A former Raytheon engineer has sued the company for patent royalties, based on what he said was a verbal agreement that he would be paid if the company used his patented invention.
Nagui Mankaruse, who has a PhD. In mechanical engineering from USC, invented a device for cooling missile defense radar systems. He was issued a US patent for his invention in 2002, and joined Raytheon in 2004. He worked for the company as an engineer until 2012.
Mankaruse claims the company offered to license the patent from him in 2008. He said that Raytheon’s technical director offered to pay him the royalty rate that Raytheon received for licensing its own patents, assuming Mankaruse’s invention actually worked.
Mankaruse said that he agreed to these terms, but that he was excluded from the development of the radar systems and told that Raytheon would not be using his invention.
He said that his patented technology was actually used to perfect three missile systems – the Firefinder, Sentinel, and Thermal High Altitude Area Defense Radar. In a letter to the company, he said that he saw his invention installed in one such system.
Mankaruse said that once he provided the company with his solution to its engineering problem, Raytheon ran out of work for him.
Raytheon’s contracts with the government are reportedly worth at least hundreds of millions of dollars.
The suit is based on breach of an oral contract.
Whether an oral contract is enforceable depends on the location and the circumstances. For example, in the US, oral contracts for more than a certain amount of money are not enforceable under the statute of frauds; the amount of money varies from state to state.
Mankaruse originally filed his complaint in state court. Raytheon had the case removed to federal court, saying that it was essentially a patent infringement claim.
Mankaruse said that he did not sue for patent infringement because he wanted the missile defense radar to continue to protect American soldiers.
Government contractors are immune from direct patent infringement liability, due to “the possibility that the United States’ procurement of important military matériel could be interrupted via infringement actions against government contractors.”
As a 2012 Federal Circuit decision in the Zoltek case confirmed, 28 U.S.C. § 1498(a) allows a patent holder to sue the US government
[w]henever an invention described in and covered by a patent of the United States is used or manufactured by or for the United States without license of the owner thereof or lawful right.
The contractor involved must reimburse the US government for the costs of any such patent infringement claims.
Some takeaways here:
- Relying on an oral agreement for a patent license is a really bad idea.
- If you believe that your patent has been infringed by a US government contractor, your only recourse may be to file an infringement suit against the US government (rather than the contractor).