Zoltek Corp. v. United States

United States Court of Appeals
for the Federal Circuit
__________________________

ZOLTEK CORPORATION,
Plaintiff-Appellee,
v.
UNITED STATES,
Defendant,
v.
LOCKHEED MARTIN CORPORATION
Defendant-Appellant.
__________________________

2009-5135
__________________________

Appeal from the United States Court of Federal
Claims in case no. 96-CV-166, Judge Edward J. Damich.
___________________________

Decided: March 14, 2012
___________________________

JOE D. JACOBSON, Green Jacobson, P.C., of Clayton,
Missouri, argued for plaintiff-appellee. Of counsel were
DEAN A. MONCO and JOHN S. MORTIMER, Wood, Phillips,
Katz, Clark & Mortimer, of Chicago, Illinois.

DONALD R. DUNNER, Finnegan, Henderson, Farabow,
Garrett & Dunner, LLP, of Washington, DC, argued for
defendant-appellant. With him on the brief were RICHARD
ZOLTEK CORP v. US 2

T. RUZICH, Duane Morris LLP, of Chicago, Illinois,
MATTHEW C. MOUSLEY, of Philadelphia, Pennsylvania,
and KERRY B. MCTIGUE, of Washington, DC, and SCOTT J.
POPMA, Finnegan, Henderson, Farabow, Garrett & Dun-
ner, LLP, of Washington, DC.

ANISHA DASGUPTA, Attorney, Appellate Staff, Civil
Division, United States Department of Justice, of Wash-
ington, DC, argued for amicus curiae United States. With
her on the brief were TONY WEST, Assistant Attorney
General, and SCOTT R. MCINTOSH, Attorney.

JERRY STOUCK, Greenberg Traurig, LLP, of Washing-
ton, DC, for amicus curiae Federal Circuit Bar Associa-
tion.

WILLIAM C. BERGMANN, Baker & Hostetler LLP, of
Washington, DC, for amicus curiae Aerospace Industries
Association of America, Inc.
__________________________

Before RADER, Chief Judge, PLAGER and GAJARSA, ∗ Circuit
Judges.
RADER, Chief Judge, NEWMAN, LOURIE, BRYSON, LINN,
PROST, MOORE, O’MALLEY, REYNA, and WALLACH, Circuit
Judges, join Part I-B of this opinion. DYK, Circuit Judge,
dissents from Part I-B.
GAJARSA, Circuit Judge.
This appeal represents the continuing saga of the
Zoltek Corporation (“Zoltek”) in its effort to obtain com-
pensation for the alleged infringement of its patent. The

∗
Circuit Judge Gajarsa assumed senior status on
July 31, 2011.
3 ZOLTEK CORP v. US

specific issue in this appeal is whether the Court of Fed-
eral Claims properly allowed Zoltek to amend its com-
plaint and transfer its claim for infringement under 35
U.S.C. § 271(g) against Lockheed Martin Corporation
(“Lockheed”) to the United States District Court for the
Northern District of Georgia. The trial court allowed the
amendment and transfer because it concluded that the
requirements of 28 U.S.C. § 1631, the transfer statute,
were satisfied. On the facts of this case, however,
amendment and transfer were legal error. Moreover,
because the error in this case was precipitated in part by
this court’s earlier decision in Zoltek Corp. v. United
States (“Zoltek III”), 442 F.3d 1345 (Fed. Cir. 2006) (per
curiam; Gajarsa, J. concurring; Dyk, J. concurring;
Plager, J. dissenting) we revisit the basis for that deci-
sion. Thus, in light of our revisiting of our earlier deci-
sion, we (1) reverse the trial court’s decision here allowing
amendment of Zoltek’s complaint and transferring the
amended complaint to the district court; and (2) we re-
mand the case to the trial court for further proceedings
consistent with this opinion.
BACKGROUND
Zoltek is the assignee of United States Reissue Patent
No. 34,162 (the “RE ’162 Patent”), entitled “Controlled
Surface Electrical Resistance Carbon Fiber Sheet Prod-
uct.” Claims 1-22 and 33-38 relate to methods of manu-
facturing carbon fiber sheets with controlled surface
electrical resistivity; claims 23-32 and 39-40 are product-
by-process claims for the partially carbonized fiber sheets.
Zoltek is presently asserting only the method claims,
which generally contain two steps: partially carbonizing
the fiber starting material and then processing those
fibers into sheet products. The carbon fiber products at
issue were used in the F-22, a fighter jet, which Lockheed
designed and built pursuant to a contract with the Gov-
ZOLTEK CORP v. US 4

ernment. The F-22 contains two types of carbon fiber
products: silicon carbide fiber mats (“Tyranno fibers”),
which are fibrous reinforcing material, and prepregs
(“Nicalon fibers”), which are pre-impregnated material
typically used in the manufacture of high performance
composites. Zoltek Corp. v. United States (“Zoltek I”), 51
Fed. Cl. 829, 831 & nn.1-2 (2002).
In its original complaint filed in 1996, Zoltek sued the
United States under 28 U.S.C. § 1498(a), alleging that,
without a license from Zoltek or other lawful right, the
claimed invention covered by the RE ’162 Patent was
infringed because the resulting product was used or
manufactured by or for the United States. At that time,
Zoltek did not assert any claims against Lockheed. Under
§ 1498(a),
Whenever an invention described in and covered
by a patent of the United States is used or manu-
factured by or for the United States without li-
cense 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 re-
covery of his reasonable and entire compensation
for such use and manufacture.
Section 1498(a) “is more than a waiver of immunity and
effects an assumption of liability by the government.”
Advanced Software Design Corp. v. Fed. Res. Bank, 583
F.3d 1371, 1375 (Fed. Cir. 2009) (quoting Richmond
Screw Anchor Co. v. United States, 275 U.S. 331, 344
(1928)).
The United States (“Government”) moved for partial
summary judgment arguing that 28 U.S.C. § 1498(c)
precluded Zoltek’s recovery for the Government’s use of
the method claims. Zoltek I, 51 Fed. Cl. at 830. Section
5 ZOLTEK CORP v. US

1498(c) states that “[t]he provisions of this section shall
not apply to any claim arising in a foreign country.” The
manufacturing of the Tyranno and Nicalon fibers begins
in Japan, where the fibers are “partially carboniz[ed].”
Zoltek Corp. v. United States (“Zoltek II”), 58 Fed. Cl. 688,
690 (2003). The fibers are then imported into the United
States, where they are processed into sheets. 1 Id. The
Government argued Zoltek’s claim arose in a foreign
country and, therefore, its sovereign immunity was not
waived.
The trial court held in Zoltek I that § 1498 “does not
[waive the Government’s sovereign immunity as] to all
forms of direct infringement as currently defined in 35
U.S.C. § 271.” 51 Fed. Cl. at 837. The trial court, how-
ever, did not rule on the Government’s summary judg-
ment motion, but stayed the motion pending additional
briefing concerning Zoltek’s ability to assert a claim for a
taking of its patent rights under the Fifth Amendment.
See id. at 839. It subsequently denied the Government’s
motion, holding that Zoltek could assert a takings claim.
Zoltek II, 58 Fed. Cl. at 707. Both parties appealed.
In our per curiam opinion, the panel majority re-
versed the trial court’s ruling that Zoltek could allege
patent infringement as a Fifth Amendment taking under
the Tucker Act. Zoltek III, 442 F.3d at 1353 (per curiam).
In the same opinion, the panel majority affirmed the trial
court’s conclusion that Zoltek’s infringement allegations
were precluded by § 1498, but—unlike the trial court and
the dissent—the majority cited § 1498(a) as the basis for

1 In Zoltek III, this court stated that the Nicalon fi-
bers were manufactured and formed into sheet products
in Japan. 442 F.3d at 1349. This statement was contrary
to the facts as found by the trial court, see Zoltek Corp. v.
United States (“Zoltek IV”), 85 Fed. Cl. 409, 411 n.1
(2009), and we correct it here.
ZOLTEK CORP v. US 6

the holding, without reaching the issue of § 1498(c). Id.
In doing so, the panel majority relied on NTP, Inc. v.
Research In Motion, Ltd., 418 F.3d 1282, 1316 (Fed. Cir.
2005), for the proposition that “direct infringement under
section 271(a) is a necessary predicate for government
liability under section 1498.” Id. at 1350. Because “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,” we held that a § 1498
remedy is foreclosed “where, as here, not all steps of a
patented process have been performed in the United
States.” Id. (citing NTP, 418 F.3d at 1318). We then
remanded the case for further proceedings. Id. at 1353.
On remand, Zoltek sought leave to amend its com-
plaint to add a claim against Lockheed for infringement of
the RE ’162 Patent’s method claims under 35 U.S.C.
§ 271(g) and to transfer that claim to the Northern Dis-
trict of Georgia pursuant to 28 U.S.C. § 1631. The trial
court explained that it lacked jurisdiction over Zoltek’s
claims against the Government based on this court’s
holding in Zoltek III and that the Northern District of
Georgia would have jurisdiction over Zoltek’s claim for
infringement against Lockheed. Zoltek IV, 85 Fed. Cl. at
413, 418.
The trial court rejected the Government’s argument
that on the basis of the grant of immunity for contractors
provided in § 1498(a), there is no jurisdiction in the
Northern District of Georgia. The second paragraph of
§ 1498(a) states that “the use or manufacture of an inven-
tion described in and covered by a patent of the United
States by a contractor . . . for the Government and with
the authorization or consent of the Government, shall be
construed as use or manufacture for the United States.”
According to the trial court, Ҥ 1498(a) only insulates
government contractors from suit when the Government
7 ZOLTEK CORP v. US

can be found liable,” and even if § 1498(a) insulated
government contractors from liability, transfer was still
proper because § 1498(a) is an affirmative defense and not
a jurisdictional bar. Id. at 418-19.
The trial court also found that it was in the interest of
justice to transfer the claim because (1) it was plausible
that without transfer at least part of Zoltek’s claim for
infringement against Lockheed would be time-barred; (2)
Lockheed had participated in the suit through discovery
beginning in 1997 and was aware that its product was the
subject of this litigation; and (3) Zoltek was the first
plaintiff to discover “a legislative gap between the defini-
tion of infringement under § 1498 and the definition of
infringement under § 271.” Id. at 420-21. The trial court
thus granted Zoltek leave to amend its complaint. Based
upon the trial court’s determination, Zoltek amended its
complaint.
Subsequently, the Court of Federal Claims certified
the following controlling question of law to this court for
interlocutory appeal: “whether 28 U.S.C. § 1498(c) must
be construed to nullify any government contractor immu-
nity provided in § 1498(a) when a patent infringement
claim aris[es] in a foreign country.” Zoltek Corp. v. United
States, No. 96-cv-166, Dkt. No. 385 (May 14, 2009) (“Certi-
fied Order”). This court accepted the appeal explaining
that the issues before the court are “whether the trial
court should have transferred the case and whether the
court should have allowed the complaint to be amended to
add Lockheed as a defendant.” Zoltek Corp. v. United
States, Misc. No. 903, 2009 WL 3169301, *1 (Fed. Cir.
Sept. 30, 2009). We have jurisdiction pursuant to 28
U.S.C. § 1292(d)(2).
ZOLTEK CORP v. US 8

