Iris Corporation v. Japan Airlines Corporation
112 U.S.P.Q. 2d (BNA) 1689, 2014 U.S. App. LEXIS 20142, 769 F.3d 1359 (2014)
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Rule of Law:
When a private party's allegedly infringing use of a patented invention is both required by the government and for the government's benefit, the patent owner's exclusive remedy is an action against the United States under 28 U.S.C. § 1498(a).
Facts:
- IRIS Corporation owns a U.S. patent for methods of making a secure identification document containing an embedded computer chip, such as an electronic passport.
- Japan Airlines Corporation (JAL) is a commercial airline that operates flights into the United States.
- At its check-in facilities throughout the U.S., JAL examines the electronic passports of its passengers.
- JAL conducts these passport examinations in order to comply with U.S. federal laws and international treaties concerning border security.
- IRIS alleged that some of the electronic passports JAL examines were made using the methods claimed in its patent.
Procedural Posture:
- IRIS Corporation sued Japan Airlines Corporation (JAL) for patent infringement in the U.S. District Court for the Eastern District of New York, a federal trial court.
- JAL filed a motion to dismiss for failure to state a claim, arguing that IRIS's only remedy was a suit against the United States under 28 U.S.C. § 1498(a).
- The district court granted JAL’s motion to dismiss, but did so based on a different legal rationale.
- IRIS, as the appellant, appealed the district court's dismissal to the U.S. Court of Appeals for the Federal Circuit, where JAL was the appellee.
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Issue:
Does a private airline's government-mandated examination of electronic passports, performed to enhance border security, constitute an act 'for the United States' under 28 U.S.C. § 1498(a), thereby requiring a patent infringement suit to be brought against the U.S. government instead of the airline?
Opinions:
Majority - Hughes, Circuit Judge
Yes. A private airline's government-mandated examination of electronic passports is an act 'for the United States' under 28 U.S.C. § 1498(a). The court found that JAL's actions met the two-part test for an activity to be 'for the United States': (1) it was conducted with the 'authorization or consent of the Government,' and (2) it was conducted 'for the Government.' The government's authorization was clear because federal laws require JAL to examine the passports; compliance with the law is impossible without performing the allegedly infringing act. The activity was for the government's benefit because it directly enhances border security, helps detect fraudulent passports, and reduces demands on government resources, which are all uniquely governmental functions. Since both prongs were met, IRIS's exclusive remedy lies in a suit against the United States in the Court of Federal Claims, not a suit against JAL.
Analysis:
This decision solidifies the scope of sovereign immunity under 28 U.S.C. § 1498(a) by extending its protection to private entities compelled by law to perform quasi-governmental functions. It clarifies that when a private party's infringement is a direct and necessary consequence of regulatory compliance for a core government interest, the liability shifts from the private actor to the government. This precedent protects government contractors and other regulated entities from patent infringement litigation, channeling such disputes to the Court of Federal Claims and ensuring that the government, which mandates the action, is the responsible party.
