Zoltek Corp. v. U.S.

• Decision Date: 31 March 2006
• Docket Number: No. 04-5100.,No. 04-5102.,04-5100.,04-5102.
• Citation: 442 F.3d 1345
• Parties: ZOLTEK CORPORATION, Plaintiff-Cross Appellant, v. UNITED STATES, Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

442 F.3d 1345

ZOLTEK CORPORATION, Plaintiff-Cross Appellant, v. UNITED STATES, Defendant-Appellant.

No. 04-5100.

No. 04-5102.

United States Court of Appeals, Federal Circuit.

March 31, 2006.

COPYRIGHT MATERIAL OMITTED

Dean A. Monco, Wood, Phillips, Katz, Clark & Mortimer, of Chicago, Illinois, argued for plaintiff-cross appellant. With him on the brief was John S. Mortimer. Of counsel on the brief were James F. Davis and Pamela S. Kane, Howrey, Simon, Arnold & White, of Washington, DC.

Anne Murphy, Attorney, Appellate Staff, Civil Division, United States Department of Justice, of Washington, DC. With her on the brief were Peter D. Keisler, Assistant Attorney General, Scott R. McIntosh, Attorney, and Gary L. Hausken, Attorney.

Before GAJARSA, Circuit Judge, PLAGER, Senior Circuit Judge, and DYK, Circuit Judge.

Concurring opinion filed by Circuit Judge GAJARSA.

Separate concurring opinion filed by Circuit Judge DYK. Dissenting opinion filed by Senior Circuit Judge PLAGER.

PER CURIAM.

The United States appeals the order of the Court of Federal Claims holding that it could assert jurisdiction over Zoltek Corporation's ("Zoltek")'s patent infringement allegations by treating the action as a Fifth Amendment taking under the Tucker Act. Zoltek cross-appeals the trial court's ruling that 28 U.S.C. § 1498(c) bars this action as arising in a foreign country. The Court of Federal Claims certified the rulings under 28 U.S.C. § 1292(d)(2), and this court accepted jurisdiction. See Zoltek Corp. v. United States, No. 96-166 C (Fed. Cl. Feb. 20, 2004) (certification); see generally Zoltek Corp. v. United States, 58 Fed.Cl. 688 (2003), Zoltek Corp. v. United States, 51 Fed.Cl. 829 (2002).

We conclude that under § 1498, the United States is liable for the use of a method patent only when it practices every step of the claimed method in the United States. The court therefore affirms the trial court's conclusion that § 1498 bars Zoltek's claims. However, we reverse the trial court's determination that it had jurisdiction under the Tucker Act based on a violation of the Fifth Amendment.

I.

Zoltek Corporation ("Zoltek") is the assignee of United States Reissue Patent No. 34,162 (reissued Jan. 19, 1993) to a "Controlled Surface Electrical Resistance Carbon Fiber Sheet Product" ("the Re '162 patent"). The Re '162 patent claims certain methods of manufacturing carbon fiber sheets with controlled surface electrical resistivity.¹

Independent claim 1 is representative. After reissue, it reads:

1. A method of manufacturing a plurality of different value controlled resistivity carbon fiber sheet products employing a carbonizable fiber starting material; said method comprising

selectively partially carbonizing previously oxidized and stabilized fiber starting material

for a predetermined time period in an oxygen free atmosphere within a furnace at selected temperature values within a temperature range from 370 degrees Centigrade to about 1300 degrees Centigrade

by soaking the stabilized fiber starting material at the selected temperature for the predetermined period of time

to provide a preselected known volume electrical resistivity to the partially carbonized fibers corresponding to that volume electrical resistivity value required to provide the preselected desired surface resistance value for the finished sheet products,

and thereafter processing the partially carbonized fibers into homogeneous carbon fiber sheet products having the preselected desired surface electrical resistances.

Re '162 patent, col. 8, ll. 42-66.

The method thus takes a "carbonizable fiber starting material" and requires "partially carbonizing" it. "Carbonization" as used in the Re '162 patent means "a process which involves heat treatment in an inert atmosphere which eliminates or removes all elements other than carbon." Zoltek, 48 Fed.Cl. 290, 293 (2000). "Partial carbonization" refers to carbonization sufficient to achieve a desired surface resistance in a sheet woven from the resulting fibers. Id. at 295.