DISCUSSION
Under 28 U.S.C. § 1631, transfer is appropriate if (1)
the transferor court lacks jurisdiction; (2) the action could
have been brought in the transferee court at the time it
was filed; and (3) transfer is in the interest of justice.
This court reviews the trial court’s grant of a motion to
transfer a claim for an abuse of discretion, but issues of
law are reviewed de novo. See Rick’s Mushroom Serv.,
Inc. v. United States, 521 F.3d 1338, 1342-43 (Fed. Cir.
2008). As we stated in Zoltek III, the issues before the
court in this case are purely questions of law. 442 F.3d at
1349. And as we shall explain, the trial court inadver-
tently erred as a matter of law in authorizing the
amendment and the transfer of Zoltek’s claim against
Lockheed.
I.
In confronting the question of whether a contractor
acting under Government authority could be held liable
for patent infringement, in a situation in which we had
previously held the Government not liable for the alleg-
edly infringing actions of its contractor, we realized that
one of two consequences would result. Either we had to
conclude that a patentee’s well-pleaded complaint of
infringement in the United States of a United States
patent in these circumstances fails to state a cause of
action against both the Government and the Govern-
ment’s contractor, or we would have to override the long-
standing understanding of the statutory framework that a
contractor working for the Government is immune from
individual liability for patent infringement occurring in
the course of conducting the Government’s contract.
This caused us to re-examine the premises on which
our earlier opinion in Zoltek III was based, and to recon-
sider the consequences of that opinion. As we shall ex-
9 ZOLTEK CORP v. US

plain, we have concluded that the change in law effected
by this court’s decision in Zoltek III, which limited the
scope of § 1498(a) to direct infringement under § 271(a), is
in error, and must be corrected. We note that, before
arriving at this conclusion, we reviewed the briefs and
arguments before the court in the earlier appeal that
resulted in the Zoltek III opinion, as well as the trial
court’s several opinions and, of course, the briefs and
arguments in this phase of the case. Since our re-
examination of the case in effect reinstates the Govern-
ment’s potential liability under §1498(a) for the infringe-
ment alleged in this case, we particularly note that the
Government has been an active participant in all phases
of the trial and appeals in this case, including oral argu-
ment in the present appeal even though the case was
nominally between Zoltek and Lockheed Martin.
A.
As explained below, the Zoltek III panel’s limitation of
§ 1498(a) to infringement under § 271(a) is inconsistent
with the plain language of the statute, and in deciding to
limit § 1498(a), the panel misapplied its own case law.
That error significantly limits the protection that
§ 1498(a) provides to government contractors, which, in
this case, results in Lockheed having liability for conduct
otherwise immunized by § 1498(a). It creates the possibil-
ity that the United States’ procurement of important
military matériel could be interrupted via infringement
actions against government contractors—the exact result
§ 1498 was meant to avoid. And finally, it vitiates the
Congressional scheme, spread across three Titles in the
United States Code, see 35 U.S.C. §§ 154(a)(1), 271(g), 19
U.S.C. § 1337, and 28 U.S.C. § 1498, which is meant to
give relief to process patent holders when the resulting
products of their patented process are used within the
ZOLTEK CORP v. US 10

United States—regardless of where the process is prac-
ticed.
Before analyzing Zoltek III’s interpretation of § 1498,
we review the history of the adoption of that section. In
Schillinger v. United States, the Supreme Court held that
patent infringement was a tort for which the Government
had not waived sovereign immunity. 155 U.S. 163, 167-69
(1894). Thus, absent conduct by the United States from
which a contract to license the patent could be inferred, a
patent holder lacked a remedy for infringement by the
United States. Id. at 169-71.
In response to the perceived injustice of the Schillin-
ger rule, Congress enacted the precursor to 28 U.S.C.
§ 1498, which provided:
That whenever an invention described in and cov-
ered by a patent of the United States shall hereaf-
ter be used by the United States without license of
the owner thereof or lawful right to use the same,
such owner may recover reasonable compensation
for such use by suit in the Court of Claims.
Act of June 25, 1910, Pub. L. No. 61-305, 36 Stat. 851
(1910) (“1910 Act”); see also Crozier v. Fried. Krupp Akti-
engesellschaft, 224 U.S. 290, 304 (1912) (describing the
history of the 1910 Act).
In 1918, the Supreme Court applied the 1910 Act to
the issue of patent infringement by government contrac-
tors in the course of producing warships during World
War I. William Cramp & Sons Ship & Engine Bldg. Co.
v. Int’l Curtis Marine Turbine Co., 246 U.S. 28 (1918).
Despite the contractor’s construction of warships pursu-
ant to “comprehensively detailed” specifications provided
by the Navy, the Court found that the 1910 Act did not
shield the contractor from infringement. Id. at 42-43.
11 ZOLTEK CORP v. US

Reaction to the Court’s March 4, 1918 decision was
swift. On April 20, Acting Secretary of the Navy Franklin
D. Roosevelt wrote a letter to the chairman of the Senate
Committee of Naval Affairs, stating that the Navy was
confronted with a difficult situation as the result
of [the] decision by the Supreme Court affecting
the government’s rights as to the manufacture
and use of patented inventions, and it seems nec-
essary that amendment be made of the Act of
June 25, 1910 . . . . [T]he decision is, in effect, . . .
that a contractor for the manufacture of a pat-
ented article for the government is not exempt . . .
from injunction and other interference through
litigation by the patentee.
A prior decision of the Supreme Court, that in the
case of Crozier v. Krupp [224 U.S. 290] had been
interpreted as having the opposite meaning, and
the department was able up to the time of the
later decision, on March 4 last, to proceed satis-
factorily with the procuring of such patented arti-
cles as it needed, leaving the matter of
compensation to patentees for adjustment by di-
rect agreement, or, if necessary, by resort to the
Court of Claims under the above-mentioned act of
1910. Now, however, manufacturers are exposed
to expensive litigation, involving the possibilities
of prohibitive injunction payment of royalties,
rendering of accounts, and payment of punitive
damages, and they are reluctant to take contracts
that may bring such severe consequences. The
situation promised serious disadvantage to the
public interests, and in order that vital activities
of this department may not be restricted unduly
at this time, and also with a view of enabling dis-
satisfied patentees to obtain just and adequate
ZOLTEK CORP v. US 12

compensation in all cases conformably to the de-
clared purpose of said act, I have the honor to re-
quest that the act be amended by the insertion of
a proper provision therefore in the pending naval
appropriation bill.
Wood v. Atl. Gulf & Pac. Co., 296 F. 718, 720-21 (D. Ala.
1924) (quoting letter). In response to this letter, the 1910
Act was amended to provide
That whenever an invention described in and cov-
ered by a patent of the United States shall hereaf-
ter be used or manufactured by or for the United
States without license of the owner thereof or law-
ful right to use or manufacture the same, such
owner may recover owner’s remedy shall be by suit
against the United States in the Court of Claims
for the recovery of his reasonable and entire com-
pensation for such use and manufacture by suit in
the Court of Claims.
Act of July 1, 1918, Pub. L. No. 65-182, 40 Stat. 704, 705
(1918) (additions in italics; deletions struck through).
As a result of the amendment, the Government not
only waived sovereign immunity for its own unlawful use
or manufacture of a patented invention, but, in most
cases, assumed liability when its contractors did so. See
Richmond Screw, 275 U.S. at 343-44. Moreover, when
applicable, the amendment made the specified remedy
exclusive. Id. at 344. Indeed, the Supreme Court said:
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 . . . to suit
against the United States in the Court of Claims
13 ZOLTEK CORP v. US

for the recovery of his reasonable and entire com-
pensation for such use and manufacture. The
word ‘entire’ emphasizes the exclusive and com-
prehensive character of the remedy provided.
Id. at 343. See also Identification Devices v. United
States, 121 F.2d 895, 896 (D.C. Cir. 1941); Pollen v. Ford
Instrument Co., 108 F.2d 762, 763 (2d Cir. 1940).
To the degree that any doubt existed, Congress fur-
ther clarified the scope of the 1918 amendment by enact-
ing what is now the second paragraph of 28 U.S.C.
§ 1498(a), which reads:
[T]he use or manufacture of an invention de-
scribed 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 Gov-
ernment, shall be construed as use or manufac-
ture for the United States.
Act of Oct. 31, 1942, Pub. L. No. 77-768, § 6, 56 Stat.
1013, 1014; see also S. Rep. No. 77-1640 (1942) at 1 (stat-
ing that the purpose of the second paragraph of § 1498 is
“[t]o clarify existing legislation . . . with respect to con-
tractors and subcontractors manufacturing and using
inventions for the Government”).
These provisions were codified in their modern form
in 1949:
Whenever an invention described in and covered
by a patent of the United States is used or manu-
factured by or for the United States without li-
cense 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
ZOLTEK CORP v. US 14

recovery of his reasonable and entire compensa-
tion for such use and manufacture.
****
For the purposes of this section, the use or manu-
facture 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.
Act of May 24, 1949, Pub. L. No. 81-72, § 87, 63 Stat. 89,
102 (“1949 Act”); see also 28 U.S.C. § 1498(a). 2
As enacted, this could be read to permit suit against
the United States for the unlawful use or manufacture of
patented inventions abroad, e.g., under foreign patent
law. See H.R. Rep. No. 86-624, at 6-7 (1959) (letter from
William Macomber, Jr., Assistant Secretary of State).
Indeed, at least one plaintiff brought suit in the Court of
Claims seeking compensation for such activities. See
Yassin v. United States, 76 F. Supp. 509, 511, 513-14 (Ct.
Cl. 1948). To clarify the scope of § 1498, Congress intro-
duced a geographic limitation, which is now codified at 28
U.S.C. § 1498(c): “The provisions of this section shall not

