NASA's Administrative Review of a Patent Infringement Claim
(Correspondence, 08/08/2000, GAO/RCED-00-240R).
Pursuant to a congressional request, GAO provided information on the
National Aeronautics and Space Administration's (NASA) administrative
review of a patent infringement claim, focusing on: (1) whether NASA
adhered to established procedures in conducting its administrative
review of the inventor's infringement claim; and (2) what criteria NASA
used in reaching its decision.
GAO noted that: (1) NASA reviewed the inventor's complaint in accordance
with its procedures governing administrative reviews of patent
infringement claims; (2) even though the inventor never filed an
official claim, NASA treated his complaint as an infringement claim
because it had no other mechanism for investigating allegations of
infringement and wanted to remove any doubt that it had infringed the
patent in question; (3) also, NASA and the inventor agree that the
agency's decision to treat the inventor's allegation as an infringement
claim probably will work to his advantage if he chooses to bring an
infringement suit; (4) the inventor was correct that NASA used the same
attorney to conduct the administrative review that earlier had been
involved in licensing negotiations on the inventor's patent; (5) while
this does not violate NASA's procedures, it is inconsistent with federal
internal control standards; (6) NASA said it would separate the duties
if such a case arose in the future; (7) NASA applied the federal patent
law to reach its decision; (8) NASA interpreted the law as providing
that only the patent claims--those specific elements set out in the
patent that make the invention novel--can be infringed; and (9) after
surveying the operations of its field units, NASA concluded that none of
its systems--including the Mars Pathfinder landing system and the
TransHab Design Concept cited by the inventor--infringed the claims in
the inventor's patent.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: RCED-00-240R
TITLE: NASA's Administrative Review of a Patent Infringement
Claim
DATE: 08/08/2000
SUBJECT: Patent law
Aerospace industry
Internal controls
Patents
Intellectual property
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GAO/RCED-00-240R
Review of NASA's Administrative Action
B- 285211 August 8, 2000 The Honorable Robert F. Bennett United States
Senate
Subject: NASA's Administrative Review of a Patent Infringement Claim Dear
Senator Bennett: On February 7, 2000, the National Aeronautics and Space
Administration (NASA) responded to an inventor's complaint that the agency
had used his patented technology without approval, compensation, or
acknowledgment. NASA told the inventor that it had conducted an
administrative review of the matter and concluded that there was no
infringement. The inventor contacted you about this matter, and you asked us
to review NASA's administrative action on his complaint.
As agreed with your office, this report addresses (1) whether NASA adhered
to established procedures in conducting its administrative review of the
inventor's infringement claim and (2) what criteria NASA used in reaching
its decision. As also agreed, we take no position as to whether NASA
infringed the inventor's patent.
Results in Brief
NASA reviewed the inventor's complaint in accordance with its procedures
governing administrative reviews of patent infringement claims. Even though
the inventor never filed an official claim, NASA treated his complaint as an
infringement claim because it had no other mechanism for investigating
allegations of infringement and wanted to remove any doubt that it had
infringed the patent in question. Also, NASA and the inventor agree that the
agency's decision to treat his allegation as an infringement claim probably
will work to his advantage if he chooses to bring an infringement suit. The
inventor was correct that NASA used the same attorney to conduct the
administrative review that earlier had been involved in licensing
negotiations on his patent. While this does not violate NASA's procedures,
it is inconsistent with federal internal control standards, and NASA said it
would separate the duties if such a case arose in the future.
NASA applied federal patent law to reach its decision. NASA interpreted the
law as providing that only the patent “claims”- those specific
elements set out in the patent
United States General Accounting Office Washington, DC 20548
Resources, Community, and Economic Development Division
B- 285211
GAO/ RCED- 00- 240R Review of NASA's Administrative Action 2 that make the
invention novel- can be infringed. After surveying the operations of its
field units, NASA concluded that none of its systems- including the Mars
Pathfinder landing system and the TransHab Design Concept cited by the
inventor- infringed the claims in the inventor's patent. NASA's decision
completes its administrative review process. If the inventor wishes to
pursue his complaint, his recourse is to file a claim with the U. S. Court
of Federal Claims.
Background
A patent is a grant made by the government to an inventor, conveying and
securing to him or her the exclusive right to an invention for a term of
years. The Patent and Trademark Office (PTO) grants patents in the United
States. By its terms, a patent gives an inventor the right to exclude others
from making, using, or selling the invention for a specified period, in this
instance 17 years. A person infringes another's patent when he or she makes,
uses, or sells the subject invention without permission during the patent
term.
