by Dennis Cro

"A key reason is 28 U.S.C. § 1498. That statute channels patent infringement claims involving government-authorized work away from private defendants and into the U.S. Court of Federal Claims, with the United States as the sole defendant (and a reasonable royalty as the only remedy). For government contractors and subcontractors, § 1498 operates as a powerful shield: if the infringing activity was performed "for the Government" and "with the authorization or consent of the Government," the patent holder's only remedy is a compensation action against the United States. The contractor walks free."

"In Arlton v. AeroVironment, Inc., No. 2021-2049 (Fed. Cir. Feb. 2026) (nonprecedential), the Federal Circuit affirmed summary judgment shielding AeroVironment from patent infringement liability under § 1498 for its work developing NASA's Ingenuity Mars helicopter and a terrestrial copy called "Terry." The Arltons - co-inventors and co-owners of U.S. Patent No. 8,042,763, covering a counter-rotating coaxial rotor UAV - had developed the underlying technology under Small Business Innovation Research (SBIR) contracts with the military. When the government declined to award them follow-on work and instead contracted with AeroVironment through JPL and NASA, the Arltons sued AeroVironment for infringement."

The War Industry heavily funds new technology and patents but generates few infringement lawsuits because 28 U.S.C. §1498 redirects claims involving government-authorized work to the U.S. Court of Federal Claims against the United States, with a reasonable royalty as the sole remedy. Section 1498 protects contractors when activities occur "for the Government" and "with the authorization or consent of the Government," requiring patentees to pursue compensation from the United States while contractors face no liability. The statute reflects a policy tradeoff in which taxpayers fund development and the government retains control to resolve patent disputes. The Federal Circuit applied §1498 in Arlton v. AeroVironment, affirming contractor immunity for work on NASA's Ingenuity and its terrestrial copy after the inventors sued following lost follow-on contracts.

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