2 The statute was first codified as 35 U.S.C. § 68
(1926). The re-codification at 28 U.S.C. § 1498 substan-
tially altered the text. See Act of June 25, 1948, Pub. L.
No. 80-773, 62 Stat. 869, 941 (1948) (enacting into posi-
tive law as 28 U.S.C. § 1498). The codified text was
revised shortly thereafter to “restate[] its first paragraph
to conform more closely with the original law.” H.R. Rep.
No. 81-352, at 11 (1949); see also 1949 Act § 87. The 1949
Act is identical to the current text of the first sentence of
28 U.S.C. § 1498(a), with the exception of the name of the
Court of Federal Claims.
15 ZOLTEK CORP v. US

apply to any claim arising in a foreign country.” Act of
Sept. 8, 1960, Pub. L. No. 86-726, § 1, 74 Stat. 855, 855;
see also H.R. Rep. No. 86-624, at 1. Within that historical
framework, we turn to the terms of the statute and their
application to this case.
B.
In doing so we find that this court’s holding in Zoltek
III, which found liability under 35 U.S.C. § 271(a) to be a
predicate to government liability under § 1498, must be
corrected because it 1) was contrary to the plain language
of § 1498; 2) relied on dicta and a fundamental misreading
of the statute; 3) impermissibly rendered subsection (c) of
§ 1498 inoperative; and 4) caused 19 U.S.C. § 1337(l) to
become ineffective while ignoring Congress’s clear intent.
Since a panel of this court cannot reverse a prior panel
decision, the court sua sponte voted to take Part I-B of
this opinion en banc for the limited purpose of vacating
the Zoltek III opinion. The active judges, consisting of
RADER, Chief Judge, NEWMAN, LOURIE, BRYSON,
LINN, PROST, MOORE, O’MALLEY, REYNA, and
WALLACH, Circuit Judges, voted to vacate the Zoltek III
opinion. DYK, Circuit Judge, dissents from the en banc
portion of the opinion. See Midwest Indus., Inc. v. Kara-
van Trailers, Inc., 175 F.3d 1356, 1359 n.* (Fed. Cir.
1999) (reversing prior precedent through an en banc vote
on one part of an opinion), abrogated on other grounds by
TrafFix Devices, Inc. v. Mktg. Displays, Inc., 532 U.S. 23,
28 (2001); Nobelpharma AB v. Implant Innovations, Inc.,
141 F.3d 1059, 1068 n.5 (Fed. Cir.1998) (same);
Kingsdown Med. Consultants, Ltd. v. Hollister, Inc., 863
F.2d 867, 876 n.16 (Fed. Cir. 1988) (same).
i.
It is fundamental that “[t]he starting point in every
case involving construction of a statute is the language
ZOLTEK CORP v. US 16

itself.” Santa Fe Indus., Inc. v. Green, 430 U.S. 462, 472
(1977) (internal quotation marks omitted). Section 1498
waives the United States’ sovereign immunity from suit.
Thus, it must be strictly construed in favor of the United
States. Blueport Co. v. United States, 533 F.3d 1374,
1378 (Fed. Cir. 2008) (citing Lane v. Pena, 518 U.S. 187,
192 (1996)). Any ambiguity in the statute must be re-
solved in favor of immunity. See Lane, 518 U.S. at 192.
Section 1498(a) allows for suit against the Govern-
ment “[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” and provides that government
contractors would be immune from suit for such use or
manufacture. See 28 U.S.C. § 1498(a). The scope of the
Government’s waiver of sovereign immunity thus depends
on the meaning of (1) “an invention described in and
covered by a patent”; (2) “used or manufactured by or for
the United States”; and (3) “without license of the owner
[of the patent] or lawful right” to do so. Id. Moreover,
this language must be interpreted in accordance with its
ordinary meaning in 1910, when Congress enacted
§ 1498’s precursor. See Perrin v. United States, 444 U.S.
37, 42 (1979) (stating that “unless otherwise defined,
words will be interpreted as taking their ordinary, con-
temporary, common meaning” at the time Congress
enacted the statute).
The language “described in and covered by a patent”
has been part of § 1498 since its precursor was enacted in
1910. See 1910 Act. Based on Supreme Court case law
and the Patent Act at the time of the 1910 Act, for an
invention to be “described in and covered by a patent,” the
invention must be claimed in the patent. See Lehigh
Valley R.R. Co v. Mellon, 104 U.S. 112, 119 (1881) (“[T]he
scope of letters-patent should be limited to the invention
17 ZOLTEK CORP v. US

covered by the claim . . . .”); see also Patent Act of 1870, 41
Cong. Ch. 230, § 26, 16 Stat. 198, 201 (1870) (“Patent Act
of 1870”) (stating that the patent “shall particularly point
out and distinctly claim the part, improvement, or combi-
nation which he claims as his invention or discovery”). In
the intervening years, both the relevant case law and
subsequent amendments to the Patent Act are consistent
with this understanding of “described in and covered by a
patent.”
Moving next to the “used or manufactured” language,
we note that at the time the amendment to the 1910 Act
was adopted, the Patent Act gave the patentee “the exclu-
sive right to make, use, and vend the . . . invention or
discovery.” Patent Act of 1870 § 22. The Supreme Court
has explained that “make” and “use” were not “technical
terms.” Bauer & Cie v. O’Donnell, 229 U.S. 1, 10 (1913).
It stated that “make . . . embraces the construction of the
thing invented [and t]he right to use is a comprehensive
term and embraces within its meaning the right to put
into service any given invention.” Id. at 10-11. As ex-
plained above, the “invention” is what is claimed in the
patent. Thus, to “use” an invention, each limitation of the
claims must be present in the accused product or process.
See Sargent v. Hall Safe & Lock Co., 114 U.S. 63, 86
(1885) (holding the defendant did not infringe where its
product lacked an element of the asserted claim).
The last phrase we must interpret, “without license of
the owner thereof or lawful right,” has also been part of
§ 1498(a) since the 1910 Act. “Without license of the
owner” means simply that the owner has not given the
Government a license to use the patented invention.
Early variants of the bill that would ultimately become
the 1910 Act lacked the requirement that the use or
manufacture be “without . . . lawful right.” H.R. 7653,
60th Cong., 42 Cong. Rec. 6,164 (1908); S. 7676, 59th
ZOLTEK CORP v. US 18

Cong., 41 Cong. Rec. 1,344 (1907). Congress added the
requirement in order to make clear that the United States
would not be liable for manufacturing or using inventions
created by its employees in the course of their employ-
ment, a lawful shop right under then-existing law. See
H.R. Rep. No. 61-1288, at 3-4 (1910) (citing Solomons v.
United States, 22 Ct. Cl. 335 (1887), aff’d, 137 U.S. 342
(1890)); 45 Cong. Rec. 8,757 (1910). Of course, the words
of the limitation are not confined to the Government’s
shop rights. Instead, they carve out from the Govern-
ment’s assumption of liability all lawful uses, i.e. all uses
which are not covered by the scope of the patent grant.
See United States v. Palmer, 128 U.S. 262, 271-72 (1888)
(noting that a patent grants a monopoly against citizen
and Government alike, but questioning the availability of
a remedy for infringement by the United States); W.L.
Gore & Assocs., Inc. v. Garlock, Inc., 842 F.2d 1275, 1283
(Fed. Cir. 1988) (Rich, J.) (stating that a patent is a grant
of the right to exclude others from violating the patent
grant in Title 35, but § 1498 modifies the grant so the
Government may use what it needs), abrogated on other
grounds by eBay Inc. v. MercExchange, L.L.C., 547 U.S.
388, 391-94 (2006). In short, lawful right refers to the
United States’ right to use or manufacture an invention—
without liability under § 1498—in all cases where other
unlicensed parties can do so without directly infringing a
patent. See Garlock, 842 F.2d at 1283 (“The government
has graciously consented . . . to be sued . . . for what would
be infringement if by a private person.”).
Thus, § 1498(a) waives the Government’s sovereign
immunity from suit when (1) an invention claimed in a
United States patent; (2) is “used or manufactured by or
for the United States,” meaning each limitation is present
in the accused product or process; and (3) the United
States has no license or would be liable for direct in-
19 ZOLTEK CORP v. US

