without the threat that the work would not be carried out because its
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`supplier or contractor was enjoined from or feared a suit for infringement of a patent.”).
`
`The 1918 amendment was later codified as 28 U.S.C. § 1498, which today reads, in
`
`relevant part:
`
`(a) Whenever an invention described in and covered by a patent of the United
`States is used or manufactured by or for the United States without license
`of the owner thereof or lawful right to use or manufacture the same, the
`owner's remedy shall be by action against the United States in the Court of
`Claims for the recovery of his reasonable and entire compensation for such
`use and manufacture. . . .
`
`For the purposes of this section, the use or manufacture of an invention
`described in and covered by a patent of the United States by a contractor, a
`subcontractor, or any person, firm, or corporation for the Government and
`with the authorization or consent of the Government, shall be construed as
`use or manufacture for the United States. . . .
`
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`The provisions of 28 U.S.C. § 1498(a) therefore serve two purposes. In cases against the
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`United States in the Court of Federal Claims, § 1498(a) acts as a waiver of sovereign immunity,
`
`and grants a remedy that may be sought from the government. See Manville Sales Corp. v.
`
`Paramount Sys. Inc., 917 F.2d 544, 555 n. 6 (Fed. Cir. 1990). In the context of patent suits
`
`amongst private parties in the district courts, § 1498(a) codifies an affirmative defense that the
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`accused infringers may raise on the merits. See id.
`
`In order to claim the defense of § 1498(a), a private party must establish its use is both
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`“for the Government,” and “with the authorization or consent of the Government.” See Madey v.
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`Duke University, 413 F. Supp. 2d 601, 607 (M.D.N.C. 2006). A use is “for the Government” if it
`
`is “for the Government’s benefit.” See Hughes Aircraft Co. v. United States, 534 F.2d 889, 897
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`5
`(Ct. Cl. 1976) . A use is with the “authorization and consent of the Government” where the
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`government either expressly or impliedly consents to the alleged infringement. See Madey, 413
`
`F. Supp. 2d at 607. Both of these elements will be discussed at further length in the following
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`sections, when the government addresses the particular issues raised in the Court’s Order. 6
`
`5 c
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`In 1982, the Federal Circuit adopted as binding precedent the decisions of its predecessor
`
`ourts, the Court of Claims and the Court of Customs and Patent Appeals. South Corp. v. United
`States, 690 F.2d 1368, 1370 (Fed. Cir. 1982).
`
`6 i
`
`In order that related points may be addressed together, the government has addressed the
`
`ssues in a different order than as posed by the Court.
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`III.
`
`DISCUSSION
`
`A.
`
`The Inspection of Passports by JAL Does Not Conflict with IRIS’
`Patent Rights
`
`The first issue raised by the Court’s Order asks whether, assuming that an electronic
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`7
`passport has been made overseas using a patented process, the inspection of that passport by an
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`airline conflicts with the patent rights afforded the patent owner. It is the government’s position
`
`that there is no such conflict.
`
`1.
`
`JAL’s Use of IRIS’ Invention, if Any, Is For the Government and
`With the Authorization and Consent of the Government, Therefore
`JAL is Immunized From Suit
`
`The Magistrate Judge did not address the effect of § 1498(a) in her Report and
`
`Recommendation, instead resolving a perceived conflict in federal law by determining that the
`
`requirements of the Enhanced Border Security Act trump the legal protections of the Patent Act.
`
`The government respectfully submits that the § 1498(a) issue should have been treated by the
`
`Magistrate Judge first as a threshold issue. In cases where the government has granted its
`
`authorization and consent to an infringement, 28 U.S.C. § 1498 operates to immunize private
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`parties against claims of infringement. Because JAL’s examination of passports is both “for the
`
`Government” and “with the authorization and consent of the Government,” there can be no
`
`liability under 35 U.S.C. § 271. There is therefore no conflict between § 271 and the Enhanced
`
`Border Security Act, and the Magistrate Judge did not need to resolve the case by applying the
`
`Second Circuit’s reasoning in the SmithKline case.
`
`7 m
`
`
`
`While the Court’s Order does not explicitly ask the government to assume that the
`anufacture occurs overseas, it does reference 35 U.S.C. § 271(g) as the basis for liability.
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`Indeed, one of the purposes of § 1498(a) is to prevent such conflicts between the needs
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`and requirements of the United States, and the private patent rights of individuals. See W.L.
