Petition for Writ of Certiorari — Blueport Co., LLC v. United States (No. 08-546)

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Supreme as U.S.

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No.08- 08-546 OCT 22 2008

Iw tue OFFICE OF THE CLERK

Supreme Court of the United States

REELED EF

BLUEPORT COMPANY LLC,

Petitioner,

UNITED STATES OF AMERICA,

Respondent.

ON PETITIONER VOR A WRIT OF CERTIORARI TO THE

UNITED STATES Court OF APPEALS

FOR HE FEDERAL CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

Kurt M. RYLANDER

RYLANDER & ASSOCIATES PC

406 West 12 Street

Vancouver, WA 98660

(360) 750-9931

Attorneys for Petitioner

218993 g

COUNSEL PRESS

&O)) 274-3321 © ($00) 359-6859

QUESTIONS PRESENTED FOR REVIEW

(1) Did the Federal Circuit err in shifting the

burden onto Plaintiff, after Plaintiff established prima

facie jurisdiction, to disprove the defenses enumerated

in 28 U.S.C. § 1498(b) thus further enhancing a split

between circuit courts of appeal regarding treatment

of jurisdictional defenses in suits against the

Government?

(2) Did the Federal Circuit commit legal error by

construing the “order, influence, or induce” proviso of

28 U.S.C. § 1498(b) to not require any nexus between

the Government acts alleged to infringe and the alleged

position of influence or inducement?

TABLE OF CONTENTS

Questions Presented for Review ..............

I esc c ees esses sessevensss

Table of Cited Authorities ...................

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Statement of Facts and Procedural History .

Reasons for Granting the Petition ............

A. There Is A Split In The Circuit Courts

Over Whether Jurisdictional Defenses In

Suits Against The Sovereign Are The

Government’s Burden To Prove, Or The

Plaintiff’s Burden To Disprove. ........

B. The Federal Circuit Misconsctrued The

Section 1498(b) Defenses To Not Require

A Nexus Between The Government’s

Infringement And The Alleged Position

To Order, Influence Or Induce. .........

Contents

Page

1. Eliminating The Need For A Nexus

Fundamentally Alters The Law Of

Licenses As Related To The

COUOTIONE, yw sk ici iv sec bieoees 23

2. The Federal Circuit Construction

Conflicts With The Separability Of

Rights Granted Under 17 U.S.C.

ery eae eee eee cn ee 27

C. The Conjunction Of Erroneously Placing

The Burden Of Proof On Plaintiff With A

Ruling That Requires No Nexus Between

The Acts Alleged To Infringe And Those

Alleged To Establish The Defenses,

Swallows The Section Whole ........... 28

eo rere rete Wena ne the: 29

TABLE OF APPENDICES

Page

Appendix A — Opinion Of The United States

Court Of Appeals For The Federal Circuit

EPOGIIOG SUF TD, BGS occ cckcccceccsessenss la

Appendix B — Opinion Of The United States

Court Of Federal Claims Dated May 7, 2007... 2la

TABLE OF CITED AUTHORITIES

Page

Cases

Ariadne Fin. Servs. Pty. Ltd. v. U.S.,

133 F.3d 874 (Fed.Cir. 1998) ...............-. 19

Autery v. U.S.,

992 F.2d 1523 (11 Cir. 1993),

cert. denied, 114 S. Ct 1829 (1994) ......... 14, 17

Blueport v. U.S.,

533 Fi3d 1374 (Fed. Cir., July 25, 2008) .... passem

Blueport v. U.S..

76 Fed. Cl. 702 (Fed. Cl., May 07, 2007) .... passim

Bose Corp. v. Consumers Union of U.S., Inc.,

466 U.S. 485, 104 S. Ct. 1949,

80 L. Ed. 2d 502 (1984), reh’g denied,

467 U.S. 1267, 104 S. Ct. 3561,

ee mF ek | ee 22

Carlyle v. U.S.,

674 F.2d 554 (6th Cir. 1982) ................ 14-15

Carson v. Dynegy, Inc.,

344 F.3d 446 (5* Cir. 2003) ................. 26

CMS Software Design Sys., Inc.

v. Info Designs, Inc.,

785 F.2d 1246 (5th Cir. 1986) ............... 26

Cited Authorities

Page

Columbia Pictures Industries, Inc.

v. Redd Horne, Inc.,

148 F.20 154 (Ge Gir. 1984) ................. 27

Consolidated Rail Corp. v. Gottshall,

512 U.S. 532, 1148S. Ct. 2396,

ee OO ek 21

Corning Glass Works v. Brennan,

417 U.S. 188, 94S. Ct. 22238,

Re oe RUPE ksi oe cee c vce sevcevas 21

Forshey v. Gober,

226 F:'3d 1299 (Fed. Cir. 2000) .............. 21

Frazer v. U.S.,

288 F:3d 1347 (Fed. Cir. 2002) .............. 19

Haberman v. Finch,

S08 Fo GS4 (2d Cir. 1960)... ow cc cece ceeness 21

Hopland Band of Pomo Indians v. U.S.,

855 F2d 1573 (Fed. Cir. 1988) .............. 19

Irwin v. Dept. of Veterans Affairs,

498 U.S. 89, 111 S. Ct. 453,

112 L. Ed. 2d 435 (1990), reh’g denied,

og A 2 | ee 18

Vii

Cited Authorities

Page

John R. Sand & Gravel Co. v. U.S.,

__ US. _, 1288. Ct. 750,

100 L,. Bid. ZG GOT CR) Cw no oc ccc cence ces 19

Kendall v. U.S..,

107 U.S. 128, 28. Ct. 277,

pe Se gk Ree ee 19

kiehn v. U.S.,

984 F-2d 1100 (10* Cir. 1998S) ............... 17

Lulirama Ltd., Inc.