fringement of the patent right for such use or manufac-
ture if the United States was a private party. Section
1498 makes no reference to direct infringement as it is
defined in § 271(a). Indeed, so interpreting § 1498(a) is
contrary to its plain language, interpreted in light of the
meaning of that language in 1910.
ii.
Moreover, the panel majority’s per curiam interpreta-
tion of § 1498(a) in Zoltek III was rooted in a fundamental
misreading of the statute. The panel failed to rely on the
plain language of the statute, but premised its conclusion
on NTP, Inc. v. Research in Motion, Ltd., which stated
that “direct infringement under section 271(a) is a neces-
sary predicate for government liability under section
1498.” 418 F.3d 1282, 1316 (Fed. Cir. 2005) (citing as
authority a footnote in Motorola, Inc. v. United States, 729
F.2d 765, 768 n.3 (Fed. Cir. 1984)). However, NTP did not
involve the United States as a party and was interpreting
35 U.S.C. § 271(a), not 28 U.S.C. §1498; the court referred
to § 1498(a) only to provide a framework for analyzing
§ 271(a). See id. at 1315-16 (interpreting “use within the
United States” under 271(a)). Therefore, this court’s
statement in NTP regarding the scope of § 1498 was not a
holding of the case and accordingly such dictum is not
binding.
NTP itself was relying on dictum from Motorola when
it referred to § 1498(a). In Motorola, this court cited to
Decca Ltd. v. United States, 640 F.2d 1156, 1167 (Ct. Cl.
1980) and stated that “the Government can only be sued
for any direct infringement of a patent (35 U.S.C.
§ 271(a)), and not for inducing infringement by another
(section 271(b)) or for contributory infringement (section
271(c)).” 729 F.2d at 768 n.3. However, in 1984, § 271(g)
had not been enacted and § 154(a)(1) did not include the
ZOLTEK CORP v. US 20

right to exclude others from using products made by a
patented process—statutory provisions that were not
implemented until 1988. Process Patents Amendment
Act of 1988 (“PPAA”), P.L. 100-418, §§ 9002, 9003, 102
Stat. 1107, 1563-64 (1988). Therefore, at that time it was
logical to use those sections of Title 35 to illustrate the
idea that § 1498 requires direct infringement and does not
apply to indirect infringement. But using § 271(a) as
shorthand to define direct infringement under § 1498 was
not a holding of the case and did not reflect Motorola’s
holding, which was that § 1498 did not incorporate 35
U.S.C. § 287. Motorola, 729 F.2d at 769. Tellingly, that
statement appeared in a footnote listing some of the
several differences between a § 1498 action and one under
Title 35. Id. at 768 n.3.
In Decca, the Court of Claims, our predecessor court,
concluded that § 1498(a) did not waive the Government’s
sovereign immunity for indirect infringement under 35
U.S.C. §§ 271(b) and (c). 640 F.2d at 1169-70. Decca did
not hold, as Motorola assumed, that § 1498(a) is synony-
mous with infringement under § 271(a). Rather, the court
“h[e]ld that 35 U.S.C. §§ 271(b) and (c) are not incorpo-
rated by implication in [§] 1498.” Id. at 1170. The court
explained that inducement and contributory infringement
are outside § 1498(a) because they “do not involve the
Government’s making or using a patented invention . . . .”
Id. at 1170 & n.31 (emphasis added). In coming to this
conclusion, the court recognized the importance of the
language in § 1498(a), which is limited to inventions that
are “used or manufactured by or for the United States.”
The court stated simply:
Because section 1498 is an eminent domain stat-
ute, the Government has consented there under
only to be sued for its taking of a patent license.
Expressed differently, section 1498 is a waiver of
21 ZOLTEK CORP v. US

sovereign immunity only with respect to a direct
governmental infringement of a patent. Activities
of the Government which fall short of direct in-
fringement do not give rise to governmental liabil-
ity because the Government has not waived its
sovereign immunity with respect to such activi-
ties. Hence, the Government is not liable for its
inducing infringement by others, for its conduct
contributory to infringement of others, or for
what, but for section 1498, would be contributory
(rather than direct) infringement of its suppliers.
Although these activities have a tortious ring, the
Government has not agreed to assume liability for
them. In short, under section 1498, the Govern-
ment has agreed to be sued only for its direct in-
fringement of a patent.
Id. at 1167. Nothing in that statement can be read to
mean that § 1498 requires as a predicate liability under
§ 271(a). In fact, that statement indicates that any direct
infringement that would normally require a license by a
private party falls under § 1498. Therefore, we are not
mandated by NTP, Motorola, or Decca to conclude that
direct infringement under §1498 equates to direct in-
fringement under § 271(a).
iii.
Furthermore, Zoltek III’s limitation of § 1498(a) to
§ 271(a) renders § 1498(c) superfluous, violating the canon
of statutory construction that “a statute should be inter-
preted so as not to render one part inoperative.” CSX
Transp., Inc. v. Ala. Dep’t of Revenue, 131 S.Ct. 1101,
1111 (2011) (citation and internal quotation marks omit-
ted). Section 271(a) requires that the infringing activity
occur “within the United States.” (emphasis added). Yet
§ 1498(c) provides the exact same limitation by eliminat-
ZOLTEK CORP v. US 22

ing the Government’s liability “for a claim arising in a
foreign country.” By limiting § 1498(a) to activities within
the United States, the panel in Zoltek III rendered
§ 1498(c) superfluous. Section 1498(c), however, is not
superfluous. Congress specifically added this section to
28 U.S.C. § 1498 to ensure that the Government would
not be held liable for claims arising abroad. See H. Rep.
No. 86-624, at 5-6 (1959).
Thus, when the panel in Zoltek III concluded that the
Government’s liability under § 1498(a) is limited to in-
fringement under § 271(a), it was relying on dictum as
expressed by NTP, and not the tools of statutory construc-
tion. The plain language of § 1498(a) indicates that
§ 1498(a) operates independently from Title 35. Indeed,
this court so held in Motorola, where we said that
“[a]lthough a section 1498 action may be similar to a Title
35 action, it is nonetheless only parallel and not identi-
cal.” Motorola, 729 F.2d at 768. Instead of relying on any
infringement sections in § 271, § 1498(a) creates its own
independent cause of action.
iv.
Finally, Zoltek III’s interpretation of § 1498 elimi-
nated the effect of 19 U.S.C. § 1337(l) even though “[w]e
must read the statutes to give effect to each if we can do
so while preserving their sense and purpose.” Watt v.
Alaska, 451 U.S. 259, 267 (1981) (citing Morton v. Man-
cari, 417 U.S. 535, 551 (1974)). Zoltek III negated Con-
gress’s clear intent to protect products resulting from a
patented process, wherever practiced, when it rendered
§ 1337(l) ineffective, thereby limiting the remedies of
parties in situations similar to Zoltek’s.
23 ZOLTEK CORP v. US

Title 19 U.S.C. section 1337 allows process patent
holders to petition the International Trade Commission to
exclude the
importation into the United States, . . . or the sale
within the United States after importation by the
owner, importer, or consignee of articles that . . .
are made, produced, processed, or mined under, or
by means of, a process covered by the claims of a
valid and enforceable United States patent.
19 U.S.C. § 1337(a)(1)(B)(ii). Therefore, subject to the
other requirements of § 1337, Zoltek could at least pre-
vent the importation of products made by its patented
process. However, under § 1337(l), entitled “Importation
by or for United States,”
[a]ny exclusion . . . in cases based on a proceeding
involving a patent, . . . under subsection (a)(1) of
this section, shall not apply to any articles im-
ported by and for the use of the United States, or
imported for, and to be used for, the United States
with the authorization or consent of the Govern-
ment.
Thus, when products resulting from a patented process
are imported for the United States, such as by a govern-
ment contractor, the process patent owner cannot exclude
the products from entering the United States. However,
in the same subsection, Congress gave process patent
owners in such a predicament a remedy:
Whenever any article would have been excluded
from entry . . . but for the operation of this subsec-
tion, an owner of the patent . . . adversely affected
shall be entitled to reasonable and entire compen-
sation in an action before the United States Court
ZOLTEK CORP v. US 24

of Federal Claims pursuant to the procedures of
section 1498 of Title 28.
19 U.S.C. § 1337(l). Based on the plain language of
§ 1337, Congress clearly intends that patent holders shall
have a remedy under 28 U.S.C. § 1498 for the importation
of products made by a patented process if the products
could have been excluded under § 1337. By continuing to
require § 271(a) liability as a predicate for liability under
§ 1498(a), Zoltek III, relying on the perpetuation of the
dictum in NTP, disturbed Congress’s statutory scheme
and intent. See S. Rep. No. 93-1231, at 1999 (1974)
(commenting on the purpose of subsection (i), later redes-
ignated as subsection (l), and stating that “Any patent
owner adversely affected by this subsection would be
entitled to reasonable and entire compensation pursuant
to 28 U.S.C. 1498. [sic]” (emphasis added)).
Title 35 U.S.C. section 271(a) does not protect against
the importation of products made by a patented process,
but § 271(g) states that “[w]hoever without authority
imports into the United States or offers to sell, sells, or
uses within the United States a product which is made by
a process patented in the United States shall be liable as
an infringer.” Because § 1337 unambiguously asserts
Congress’s intent to give process patent owners a remedy
for importation of products made using their process, it
would be incorrect to maintain Zoltek III’s holding that
§ 271(a) infringement is a predicate to United States
liability under § 1498. If Zoltek III is correct, a process
patent holder who requests a § 1337 exclusion order from
the International Trade Commission to prevent the
importation of articles to be used by or for the United
States will be denied such relief by operation of § 1337(l).
But the patentee will be directed to obtain “reasonable
and entire compensation” from the United States, which
he “shall” be entitled to in the Court of Federal Claims
25 ZOLTEK CORP v. US

under § 1498. See § 1337(l). However, under Zoltek III,
the patentee will be denied relief because his claim cannot
be predicated on § 271(a). Zoltek III vitiated the effect of
19 U.S.C. § 1337(l), and as explained above, it relied on
dicta to refute the plain language of 28 U.S.C. § 1498(a)
and render superfluous 28 U.S.C. § 1498(c). Therefore,
that opinion is vacated by the court en banc. 3
II.
While this court in Zoltek III was incorrect when it
determined that infringement under § 271(a) is a predi-
cate for Government liability under § 1498(a), we must
now determine as a matter of law whether Lockheed’s
actions create Governmental liability under § 1498(a).
Under § 271(g), Lockheed allegedly infringed Zoltek’s
patents when it used in the United States, or imported
into the United States, the product made using the pat-