Independent claim 11 describes a representative method for making such fibers and weaving them into a fiber sheet. After reissue, it reads:

11. A method of manufacturing a plurality of different value controlled resistivity carbon fiber sheet products employing carbonizable, previously oxidized and stabilized fiber starting material; said method comprising

forming an oxidized and stabilized tow, stretching and breaking the stabilized tow,

forming the stabilized stretched and broken fiber filaments into sliver comprised of,

large bundles of discontinuous filaments in an untwisted condition,

converting the sliver into roving, spinning the roving into a spun yarn, plying or twisting the spun yarn, weaving or knitting the plied and twisted spun yarn into fabric,

and selectively partially carbonizing the fabric thus formed at preselected elevated temperature values for a predetermined time period in an oxygen free atmosphere within a furnace having a continuously increasing temperature profile within the range from about 370 degrees Centigrade to about 1300 degrees Centigrade to provide a known preselected electrical volume resistivity to the partially carbonized fiber filament in the fabric corresponding to that value of electrical volume resistivity required to provide the preselected desired surface resistance for the finished fabric.

Re '162 patent, col. 9, l. 65—col. 10, l. 24.

Independent claim 15 describes a method for making and processing the fibers into paper-like sheet products. Id. at col. 10, l. 35 — col. 11, l. 8. In short, the steps of the claimed methods are directed to "partially carbonizing" fibers, and weaving or processing them into controlled resistivity carbon fiber mats or sheets.

The relevant facts are undisputed. The United States contracted with Lockheed Martin Corporation ("Lockheed") to design and build the F-22 fighter. Zoltek, 51 Fed.Cl. at 831. Lockheed subcontracted for two types of silicide fiber products that it uses in the aircraft. The first is a pre-impregnated material made from Nicalon silicon carbide fibers. These fibers are partially carbonized and manufactured into sheets in Japan, which are then imported into the United States. The second is a silicide fiber mat made from Tyranno fibers. The Tyranno fibers are manufactured exclusively in Japan, but they are processed into mats in the United States. Zoltek, 58 Fed.Cl. at 690.

Zoltek brought suit in the Court of Federal Claims under § 1498(a), alleging that the United States and Lockheed used the methods claimed in the Re '162 patent when Lockheed's subcontractors made the two silicide fiber products used in the F-22. Zoltek alleges that the mats and sheets were made, for the United States, using the claimed methods.

The government moved for partial summary judgment that Zoltek's § 1498(a) claims were barred by § 1498(c) because they arose in Japan. The trial court denied the motion. Although it agreed that § 1498(c) barred Zoltek's claims under § 1498(a), the trial court directed Zoltek to amend its complaint to allege a taking under the Fifth Amendment. Id. at 707. The trial court concluded that Zoltek could assert the infringement claims under 28 U.S.C. § 1491(a)(1) as a taking in violation of the Fifth Amendment. Id. at 690-91 & 695-706. The trial court certified its § 1498 analysis and its holding that Zoltek's patent infringement claims sounded in the Fifth Amendment, under § 1292(d)(2). Both parties timely sought permission to appeal. This court accepted the interlocutory appeals and has jurisdiction under 28 U.S.C. §§ 1292(c)(1) and 1295(a)(3).

The issues before the court are purely questions of law. This court reviews the trial court's statutory and constitutional analysis without deference. See Shoshone Indian Tribe of Wind River Reservation v. United States, 364 F.3d 1339, 1345 (Fed. Cir.2004).

II.

The federal government is immune from any legal action by its sovereign immunity. See United States v. Sherwood, 312 U.S. 584, 586, 61 S.Ct. 767, 85 L.Ed. 1058 (1941) (stating that "[t]he United States, as sovereign, is immune from suit save as it consents to be sued"). The waiver of immunity can be limited and conditioned by the Congress. See United States v. Nordic Village Inc., 503 U.S. 30, 34, 112 S.Ct. 1011, 117 L.Ed.2d 181 (1992) (stating that the government's consent to be sued must be strictly construed in favor of the sovereign and not enlarged beyond what the language requires). A patentee's judicial recourse against the federal government, or its contractors, for patent infringement, is set forth and limited by the terms of 28 U.S.C. § 1498.² Section 1498(a) provides, in pertinent part:

Whenever an invention described in and covered by a patent of the United States is used. . . 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 United States Court of Federal Claims for the recovery of his reasonable and entire compensation for such use and manufacture.

Id. (emphasis added).

This court has held that "direct infringement under section 271(a) is a necessary predicate for government liability under section 1498." NTP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282, 1316 (Fed.Cir.2005) (citing Motorola, Inc. v. United States, 729 F.2d 765, 768 n. 3 (Fed.Cir.1984)). We have further held that "a process cannot be used `within' the United States as required by section 271(a) unless each of the steps is performed within this country." Id. at 1318. Consequently, where, as here, not all steps of a patented process have been performed in the United States, government liability does not exist pursuant to section 1498(a). We affirm the trial court's conclusion that § 1498(a) bars Zoltek's claims.

III.

We turn to the trial court's takings analysis. The Court of Federal Claims held that Zoltek could...