v. Axcess Broadcast Svcs, Inc.,

126 Foe Bre CF" Cr WS8T) nn wc cc ccc cwesss 26

Martinez v. U.S.,

S33 F.3d 1296 (Ped. Cir. 2008) .........0000. 19

MacLean v. U.S.,

454 F'3d 1334 (Fed. Cir. 2006) .............. 19

Matter of Government Acquisition

of License to Wmployee’s Invention,

B-199,026, 60 Comp. Gen. 248,

1981 WL 22453 (Comp. Gen. Feb. 11,1981) .. 24

New York Times Co., Inc. v. Tasini,

533 U.S. 488, 121 S. Ct. 2381,

150 E.. Bd. Be A )Cw.n occ cc cece cecues 27

vill

Cited Authorities

Page

Playmedia Sys. Inc. v. Am. Online, Inc.,

171 F Supp. 2d 1094 (C.D. Cal. 2001) ....... 26

Prescott v. U.S.,

973. F.2d G36 (OS™ Cir. 190Z) 2... cc eees 14, 15, 16,17

Respect, Inc. v. Fremgen,

897 F. Supp. 361 (N.D. Ill. 1995) ............ 27

Sharp v. U.S.,

401 Febd 440 (6" Cir, B00) .. 2.5 cc ccc cedener 17

Smith v. U.S.,

$43 F. Supp. 160:(D.2.1. 1906) «40... 0c ese. 17

Stewart v. Abend,

495 U.S. 207, 110 S. Ct. 1750,

100 L.. Bed. 2G SGA (ISO) ow cs vs cccckvsuenses 27

Stewart v. U.S.,

199 F.2d S17 (7th Cir. 1962) «2... hci cices 15, 16, 17

Strategical Demolition Torpedoe Co. v. U.S.,

110 F. Supp. 264,

124 Ct. Ch. Ge Ce CA, EB) nce eee 20

Tcherepnin v. Knight,

389 U.S. 332, 88 S. Ct. 548,

19 2. Be. Bee GO CERT so cea ves ae ens 21

Cited Authorities

Venture Coal Sales Co. v. U.S..,

370 F.3d 1102 (Fed. Cir. 2004) .............. 18-19

Zoltek Corp. v. U.S.,

51 Fed. Cl. 829, 62 U.S.PQ.2d 1366 (2002) ... 15

Statutes

re passim

EE vse v rene sccccceseseeveceevees 27

EE EE) voce vcs vsescesececeseeecs 1

ED cc ces cess erevevecars passim

re passim

eS () ee ee 15

EE isc e case ec evsesvecessecnsss 19

DE go oc ese ese seecsans 14, 15, 19

Other Authorities

H.R. Rep. 94-1476, 1976 U.S.C.C.A.N. 5659 .... = 27

Blueport LLC (“Blueport”) hereby petitions for a

writ of certiorari to review the judgment of the United

States Court of Appeals for the Federal Circuit entered

in this action on July 25, 2008.

DECISIONS BELOW

The decision of the United States Court of Appeals

for the Federal Circuit affirming the judgment of the

United States Court of Federal Claims is reported at

533 F.3d 1374 (J*ed. Cir, July 25, 2008) (Appendix A,

la-20a). The judgment of the United States Court of

Federal Claims is reported at 76 Fed. Cl. 702 (Fed. Cl.,

May 07, 2007) (Appendix B, 21a-101a).

JURISDICTIONAL STATEMENT

This Court has jurisdiction pursuant to 28 U.S.C.

§ 1254(1) as a petition for writ of certiorari from the July

25, 2008 final decision of the United States Court of

Appeals for the Federal Circuit.

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOKED

Section 1498(b) of Title 28 provides:

(b) Hereafter, whenever the copyright in

any work protected under the copyright laws of

the United ‘States shall be infringed by the

United States, by a corporation owned or

controlled by the United States, or by a

contractor, subcontractor, or any person, firm,

or corporation acting for the Government and

with the authorization or consent of the

Government, the exclusive action which may be

brought for such infringement shall be an action

by the copyright owner against the United

States in the Court of Federal Claims for the

recovery of his reasonable and entire

compensation as damages for. such

infringement, including the minimum statutory

damages as set forth in section 504(c) of title 17,

‘United States Code: Provided, That a

Government employee shall have a right of

action against the Government under this

subsection except where he was in a position to

order, influence, or induce use of the

copyrighted work by the Government: Provided,

however, That this subsection shail not confer a

right of action on any copyright owner or any

assignee of such owner with respect to any

copyrighted work prepared by a person while

in the employment or service of the United

States, where the copyrighted work was

prepared as a part of the official functions of

the employee, or in the preparation of which

Government time, material, or facilities were

used: And provided further, That before such

action against the United States has been

instituted the appropriate corporation owned

or controlled by the United States or the head

of the appropriate department or agency of the

Government, as the case may be, is authorized

to enter into an agreement with the copyright

owner in full settlement and compromise for the

damages accruing to him by reason of such

infringement and to settle the claim

administratively out of available appropriations.

Except as otherwise provided by law, no

recovery shall be had for any infringement of

a copyright covered by this subsection

committed more than three years prior to the

filing of the complaint or counterclaim for

infringement in the action, except that the

period between the date of receipt of a written

claim for compensation by the Department or

agency of the Government or corporation

owned or controlled by the United States, as

the case may be, having authority to settle

such claim and the date of mailing by the

Governmer.t of a notice to the claimant that

his claim has been denied shall not be counted

as a part of the three years, unless suit is

brought betore the last-mentioned date.

STATEMENT OF THE CASE

Blueport Company LLC (“Blueport”) filed this

complaint November 18, 2002, against the Air Force for

two software programs created by a low ranking enlisted

airman, Mark Davenport, collectively referred to as

“AUMD”, asked Davenport to donate the program to

the Air Force through the Air Force’s IDEA suggestion

program. When he refused, the Air Force threatened

Davenport with courts martial if he did not release the

code. The Air Force then hired a government contractor,

SAIC, to hack into AUMD to alter the built-in expiration

date function, as well as changing the copyright

management and authorship information, so the Air

Force could use the programs while SAIC created an

“exact replication” of AUMD in a system known as

MARS (for Manpower Access Report System).