On June 19, 1990, PTO granted U. S. Patent No. 4,934,631 to the inventor.
The patent describes the invention as a “lighter- than- air type
vehicle comprising a framework and a series of inflatable lift bags secured
to said framework.” The lift bags were designed to contain heating
elements and a gas, such as hydrogen or helium, in contact with these
heating elements.
Believing his technology could be adapted successfully for a broad range of
military and civilian projects, the inventor had attempted since 1989 to
market his invention to the government. He said that certain agencies,
including NASA, expressed interest but declined his offers to license the
invention or enter into a contract with him to develop and use his
technology.
In 1997, the inventor saw drawings of the Mars Pathfinder landing system
developed by NASA and noted that the system used inflatable bags that he
believed were similar to those described in his patent. He concluded that
NASA had adapted and was using his invention without approval, compensation,
or acknowledgment. After further research, he concluded that NASA also was
using bags similar to his own in its TransHab Design Concept, which features
inflatable structures that can be used to house personnel and equipment in
space.
On February 26, 1997, the inventor contacted the NASA Administrator and
complained that NASA had used his invention without his approval. The
complaint was referred to the Director of the Infringement Division in the
Office of the Associate General Counsel for Intellectual Property. After
obtaining the inventor's approval, NASA docketed the matter as a
“license to proffer” on March 7, 1997, giving NASA permission to
send the patent to its various units to determine whether they had an
interest in obtaining a license to use the technology. On July 30, 1997, the
Director of the Infringement Division sent a letter to the inventor
informing him that the agency had no interest in obtaining a license.
B- 285211
GAO/ RCED- 00- 240R Review of NASA's Administrative Action 3 On March 31,
1998, the inventor asked the NASA Inspector General to conduct an
investigation into NASA's use of his patented technology. The Inspector
General conducted a preliminary investigation and concluded the complaint
constituted a claim of infringement. On October 14, 1999, the Inspector
General referred the case to the Associate General Counsel for Intellectual
Property, and on November 3, 1999, the Director of the Infringement Division
notified the inventor that it was treating his complaint as a patent
infringement claim and was initiating a formal administrative review.
On February 7, 2000, the Director of the Infringement Division notified the
inventor by letter that he had completed the administrative review of the
infringement claim and found no evidence of infringement by NASA.
Accordingly, he said that NASA was denying the inventor's claim and that, if
the inventor was not satisfied with this result, his recourse was to file a
lawsuit for patent infringement. The Director also pointed out that the
statute of limitations- which by law had been suspended, or
“tolled,” during the administrative review- again would begin to
run. 1
The inventor is not satisfied with NASA's response. From a procedural
standpoint, he says he does not understand why NASA chose to treat his
complaint as a request for a claim of patent infringement when he had not
made a formal request for an administrative review. He also is concerned
that the Director of the Infringement Division, who prepared NASA's
response, was the same attorney to whom he had spoken over the years about
NASA's possibly licensing his invention.
The inventor also disagrees with the criteria NASA used in reaching its
decision. He believes that NASA is interpreting the case law on patent
infringement too narrowly because, under NASA's interpretation, one could
easily “invent around” almost any patent. He said that, in
addition to considering the patent claims, NASA should consider such factors
as the description and specifications set out in the patent. Moreover, the
inventor disagrees with NASA's (1) characterizing his invention as a
“dirigible” or a “blimp” and (2) comparing it with
single- walled inflatable structures covered by earlier patents. He says
NASA did not address his basic complaint that the agency developed an
interest in using double- walled inflatable airbags- a primary feature of
his invention- only after he brought the potential uses to the agency's
attention.
NASA Followed Its Procedures in Conducting the Administrative Review of the
Infringement Claim
NASA followed its established procedures in reviewing the inventor's
complaint. While NASA was not required to treat the complaint as an
infringement claim, it had the authority to do so, and its use of the formal
administrative review process was
1 In its response to the inventor, NASA also noted that the patent had
expired. The patent expired on June 19, 1999, because the inventor did not
pay the required maintenance fees. Subsequently, however, he filed a
petition for reinstatement, paid the fees, and on May 22, 2000, was informed
by PTO that his patent was reinstated.
