U.S. government owes over $100 million for TSA's patent infringement

  • TSA used patented method for recycling trays at major airports
  • Had previously turned down deal with SecurityPoint Holdings
  • Court says SecurityPoint due at least $103 million in royalties

(Reuters) - The U.S. government owes a patent holding company at least $103 million because of the Transportation Security Administration's misuse of its technology for handling trays at airport security checkpoints, a Washington, D.C.-based federal court said.

In an opinion made public Friday, the U.S. Court of Federal Claims said the TSA used SecurityPoint Holdings Inc's patented methods for most of its security screenings at the largest U.S. airports since 2008 without compensating it.

The U.S. Department of Justice, which represented the U.S. government, declined to comment.

St. Petersburg, Florida-based SecurityPoint's founder Joseph Ambrefe offered the TSA a license to his patent in 2005 in exchange for the exclusive right to advertise on the trays at U.S. airports.

The TSA had success testing SecurityPoint's technology and equipment, but refused SecurityPoint's offer.

The court said the TSA began using the same method with its own equipment later that year at most or all of the airports under its control, and SecurityPoint sued the U.S. government for patent infringement in 2011.

The government conceded that it had used the technology since 2008 in 10 airports including Dallas/Fort Worth, Boston Logan, Phoenix Sky Harbor and all three major Washington, D.C.-area airports.

The court rejected the government's arguments that SecurityPoint's patent was invalid in 2015, leaving questions about the extent of the government's infringement and how much it owed in damages.

After a trial last year, Senior U.S. Judge Eric Bruggink of the Court of Federal Claims said in an August opinion unsealed Friday that the government owes SecurityPoint $103.6 million in royalties from 2008 through the date of the opinion.

Bruggink said the TSA's checkpoint design guides, employee testimony and expert testimony showed that with a few exceptions, SecurityPoint's tray-recycling method was "universally used as the default method for all lanes" at the largest U.S. airports.

The court's award was lower than SecurityPoint's request for $618 million in royalties, but higher than the government's proposal for a $12.6 million lump sum.

Bruggink also said SecurityPoint should receive additional damages based on interest accrued while the infringement happened, "given the length of time of uncompensated infringement."

SecurityPoint attorney Bradley Graveline of Sheppard Mullin Richter & Hampton said in a statement that he and his client were pleased with the decision and the "historic result," which they expect to be the "largest patent infringement damages award of its kind against the Government." Laura Burson of Sheppard Mullin also led SecurityPoint's legal team.

The case is SecurityPoint Holdings Inc v. United States, U.S. Court of Federal Claims, No. 1:11-cv-00268.

For SecurityPoint: Bradley Graveline and Laura Burson of Sheppard Mullin Richter & Hampton

For the U.S. government: Gary Hausken of the Department of Justice

Our Standards: The Thomson Reuters Trust Principles.

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Blake Brittain reports on intellectual property law, including patents, trademarks, copyrights and trade secrets. Reach him at blake.brittain@thomsonreuters.com