Historic $130m+ Patent Infringement Award Against The United States Of America

• Published date: 03 December 2021
• Subject Matter: Intellectual Property, Patent
• Law Firm: Sheppard Mullin Richter & Hampton
• Author: Mr Bradley Graveline, Laura M. Burson and Kazim A. Naqvi

A Sheppard Mullin trial team led by partners Brad Graveline and Laura Burson obtained one of the largest patent infringement damages awards against the United States of America for client SecurityPoint Holdings, Inc (SecurityPoint). Sheppard Mullin partner Don Pelto and associates Kazim Naqvi, Rebecca Mackin, and Tom Carr were also key members of the trial team. In addition, the Sheppard Mullin team included trial specialist Stephanie Limbaugh and legal assistants Dori Dellisanti and Ann Castro.

On October 22, 2021, the United States Court of Federal Claims released an opinion awarding SecurityPoint more than $100 million in damages for the United States' unauthorized use of SecurityPoint's U.S. Patent No. 6,888,460 (the "'460 Patent"), which claims a method of moving and processing trays with carts in security screening checkpoints at all Cat X and Cat I airports in the United States. SecurityPoint's patented method is now well-known and ubiquitous in security screening checkpoints at airports after the tragedy of 9/11. In addition, the Court held that SecurityPoint is entitled to delay damages as well as additional damages for the United States' continuing infringement of the patent after the close of fact discovery. The parties agree that these additional damages will be at least another $30 million, making this one of the largest, if not the largest, patent infringement damages awards ever against the United States.

SecurityPoint brought its claim for patent infringement against the United States under 28 U.S.C. ' 1498, in which Congress waived the sovereign immunity of the United States against patent infringement claims as well as certain copyright claims. These claims must be brought in the United States Court of Federal Claims.

In the SecurityPoint case, the Court of Federal Claims bifurcated the case into two phases: (1) patent validity; and (2) extent of infringement and damages.

In the first phase of the litigation, the government admitted infringement at ten airports, but challenged the validity of the patent, arguing that it was obvious over the prior art. After discovery and a trial, the Court held that the '460 patent is valid and non-obvious. The Court found that the government did not meet its burden of proving by clear and convincing evidence that the patent would have been obvious under 35 U.S.C. ' 103. In addition, the Court found that the objective indicia of non-obviousness weighed in SecurityPoint's favor. Specifically, the patented...