B- 285211
GAO/ RCED- 00- 240R Review of NASA's Administrative Action 4 reasonable
under the circumstances. The inventor made a written request for an
investigation, accusing NASA of infringing his patent and, according to NASA
officials, the administrative review is NASA's only mechanism for handling
such a complaint. Moreover, while NASA found no infringement on its part,
the decision to conduct a formal review may be to the inventor's benefit, as
it provides him with additional time and the agency's position on the record
if he decides to pursue the matter in the courts.
NASA's Administrative Review, While Not Required, Was Conducted in
Accordance With Its Procedures
NASA's procedures for administratively reviewing a claim of patent
infringement against the agency are set out in an attachment to a September
29, 1987, letter to all NASA installations by the Associate General Counsel
for Intellectual Property. According to the Director of the Infringement
Division, these requirements were modeled after those established by the
Department of Defense (DOD). He said that, like the DOD regulations, NASA's
procedures are intended to provide both the claimant and the agency with an
alternative to litigation, although the administrative process is not a
prerequisite for litigation. The procedures provide for no administrative
appeal; if NASA finds no infringement, the claimant's recourse is to sue in
federal court.
NASA's procedures set out specific elements for initiating an administrative
review. There must be a claim in writing that makes an allegation of
infringement, requests compensation, cites the patent that is believed to
have been infringed, and designates the item or process that is alleged to
have infringed. The claimant also is encouraged to provide information such
as identification of procurements that involve the infringing items,
detailed descriptions of the infringing items, a list of persons to whom
notices of infringement have been sent, and a listing of all government
contracts under which the claimant has performed work. When NASA has
determined that it will review a claim, its procedures instruct the Office
of the Associate General Counsel for Intellectual Property to docket the
case and to inform the claimant of this action. The Associate General
Counsel then contacts those NASA installations that are primarily concerned
with the subject matter of the alleged infringement and instructs them to
determine whether an infringement occurred. Ultimately, the Associate
General Counsel responds to the claim in writing, setting out specific
reasons if the claim is denied. NASA followed these procedures in this case.
The inventor said that, although he asked NASA for an investigation, he
never presented an infringement claim to NASA that would have initiated a
formal administrative review. Part of his reason for asking for the
investigation was that he did not know or have access to much of the
information necessary to determine whether an infringement had occurred. He
noted, for example, that he had hoped to obtain details on the technology
being used in the Mars Pathfinder and TransHab projects.
The Director of the Infringement Division agreed that, although NASA was not
required to initiate a formal administrative review, its decision to do so
was proper under the circumstances. He noted that the inventor had requested
in writing that NASA conduct
B- 285211
GAO/ RCED- 00- 240R Review of NASA's Administrative Action 5 an
investigation of his complaint. He said that NASA had decided to treat the
request for
an investigation as an infringement claim because it had no other mechanism
to investigate a complaint and wanted to be positive that it had not, even
inadvertently, infringed the inventor's patent. The Director said that NASA
wanted to give the inventor every benefit of the doubt and that treating the
request for an investigation as an infringement claim ensured that the
inventor's concerns received a complete review.
Director Had Authority to Conduct the Administrative Review A related
concern raised by the inventor was that the Director of the Infringement
Division- who conducted the administrative review of the infringement claim-
was the same attorney with whom the inventor had talked on earlier occasions
about a possible contract or licensing arrangement with NASA. Thus, he
questioned the Director's impartiality in conducting the administrative
review.
The Director of the Infringement Division agreed that he had previous
contact with the inventor about his patent. However, he said that this was
the result of his having two roles within the division. One role is to act
as an intermediary for persons who bring patents to NASA seeking licensing
arrangements. The other is to conduct administrative reviews on claims
brought by persons who believe NASA may have infringed their patents. He
noted that the two roles are complementary and have the same objective- to
ensure that NASA avoids even the appearance of infringing another's
invention. The Director also noted that he is the only attorney assigned to
the Infringement Division, which receives no more than two to three patent
infringement claims per year.
In his role as intermediary for persons seeking licensing arrangements, the
Director noted that he did not make the decision himself on whether to seek
a license but rather sought assistance from the NASA units that might use or
be interested in the particular technology. When these units expressed no
such interest, the Director was the person who relayed this information to
the inventor.
The Director said that in his second role, he conducted the administrative
review on the inventor's claim. He said that it did not occur to him that
someone might question his impartiality, since he is always the attorney who
conducts the administrative reviews. He said that there is no special NASA
policy or procedure covering a situation in which the Director had previous
involvement with a claimant. The Director also noted that his supervisor,
the Associate General Counsel for Intellectual Property, reviewed and
approved his decision and the written response before it was sent to the
inventor.
