Recent Court Case on Patented Products Specified by DOT - LAW OFFICE OF ELIAS M. GORDAN

<body topmargin=0 leftmargin=0 marginheight=0 marginwidth=0> <table cellpadding=0 cellspacing=0 border=0 height="100%"><tr> <td valign="top" width=175 BGCOLOR="#A6CAF0" TEXT="#080000"> <div> <B> <TABLE BORDER="0" CELLPADDING="2" CELLSPACING="1" WIDTH="132" BORDERCOLORLIGHT="#C0C0C0" BORDERCOLORDARK="#808080" FRAME="BOX" RULES="ALL" ALIGN="BOTTOM" HSPACE="0" VSPACE="0" > <tR> <tD VALIGN=TOP HEIGHT= 35 ><NOBR><div> <IMG BORDER="0" SRC="1x1.gif" HEIGHT="29" ALIGN="BOTTOM" HSPACE="0" VSPACE="0" WIDTH="21"></div> </NOBR></tD> <tD VALIGN=TOP><NOBR><div> <IMG BORDER="0" SRC="1x1.gif" HEIGHT="29" ALIGN="BOTTOM" HSPACE="0" VSPACE="0" WIDTH="21"></div> </NOBR></tD> <tD VALIGN=TOP WIDTH="20"><IMG BORDER="0" SRC="1x1.gif" HEIGHT="35" ALIGN="bottom" WIDTH="20" HSPACE="0" VSPACE="0"></tD> <tD VALIGN=TOP><NOBR><div> <A HREF="index.htm" TARGET="_top" TITLE="HOME PAGE LAW OFFICE OF ELIAS M. GORDAN"><U><B><IMG SRC="00d0d1d0.gif" border=0 width="13" height="29" ALIGN="BOTTOM" HSPACE="0" VSPACE="0"></B></U></A></div> </NOBR></tD> <tD VALIGN=TOP><NOBR><div> <IMG BORDER="0" SRC="1x1.gif" HEIGHT="29" ALIGN="BOTTOM" HSPACE="0" VSPACE="0" WIDTH="27"></div> </NOBR></tD> </tR> </TABLE></B></div> <div> <B>© </B>2001 Elias M. Gordan</div> <div> All rights reserved</div> <bR> <div> <B>Law Office of</B></div> <div> <B>Elias M. Gordan</B></div> <div> Post Office Box 60</div> <div> Palos Park, IL  60464</div> <bR> <div> Phone  708.923.9735</div> <div> Email  gordanlaw@att.net</div> <div> Web    www.gordanlaw.com</div> <div> <A HREF="index.htm" TARGET="_top" TITLE="HOME PAGE LAW OFFICE OF ELIAS M. GORDAN"><U><B>HOME</B></U></A></div> <div> <A HREF="id24.htm" TARGET="_top" TITLE="LAW OFFICE OF ELIAS M. GORDAN About Us"><U><B>About Us</B></U></A></div> <div> <A HREF="id30.htm" TARGET="_top" TITLE="LAW OFFICE OF ELIAS M. GORDAN Links"><U><B>Links</B></U></A></div> <div> <A HREF="id26.htm" TARGET="_top" TITLE="LAW OFFICE OF ELIAS M. GORDAN Contact U"><U><B>Contact Us</B></U></A></div> <bR> <bR> <bR> </td> <td valign="top" BGCOLOR="#FFFFFF" TEXT="#080000"> <div> PATENTED DOT-SPECIFED PRODUCTS: WHAT THEY WON'T TELL YOU</div> <div> (C) 2003 Elias M. Gordan.  All Rights Reserved</div> <bR> <div>         In the course of our patent-application work (including some for the construction trades), we have come across a recent court decision that should be of interest in any of you who do DOT work.  </div> <div> The case, <U>State Contracting and Engineering Corporation vs. State of Florida</U>, involved State Contracting (“SCE”), a contractor doing work for the Florida DOT (FL-DOT).  In 1989, SCE was awarded a FL-DOT contract to provide precast concrete noisewalls, and submitted a value engineering proposal, using a design they developed themselves, for use in sandy soils.  As payment for their proposal, they received 50% of the contract savings (IDOT and other DOTs follow the same format).  FL-DOT started to specify the design as an alternative for future projects.  </div> <div>         SCE, in a shrewd move, applied for patents in 1990, and obtained patents in 1993 and 1995 for the method and the device they designed.  FL-DOT paid the value-engineering incentive, <B>but did not think to negotiate the ability to (sub)license SCE's technology to future bidders</B>.  </div> <div>         FL-DOT specified the patented product, 16 other contractors used it, and all of them were sued by SCE for patent infringement (9 contractors in one lawsuit, 7 contractors in the other), when they refused to pay license fees to SCE.   The State of Florida was sued, too, for patent infringement and breach of contract.  The Federal court in Florida ruled for the State and the group of 4 contractors, and SCE appealed.  (The case against the 9 contractors is pending).  In 2001, the Federal appeals court in Washington, DC agreed that the State of Florida could not be liable for patent infringement, since they are covered by the 11<FONT SIZE="1" COLOR="#000000" FACE="Arial" >th</FONT> Amendment to the Constitution (i.e. they can't be sued in Federal Court without their consent, since patent cases are always Federal cases). The appeals court also rejected SCE's breach of contract claim against the State.  </div> <bR> <div> <B>The Federal appeals court reinstated the case against the seven contractors, however, and the contractors lost, since they only had rights to SCE's data as published in the FL-DOT plans and specs.  They could not use SCE's patented invention, since the State of Florida had not negotiated sub-licensing rights.  Four of the 7 contractors were ordered to pay a total of $9.5 million.  The case is currently on appeal.  FL-DOT has set aside a total of $21.5 million to reimburse the contractors for their costs (including hundreds of thousands of dollars in legal bills ), under a Special Provision issued at the time the jobs were bid.</B></div> <bR> <div> From our experience, we have seen patented products specified by DOTs for one-of-a-kind specialty items, where no alternative is specified.  DOTs mistakenly think that if they specify it, the Contractor can use it.  On the flipside, if you think of an new or even improved device, it is possible to get a patent on it.</div> <bR> <div> I<FONT SIZE="3" COLOR="#000000" FACE="Times New Roman" >f you have any questions, or for more details, </FONT><FONT SIZE="3" COLOR="#0000BF" FACE="Times New Roman" ><A HREF="id26.htm" TARGET="_top" TITLE="LAW OFFICE OF ELIAS M. GORDAN Contact U"><U>contact us</U></A></FONT></div> <bR> <DIV ALIGN="LEFT"></DIV> <div> <B>DISCLAIMER</B></div> <div> The information contained in this guide is meant only to convey general information, and is not intended to serve as legal advice or counsel, nor is it meant to create an attorney-client relationship.  The information presented here is subject to change or modification that any time without notice, and may not apply to the specific facts of your case.  Accordingly, you should check with a with an attorney before acting on this information, to make sure that it applies to your situation.</div> <bR> <bR> <div> <A HREF="index.htm" TARGET="_top" TITLE="HOME PAGE LAW OFFICE OF ELIAS M. GORDAN"><U><B>BACK TO HOME PAGE AND RECENT NEWS</B></U></A></div> <bR> <DIV ALIGN="LEFT"></DIV> <div> <B>Law Office of Elias M. 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