Davenport’s assignee, Blueport, filed an

administrative claim, which was denied, and then

Blueport brought suit alleging, inter alia, copyright

infringement for creation, reproduction and distribution

of the hacked versions of AUMD, and for creation,

reproduction and distribution of the MARS programs.

The Court of Federal Claims ruled after trial that

Blueport bore the burden of disproving the Section

1498(b) defenses, and failed to carry that burden,

published at 76 Fed. Cl. 702 (2007). The trial court,

finding jurisdiction lacking, dismissed Plaintiff’s suit

without addressing the merits and entered final

judgment in favor of the Government from which an

appeal was taken.

The Federal Circuit affirmed the judgment, ruling

that (1) despite contrary treatment of similar language

in jurisdictional defenses of other statutes, and within

the same section, that the burden of the Section 1498(b)

defenses lay with the Federal employee plaintiff to

disprove, and (2) the Section 1498(b) defenses did not

require any nexus between the infringing acts and the

acts alleged to establish the jurisdictional defenses.

The Federal Circuit ruling effectively allows the

Government to take an unlimited license in a person’s

property without compensation if that person has ever

been an employee of the Federal Government. In this

ease, Mr. Davenport, while an enlisted member of the

Air Force, created a pair of software programs on his

own, granted the Air Force a limited permissive license

to use that software that expressly and automatically

terminated on clear expiration date. Blueport did not

sue for infringement for the acts occurring during the

license period, but instead for (a) the Air Force hiring and

directing SAIC to hack into and duplicate the software

after the expiration date, and (b) the Air Force hiring and

directing SAIC to make a duplicate derivate work of the

software, known as MARS, during the period the Air Force

used the hacked version of Blueport’s software.

At the time of the infringing uses (the creation, copying

and distribution of hacked versions of AUMD, and the

creation, copying and distribution of the derivative work

MARS - which was not even addressed by Federal Circuit),

Mr. Davenport was not in a position to order, influence, or

induce the infringing use, and in fact attempted - to no

avail - to prevent the infringing use. Moreover, at the time

of the infringing uses, the software was not even owned

by Davenport, but had been assigned to Blueport.

The Federal Circuit opinion erroneously reads into the

statute “. .. except where he was ever in a position to order,

influence, or induce any use...” The infringing use and

position of influence should and must be wholly and

indivisibly conternporaneous, i.e., have a nexus, to fall with

in the Section 1498(b) defenses. Without a requirement

for nexus the Government is granted a staggering

authority to appropriate the property of Federal employees

without compensation.

The Federal Circuit’s opinion is inconsistent with the

statute, and inconsistent with the Congressional intent to

expand the rights of Federal employees while preventing

self-dealing, not simply a means by which the Government

may disregard employee’s rights by causing the exception

to swallow the rue.

STATEMENT OF FACTS AND

PROCEDURAL HISTORY

In May of 1998, at the time Davenport wrote the

AUMD programs, the Air Force Manpower Specialists

used an Oracle Database system called Manpower Data

System (MDS) housed on mainframe computers at

Gunter Air Force base. FCJAX 133-4'. MDS was very

unwieldy for manpower career specialists, who are not

computer programmers but mere end users. I/d., 133-4.

Manpower career specialists entered data into reports

for inclusion in MDS by Gunter, and ran request for

reports, which were delivered as print outs or on

magnetic tapes from Gunter, requiring very long

turnaround times. /d., 133-4, 346. The turn around could

be days, and the cumbersome reports, when they came,

included significant amounts of superfluous material.

Id., 133-4, 228-9.

Davenport was a junior enlisted man, a Manpower

Specialist, pay grade E-6, when he created the AUMD

programs at issue in May 1998. FCJAX 145, 304. He

retired at the same pay grade three years later. /d., 284.

His official position during that time was a Manpower

Data Manager in the Pacific Air Force Command

(PACAF). /d., 137. His job was to make sure the system

data was updated in a timely manner, to provide data to

Manpower groups with the local commands within the

Pacific Air Force Command (PACAF), and to teach use

of the database MDS system for generating reports and

inputting data. /d., 138-9. He was an operator of existing

computer programs. /d., 138. There was no requirement

1. FCJAX refers to the Federal Circuit Joint Appendix.

for programming in his job functions. /d., 138. He was

never a reporting senior over other Air Force personnel,

nor was he a direct supervisor over anyone. /d., 137.

He did not possess contracting auti:ority to issue or

modify contracts. /d., 141.

Air Force enlisted personnel have official printed job

descriptions that define the “official functions” of a

Manpower Specialist in published Career Field

Education and Training Plans (CF ETP) for the

Manpower field.2 FCJAX 743-45, 747, 749, 752-3, 755,

793, 804. The CFETP is the “job description” for each

listed career fie!d in the Air Force. /d., 309. There is an

Air Force Manual (AF MAN) for each Air Force Specialty

Code (AFSC). /d., 137. The “3U0” AFSC denoted the

Manpower Career Field. Davenport’s AFSC was 3U071

during the pertinent time period — the “071” indicating

his pay grade &-6. Davenport later requested and

received a V prefix, making it V3U071. /d., 138, 239.

Davenport's award of the “V” prefix was based on his

skills in monitoring the computer applications—not any

other basis for V prefix. /d., 141, 239. The V prefix does

not apply to the Computer Programmer career field,

which is an entirely separate AFSC, the “38C” AFSC.