We pointed out to the Director of the Infringement Division that, even
though he appears to have followed established procedures, his dual role
involving the inventor's patent does not appear to be in accordance with the
guidelines on the separation of duties set out in the Comptroller General's
Standards for Internal Control in the Federal Government, which provides as
follows:
B- 285211
GAO/ RCED- 00- 240R Review of NASA's Administrative Action 6 “Key
duties and responsibilities need to be divided or segregated among different
people to reduce the risk of error or fraud. This should include separating
the responsibilities for authorizing transactions, processing and recording
them, reviewing the transactions, and handling any related assets. No one
individual should control all aspects of a transaction or event.”
Both the Director and the Associate General Counsel for Intellectual
Property said that the separation of duties issue had not occurred to them
at the time. They noted that this was the first case in their experience in
which the Director had handled a potential licensing arrangement and an
infringement claim on the same patent. The Associate General Counsel said
that, if such a case occurs again, he will assume responsibility for the
administrative review.
Administrative Review Appears to Benefit the Inventor The Director of the
Infringement Division said that NASA's decision to treat the request for an
investigation as an infringement claim probably worked to the inventor's
advantage. Under 35 U. S. C. 286, there is a 6- year statute of limitations
on patent infringement by the federal government. However, the statute is
suspended, or “tolled,” during the administrative review of an
infringement claim. Thus, the time taken by NASA to review the inventor's
complaint allows him a longer period in which to file a lawsuit and for
which to claim damages. Also, NASA's procedures require the agency to inform
a claimant in writing of the basis for denying a claim. By issuing a formal
response, NASA provided the inventor with its position, which he could then
use in preparing a lawsuit.
We discussed with the inventor the Director's position on the need for and
potential benefits of the administrative review. The inventor said that
while he did not agree with the need for an administrative review, the way
the review was conducted, or the review's finding, the process probably
works to his advantage in that he has more time to file a lawsuit and has
NASA's position on the record.
NASA Used Established Criteria in Reaching Its Decision
In deciding whether it infringed the inventor's patent, NASA applied federal
patent law that only the “claims” in a patent can be infringed.
After identifying the relevant elements in each of the inventor's two
claims, NASA asked its various operating units to determine whether any of
the agency's systems- including the Mars Pathfinder landing system and the
TransHab- had used technology similar to that protected by the subject
patent. On the basis of the feedback from these units, NASA determined that
there was no infringement.
NASA Examined the Claims in the Inventor's Patent Under the provisions of 35
U. S. C. section 112, a specification as part of the application for a
patent “shall conclude with one or more claims particularly pointing
out and
B- 285211
GAO/ RCED- 00- 240R Review of NASA's Administrative Action 7 distinctly
claiming the subject matter which the applicant regards as his
invention.”
Thus, a patentee must “claim” his invention by stating his
claims in his application. Typically, each claim in a patent application
consists of several elements. Those claims PTO approves become a part of the
patent that is issued. In turn, infringement of a patent is established by
showing that an accused, or allegedly infringing, device or process matches
or infringes a claim. For this purpose, each element of a claim is deemed to
be necessary to the patentee's statement of his or her claim, and each
element or its equivalent must exist in the accused device or process for
infringement to be proved. 2
NASA applied these rules in conducting its administrative review. According
to the Director of the Infringement Division, his first step in determining
whether an infringement occurred was to identify the precise elements
actually “claimed” in the patent. He noted that the inventor's
patent included only two claims, the first of which is stated as follows:
“An inflatable air bag for lighter- than- air type vehicles, having a
flame resistant liner, said air bag being provided with an interior heating
element and a lighterthan- air gas in intimate contact with said heating
element, said air bag also including sealed tubular portions communicating
with the exterior and passing through opposite ends of said air bag for
receiving external structural mounting support thereat.”
The inventor's second claim is for a “combination” and is stated
as follows: “An elongate vehicle including, in combination: a
framework provided a door and a forwardly facing window; a series of
inflatable lift bags secured to and about said framework, said lift bags
containing a lighter- than- air gas and being individually provided with
respective interior heating element means for variably heating and thereby
variably expanding said gas within each of said lift bags; means for heating
said heating elements coupled thereto; propulsion structure coupled to and
disposed outside of said framework; and means mounted to and within said
framework for supplying power to said propulsion structure, and wherein said
air bags are each provided with integral tubes communicating with the
exterior at opposite ends of said air bags, said air bags being mounted to
said framework by portions of said framework passing through said
tubes.”
