Can GM Legally Ignore Others' Patents, Thanks To US Ownership?

from the that-might-make-for-a-fun-lawsuit... dept

Thu, Oct 14th 2010 11:35am — Mike Masnick

Years ago, we wrote about how the US gov't used a "state secret" claim to simply ignore patents from a startup that may have been infringed by Lucent, so that it could use a startup's patented technology without getting a license (Updated to clarify that it wasn't Lucent's patents). Of course, there have been some other lawsuits on the subject and in the famous Zoltek case, it was ruled that the US gov't could effectively ignore patents of citizens. While some felt this probably wouldn't be that big of a deal (how often would it come up?), others are now pointing out that, thanks to the US gov't bailing out certain companies and taking equity stakes in the process, it could be argued that a US-owned GM is simply not subject to patent laws any more, and could, legally, get away with ignoring the restrictions on certain technologies covered by patents. Would GM actually do this? I doubt it, but it certainly could make for quite the legal fight if the company ever tried to use this as a defense in a patent lawsuit...

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Filed Under: federal ownership, ownership, patents
Companies: gm, zoltek

19 Comments

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Alatar, 14 Oct 2010 @ 12:03pm

But but but...
But patents are here only to promote progress and innovation. There is simply no way they could hinder anything.
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sehlat (profile), 14 Oct 2010 @ 12:20pm

Shhh! Do *NOT* give lawyers ideas.
They have enough ways to abuse the spirit of the law, as well as the letter, as it is.
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Anonymous Coward, 14 Oct 2010 @ 12:23pm

Thank you for the heads up. I am going to give Adam a call and let him know that the case has morphed in a direction that I fully expected it would, much to the surprise/shock of both the USG and its contractors/subcontractors.

Zoltek is now two cases; Zoltek v. US in the Court of Federal Claims and Zoltek v. Lockheed Martin in the Federal District Court located in Atlanta.
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Jay (profile), 14 Oct 2010 @ 12:31pm

Similar questions come up in my neck of the woods with the 'Crown' (eg, State) enjoying certain protections and immunities. We have a whole bunch of 'State Owned Enterprises' and the legal question is whether or not those SOEs also enjoy the same protections.

The rule is that they dont. Ownership by the state does not make it part of the state. There are a whole list of criteria the entity must meet. The most relevant here would be whether or not the state controls the entity or not. If GM were state controlled, as opposed to state owned, then you could argue it should be included. However, if its simply ownership with an independent board (who are of course answerable to shareholders, but not controlled by them) then GM would fail the legal test here and not enjoy state immunity from patents.
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A Dan (profile), 14 Oct 2010 @ 12:37pm

Re:
The lesson here is that the government should never be allowed to exempt itself from rules it makes. Then the ambiguity is gone.
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Hulser (profile), 14 Oct 2010 @ 12:53pm

Grandfather
My guess is that even if GM were to get some special privileges from being owned by the governemnt, that these privileges wouldn't carry over after their IPO. In other words, the privileges wouldn't be grandfathered to GM after they were no longer owned by the governemnt. Given this, I would think that GM lawyers would avoid invoking these priveleges at all costs.
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RD, 14 Oct 2010 @ 1:03pm

Re: Re:
"The lesson here is that the government should never be allowed to exempt itself from rules it makes. Then the ambiguity is gone."

While you are on the right track here, you are about a decade too late. We have left the 28th amendment behind a long time ago. There are laws that pertain to us that dont the them (*cough*HeathCare*cough*) so this is now a moot idea.
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angry dude, 14 Oct 2010 @ 1:09pm

Masnik, WTF are you writing about ???
"Years ago, we wrote about how the US gov't used a "state secret" claim to simply ignore patents from Lucent, so that it could use Lucent's patented technology without getting a license."

Huh ??????????????????????????

It wasn't Lucent patent, idiot
The patent belonged to small company - Crater Corporation and it was used by Lucent without license to make some money (actually a lot of money) on government contract without paying a dime to patent holder

Lucent was sued by Crater for willfull patent infringement but the case was killed when some of Lucent's friends in Wash DC invoked state secret clause to shield Lucent from any kind of court-ordered discovery

And this is called "journalism" nowadays !!!!!