Id., 142, 143-4, 560, 804. No computer skills sets are listed

or required for « Manpower Technician other than use

of standard PC-)hased office programs. /d., 140. There

is no programming requirement for the Manpower

career field. /d., 140. CMS (Chief Master Sergeant)

2. In denying Blueport’s administrative claim, the Air Force

mistakenly believed Mr. Davenport was a Communications-

Computer Systems Career Field, AFSC 3Cxxx-series, rather than

V3U071. FCJAX 93, 2™ Col., bottom paragraph.

Dant, the most senior enlisted Manpower Specialist in

the Air Force with over twenty years experience in the

Manpower field, testified that he did not know how to

program, never did, and that programming was not a

job requirement. /d., 305-6. Davenport retained that

AFSC V3U071 rating until retirement. /d., 144.

Computer programming was a type of work neither

expected from Davenport, nor encouraged by the Air

Force for Davenport or others in his career field. FCJAX

309-10. Davenport’s chain of command testified

uniformly that his job description and his scope of

employment did not include programming or writing any

software for the Air Force. Id., 306-7, 309-10, 320-21, 344

346. Someone in Davenport’s career field would never

be expected to write software programs for use by

Manpower. /d., 306-7, 309-10. None of his superiors ever

ordered Davenport to produce the programs, nor would

they have felt‘it was their place to do so. /d., 306, 320-1,

346-7.

Davenport requested programming training

numerous times and he was denied each time. F'CJAX

136. He never received any training in programming

from or through the Air Force. /d., 136, 280. Whenever

he asked, the answer was always no because he wasn’t

a programmer, and so it was not necessary for his job.

Id., 280. Turned down by the Air Force, Davenport

taught himself how to program by purchasing software

and books with his own money, and spending his off-

duty time learning to program. /d., 137, 146.

Davenport created the AUMD software through his

own initiative, time, and resources. FCJAX 308-9, 321.

Th. complex screen displays and user interface and the

datapase table structures were original creations by

Davenport. /d., 148-51, 195-6. He did this programming

only at home, on his personal time, and he tested and

debugged it at home, without any Government data, by

creating a dummy database with fake data. /d., 149-51,

2384, 243, 246, 394, 306, 309, 321, 328-9. Davenport did

not have a conrection to Government databases while

developing the AUMD software at home. /d., 149.

Connection to the MDS was not necessary. Id., 150.

Davenport completed development of a working beta

version of the AUMD program by about May 28, 1998.

Id., 106 115. This. beta version included the user interface

screens and the database table structure. /d., 234.

Davenport never brought the source code from his home

to work, and never copied the source code to his work

computer. /d., 197 125. Each copy of AUMD software

included a startup page which identified Mr. Davenport,

and later Blueport, as the author/copyright owner and

incorporated an expiration date which prevented

operation of the software beyond the expiration date.

Id., 184-5.

AUMD’s substantial improvements over Air Force

software made it very popular and it was passed around

informally to members of various commands. FCJAX

306-9, 321-24. AUMD became widespread due to its

superior performance and at the initiative and direction

of Davenport’s superiors and others in the Manpower

community, and not through promotion by Davenport.

Id., 321-5, 341-2. Davenport did not encourage people

to use the program. /d., 321-3 (“Q. Now, to your

knowledge, at any time when Technical Sergeant

Davenport was in your chain of command was he trying

to get people to use the program who didn’t want to?

A [Col. Manning]. No, he was not.”). Maj. Meaker, a

Government witness, corroborated the fact that

Davenport’s seniors, his chain-of-command, were the

source of pushing distribution of the AUMD software,

not Davenport. /d., 341-2. Davenport supplied copies of

AUMD at the personal request of recipients. /d., 317,

823.

As a result of the widespread use due its popularity,

people sent suggestions to Davenport for new features,

but Davenport alone decided what features would be

incorporated, and Davenport did this programming on

his own time at home rather than at work. FCJAX 277,

303, 305-6, 309, 346.

Persons in the Air Force requested Davenport on

several occasions to make presentations of the AUMD

software. FCJAX 179-81, 237-8, 324-5. Davenport did

not initiate any presentations or training on the AUMD

programs at any time. /d., 153. Demonstrating AUMD

was not part of Davenport’s official functions. Jd., 237.

Davenport was sent to at least three different Air Force

bases to train manpower technicians in the Air Force’s

official MDS system. /d., 237. During those trips the

users requested that he demonstrate the AUMD

programs which they had heard about by word of mouth.

Id., 237. Davenport complied with their requests, but

only after the official MDS training had been completed.

Id., 237. At the San Antonio Manpower conference —

referred to at trial as the “conference of colonels” —

Davenport was directed to attend this conference and

he would not have been present except for the request

of senior officers and noncommissioned officers. /d., 156,

580-1. Col. Manning testified that Davenport was

“invited” to the “conference of colonels” by a Col.

Jensen, but that as a junior enlisted person Davenport

was not in a position to refuse the invitation. Jd., 322-5.

Davenport’s former superiors and co-workers, all

currently senior officers and senior non-commissioned

officers in the Air Force, testified that they felt the

AUMD software belonged to Davenport and that they

had no rights or ownership to it. FCJAX 306, 320-1,

346-7.

During 1999, the Air Force repeatedly asked

Davenport to release the AUMD source code to the Air

Force. Glendon Hendricks, head of MDS program, asked

Davenport to submit nis program for consideration

through the Air Forces IDEA program. FCJAX 171-2.

Mr. Davenport declined. Jd. The Air Force then

threatened Davenport with courts martial if Davenport

did not immediately turn over the code. /d., 172-3. Again,

Davenport stood fast and the Air Force backed down.

Id.