`
`Gore & Associates v. Garlock, Inc., 842 F.2d 1275, 1283 (Fed.Cir.1988) (“The patentee takes his
`
`patent from the United States subject to the government's eminent domain rights to obtain what it
`
`needs from manufacturers and to use the same.”). In the absence of § 1498(a), private parties
`
`would be put in the position of choosing between avoiding liability for patent infringement or
`
`complying with government regulations or procurement contracts. Section 1498 was enacted to
`
`prevent parties from having to make this choice. See Bereslavsky v. Esso Standard Oil Co., 175
`
`F.2d 148, 149 (4th Cir. 1949) (noting that prior to the 1918 amendment, “contractors were
`
`hesitant to enter into broad procurement contracts for the government, with the possibility of
`
`being sued for patent infringement, and wartime procurement was being hindered.”).
`
`This goal of § 1498 is achieved by exempting parties from suits for patent infringement
`
`under 35 U.S.C. § 271 when two conditions are met. First, the allegedly infringing acts must be
`
`“undertaken for the Government, i.e., for the Government’s benefit.” See Hughes, 534 F.2d at
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`897. Second, the government must give its authorization and consent for the use. Id. Because
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`both of these elements are present in the case at hand, JAL’s inspection of passports cannot be
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`actionable under § 271(g).
`
`It is clear that JAL’s inspection of passports is undertaken “for the Government.” Courts
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`have found use to be “for the Government” when there is a “clear government directive with
`
`some specific benefit accruing to the government.” See Advanced Software Design Corp. v.
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`Federal Reserve Bank of St. Louis, 2007 WL 3352365 at *5 (E. D. Mo. 2007) (emphasis in
`
`original) (surveying cases). Cases in which use “for the Government” has been found to be
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`lacking typically involve conclusions that the government interest or benefit is too remote. See
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`Windsurfing Int’l, 534 F. Supp. 588.
`
`There can be no argument that JAL’s inspection of passports is pursuant to a clear
`
`government directive. An Act of Congress, the Enhanced Border Security Act, requires JAL to
`
`undertake the exact actions that IRIS claims are infringing. JAL has no control over the method
`
`by which the passports its agents examine are manufactured. If JAL wants to comply with
`
`Federal law, it must examine the passports as they are made by others.
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`There can also be no dispute that the directive of the Enhanced Border Security Act
`
`provides a specific benefit to the government, namely, improved national security through the
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`compilation of accurate passenger manifests. See Magistrate Judge’s Report and
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`Recommendation at 28 (noting the “national security interests embodied in the mandate of the
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`Enhanced Border Security Act.) JAL’s inspection of passports is therefore “for the
`
`Government.”
`
`By the same token, JAL’s inspection of passports occurs with the government’s
`
`authorization and consent, even though the government has no contract or agreement with JAL
`
`that expressly provides its authorization and consent. It is certainly true that authorization and
`
`consent is often given expressly by incorporation in a government contract. See, e.g., Carrier
`
`Corp. v. United States, 534 F.2d 244, 247 (Ct. Cl. 1976). However, the government may also
`
`give its authorization and consent implicitly, “e.g., by contracting officer instructions, by
`
`specifications or drawings which impliedly sanction and necessitate infringement, [or] by post
`
`hoc intervention of the government in pending infringement litigation against individual
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`contractors.” Hughes, 534 F.2d at 901. Courts have also found implicit authorization and
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`consent where the government’s specifications required infringement of a patent, or where the
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`government mandated that a party use or manufacture the allegedly infringing device. See Madey
`
`v. Duke, 413 F. Supp. 2d at 609 (surveying cases).
`
`There is no denying the fact that authorization and consent is present when JAL examines
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`United States passports. United States passports are made according to government
`
`specifications, by government contractors and subcontractors. Furthermore, while passports are
`
`issued to and carried by private citizens, they remain the property of the government. 22 C.F.R.
`
`§ 51.9 (“[a] passport shall at all times remain the property of the United States and shall be
`
`returned to the Government upon demand.”) There can be no argument that the government did
`
`not authorize and consent to JAL’s use of this government property, made according to
`
`government specifications, in a manner required by an Act of Congress.
`
`Authorization and consent has also been given with respect to JAL’s examination of
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`foreign passports. While the government does not write specifications for the electronic passports
`
`issued by foreign countries, we do note that many countries adopted their electronic passports in
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`response to a directive of the United States. Namely, the United States Visa Waiver Program (8
`
`U.S.C. §§ 1187, 1732) encourages foreign countries to adopt electronic passports so that their
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`citizens may continue to enter the United States without first obtaining a visa. See Amended
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`Complaint at 3.