I call it a pornography

Shame on you, Masnik !!!

Pull down your pants, Mikey, and take a punishment
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Anonymous Coward, 14 Oct 2010 @ 1:10pm

Re: Re:
The issue here is not the USG exempting itself from the rules (though Congress does this all the time...read a recent article on Volokh about insider trading by congressional staffers), but what is known as sovereign immunity. Sovereign Immunity is a longstanding doctrine that private suits against the USG can only be maintained when the USG has consented to such suits.

Interestingly, in cases involving patent (and copyright) infringement, the far more troubling issue is the sovereign immunity enjoyed by the states. For example, a state can receive a patent and sue a private third party. However, the converse is not true.
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Anonymous Coward, 14 Oct 2010 @ 1:13pm

Re:
You are definitely on the right track. Sovereign immunity only extends to the government itself and "units" that are generally deemed to be "arms of the government". A mere equity interest does not an "arm" make.
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RD, 14 Oct 2010 @ 1:19pm

Re: Masnik, WTF are you writing about ???
"Lucent was sued by Crater for willfull patent infringement but the case was killed when some of Lucent's friends in Wash DC invoked state secret clause to shield Lucent from any kind of court-ordered discovery"

So....Lucents patents were ignored under the "State secret" claim...Your round-about rant doesnt negate the point.

"And this is called "journalism" nowadays !!!!!"

No, its what is called a TECH BLOG. You know what blogs are, right? Then again, perhaps you dont, you're frothing so much I doubt much could get through that haze of hate.

"I call it a pornography"

This line makes no sense.

"Shame on you, Masnik !!!"

Why? He's not a journalist.

"Pull down your pants, Mikey, and take a punishment"

For what? Writing his OPINION about something? Ok then, YOU pull YOUR pants down, since your own opinion doesnt meet MY "journalistic standards" either. Time for a beating of a petulant whiner.
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Anonymous Coward, 14 Oct 2010 @ 1:23pm

Is GM above the law?
Soon they'll also invent a car that has a "revolutionary" bamboo frame and flat reed-based side paneling. This will demonstrate that safety standards are no longer a problem in pursuit of profits either.
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Mike Masnick (profile), 14 Oct 2010 @ 1:33pm

Re: Masnik, WTF are you writing about ???
It wasn't Lucent patent, idiot
The patent belonged to small company - Crater Corporation and it was used by Lucent without license to make some money (actually a lot of money) on government contract without paying a dime to patent holder

Actually, you're correct. I made a mistake and now I've fixed it.

Not sure why you need to go ballistic over it. We always are willing to correct mistakes in the post when clarified by commenters.
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Anonymous Coward, 14 Oct 2010 @ 1:35pm

@12
and thsi car will use your feet to move it.....and require someone named fred to pilot it.
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Stuart (profile), 14 Oct 2010 @ 2:38pm

Re:
You mean if GM were controlled by the US government. As in if the president of the US could say ... Fire the head of GM.
That could NEVER happen. :)
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Pontifex (profile), 14 Oct 2010 @ 2:46pm

Re: Re: Masnik, WTF are you writing about ???
"Pull down your pants, Mikey, and take a punishment."

I'm fairly certain that Angry Dude just wants to see Mike without his pants on.
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Rinald J Roley, 14 Oct 2010 @ 6:08pm

Support The Tea Party Now
This is exactly the kind of thing we have to expect since Obama and his socialist cronies usurped power.

Bush and the Republicans would never simply ignore important laws in this way.
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abc gum, 14 Oct 2010 @ 6:31pm

Re: Masnik, WTF are you writing about ???
Angry Dude -> "Pull down your pants, Mikey, and take a punishment"

Whoa ! .... you are one sick dude.
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Anonymous Coward, 14 Oct 2010 @ 8:51pm

Re: Re: Re: Masnik, WTF are you writing about ???
Don't feed the trolls.
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