3 The dissent contends that this court lacks juris-
diction to address the question whether section 1498(a) is
limited to infringement under 35 U.S.C. § 271(a), because
that question is not within the scope of the order on
appeal. In fact, however, the transfer order that is the
subject of this appeal was predicated in part on the trial
court’s conclusion that it lacked jurisdiction over the claim
before it, see 28 U.S.C. § 1631, and that conclusion fol-
lowed from the trial court’s application of this court’s
earlier decision in Zoltek III. This court’s act of vacating
Zoltek III thus directly affects the transfer order that is on
appeal here. For that reason, this case is entirely differ-
ent from United States v. Stanley, 483 U.S. 669 (1987), on
which the dissent relies, in which the court of appeals
improperly addressed an entirely different theory of
liability from the one at issue in the order on appeal.
With respect to the substantive objections raised by Judge
Dyk, he reiterates the same rationale he espoused in his
concurrence in Zoltek III, which is still not mandated by
the dicta of the cases upon which he relies.
ZOLTEK CORP v. US 26

ented process. 35 U.S.C. § 271(g). The issue is whether
that act falls under § 1498(a), thus giving Lockheed
immunity from suit and Zoltek the right to compensation
from the Government. To be within the parameters of
§ 1498(a), Lockheed must have used the invention with-
out a license and without lawful right. Lockheed clearly
was not licensed to practice Zoltek’s invention. Therefore,
the issue is whether they had the lawful right to do so. As
explained above, we have defined “without lawful right”
for purposes of § 1498(a) as use of an invention that, if
done by a private party, would directly infringe the pat-
ent. The liability of the United States under § 1498 is
thus linked to the scope of the patent holder’s rights as
granted by the patent grant in title 35 U.S.C. sec-
tion 154(a)(1). As the patent grant has expanded over the
years, so too has the coverage of § 1498(a). If a private
party had used Zoltek’s patented process to create the
resulting product, there would be liability for infringing
Zoltek’s patent right under § 154(a)(1) and § 271(g). We
hold that the Government is subject to the same liability
in this case, and that precedent and legislative intent
dictate that result.
A.
In Quanta Computer, Inc. v. LG Elecs., Inc., the Su-
preme Court held that in the patent exhaustion context,
“methods . . . may be ‘embodied’ in a product.” 553 U.S
617, 628 (2008). The holding was necessary to avoid “an
end-run around exhaustion” where “[p]atentees seeking to
avoid patent exhaustion could simply draft their patent
claims to describe a method rather than an apparatus.”
Id. at 629-30. This concept was not applied to 35
U.S.C. § 271(f) in Cardiac Pacemakers, Inc. v. St. Jude
Med., Inc., because method patents do not have physical
components that could be combined outside the United
States as prohibited by § 271(f). 576 F.3d 1348, 1364
27 ZOLTEK CORP v. US

(Fed. Cir. 2009) (en banc). That does not mean, however,
that the concept is not applicable under § 1498 because
§§ 154(a)(1), 271(g), and 1498(a) are applicable to process
patents. Although the process itself was partially prac-
ticed outside the United States in this case, the product
resulting from the practice, which embodies the patented
process, was imported into, or used in, the United States.
Therefore the process has been “used” without a license or
lawful right. A contrary result would similarly avoid
infringement by the United States. Additionally, contrac-
tors could practice the processes overseas whereby the
resulting product would be immunized from exclusion
from importation under § 1337.
To allow such a result is contrary to the PPAA’s legis-
lative history, which reflects the understanding that to
protect process patents is to protect the products resulting
from the process. Although “use” of the invention “with-
out lawful right” does not use the exact same terms as
§ 271(g), we can look to Judge Learned Hand for guid-
ance. He notes that, “Courts have not stood helpless in
such situations; the decisions are legion in which they
have refused to be bound by the letter, when it frustrates
the patent purpose of the whole statute.” Cabell v. Mark-
ham, 148 F.2d 737, 739 (2d Cir. 1945) (citing Justice
Holmes for the proposition that “it is not an adequate
discharge of duty for courts to say: We see what you are
driving at, but you have not said it, and therefore we shall
go on as before.” Johnson v. United States, 163 F. 30, 32
(1st Cir. 1908)). The Supreme Court approvingly quoted
Judge Learned Hand in Cabell and said:
Of course it is true that the words used, even in
their literal sense, are the primary, and ordinarily
the most reliable, source of interpreting the mean-
ing of any writing: be it a statute, a contract, or
anything else. But it is one of the surest indexes
ZOLTEK CORP v. US 28

of a mature and developed jurisprudence not to
make a fortress out of the dictionary; but to re-
member that statutes always have some purpose
or object to accomplish, whose sympathetic and
imaginative discovery is the surest guide to their
meaning.
Watt v. Alaska, 451 U.S. 259, 266 n.9 (1981) (quoting 148
F.2d at 739).
As explained above, the plain language of the statute
is clear. Additionally, the legislative purpose behind
§ 1498 is clear. The Supreme Court has stated that
§ 1498(a) was meant to “relieve the contractor entirely
from liability of every kind for the infringement of patents
in manufacturing anything for the government” in order
“to stimulate contractors to furnish what was needed for
the war, without fear of becoming liable themselves for
infringements . . . .” Richmond Screw, 275 U.S. at 343-45.
This purpose survives today.
In 1988, the patent grant under § 154(a)(1) was ex-
panded to state “if the invention is a process,” the patent
shall contain a grant to the patentee, his heirs or assigns,
“of the right to exclude others from using or selling
throughout the United States, or importing into the
United States, products made by that process.” PPAA
§ 9002. Section 271(g) was also added at that time to
clarify that violating this right is an act of infringement.
§ 9003. Section 154(a)(1) was modified, and section 271(g)
was adopted, by Congress because “[i]n order to make
patent protection of a process meaningful, it is . . . neces-
sary to consider the patented process and the resulting
product as a whole, with the consequence that process
protection is automatically extended to the resulting
product even if the said product has not been claimed.” S.
29 ZOLTEK CORP v. US

Rep. No. 100-83, at 31 (1987) (citations omitted and
emphasis added).
The purpose supporting the changes was to harmo-
nize United States law with that of the rest of the indus-
trialized world, in which “most countries’ patent laws are
structured so that the direct product of a patented process
is also included within the scope of the patent.” Id.;
accord H. Rep. No. 100-60, at 4 (1987). Congress noted
that previously, “[w]ith respect to process patents, courts
have reasoned that the only act of infringement is the act
of making through the use of a patented process; there-
fore, there can be no infringement if that act occurs out-
side the United States.” H. Rep. 100-60, at 5 (1987)
(citations omitted). Congress then noted that “this ra-
tionale is not adequate because it ignores the reality that
the offending act is the importation of a product made
through the use of a protected process patent or its subse-
quent sale within the United States.” Id. at 6 (emphasis
added).
Thus, because the scope of the Government’s “lawful
right” to “use” the invention under § 1498(a) is deter-
mined by the scope of § 154(a)(1), Congress’s expansion of
the patent grant makes § 1498(a) cover the use of a prod-
uct that incorporates the patented process by which it was
created. We agree with the argument made by the Fed-
eral Circuit Bar Association in its amicus brief that no
revision to § 1498(a) was necessary to reach this result; it
was accomplished by the expansion of the patent grant.
Amicus Brief of the Fed. Cir. Bar Ass’n at 14.
We recognize that this “court may not read an
amendment to one section of a statute as an amendment
to an entirely different section of the statute in the ab-
sence of any statutory justification.” Rotec Indus., Inc. v.
Mitsubishi Corp., 215 F.3d 1246, 1258 (Fed. Cir. 2000). In
ZOLTEK CORP v. US 30

Rotec, we analyzed an amendment to 35 U.S.C. § 271(a)
and determined that it did not apply to § 271(f). Id. at
1257-58. It would seem that Rotec’s rule would be espe-
cially applicable here since it may appear that we have
determined that the amendment of one statute is an
amendment to a completely different statute, rather than
simply different sections of the same statute. But, in this
case, as explained above, there is compelling statutory
justification for such an interpretation. However, such a
justification is not even necessary because “lawful right”
is linked to the scope of the patent grant; we are not
amending the meaning of lawful right—that was done by
Congress. We are simply stating the effect the amend-
ment to the patent grant had on § 1498(a), which is
defined by its terms and the patent grant.
Therefore, based on clear Congressional intent to pro-
tect contractors from infringement so that the Govern-
ment’s important business may not be disturbed, it would
be absurd to find that the importation or use of a product
created through the use of a patented process as prohib-
ited by 35 U.S.C. §§ 154(a)(1) and 271(g) fails to be the
equivalent of use of the invention without lawful right to
do so.
This is illustrated by a simple example. Had Lock-
heed practiced the process overseas without bringing the
resulting products back to the United States, there would
be no direct infringement of Zoltek’s patent rights under
§ 271(a) or (g). Additionally, Zoltek would have no rem-
edy against the Government under § 1498. As held in
NTP, there would be no infringement under § 271(a)
because all steps of the patented process were not carried
out “within the United States.” 418 F.3d 1282, 1318.
There would be no § 271(g) infringement because none of
the products made using the patented process were ever
present in the United States as required by the statute.
31 ZOLTEK CORP v. US

35 U.S.C. § 271(g). Additionally, as explained below, the
Government would not have waived its sovereign immu-
nity under § 1498 because § 1498(c) states that the section
does not apply to claims arising in a foreign jurisdiction,
and a claim arising from an act which has no connection
to the United States arises overseas. Essentially, as long
as the products made by the patented process overseas
are not imported into, or used within, the United States,
Lockheed has the lawful right to use the patented process
under § 1498(a) because the “within the United States”
requirements of §§ 154(a)(1), 271(a), and 271(g) are not
met, and § 1498(c) is implicated by the claim arising
outside the jurisdiction of the United States.
When it imported the resulting products into the
United States, or used them within the United States,
Lockheed used Zoltek’s patented invention “without
license of the owner thereof or lawful right to use or
manufacture the same . . .” because it is the act of impor-
tation or use in the United States of the products made by
the patented process that constitutes improper use of a
patented invention. As explained, the products them-
selves embody the patented invention for the purposes of
§ 1498. It could be argued that importing the resulting
products is not the same as “use” of the invention under
the literal terms of § 1498 because the process itself is the
invention, not the resulting products. In light of the
modification, however, of the patent grant (§ 154(a)(1))
and adoption of 35 U.S.C. § 271(g), and considering the
effect of Congress’s mandate in 19 U.S.C. § 1337(l), in the
context of § 1498, the product of a patented process is not
only the product, but also the physical embodiment of the
invention. Therefore, Lockheed’s actions constitute use of
the invention without lawful right under the terms of
§ 1498(a).
ZOLTEK CORP v. US 32