Davenport participated in a Manpower User Group

(“MUG”), composed of end-users of the MDS system,

which passed requests or “wish lists” up to the decision

makers. FCJAX 157-8. During a meeting in February

1999, the MUG considered whether AUMD (referred

to at the meetinz as the “MDS Preprocessor’) should

be adopted as an official program, but the MUG rejected

the proposal. Jd., 158-9, 559. Davenport, however, was

not involved with the MUG evaluation, was not present,

and was not even aware that the MUG had discussed

the issue. /d., 158-9. The reason he didn’t know was

because his commanding officer determined to send a

different person to the MUG meeting—Davenport had

by then “essentially been excluded from the Manpower

user group’s advisory authority.” /d., 160 (emphasis

added). His commanding officer in PACAF felt that

Davenport should not attend MUG meetings, or

conferences at Gunter AFB. /d., 160.

On January 11, 2000, the Air Force issued a

solicitation for contractors to recreate the AUMD

programs. The solicitation was republished on March

14, 2000. The new program was to be known as the

MARS program, and was to duplicate the operation and

user interface of AUMD. FCJAX 106 119.

Davenport assigned all rights to Blueport, who in

turn registered the AUMD software copyrights and

assignment on March 9, 2000. FCJAX 105 113, 8. The

Air Force refused to negotiate a license with Blueport,

and Blueport was forbidden by the Government from

bidding on a contract to duplicate Davenport’s AUMD.

Id., 279-80.

The Air Force selected Science Applications

International Corporation (“SAIC”) on April 10, 2000,

to duplicate the AUMD. FCJAX 106 20. Because the

automatic expiration programmed into the AUMD

prevented use of the programs after May 15, 2000, zd.,

106 121, the Air Force also instructed SAIC to hack into

the AUMD code to change the automatic expiration date,

and alter the copyright management information so that

the startup page showed the Air Force as the author

and copyright owner. /d., 217 (“One of our software

engineers essentially hacked into it.”); /d., 219, 622-3.

The Air Force t.1en posted the altered versions of AUMD

on internet and intranet websites, where they were

downloaded and used by commands throughout the Air

Force, and were available for download by civilians

outside the Air Force as well. /d., 196-203. Neither the

alterations to the expiration function, nor the alterations

to the copyright management information, nor the

posting and distribution of copies of the AUMD software

were authorized by Davenport or Blueport. /d., 107 124.

The Air Force provided copies of the AUMD

compiled source code to SAIC, and SAIC used this code

to produce software, MARS, that is virtually identical,

an “exact replication”, in relevant respects to the

original AUMD software. FCJAX 177, 203, 206-9, 562-3,

588 (3.2.2.4), 599, 647 (12.5), 813. SAIC had access to

the running AUMD software and in fact tested MARS

by running AUMD and MARS side by side. /d., 205-6.

The MARS and AUMD screens and interface are

essentially identical, and the screens, which were exactly

duplicated, include protectable creative expression —

they are the heart and sole of the programs. /d., 177,

208, 206-9, 562-3, 588 ("3.2.2.4), 599, 647 (12.5), 813. The

AUMD interface was the key to its acceptance and

popularity. /d.,3:21, 339, 378.

Blueport alleged infringement for (1) from May 15,

2000 and after, Government hacking, copying and

distribution of the hacked AUMD programs, and

(2) creation, copying and distribution of MARS. FCJAX

36-95.

REASONS FOR GRANTING THE PETITION

A. There Is A Split In The Circuit Courts Over Whether

Jurisdictional Defenses In Suits Against The

Sovereign Are The Government’s Burden To Prove,

Or The Plaintiff’s Burden To Disprove.

Placing the burden on a plaintiff to disprove

the negative jurisdictional defenses contradicts

Congressional intent, and this error impacts literally

every suit that could be asserted against the

Government. Importantly, the Circuits have created a

tangled patchwork, where even they don’t know how to

evaluate a jurisdictional defense—and it largely depends

on what Circuit they want to follow.

Neither this Court nor, previously, the Federal

Circuit, has ever addressed the allocation of the burden

of proof on the Section 1498(b) defenses, which applies

to suits against the Government for copyright

infringement. Yet lower courts and the Circuit Courts

of Appeals have addressed similarly worded defenses

in statutes providing similar waivers of sovereign

immunity, and the conflicting rulings have created a

clear split in addressing such defenses in suits against

the Government.

For example, while the Discretionary Function

Exception to the Federal Tort Claims Act, 28 U.S.C.

§ 2680, is jurisdictional, the Government, not the

claimant, bears the burden of proof. See Prescott v. U.S.,

973 F.2d 696, 701-02 (9"" Cir. 1992); Autery v. U.S., 992

F.2d 1523, 1526 (11 Cir. 1993), cert. denied, 114 S. Ct

1829 (1994); Carlyle v. U.S., 674 F.2d 554, 556 (6th

Cir.1982); Stewart v. U.S., 199 F.2d 517, 520 (7th Cir.1952).

This allocation of burden comports with the statutory

intent. “[P]lacing the burden on the plaintiff would

‘impose upon the plaintiff the burden of proving

[thirteen] negative averments. Such a result would

border on the preposterous.” Prescott, id. at 702 (citing

and quoting Stewart, 199 F.2d at 520); Stewart, 199 F.2d

at 519-20 (“The position which the Government urges

upon us is inirnical to all reason, logic and common

sense.”). Yet in the present case, in a statute with similar

language, the Federal Circuit ruled completely contrary,

i.e. that the low level Government employee bears the

burden of proving multiple negative averments. This

similarly “border[s] on the preposterous.”

In another example, the jurisdictional defenses in

Section 1498(c), again with similar language and even

within the same statute in issue here, were construed

as placing the burden of proof on the Government.

Zoltek Corp. v. U.S., 51 Fed. Cl. 829, 62 U.S.P.Q.2d 1366

(2002) (ruling that the Government bears the burden of

proof under Section 1498(c), which relates back to both

Sections 1498(a) and 1498(b), on the issue of whether a

claim arose in a foreign country). The Zoltek court found

significant that Section 1498(c) was worded negatively.