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`In the present case, the government mandates that JAL perform the very acts that IRIS
`
`claims are infringing - the examination of passports. Accepting, as we must at this stage of the
`
`case, IRIS’ factual assertion that all the electronic passports examined by JAL are made
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`according to its patented process, the government’s requirements cannot be met without JAL’s
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`alleged infringement. The fact that the Enhanced Border Security Act does not specifically
`
`require infringement of the ‘506 patent or mandate electronic passports is not controlling. See
`
`TVI Energy Corp. v. Blane, 806 F.2d 1057, 1060 (Fed. Cir. 1986) (“The mere fact that the
`
`Government specifications . . . did not absolutely require [defendant] to infringe . . . does not
`
`extinguish the Government's consent.”)
`
`IRIS argues that JAL has not “used or manufactured” the invention of the ‘506 patent and
`
`therefore is not entitled to the protections of § 1498(a). See IRIS Mem. in Opp. to JAL’s Mot. to
`
`Dismiss at 8. According to IRIS, since the ‘506 patent claims a method of manufacture, the only
`
`party that can be shielded from claims of infringement under § 1498(a) are those who actually
`
`manufacture the electronic passports for the government. Id. IRIS’ contentions lack merit.
`
` IRIS’ argument leads to the illogical result that the government has the right under
`
`§ 1498(a) to shield its contractors who supply it with passports, but cannot also shield those who
`
`8
`are required by the government to use those same passports to protect national security. The
`
`Federal Circuit has noted that § 1498(a) should be read “so as not to limit the government's
`
`freedom in procurement by considerations of private patent infringement.” TVI, 806 F.2d at
`
`1060. The same reasoning extends to cases in which the government is mandating use of articles
`
`it has already procured.
`
`The Magistrate Judge’s Report and Recommendation should have addressed the
`
`applicability of § 1498(a) as a threshold issue. If it had, it would have not been necessary to
`
`decide whether the Patent Act or the Enhanced Border Security Act should prevail in a conflict
`
`8 w
`
`
`
`Even more strangely, IRIS’ argument would mean that the government could shield those
`ho are actually practicing the method of the patent, but could not shield those who use the
`resulting product, which itself is unpatented.
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`between their mandates. In fact, there is no conflict, because § 1498(a) exempts situations such
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`as the present one from an infringement action under the Patent Act.
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`2.
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`Application of the Narrow Exception of SmithKline is Inappropriate
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`Because the Magistrate Judge chose not to address the operation of § 1498(a), she found,
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`unnecessarily, that a conflict exists between the Patent Act and the Enhanced Border Security
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`Act, and then proceeded to resolve this conflict by extending the Second Circuit’s holding in the
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`SmithKline case. The government believes that extending the holding of SmithKline to patent
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`cases is unwise.
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`In SmithKline, the court was presented with a case in which the defendant, a manufacturer
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`of generic drugs, wished to obtain FDA approval of a generic form of SmithKline’s nicotine gum
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`Nicorette. SmithKline, 211 F.3d at 23. By the terms of the Hatch-Waxman Amendments, the
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`defendant was required to submit with its application proposed labeling for the generic product,
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`which was required to be the “same” as the labeling for SmithKline’s gum. Id. SmithKline sued,
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`claiming that its labels were copyrighted and therefore the defendant could not use the “same”
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`labeling on its gum. Id. at 23-24.
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`The court was therefore faced with a situation in which the defendant could not possibly
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`comply with the Hatch-Waxman Amendments and also avoid copyright infringement. Id. at 27.
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`Finding a conflict between two Acts of Congress, the court determined that the later-enacted
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`Hatch-Waxman Amendments prevailed over the Copyright Act. Id. at 28-29. In her Report and
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`Recommendation, the Magistrate Judge found that the case at hand presented a similar conflict of
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`laws, and the Enhanced Border Security Act prevailed. Report and Recommendation at 23-30.
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`It should be noted at the outset that the procedural context of the present case is
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`distinguishable from the one in SmithKline. In SmithKline, there was no serious question that the
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`defendant’s labels infringed SmithKline’s copyright, because the Hatch-Waxman Amendments
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`required that the labels be the “same.” The Second Circuit was therefore presented with a known
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`conflict between two laws.