B.
We must now determine whether 28 U.S.C. § 1498(c)
applies to this case. Section 1498(c) states that “[t]he
provisions of [§ 1498(a)] shall not apply to any claim
arising in a foreign country.” The partially carbonizing
step used to make the products alleged to infringe the RE
’162 Patent occurs in Japan, while the processing step
occurs in the United States. Thus, the question here is
whether a claim “aris[es] in a foreign country” when one
step of the claimed method is performed in a foreign
country and another step is performed in the United
States.
Congress amended § 1498 to add subsection (c) in
1960. Pub.L. 86-726, § 1, 74 Stat. 855, 856 (1960) (adding
copyrights to the scope of § 1498). Congress wanted “to
avoid liability for claims arising out of infringements of
patents or copyrights in a foreign country.” S. Rep. No.
86-1877, at 5 (1960). Indeed, the plain language of
§ 1498(c) eliminates Government liability for claims
“arising in a foreign country” not claims arising under
foreign law. Section 1498(c) was adopted “to remove the
possibility of [the bill] being interpreted as applying to
acts of infringement in foreign countries.” Id. at 7.
However, in this case, § 1498(c) does not exempt the
United States from liability because the infringing acts—
use or importation of the products resulting from the
process—occurred in the United States. Importation
occurs when the product crosses the United States’ bor-
der, and use occurs within the United States. Both of
those acts occur within the United States and any claim
regarding those acts similarly arises within the United
States. There is no infringement in a foreign country
because the patent grant and the infringement statutes
do not cover activities that occur outside the United
33 ZOLTEK CORP v. US

States. See 35 U.S.C. §§ 154(a)(1), 271. Because the
resulting products were imported or used in the United
States, Zoltek’s claim for relief does not “arise” in a for-
eign country and § 1498(c) does not apply to this case.
This conclusion is supported by precedent; the legislative
histories of section 154(a)(1)’s modification and the en-
actment of section 271(g); and Congress’s intent to create
a comprehensive scheme meant to protect contractors,
inventors, and the United States.
Accordingly, we hold that for the purposes of section
1498, the use or importation “within the United States
[of] a product which is made by a process patented in the
United States” constitutes use of the invention without
lawful right because the products embody the invention
itself. We add that nothing in this opinion should be
construed to affect our Title 35 jurisprudence.
SUMMARY
In its original suit before the Court of Federal Claims,
Zoltek alleged infringement by the Government of its
patent, and a right to recover compensation therefore by
virtue of 28 U.S.C. § 1498(a). The trial court ruled for the
Government on the § 1498 issue on the basis of its under-
standing of § 1498(c) as applied to these facts, but permit-
ted Zoltek’s case to go forward on its theory of a taking of
its patent rights under the Fifth Amendment. We now
hold:
1. 28 U.S.C. § 1498(a) creates an independent cause
of action for direct infringement by the Government or its
contractors that is not dependent on 35 U.S.C. § 271(a).
Direct infringement under § 1498(a) comes within the
scope of the right to exclude granted in 35 U.S.C.
§154(a)(1). Thus, under § 1498(a) the Government has
waived its sovereign immunity for direct infringement,
which extends not only to acts previously recognized as
ZOLTEK CORP v. US 34

being defined by § 271(a) but also acts covered under
§ 271(g) due to unlawful use or manufacture. Therefore,
as in this case, when the product of a patented process is
used in, or imported into, the United States by or for the
United States, there is direct infringement for the pur-
poses of a § 1498 action. We do not decide the issue of
indirect infringement, under §§ 271(b), (c), and (f), which
is not before us. Zoltek has filed a complaint with well-
pleaded allegations against the Government for infringe-
ment under § 1498(a). The trial court’s holding to the
contrary is reversed, and the case is remanded for further
proceedings in accordance with this opinion;
2. Properly understood, § 1498(c) has no application
to the facts of this case in which a United States patent
was allegedly infringed by activities that took place
within the United States. Thus § 1498(c) does not bar
Zoltek’s suit against the Government. The trial court’s
holding to the contrary is reversed;
3. When the United States is subject to suit under
§ 1498(a) for alleged infringement of a patent by a con-
tractor acting by and for the United States, the contractor
by law is rendered immune from individual liability for
the alleged infringement. The trial court’s holding to the
contrary on appeal in this case is reversed; and
4. Since the Government’s potential liability under
§ 1498(a) is established, we need not and do not reach the
issue of the Government’s possible liability under the
Constitution for a taking. The trial court’s determina-
tions on that issue are vacated.
CONCLUSION
REVERSED IN PART, VACATED IN PART, AND
REMANDED
35 ZOLTEK CORP v. US

COSTS
No costs.
 United States Court of Appeals
for the Federal Circuit
__________________________

ZOLTEK CORPORATION,
Plaintiff-Appellee,
v.
UNITED STATES,
Defendant,
v.
LOCKHEED MARTIN CORPORATION
Defendant-Appellant.
__________________________

2009-5135
__________________________

Appeal from the United States Court of Federal
Claims in case no. 96-CV-166, Judge Edward J. Damich.
__________________________

DYK, Circuit Judge, dissenting.
This court en banc overrules our precedent that 28
U.S.C. § 1498(a) is limited to infringement under 35
U.S.C. § 271(a), precedent which led to a holding in this
very case that the United States was not liable under
section 1498(a) for infringement of a method patent
outside the United States. Zoltek Corp. v. United States,
442 F.3d 1345, 1350 (Fed. Cir. 2006). The Supreme Court
denied certiorari. Zoltek Corp. v. United States, 551 U.S.
1113 (2007).
ZOLTEK CORP v. US 2

The overturning of this earlier Zoltek decision here is
accomplished through the extraordinary approach of sua
sponte en banc action where the issue was not argued by
any of the parties, and where the government itself was
not a party to the appeal but participated only as amici
curiae. In my view the en banc decision is beyond our
jurisdiction and, in any event, is clearly incorrect on the
merits. I respectfully dissent.
I Jurisdiction
This case comes to us as an interlocutory appeal certi-
fied pursuant to 28 U.S.C. § 1292(d)(2), which provides
that an interlocutory appeal may be permitted if a judge
of the Claims Court, “in issuing an interlocutory order,
includes in the order a statement that a controlling ques-
tion of law is involved with respect to which there is a
substantial ground for difference of opinion and that an
immediate appeal from that order may materially ad-
vance the ultimate termination of the litigation.” The
legislative history of this exception indicates that it
“should only be used in exceptional cases where an inter-
mediate appeal may avoid protracted and expensive
litigation.” H.R. Rep. No. 85-1667, at 2 (1958).
After our 2006 holding in this case that the United
States was not liable for infringement under section
1498(a), the Claims Court allowed the complaint to be
amended to state an infringement claim against Lockheed
and granted Zoltek’s motion to transfer this claim to the
United States District Court for the Northern District of
Georgia. Zoltek v. United States, 85 Fed. Cl. 409, 422
(2009). In connection with the transfer order, the Claims
Court recognized that it could only transfer claims under
28 U.S.C. § 1631 if, inter alia, “the transferee court would
have had jurisdiction at the time the original case was
filed.” Id. at 413. On motion by Lockheed, the Claims
3 ZOLTEK CORP v. US

Court amended its transfer order and certified as a con-
trolling question of law for interlocutory appeal under 28
U.S.C. § 1292(d)(2) the issue of “whether 28 U.S.C.
§ 1498(c) must be construed to nullify any government
contractor immunity provided in § 1498(a) when a patent
infringement claim ‘aris[es] in a foreign country.’” Trans-
fer Order, Zoltek Corp. v. United States, No. 96-166 C
(Fed. Cl. May 14, 2009), ECF No. 385. The Claims
Court’s theory apparently was that, although the North-
ern District of Georgia would have jurisdiction over the
claims against Lockheed, it would be more efficient to
determine before transfer whether Zoltek’s claim was
viable.
It seems clear to me that the certified order does not
confer appellate jurisdiction over the earlier dismissal of
the claims against the United States. The Supreme Court
has stated that for interlocutory appeals under section
1292(d)(2), “appellate jurisdiction applies to the order
certified to the court of appeals, and is not tied to the
particular question formulated by the district court.”
Yamaha Motor Corp., U.S.A. v. Calhoun, 516 U.S. 199,
205 (1996). 1 However, “[t]he court of appeals may not
reach beyond the certified order to address other orders
made in the case,” and may only “address any issue fairly
included within the certified order.” Id.
Here, the certified order was limited to transferring
claims against Lockheed. The certified order does not
confer appellate jurisdiction over the earlier dismissal of
infringement claims against the United States. This