Id. at 833; see 28 U.S.C. §1498(¢) (“... this section shall

not apply ...”). To that point, a comparison of Sections

1498(b) and 14933(c), as well as 28 U.S.C. § 2680, reveals

the same Congressional intent: Section 1498(b) (“except

where ... this subsection shall not confer a right of

action”); Section: 1498(c) (“this section shall not apply”);

§ 2680 (“shall nct apply to”). Yet here again, the Federal

Circuit ruled cornpletely contrary, that while the Section

1498(c) jurisdictional defense, with similar negative

wording, and which applies to Section 1498(b), was the

Government’s burden, the Section 1498(b) defenses

(which also happen to be far more nebulous), remain

the Federal employee plaintiff’s burden.

The Court of Federal Claims’ error, affirmed by the

Federal Circuit in placing the burden of proof on

Blueport to disprove the enumerated defenses in

Section 1498(b), hi-lights the split between the Circuits

regarding the burden of proof and burden shifting in

claims for damages brought against the Government.

The Court of Federal Claims acknowledged this

Circuit split in addressing such provisos between Circuit

Courts, as well as within the Federal Circuit and Court

of Federal Claims, and the apparent inconsistency in

Supreme Court itself. Blueport, 76 Fed.Cl. at 717-18

(describing the “two models” as the “hard view” and

“soft view”, and noting that “Our [Federal] Circuit seems

to be of two minds as to the issue of whether conditions

to waivers of sovereign immunity are themselves

jurisdictional.”). The Federal Circuit also acknowledged

the split between Circuits regarding the interpretation

of who carries the burden of proof on limitations to

waivers of sovereign immunity. Blweport, 5383 F.3d at

1381 (“... the circuit courts are divided on whether these

Federal Tort Claims Act cases are consistent with

Supreme Court precedent .. .”). The Federal Circuit

noted that the 9 and 7th Circuits have taken a view

that enumerated defenses to a substantive waiver of

sovereign immunity should be viewed as shifting the

burden of proof to the Government, citing Prescott, 973

F.2d 696, and Stewart, 199 F.2d 517, while the noting

other Circuits appear to have taken an opposite view,

citing as support Sharp v. U.S., 401 F.3d 440, 448 FN1

(6 Cir. 2005), Kiehn v. U.S., 984 F.2d 1100, 1105 FN7

(10 Cir. 1993), and Autery v. U.S., 992 F.2d 1523, 1526

n.6 (11" Cir. 1993). Blueport, 533 F.3d at 1381. Other

courts have noted this split of authority as well, and have

even disagreed as to which side the respective Circuits

have come down on. Compare, Smith v. U.S., 948 F. Supp.

159, 168 (D.R.I. 1996) (discussing the Circuit split and

finding that, in the absence of First Circuit authority,

(“this court will follow the lead of the Sixth, Seventh,

and Ninth Cireuits, and employ the burden shifting

approach”... “the government bears the burden to

establish the applicability of an FTCA exception . . .”)

with Blueport, 533 F.3d at 1381 (Federal Circuit

describing Sixth Circuit as disagreeing with Prescott and

Stewart). The Faderal Circuit has come down on the side

of the “hard view” — at least in this case.

The Federal Circuit, although acknowledging the

split and the similarities between the enumerated

defenses in Section 1498(b) and the enumerated

defenses in the ]*ederal Tort Claims Act, sought to avoid

the question by simply stating that the Federal Tort

Claims Act is a different statute and so not applicable in

this case. Blueport, 533 F.3d at 1881. But the issue of

exceptions to waivers of sovereign immunity goes beyond

an individual statute, and the piecemeal approach

heretofore creates confusion — it is not clear in a given

case whether provisions worded as exceptions to a

substantive waiver of sovereign immunity, or limitations

on such waivers, are to be treated by courts as

analogous to enumerated affirmative defenses thereby

placing the burden of proof on the Government, or

burdens which a plaintiff must prove beyond a prima

facze showing. The divergence is not a small issue, as it

determines whether or not the plaintiff even receives

his day in court. Clarity is needed to avoid injustice and

wastage of judicial and party resources.* “Thus a

continuing effort on our part to decide each case on an

ad hoc basis, aS we appear to have done in the

past, would have the disadvantage of continuing

unpredictability without the corresponding advantage

of greater fidelity to the intent of Congress.” /rwin v.

Dept. of Veterans Affairs, 498 U.S. 89, 95, 111 S. Ct.

453, 112 L. Ed. 2d 435 (1990), reh’g denied, 498 U.S.

1075 (1991).

Another problem with the lower courts’ approach

to the Section 1498(b) defenses regarding the “hard

view” versus the “soft view” described by the Court of

Federal Claims, see Blueport, 76 Fed. Cl. at 717-18

(discussing) and Blueport, 533 F.3d at 1381 (affirming),

is that the cases relied upon addressed questions of

statutes of limitations in the context of waiver or

estoppel, rather than burden of proof, as is the case here.

See, e.g., Venture Coal Sales Co. v. U.S., 370 F.3d 1102,

3. The present case provides a good example of this

wastage. The parties here conducted extensive expert discovery

and depositions on infringement issues, and a week-long trial

on the merits, before the Court of Federal Claims (for which

the CFC travelled to Portland, Oregon), only to have the same

court rule later that it did not have jurisdiction in the first place

and so could not reach the merits.

1105 n. 2 (Fed.(Cir.2004) (affirming dismissal of the case

as time barred under 28 U.S.C. § 2501); Ariadne Fin.

Servs. Pty. Ltd. v. U.S., 1383 F.3d 874, 878 (Fed.Cir.1998)

(dismissal on statute of limitations) MacLean v. U.S.,

454 F.3d 1334, 1336 (Fed. Cir. 2006) (statute of limitations

must be strictly construed); Hopland Band of Pomo

Indians v. U.S., 855 F.2d 1573, 1576-77 (Fed. Cir. 1988))

(limitations period not capable of waiver or subject to

an estoppel); Martinez v. U.S., 333 F.3d 1295 (Fed. Cir.

