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On October 22, 2021, the Court of Federal Claims (Court) unsealed a decision awarding contractor SecurityPoint Holdings, Inc. (SecurityPoint) over $100 million in damages for TSA’s infringement of SecurityPoint’s patent No. 6,888,460 (“the ‘460 patent”). The ‘460 patent concerns a system of trays that recycle through security screening checkpoints by use of movable carts, and was first filed with the U.S. Patent and Trademark Office on July 3, 2002 by SecurityPoint CEO Joseph Ambrefe. Ambrefe had offered the TSA a license to use the patent in exchange for the exclusive right to advertise on the trays, but TSA refused the offer.

On May 2, 2011, SecurityPoint filed suit under 28 U.S.C. § 1498(a), which provides patent owners an exclusive remedy for “reasonable and entire compensation” against the United States by action in the Court of Federal Claims when a patented invention is used or manufactured by or for the United States. SecurityPoint alleged that TSA had subsequently used carts, trays, and scanning devices at security checkpoints in a manner that infringed its ‘460 patent in over 400 airports throughout the United States. In support of its claims, SecurityPoint identified TSA internal documentation from 2006, which stated that the agency had “no single TSA standard bin return system,” whereas by 2009, an updated version of the same internal guide spelled out a process for bin return, utilizing “bin carts.” TSA eventually admitted that it had used the patented technology since 2008 in 10 airports, leaving the Court to decide damages. In one of the largest patent infringement awards of its kind, the unsealed decision determined that TSA owed SecurityPoint $103.6 million in royalties from 2008 through the date of the opinion, delay damages, and interest.

This case serves as a reminder to contractor-patent owners that recourse for money damages may be available under 28 U.S.C. § 1498(a) when the U.S. Government infringes, or authorizes another contractor to infringe, the patent owner’s patent.

 
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Photo of M.Yuan Zhou M.Yuan Zhou

M. Yuan Zhou is a counsel in the Washington, D.C. office of Crowell & Moring, where she is a member of the firm’s Government Contracts Group.

Yuan’s practice includes a wide range of investigatory, counseling, and transactional capabilities, including: internal investigations related to…

M. Yuan Zhou is a counsel in the Washington, D.C. office of Crowell & Moring, where she is a member of the firm’s Government Contracts Group.

Yuan’s practice includes a wide range of investigatory, counseling, and transactional capabilities, including: internal investigations related to the False Claims Act, the Procurement Integrity Act, and other civil and criminal matters; compliance reviews and enhancing contractor compliance programs; representing clients in suspension and debarment proceedings; counseling on data rights issues, challenges, and disputes; mandatory disclosures; and providing government contracts due diligence in transactional matters. As part of the firm’s State and Local Practice, Yuan also counsels clients on state and local procurement issues, ranging from bid protests to contract negotiations with state agencies, and advises prime contractors and subcontractors on a variety of issues including prime/sub contract formation, disputes, and other government contracts issues.

Photo of Christopher D. Garcia Christopher D. Garcia

Christopher Garcia is a counsel in the Washington, D.C. office of Crowell & Moring, where he is a member of the firm’s Government Contracts Group.

As part of his government contracts practice, Chris conducts internal investigations regarding False Claims Act issues and defends…

Christopher Garcia is a counsel in the Washington, D.C. office of Crowell & Moring, where he is a member of the firm’s Government Contracts Group.

As part of his government contracts practice, Chris conducts internal investigations regarding False Claims Act issues and defends against related government inquiries and investigative demands. Chris also assists clients with technology-related issues, including counseling clients in the areas of patents and data rights, and defending against government challenges to technical data and computer software rights assertions. In addition, Chris performs government contracts due diligence for buyers in transactional matters, representing government contractors in a range of industries. As part of the firm’s State and Local Practice, Chris also counsels clients on state and local procurement issues, including reviewing state and local opportunities, and leading negotiations with government customers regarding contractual terms and conditions. Chris also advises contractors on the federal Freedom of Information Act as well as state-level public records laws. He has counseled contractors in numerous reverse-FOIA actions at the federal and state levels.