Intellectual Property News and Reports

MICHEL, Chief Judge.

The United States appeals the final judgment of liability for its use of a patented invention and of damages by the United States Court of Federal Claims in this case under 28 U.S.C. § 1498. Paymaster Techs., Inc. v. United States, 61 Fed. Cl. 593 (2004) (“Paymaster II”). Critical to the trial court’s finding use of the invention of United States Patent No. 5,292,283 (“the ’283 patent”) by two types of money order forms by the United States Postal Service (“USPS”) was its construction of the claim limitations “form set” and “ink permeates through the sheet from said printed front surface to said back surface to provide the indicia in mirror image form on said back surface,” found in all three asserted claims. The government challenges the trial court’s interpretation of these two claim phrases, but agrees that if the constructions stand, so do the rulings of use of the patented invention. The United States also appeals the damage award, alleging that too large a royalty base was used, as no reduction was made for a percentage, allegedly 10%, of one of the form sets that due to production variations does not meet all claim limitations. Paymaster Technologies, Inc. (“Paymaster”) cross appeals the damage award and requests remand to re-determine and increase the royalty rate, particularly if the royalty base is reduced.

As to use of the patented invention, encompassing both types of money orders, because we agree with the trial court’s claim constructions, we affirm. We vacate and remand the damages judgment as to the royalty base for findings consistent with our opinion. We affirm the damages judgment as to the royalty rate of 3.5%. Finally, we commend the trial judge for her painstaking, lucid, and lengthy opinion.

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