2003) (Section 2501’s limitations period subject to

equitable tolling ); Frazer v. U.S., 288 F.3d 1347, 1353

(Fed.Cir.2002) (Section 2501’s limitations period); John

R. Sand & Gravel Co. v. U.S., —- U.S. —, 128 S. Ct. 750,

169 L. Ed. 2d £91 (2008) (stare decisis establishes the

statute of limitations in § 2501 is an element of subject

matter jurisdiction not subject to waiver) (citing Kendall

v. U.S., 107 U.S, 128, 2S. Ct. 277, 27 L. Ed. 437 (1883)).

In the present case there is no issue of waiver, because

the Government certainly raised the Section 1498(b)

defenses. Rather, the issue is which party properly

bears the burden of proof, and whether Blueport carried

that burden. The Court of Federal Claims and Federal

Circuit incorrectly applied a hard and fast rule that the

Section 1498(b) defenses are jurisdictional and therefore

the plaintiff bears the burden of proof (or dis-proof),

rather than looking to the intent of Congress as to who

should carry the burden. The Section 1498(b) defenses

bear much stronger analogy to the treatment of statutes

such as the “discretionary function” exception to the

Federal Tort Claims Act, 28 U.S.C. § 2680, than to

questions of whether time bars are subject to waiver or

estoppel, and consistency requires they be treated

similarly.

Moreover, the Federal Circuit ruling contradicts the

remedial nature of the amendments to Section 1498, which

expanded the rights of Federal employees to remove the

unnecessarily draconian complete bar against claims by

Federal employees. The enumerated defenses of Sections

1498(a) and (b) were intended as remedial measures

expanding the rights of Federal employees, and should

be interpreted in that light. Strategical Demolition

Torpedoe Co. v. U.S., 110 F. Supp. 264, 266, 124 Ct. Cl. 492

(Ct. Cl. 1953) (citing transcript of hearings before the

Subcommittee of the Committee on the Judiciary of the

House of Representatives, considering H.R. 3975, in 1952)

{noting that, although not retroactive, the provisos were

intended to remedy unjust prior provisions denying

Federal employee claims under any circumstances).

Further, the Federal Circuit ruling is inconsistent with

the legislative history of Section 1498(b). The legislative

history shows that Section 1498(b) defenses were intended

as affirmative defenses, with the burden of proof on the

Government. In Strategical Demolition Torpedo Co., the

court analyzed the legislative history of the 1952

amendments to Section 1498(a), relating to patents, which

demonstrated that the burden lay with the Government

to prove the exceptions after a plaintiff has made a prima

facie showing —

There could have been a recovery in his case

unless the Government could have shown that

the invention related to the duties of the

Government employee co-patentee or unless he

was in a position at or about the time the

invention was used to influence its use.

Id. at 267 (emphasis added).

The purpose enacting Section 1498 and the legislative

history showing: the intent are important considerations,

ignored by the Federal Circuit. Long precedent establishes

the “familiar canon of statutory construction that remedial

legislation should be construed broadly to effectuate its

purposes.” Tcherepnin v. Knight, 389 U.S. 332, 336, 88

S. Ct. 548, 19 L. Ed. 2d 564 (1967). This canon frequently

has been applied in interpreting Federal statutes

conferring benefits and rights on employees. See

Consolidated Rail Corp. v. Gottshall, 512 U.S. 532, 543,

114 S. Ct. 2396, 129 L. Ed. 2d 427 (1994) (Federal

Employers’ Liability Act); Corning Glass Works v.

Brennan, 417 U.S. 188, 208, 94 S. Ct. 2223,.41 L. Ed. 2d 1

(1974) (Equal Pay Act); Haberman v. Finch, 418 F.2d 664,

667 (2d Cir. 1969) (Social Security Act); Forshey v. Gober,

226 F:'3d 1299, 1303 (Fed. Cir. 2000) (applying same rule to

veterans’ benefits statute).

B. The Federal Circuit Misconstrued The Section

1498(b) Defenses To Not Require A Nexus Between

The Government’s Infringement And The Alleged

Position To Order, Influence Or Induce.

The Federal Circuit misconstrued the Section 1498(b)

defenses in denying Davenport’s cause of action based on

the “order, influence or induce” defenses, regardless of

whether the defense is jurisdictional or an affirmative

defense. The Federal Circuit’s misconstruction has several

perverse effects. ]‘irst, the failure to require a nexus effects

a change in the law of license, such that any limited license

granted by an employee to the Government inherently

morphs into an irrevocable license, unrestricted in time

and scope. In other words, there is no longer such a thing

as a limited, revocable license to the Government. Second,

the failure to require a nexus places Section 1498(b) in

conflict with the separability of rights in the Copyright Act,

17 U.S.C. § 106. Finally, the failure to require a nexus

undermines the remedial intent of Section 1498 by creating

an insurmountable barrier to any Federal employee

seeking redress.

When an employee actively opposes the Government’s

use of their copyrighted software, yet the Government uses

that software in spite of the employee’s opposition, the

only logical conclusion is that the employee was not in a

position to order, influence or induce the Government’s

use. Here, Blueport alleges infringement from May 15,

2000 (the date of the AUMD program expiration dates,

known in advance by the Air Force) and after by the

Government through hacking, copying and distributing

hacked copies of AUMD, and then, separately, through

creation, copying and distribution of MARS. Davenport

did not encourage this use. Indeed, he tried to stop the

Government from using AUMD but he had no influence

whatsoever. Had the Federal Circuit not eliminated the

requirement of a nexus between infringing acts and

position alleged to constitute influence or ability to induce,

such a finding would obviously have been clear error.

See Bose Corp. v. Consumers Union of U.S., Inc., 466 U.S.

485, 501 n.17, 104 S. Ct. 1949, 80 L. Ed. 2d 502 (1984), reh’g

denied, 467 U.S. 1267, 104 S. Ct. 3561, 82 L. Ed. 2d 863

(1984).

