The US Army is going to field my invention (Advise Requested)

[Soldier]

I submitted an invention to the US Army and provided more for testing upon request. They have decided to issue my invention to Soldiers and contracts will likely be awarded to manufacturers in the next few months. The cost to produce these for the Army will probably be around $150 million for an initial 5 year period. Patent Pending since 2005, I have contacted the likely manufacturers to see if they would like to enter into a patent license agreement. None have responded.

1. An Appeal Brief was filed in August 2008. Any idea when I will receive the next Office Action?

2. Is the Army legally obligated to include a clause in the contract that the manufacturers will have to license my patent once I receive it?

3. Once I receive the patent, will the manufacturers reluctantly enter into a license agreement with me?

4. My invention will also be sold to individual military and law enforcement personnel. Can a manufacturer produce these for the US government while infringing on my patent and also do the same and sell these to retailers?

5. How much of a Royalty % will I be able to receive for this invention?

Sincerely,

Retired SoldierWhat is the name of your state (only U.S. law)?

[divgradcurl]

Originally Posted by Soldier

I submitted an invention to the US Army and provided more for testing upon request. They have decided to issue my invention to Soldiers and contracts will likely be awarded to manufacturers in the next few months. The cost to produce these for the Army will probably be around $150 million for an initial 5 year period. Patent Pending since 2005, I have contacted the likely manufacturers to see if they would like to enter into a patent license agreement. None have responded.

1. An Appeal Brief was filed in August 2008. Any idea when I will receive the next Office Action?

Appeals are relatively backed up these days, but a year is a reasonable time. So any day now, one would expect.

2. Is the Army legally obligated to include a clause in the contract that the manufacturers will have to license my patent once I receive it?

No.

3. Once I receive the patent, will the manufacturers reluctantly enter into a license agreement with me?

There is no way to answer that question. They may agree to license, they may not, in which case you would need to sue them.

4. My invention will also be sold to individual military and law enforcement personnel. Can a manufacturer produce these for the US government while infringing on my patent and also do the same and sell these to retailers?

This is where things get tricky. If a contractor is contracted by the federal government to produce something for the federal government, they are protected from liability for patent infringement under 28 U.S.C. 1498. If a contractor was infringing and refused a license, you could sue them. What happens next depends, in part, on what state you are in -- which is why the state question is important.

If the contractor is solely selling to the federal government, and refuses to take a license, your remedy is to sue the U.S. Government in the Court of Federal Claims in Washington DC under 28 USC 1498 to establish a reasonable royalty rate -- basically this becomes an eminent domain case. You can recover costs and attorneys fees as well.

If you are not sure if the contractor is solely selling to the federal government, or if you know that the contractor is selling to both federal and non-federal entities, or if there are several contractors, some of whom are selling to the government only and some who are selling to multiple entities, then you sue in federal district court for patent infringement.

In some states, a federal contractor who is solely selling to the U.S. government can raise 28 USC 1498 as a defense to get out of the case -- in which case, you would need to go to the court of federal claims to sue the U.S. government.

In other states, if you sue a federal contractor for patent infringement, you have to go through the entire patent case, and if infringement is found, instead of the usual remedies (damages, royalties, etc.), 28 USC 1498 will be used to establish the royalty rate for damages for infringement related to federal sales under contract. Remedies for non-federal sales will be based on the usual patent remedies (damages, injunctive relief, etc.).

In either event, 28 USC 1498 does not allow a federal contractor to avoid liability for patent infringement for sales to non-federal entities (such as states or counties or cities or individuals), and does not establish a license or royalty rate for non-federal sales. Sales to soldiers are probably covered under 28 USC 1498 if the infringing articles are purchased via a government contract and sold to the soldiers through government sales. If you can't negotiate a license, then you have to go the standard patent infringement route to get damages for sales to non-federal entities in federal district court.

5. How much of a Royalty % will I be able to receive for this invention?

Sincerely,

Retired SoldierWhat is the name of your state (only U.S. law)?

Royalty rate determinations are extremely fact-dependent, and are generally based on the 15 so-called Georgia-Pacific factors. There is not way to estimate what royalty rates the government would be liable for without an extensive analysis of the facts.

[Soldier]

Dear Senior Member:

I greatly appreciate both the time and effort you spent in answering my questions. I hope to receive a Notice of Allowance in the next few months.

I currently live in North Carolina. I will check out the Georgia- Pacific factors.

I am going to have the invention made in the US so I have an opportunity to bid for US government contracts and also sell it to retailers.

Besides the profit potential, the invention will reduce the number of Americans being wounded or killed in combat. It has been an interesting experience so far.

Thanks again.