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`The same cannot be said of the present suit. Even if the Court decides that § 1498(a)
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`immunity is not applicable and that this case should proceed, if JAL is ultimately found not to
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`have infringed the ‘506 patent, or if the ‘506 patent is found to be invalid or unenforceable, there
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`will be no de facto conflict between the Patent Act and the Enhanced Border Security Act. Until
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`there is clearly a conflict present between the statutes, there is no need for the Court to take the
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`extraordinary step of creating a nonstatutory exception to the Patent Act at this stage of the case.
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`Furthermore, we believe that extending SmithKline to the present case is unwise, given
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`that the Second Circuit was addressing a conflict involving the Copyright Act, whereas the
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`present case concerns patent law. While copyrights and patents both protect subsets of
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`intellectual property, the law defining rights under copyright differs greatly from the patent law.
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`Copyright protects expression of ideas or information, as opposed to the ideas
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`themselves. The Second Circuit, while noting that commercial labeling was entitled to copyright
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`protection, also recognized that the protection should be limited where the labeling was not
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`created for expressive purposes. See id. at 29 n.5 (“SmithKline’s copyright claim is arguably
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`weaker than even the typical commercial labeling case, because the copyrighted text was
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`submitted to obtain FDA approval and consequent market exclusivity.”) The Second Circuit
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`concluded that SmithKline’s interest in copyright protection could therefore be balanced against
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`the harm it would suffer if an exception were permitted, noting:
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`The pertinent purpose of the copyright laws - to encourage the production of
`creative works by according authors a property right in their works so that authors
`will not have to share profits from their labors with free riders - is not seriously
`implicated by allowing the “same” labeling requirement to trump a copyright
`under the Hatch-Waxman Amendments.
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`See id. at 29 (internal citations omitted).
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`The same reasoning does not apply to patent rights, which protect ideas, not their
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`expression. The strength of a patentee’s right to exclusivity does not vary in degree depending
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`on the nature of the patented invention. Nor are courts generally free to weigh the value of
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`enforcing patent rights against the harm that would be caused by not enforcing them.
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`Compulsory licenses of patents are generally frowned upon in the United States; a patentee is
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`free to refuse to work his invention, if he so wishes. See Rite-Hite Corp. v. Kelley Co., Inc., 56
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`F.3d 1538, 1547 (Fed. Cir. 1995)(“[t]here is no requirement in this country that a patentee make,
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`use, or sell its patented invention.”).
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`Notably, the rights afforded by copyrights are granted subject to several exceptions, such
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`as fair use and independent creation. Exceptions to patent rights, on the other hand, are rare.
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`Judicially creating a new exception to the patent law, similar to the one found in SmithKline
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`Beecham, is unnecessary and inadvisable.
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`B.
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`IRIS Has No Cause of Action Against the Government Based on
`JAL’s Inspection of Passports
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`The government now turns to the fourth issue raised in the Court’s Order, namely
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`whether, in the event that JAL’s actions are an infringement under § 271(g), IRIS’ sole remedy is
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`against the government in the United States Court of Federal Claims. As will be discussed
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`below, the law is clear that no action may be maintained against the United States.
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`1.
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`Acts that Would Infringe Under 35 U.S.C. § 271(g) in the Private
`Context are not Actionable Against the Government Under 28
`U.S.C. § 1498(a)
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`The government is not liable under § 1498(a) for acts that, if performed by a private
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`party, would give rise to infringement only under § 271(g). This rule was unequivocally
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`expressed recently by the Federal Circuit in NTP, Inc. v. Research In Motion, Ltd., 418 F.3d 1282
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`(Fed. Cir. 2005): “direct infringement under section 271(a) is a necessary predicate for
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`government liability under section 1498.” Id. at 1316. By extension, acts that would be
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`infringements under other subsections of § 271 - such as § 271(g) - are not predicates for
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`§ 1498(a) liability.
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`This difference between the scope of § 271 and the cause of action granted against the
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`government by § 1498(a) is explained by the history of the two statutes. When the predecessor to
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`§ 1498(a) was enacted, Congress “intended to secure to the owner of the patent the exact
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`equivalent of what it was taking away from him.” Richmond Screw Anchor, 275 U.S. at 345. In
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`other words, the rights granted under § 1498(a) were intended to generally mirror those that
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`existed under 35 U.S.C. § 271. Over the years, however, Congress has amended § 271 to expand
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`the scope of infringement. See 1994 GATT Uruguay Round Ta