1 Yamaha was interpreting 28 U.S.C. § 1292(b),
which allows for certified interlocutory appeals from
district courts. Because the language of sections 1292(b)
and 1292(d)(2) are substantially similar, the Supreme
Court’s analysis is equally applicable here. See United
States v. Connolly, 716 F.2d 882, 884-85 (Fed. Cir. 1983).
ZOLTEK CORP v. US 4

attempt to reach beyond the certified order is nearly
identical to that rejected by the Supreme Court in United
States v. Stanley, 483 U.S. 669 (1987).
In Stanley, a veteran filed suit against the govern-
ment in district court under the Federal Tort Claims Act
(“FTCA”), alleging negligence in the administration of a
drug testing program in which he participated while on
active duty. Id. at 672. The district court granted the
government’s motion for summary judgment, finding that
the veteran’s claims were precluded by Feres v. United
States, 340 U.S. 135 (1950), because they arose out of
injuries related to his service. Stanley, 483 U.S. at 672.
On appeal, the court of appeals agreed that Feres barred
Stanley’s FTCA claims against the government, though
holding that the district court should have dismissed the
claim against the government for lack of subject matter
jurisdiction rather than disposing of the case on its mer-
its. Id.
Thereafter, the veteran filed an amended complaint,
naming as defendants certain government officers and
alleging constitutional claims against those individuals
under Bivens v. Six Unknown Federal Narcotics Agents,
403 U.S. 388 (1971). Stanley, 483 U.S. at 674. The dis-
trict court entered an order refusing to find these claims
barred, but it certified the order for interlocutory appeal
under section 1292(b). Id. at 675. On appeal again, the
court of appeals affirmed the district court’s conclusion
with respect to the individual defendants. Id. However,
the court of appeals also indicated that, due to interven-
ing precedent, the veteran “might have a viable FTCA
claim against the United States, and that law-of-the-case
principles therefore did not require adherence to the
[prior] holding that [the veteran’s] FTCA claim was
barred by Feres.” Id. at 675-76. The court of appeals
remanded the case to the district court with instructions
5 ZOLTEK CORP v. US

to allow the veteran the opportunity to again plead an
FTCA claim against the government for injuries related to
his service. Id. at 676.
On review, the Supreme Court vacated the court of
appeals decision with respect to claims against the United
States. The Court held that because the order appealed
from was an order only refusing to dismiss the claims
against the individual defendants, “[t]he Court of Appeals
. . . had no jurisdiction to enter orders relating to [the
veteran’s] long-dismissed FTCA claims” against the
United States, even though the issues involved with the
two types of claims were “closely parallel[].” Id. at 677.
The Court emphasized that the court of appeals decision
on appeal to allow the district court to reinstate a claim
against the government was “particularly astonishing in
light of the fact that the United States was not even a
party to the appeal.” Id.
Here, as in Stanley, the certified order itself in no way
addressed any claims against the government. This
court, in accepting this certified appeal, explained that
the issues before it were “whether the trial court should
have transferred the case and whether the court should
have allowed the complaint to be amended to add Lock-
heed as a defendant.” Zoltek Corp. v. United States, Misc.
No. 903, 2009 WL 3169301, at *1 (Fed. Cir. Sept. 30,
2009). There was no mention in either the Claims Court
order or this court’s order of claims against the govern-
ment. As the Court found in Stanley, it is astonishing
that the majority’s opinion has the effect of reinstating a
cause of action against the government where the gov-
ernment was not even a party to the appeal. Under
Stanley, this court lacks jurisdiction to order reinstate-
ment of claims against the government when the certified
order addressed only the transfer of claims against a
ZOLTEK CORP v. US 6

different defendant. 2 The en banc court’s action is also
particularly striking insofar as it vacates the earlier
Zoltek decision that the United States is not liable on a
takings theory. This theory of liability is not even tan-
gentially related to Zoltek’s claims against Lockheed, and
has no relationship whatsoever to the transfer order.
II The Merits
The majority’s interpretation of section 1498 is also in
my view incorrect. Section 1498(a) currently provides, in
relevant part:
Whenever an invention described in and covered
by a patent of the United States is used or manu-
factured by or for the United States without li-
cense 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 re-
covery of his reasonable and entire compensation
for such use and manufacture.
28 U.S.C. § 1498(a) (emphasis added). This provision
does not specify where the “use[] or manufacture[] by or
for the United States” must occur. However, this provi-
sion, as with the patent laws generally, must be inter-
preted in light of the presumption against
extraterritoriality which, strikingly, the majority here

2 The majority urges that this case is different from
Stanley because this court’s decision as to the govern-
ment's liability “directly affects the transfer order that is
on appeal here.” Maj. Op. at 25 n.3. This is not correct.
The necessary basis for the order transferring the claims
against Lockheed pursuant to section 1631 was the
Claims Court's lack of jurisdiction over the Lockheed
claims, not a lack of jurisdiction over the claims against
the government.
7 ZOLTEK CORP v. US

does not even mention. In light of this presumption,
section 1498(a) was clearly intended to be limited to “use[]
or manufacture[]” of the invention only within the United
States. This necessarily excludes infringement under 35
U.S.C. § 271(g) that does not depend on use or manufac-
ture in the United States but instead on the importation
into the United States of a product created by a patented
process performed abroad. Nothing in the legislative
history of section 1498(a) indicates that it was designed to
have extraterritorial reach or that a later enacted statute,
such as section 271(g), could extend its extraterritorial
scope.
“It is a longstanding principle of American law ‘that
legislation of Congress, unless a contrary intent appears,
is meant to apply only within the territorial jurisdiction of
the United States.’” EEOC v. Arabian Am. Oil Co.
(“Aramco”), 499 U.S. 244, 248 (1990) (quoting Foley Bros.,
Inc. v. Filardo, 336 U.S. 281, 285 (1949)). In applying this
presumption, courts “look to see whether language in the
[relevant Act] gives any indication of a congressional
purpose to extend its coverage” outside of the United
States. Id. (alteration in original) (internal quotation
mark omitted). Because we must “assume that Congress
legislates against the backdrop of the presumption
against extraterritoriality,” unless Congress’s affirmative
intention for a provision to govern extraterritorial activity
is “clearly expressed,” a statute is interpreted with the
narrower scope. Id. Thus, unless congressional intent
indicates to the contrary, the statutory language “applies
domestically, not extraterritorially.” Small v. United
States, 544 U.S. 385, 391 (2005). For example, in Foley
Brothers, a statute provided that “[e]very contract made
to which the United States . . . is a party” must have a
provision permitting no more than eight hours of work in
a single day. 336 U.S. at 282. Despite the broad lan-
ZOLTEK CORP v. US 8

guage of the act itself, the Supreme Court held that this
provision did not apply to a contract between the United
States and a private contractor for work to be done in Iraq
and Iran. Id. at 285. Applying the presumption against
extraterritoriality, the Court concluded that there was
nothing in the text of the statute itself or in the legislative
history “which would lead to the belief that Congress
entertained any intention other than the normal one in
this case.” Id. at 286-88.
The presumption against extraterritoriality is particu-
larly strong under the patent statutes, and is reinforced
by the requirement of narrow construction of a waiver of
sovereign immunity. See United States v. Nordic Village,
Inc., 503 U.S. 30, 33 (1992). In interpreting some of the
earliest patent laws, the Supreme Court emphasized that
the Patent Clause of the Constitution itself “is domestic in
its character, and necessarily confined within the limits of
the United States.” Brown v. Duchesne, 60 U.S. 183, 195
(1856). Thus, the laws enacted by Congress under the
Patent Clause “secure to the inventor a just remuneration
from those who derive a profit or advantage, within the
United States, from his genius and mental labors. . . .
[T]hese acts of Congress do not, and were not intended to,
operate beyond the limits of the United States . . . .” Id.
(emphasis added). This presumption against extraterrito-
rial interpretation and application of the patent laws has
remained strong since Brown. As the Supreme Court
noted recently in Microsoft Corp. v. AT&T Corp., “[t]he
presumption that United States law governs domestically
but does not rule the world applies with particular force
in patent law.” 550 U.S. 437, 454-55 (2007).
This presumption against extraterritoriality, articu-
lated in Brown, existed long before Congress enacted the
precursor to section 1498 in 1910. Act of June 25, 1910,
9 ZOLTEK CORP v. US

Pub. L. No. 61-305, 36 Stat. 851. 3 Indeed, just a few
years after the act of 1910 was passed, the Supreme Court
reemphasized that “[t]he right conferred by a patent
under our law is confined to the United States and its
territories and infringement of this right cannot be predi-
cated of acts wholly done in a foreign country.” Dowagiac
Mfg. Co. v. Minn. Moline Plow Co., 235 U.S. 641, 650
(1914) (citation omitted).
Section 1498(a) on its face does not indicate that it
was designed to have extraterritorial scope. Nor does the
legislative history of section 1498(a) suggest any intent to
have the section operate extraterritorially. Since its
original enactment in 1910, this provision has been trig-
gered whenever an invention is “used or manufactured by
or for the United States.” Under the presumption against
extraterritoriality, absent a contrary indication by Con-
gress, the general phrase “use[] or manufacture[]” in the
statute must refer only to use or manufacture within the
United States, and not to use or manufacture abroad.
This is even clearer in light of the enactment of sec-
tion 1498(c) in 1959, which provides that “[t]he provisions
of [section 1498] shall not apply to any claim arising in a
foreign country.” Section 1498(c) was added at the same
time that section 1498(b)—a parallel right of suit with