The Director said that these two claims provide few exclusive rights to the
inventor, as they give him rights only against inventions that include those
specific combinations of elements identified in the claims. For example, the
fact that the inventor identifies items such as inflatable air bags or
flame- resistant liners – items covered by earlier patents or in the
public domain – does not mean that his patent protects inflatable air
bags or
2 Warner- Jenkinson Co. v. Hilton Davis Chemical Co., 520 U. S. 17 (1997).
B- 285211
GAO/ RCED- 00- 240R Review of NASA's Administrative Action 8 flame-
resistant liners. The patent only protects the completely described
structures
claimed, of which inflatable air bags with flame resistant liners are but
components. To more fully understand the nature of the inventor's complaint,
the Director also obtained PTO's examination, or “prosecution,”
history for the patent. He found that, originally, the patent application
had included 14 claims. However, PTO questioned the patentability of all but
two of these because they were not unique or would be obvious to someone
skilled in the particular field of technology. The inventor then amended his
application, leaving only the two claims that eventually were approved by
PTO and appear in the issued patent.
NASA Found No Evidence of Infringement After determining the specific
elements covered by the claims in the inventor's patent, the Director of the
Infringement Division, by memorandum dated November 3, 1999, contacted all
NASA operating units that might be aware of any NASA technologies that were
similar to the inventor's two claims. He asked them to conduct an
investigation to determine “whether or not you believe that his
alleged claim for patent infringement is valid.” He also asked them
specifically to analyze whether any of the technologies so identified were
involved in either the Mars Pathfinder landing system or the TransHab
project. He advised them that the inventor had earlier submitted the patent
to NASA and offered to license it to the agency.
The Director said that none of the NASA units identified any technologies or
uses consistent with the claims in the inventor's patent. He concluded that,
because there were no devices that matched the claims, there was no
infringement. He discussed his reasoning in NASA's response to the inventor
and, in addition, set out the specific differences between the claims in the
inventor's patent and the technology used in the Mars Pathfinder landing
system and the TransHab project. The Director said that his February 7,
2000, response to the inventor ended NASA's administrative review of the
inventor's complaint. He said that if the inventor is still not satisfied,
his only remaining avenue for relief is through the federal courts.
As stated, we do not take a position on whether NASA's conclusion is
correct. Under 28 U. S. C. section 1498, the inventor's recourse is to file
a claim with the U. S. Court of Federal Claims if he is not satisfied with
the agency's decision.
Agency Comments
We provided a draft of this report to NASA for its review and comment. NASA
concurred with the report's findings. NASA reiterated that, in the future,
the Associate General Counsel for Intellectual Property would have
responsibility for administrative reviews of patent infringement claims in
those cases where the Director of the Infringement Division was involved in
licensing discussions on the same patent. (See enc. I for NASA's comments.)
B- 285211
GAO/ RCED- 00- 240R Review of NASA's Administrative Action 9
Scope and Methodology
To meet our objectives, we met with and examined records provided by the
inventor, the Director of NASA's Infringement Division, and NASA's Associate
General Counsel for Intellectual Property. We also obtained data from PTO's
patent records. In addition, we reviewed NASA's procedures and relevant
federal statutes, regulations, and case law related to patent examination
and patent infringement.
We conducted our work from April through July 2000 in accordance with
generally accepted government auditing standards.
---- As arranged with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 7 days after
the date of this letter. At that time, we will provide copies to the
appropriate congressional committees; interested Members of Congress; the
Honorable Daniel S. Goldin, Administrator, National Aeronautics and Space
Administration; and the Honorable Jacob J. Lew, Director, Office of
Management and Budget. We will also provide copies to others upon request.
If you have any questions about this report, please contact Derek Stewart,
Acting Associate Director, or me at (202) 512- 3841. Other key contributors
to this report were Frankie Fulton, John Hunt, Bert Japikse, and Deborah
Ortega.
Sincerely yours, Jim Wells Director, Energy, Resources,
and Science Issues Enclosure
Enclosure
GAO/ RCED- 00- 240R Review of NASA's Administrative Action 10
Comments From the National Aeronautics and Space Administration
(141436)
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