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Federal Circuit Court clarifies infringement liability for contractors

July 16, 2018 By Nancy Cleveland

Performance of a government contract often requires use of patented processes and products, which may not be owned by or licensed to the United States or the performing contractor.  Section 1498 of Title 28 of the U.S. Code establishes an exclusive remedy for patent owners to obtain just compensation when the United States or its contractors infringe their patents, while also shielding contractors from infringement liability and ensuring private patent rights do not obstruct government operations.

Under that statutory framework, when a contractor performing work “for the Government and with authorization or consent of the Government” is accused of patent infringement, § 1498 generally shields the contractor from liability and provides that any infringement action must be brought as a claim for money damages against the United States in the Court of Federal Claims.

In other words, § 1498 “waives the Government’s sovereign immunity and provides a remedy ‘[w]henever 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.'”

“By waiving the Government’s sovereign immunity, § 1498 ‘provides a cause of action against the United States’ and [a]t the same time, … protects government contractors against infringement liability and remedies where it applies.'”

Over a century old, § 1498 implements important, long-standing policies that:

1) contractors should not bear the risk associated with performing work for the government that may be infringing, and

2) the government may be liable for money damages (i.e., just compensation) for its infringing activities, but its operations will not be enjoined.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=716932

 

Filed Under: Contracting Tips Tagged With: CFC, infringement liability, license, patent, sovereign immunity

Appeals court says extension constitutes new contract for considering bid protest

August 2, 2016 By Nancy Cleveland

Award Term ExtensionsOn July 12, 2016, in Coast Professional, Inc. et. al v. United States, No. 2015-5077 (Fed. Cir. July 12, 2016), the U.S. Court of Appeals for the Federal Circuit overturned a Court of Federal Claims (“CoFC”) decision, finding that the CoFC erred in ruling that it did not have bid protest jurisdiction over the award of task orders characterized as “award-term extensions.”

The Federal Circuit’s decision provides clarity on the scope of Tucker Act’s bid protest jurisdiction, and provides a strong defense against Government arguments that attempt to limit that jurisdiction going forward.

The dispute in Coast Professional focused on “award term extensions” to task orders issued through the Federal Supply Schedule (“FSS”).

In 2008, the Department of Education (“DOE”) issued a Request for Quotations (RFQ) for services related to the collection of defaulted student loans. The RFQ stated that the Task Order would include a base term ending March 31, 2011, with additional option periods up to 24 months.

Keep reading this article at: https://www.insidegovernmentcontracts.com/2016/07/federal-circuit-confirms-that-a-task-order-award-term-extension-constitutes-a-new-contract-for-purposes-of-bid-protest-jurisdiction/

Filed Under: Contracting News Tagged With: award protest, COFC, contract extension, contract protests, Court of Appeals, DOE, Education Dept., FSS, RFQ, sovereign immunity, task order, task orders, Tucker Act

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