3 It should be noted that although section 1498 is
now codified under Title 28, the precursor to section 1498
was originally codified together with other substantive
patent law provisions. See, e.g., Compiled Statutes of the
United States 1913, tit. 60, ch. 1, § 9465. Indeed, from
the introduction of the United States Code in 1926 until
1948, this provision was codified in section 68 of Title 35.
See 35 U.S.C. § 68 (1946) (section titled “Suit for unli-
censed use of invention by the United States”). Thus, as a
provision of patent law itself, the presumption against
extraterritoriality should apply with “particular force” in
interpreting section 1498. See Microsoft, 550 U.S. at 455.
ZOLTEK CORP v. US 10

respect to infringements of copyrights committed by the
government—was added. See H.R. Rep. No. 86-624
(1959). The addition of subsection (c) was primarily to
“provide that the provisions of this bill shall have no effect
on any claim for copyright infringement against the U.S.
Government arising in a foreign country.” Id. at 1. But it
was also designed to reemphasize the fact that section
1498(a) requires use or manufacture within the United
States. See id. at 7.
In a closely analogous situation involving section
271(a) itself, the Supreme Court in Deepsouth Packing Co.
v. Laitram Corp., 406 U.S. 518 (1971), reaffirmed this
principle of non-extraterritoriality. In Deepsouth, which
was decided before sections 271(f) and (g) were added to
Title 35, the Court recognized that section 271(a), adopted
as part of the Patent Act of 1952, did not change the law
with respect to infringement. Id. at 530 & n.10. Instead,
it merely codified the understanding of infringement
present at the time it was enacted. Id. Furthermore, the
Court held that direct infringement under section
271(a)—i.e., making, using or selling a patented inven-
tion—was limited to activity occurring within the United
States. Id. at 522-23. Thus, under the patent laws, “it
[was] not an infringement to make or use a patented
product outside of the United States.” Id. at 527. The
same follows for section 1498(a). At the time of its enact-
ment, it was “not an infringement to make or use a pat-
ented product outside of the United States.” Id. Because
infringement can only be premised on activity within the
United States, section 1498(a) applies only where the
“use[] or manufacture[] by or for the United States”
occurred within the United States. See also Morrison v.
Nat’l Austl. Bank Ltd., 130 S. Ct. 2869, 2884-85 (2010).
In a number of similar cases involving extraterritori-
ality, the Supreme Court has made clear that each trig-
11 ZOLTEK CORP v. US

gering event defined in the statute—here, use or manu-
facture—must occur in the United States even though
other events create a United States nexus. For example,
in Small, the issue was whether a statute which made it
“unlawful for any person . . . who has been convicted in
any court” to possess a firearm encompassed foreign as
well as domestic convictions. 544 U.S. at 387. Even
though the statute covered only domestic possession and
there was therefore some nexus to the United States, id.
at 389, the Court determined that it “should apply an
ordinary assumption about the reach of domestically
oriented statutes,” that is, it assumed that Congress
intended each part of the statute to apply domestically,
not extraterritorially, unless congressional intent was
explicitly otherwise. Id. at 390-91. Because the statute’s
language and legislative history did not suggest any
intent to reach extraterritorial convictions as a predicate
for domestic liability, it concluded that “convicted in any
court” referred only to domestic courts. Id. at 394.
Most recently, in Morrison, the Second Circuit, while
rejecting the claim in the particular case, reiterated that
section 10(b) of the Securities Exchange Act of 1934
permits a cause of action for domestic misconduct in
connection with securities traded on foreign exchanges. 4
130 S. Ct. at 2879. The Supreme Court disagreed and,
relying on the presumption against extraterritorial appli-
cation, held that the statute applied only to domestic sales
or purchases. Id. at 2881-83. It rejected the argument
that the “manipulative or deceptive” conduct occurred in

4 Section 10(b) provides that “[i]t shall be unlawful .
. . [t]o use or employ, in connection with the purchase or
sale of any security . . . any manipulative or deceptive
device or contrivance in contravention of such rules and
regulations as the Commission may prescribe.” 15 U.S.C.
§ 78j(b).
ZOLTEK CORP v. US 12

the United States, and thus the statute was merely being
applied domestically. Id. at 2883-84. The Supreme Court
explained that “it is a rare case of prohibited extraterrito-
rial application that lacks all contact with the territory of
the United States” and that “the presumption against
extraterritorial application would be a craven watchdog
indeed if it retreated to its kennel whenever some domes-
tic activity is involved in the case.” Id. at 2884. Thus,
because “the focus of the Exchange Act is not upon the
place where the deception originated, but upon purchases
and sales of securities in the United States,” finding
jurisdiction over domestic misconduct related to securities
traded on foreign exchanges would nonetheless violate the
presumption against extraterritoriality. Id.
The majority here makes the same mistake as the
Second Circuit made in Morrison. The majority assumes
that section 1498(a) has no extraterritorial application
under its interpretation because there is a sufficient
nexus to the United States—that is, the statute applies
only if the product made abroad by the patented process is
ultimately used in the United States. This approach
ignores the plain language of section 1498(a). Section
1498(a) is clear that it applies “[w]henever an invention
. . . is used.” The invention here is a process. A process is
not “used” in the United States “unless each of the steps is
performed within this country.” NTP, Inc. v. Research in
Motion, Ltd., 418 F.3d 1282, 1318 (Fed. Cir. 2005) (em-
phasis added). This process was not “used” in the United
States—it was used in a foreign country and then the
resulting product was imported into the United States.
The use of the invention is thus plainly extraterritorial.
The fact that section 1498(a) could have been written to
indicate that infringement liability was triggered upon a
domestic event, such as domestic use of the product, is
irrelevant. As it exists, the language of section 1498(a)
13 ZOLTEK CORP v. US

applies only to “use or manufacture” of an invention in the
United States. That did not occur here.
Significantly, in the past, Congress has been explicit
when it has expanded the extraterritorial reach of section
1498(a), as it did when it enacted 19 U.S.C. § 1337(l). In
1940, Congress amended the trade statutes to provide
that the importation of a product made abroad by a pat-
ented process constituted an unfair trade practice under
section 1337, and could therefore be excluded. Act of July
2, 1940, Pub. Law No. 76-710, 54 Stat. 724. Later, in the
Trade Act of 1974, Congress provided that exclusion
orders could not be issued for articles imported by or for
the use of the United States. Act of Jan. 3, 1975, Pub. L.
No. 93-618, § 341(A), 88 Stat. 1978. Instead, Congress
provided a remedy against the government under section
1498(a) in such situations, providing that whenever a
patent owner is denied exclusion for “any articles im-
ported by and for the use of the United States,” such
owner “shall be entitled to reasonable and entire compen-
sation in an action before the United States Court of
Federal Claims pursuant to the procedures of section
1498 of Title 28.” 19 U.S.C. § 1337(l).
Section 1337(l) did not create infringement liability for
products produced abroad by a patented process. This
occurred only in 1988 when section 271(g) was added. No
similar extension of section 1498(a) was adopted when
section 271(g) was enacted. Nothing could more clearly
demonstrate that if Congress intended section 1498(a) to
cover infringement under section 271(g), it would have
said so specifically as it did with excluded products in
section 1337(l). See Aramco, 499 U.S. at 256 (holding that
“[i]t is also reasonable to conclude that had Congress
intended Title VII to apply overseas, it would have ad-
dressed the subject of conflicts with foreign laws and
procedures,” as it had explicitly done when it amended
ZOLTEK CORP v. US 14

the Age Discrimination in Employment Act of 1967 to
apply abroad). I note that the majority also urges that
section 1337(l) somehow has no effect unless section
1498(a) is read to include infringement under section
271(g). Maj. Op. at 22. The predecessor to section 1337(l)
was enacted in substantially its present form in 1974,
long before section 271(g) existed. Thus, for years before
section 271(g) existed, section 1337(l) provided a valid
remedy under section 1498(a) for the non-exclusion of
“articles imported by and for the use of the United
States.” There is no need to read section 1498(a) to incor-
porate section 271(g) to make sense out of section 1337(l).
Finally, the majority mistakenly urges that the gov-
ernment’s liability under section 1498(a) is otherwise
coextensive with potential government contractor liabil-
ity, and that section 1498(a) must therefore be interpreted
to incorporate section 271(g). There is no such principle
underlying section 1498(a). 5 Even under the majority’s
interpretation of section 1498(a) there are circumstances
in which a contractor, in the course of a government
contract, could potentially be held liable for patent in-
fringement while the government is protected from suit
by its sovereign immunity. The majority itself concedes
that section 1498 only waives “the Government’s sover-
eign immunity from suit when . . . the United States . . .
would be liable for direct infringement of the patent right
for such use or manufacture if the United States was a
private party.” Id. at 16 (emphasis added); see also Decca
Ltd. v. United States, 640 F.2d 1156, 1167 (Ct. Cl. 1980)
(“[S]ection 1498 is a waiver of sovereign immunity only
with respect to a direct governmental infringement of a

5 This argument, moreover, assumes that the con-
tractor would be liable when the government is not, an
issue presented in this case but not addressed by the
majority.
15 ZOLTEK CORP v. US

patent.” (footnote omitted)). Accordingly, the government
has not waived its sovereign immunity with respect to
indirect infringement by a contractor under sections
271(b), (c), and (f). 6 Thus, there is no anomaly in inter-
preting section 1498(a) as not incorporating section 271(g)
infringement.
To the extent this interpretation of section 1498(a)
might reveal a “loophole” in the patent laws excusing the
United States from infringement liability for use in the
United States of products produced abroad using a pat-
ented process, that “is properly left for Congress to con-

6 Section 271(f) was added in 1984 and provided li-
ability where someone within the United States supplied
the components of a patented invention to be assembled
outside of the United States. Patent Law Amendments
Act of 1984, Pub. L. No. 98-622, 98 Stat. 3383. It is clear
that section 271(f) did not create liability for direct in-
fringement. The language of section 271(f) itself mimics
the language of the indirect infringement provisions of
sections 271(b) and (c). Compare 35 U.S.C. § 271(f)(1) (“. .
. actively induce the combination . . .”), with 35 U.S.C.
§ 271(b) (“. . . actively induces infringement . . .”); compare
35 U.S.C. § 271(f)(2) (“. . . component of a patented inven-
tion . . . not a staple article or commodity of commerce
suitable for substantial noninfringing use . . .”), with 35
U.S.C. § 271(c) (“. . . component of a patented [invention] .
. . not a staple article or commodity of commerce suitable
for substantial noninfringing use . . .”). Furthermore,
section 271(f) was enacted in response to the Supreme
Court’s opinion in Deepsouth, which held that shipping
the constituent parts of a patented device overseas for
assembly was not an act of direct infringement. 406 U.S
at 528; see also Patent Law Amendments of 1984, S. Rep.
No. 98-663, at 6 (1984) (“This proposal responds to a
comment by the United States Supreme Court in [Deep-
south] calling for a legislative solution to close a loophole
in patent law.”).
ZOLTEK CORP v. US 16

sider, and to close if it finds such action warranted.”
Microsoft, 550 U.S. at 457. I respectfully dissent.