Larson v. United States
26 Cl. Ct. 365, 1992 U.S. Claims LEXIS 264, 24 U.S.P.Q. 2d (BNA) 1388 (1992)
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Rule of Law:
The U.S. government is not liable for patent infringement under 28 U.S.C. § 1498(a) when a private healthcare provider uses a patented device for patient treatment, even if the government reimburses the provider for the service through programs like Medicare. Liability for use 'for' the government requires explicit authorization or consent, which cannot be implied merely from a reimbursement scheme for 'reasonable and necessary' medical care when non-infringing alternatives are available.
Facts:
- Lester M. Larson owned several patents for a 'Thermoplastic Splint or Cast' and its application process.
- Healthcare providers used these patented splints to treat patients for conditions such as broken bones, strains, arthritis, and burn injuries.
- From 1970 onwards, these providers used Larson's splints on patients whose medical care was covered by federal programs including Medicare, Medicaid, and CHAMPUS.
- The U.S. government, through these programs, reimbursed the healthcare providers for the costs associated with the medical services rendered, which included the use of the splints.
- The government did not require, recommend, or specify that providers use Larson's particular splints or any specific brand of splint.
- Decisions regarding the course of medical treatment, including the choice of which splint to use, were made by the healthcare providers and their patients.
- Numerous non-infringing alternative splints and casts were available for providers to use.
Procedural Posture:
- Lester M. Larson (plaintiff) filed a claim against the United States (defendant) in the United States Claims Court for patent infringement.
- The court bifurcated the proceedings to address the issue of liability separately from the issue of damages (accounting).
- Larson filed a motion for partial summary judgment on the issue of liability.
- The United States filed a cross-motion for partial summary judgment on the issue of liability.
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Issue:
Does the U.S. government's reimbursement of private healthcare providers for medical services under Medicare, which may involve the use of a patented device, constitute use 'for' the government with its 'authorization or consent,' thereby triggering liability for patent infringement under 28 U.S.C. § 1498(a)?
Opinions:
Majority - Moody R. Tidwell, III
No. The government's reimbursement of healthcare providers under programs like Medicare does not constitute use 'for' the government with its 'authorization or consent' sufficient to establish liability for patent infringement under 28 U.S.C. § 1498(a). Liability under the statute requires either direct use 'by' the government (which was conceded not to have occurred) or use 'for' the government with its authorization or consent. The court reasoned that the medical services were provided for the benefit of the patient, not the government; the government's general interest in funding public health is too remote to make it a beneficiary of the specific infringing use. Furthermore, there was no governmental authorization or consent. An implied authorization theory fails because the government did not specify the use of the patented splints, and their use was not necessary to perform the medical services, as many non-infringing alternatives existed. The Medicare standard of reimbursing only 'reasonable and necessary' care is a negative payment condition, not an affirmative command to use any particular product, and it does not transform private providers into government agents.
Analysis:
This decision significantly narrows the scope of government liability for patent infringement under 28 U.S.C. § 1498(a), particularly in the context of large-scale federal reimbursement programs. It establishes a clear precedent that mere financial reimbursement for services provided by a third party, without direct government control or specification of the infringing product, is insufficient to create liability for use 'for' the government. The ruling protects the federal government from vast potential liability arising from the independent actions of private entities participating in programs like Medicare and Medicaid. It reinforces the legal principle that waivers of sovereign immunity must be construed narrowly and requires patent holders to pursue infringement claims against the direct infringers (the providers) rather than the government in such circumstances.