1. Eliminating The Need For A Nexus

Fundainentally Alters The Law Of Licenses As

Related To The Government.

The failure to require any nexus between the

Government’s infringing acts and the employee’s alleged

position of influence effectively renders any license

granted to the Government by a Federal employee

inherently unlimited. This upends the law relating to

license, a result clearly not intended by Congress.

The Air Force committed two distinct violations of

Blueport’s rights, each violation involving separate acts

which must be evaluated independently under Section

1498(b). First, after the permissive license expired

according to its express terms on May 15, 2000, the Air

Force had SAIC hack into the AUMD source code to

override the built-in expiration date and create a new,

hacked, version for copying and distribution. Second,

the Air Force created a derivative work based on the

AUMD software, called MARS, and then copied and

distributed this derivative work.

Davenport lacked any ability or position to influence,

induce — and instead he actively tried to stop — the

Air Force’s creation, copying and distribution of the

hacked versions of the AUMD programs. He similarly

lacked any ability or position to influence, or induce —

and was powerless to stop — the creation of derivative

work MARS by SAIC from his copyrighted software.

Moreover, even if the Court concluded that copying and

distributing the hacked versions of the AUMD programs

fell within the “order, influence or induce” defense, it

does not automatically follow that all unauthorized use,

including transformative use by creating other

derivative works, is subject to the same defense. The

Federal Circuit’s ruling lumps these distinct and

separate acts and defenses together.

The Government’s decision in the Matter of

Government Acquisition of License to Employee’s

Invention, B-199,026, 60 Comp. Gen. 248, 1981 WL

22453 (Comp. Gen. Feb. 11, 1981) (hereinafter

“Comptroller’s Opinion”), demonstrates the nexus

requirement. The Government in that case, evaluating

the nearly identical provisions of Section 1498(a),

determined that although the employee, Mr. Jeffers, was

in a position to order, influence or induce, use of his

patent, Section 1498(a) did not prohibit the Government

from taking a royalty bearing license if the employee

was properly shielded from the decision making process.

Comptroller Opinion, 60 Comp. Gen. at 248. In other

words, if the nexus between the Government’s use at

issue and the employee’s position of influence is severed

then the Section 1498(a) defense allowing the

Government to appropriate a royalty-free license does

not apply. /d., at 251. The Comptroller rejected the

argument that Section 1498(a) permitted the

Government to take a royalty-free license simply because

an employee was in a position to order, influence or

induce when there was clearly no nexus between the

position of influence and the Government’s decision.

Ironically, here, the Government argues exactly the

opposite position.

The Federal Circuit’s ruling in the present case

eliminates this nexus requirement. The Federal Circuit’s

opinion has the perverse result that if Mr. Jeffers had

295

refused to grant any license to the Government, if he

had objected to and actively opposed granting a license,

the Government would have had the right to take a

compulsory license without compensation.

Under the Federal Circuit’s construction, any

limited, permissive license in a work becomes under

Section 1498(b) an unlimited royalty free license for any

use whatsoever — for the life of the copyright. Any

permissive use waives all rights for all time. This

astonishing reading of Section 1498(b) transforms

Congress’ attempt at remedial legislation to grant

Federal employees rights similar to other citizens into a

weapon the Government may use to take the property

of Federal workers without compensation.

The “order, influence, or induce” defense necessarily

relates to the time and nature of the infringing acts.

This is not reading an “exception into the ‘order,

influence, or induce’ proviso”, see Blueport, 533 F.3d at

1382, but rather is necessary to make the proviso

consistent with other laws. The Federal Circuit’s ruling

creates an insurmountable obstacle to any suit by a

Federal employee. All employees are in a position to at

least “influence, or induce” use of their work. However,

even if they objected to the Government’s use, even if

such use was completely non-permissive, if the employee

were in such a theoretical position to “influence, or

induce” any use whatsoever, at any time in their career,

then they would be barred by the Federal Circuit.

The requirement for nexus is congruent with the

waiver of sovereign immunity under Section 1498(b).

The purpose of the “order, influence or induce” defense

is to prevent self-dealing by Government employees,

rather than being a corollary to work-for-hire or shop

right doctrines. Comptroller’s Opinion, 60 Comp. Gen.

at 250-1. The plain language of the statute bears this

out. The trial court incorrectly analogized this Section

1498(b) defense to the “work made for hire” defense

under the Copyright Act, and the Federal Circuit.

apparently accepted the analogy in affirming the trial

court’s opinion. The “order, influence or induce” defense

does not bear such an analogy. There is no comparable

element under the “work made for hire” doctrine to the

“order, influence or induce” defense. Rather, the “order,

influence or induce” defense is more accurately

analogized to an implied license defense, to prevent self-

dealing, and the Court should properly look to the law

of implied license for guidance. An implied license

defense requires a defendant to establish some nexus

between the terms and limitations of the implied license

and the infringing conduct such that the implied license

would excuse the (otherwise) infringing conduct.

See, e.g., Carson v. Dynegy, Inc., 344 F.3d 446, 451 n.5

(5" Cir. 2003) (citing Lulirama Ltd., Inc. v. Axcess

Broadcast Svcs, Inc., 128 F.3d 872, 884 (5 Cir. 1997)

and CMS Software Design Sys., Inc. v. Info Designs,

Inc., 785 F2d 1246, 1248 (5th Cir. 1986)) (a defendant

bears the burden of proving the existence of any license

as an affirmative defense to infringement, and if such

existed, whether the license was irrevocable). Moreover,

a non-exclusive license is fully revocable as a matter of

law where it is not supported by consideration.

Lulirama, 128 F.8d at 884. Copyright licenses are

interpreted narrowly. Playmedia Sys. Inc. v. Am.

Online, Inc., 171 F. Supp. 2d 1094, 1099 (C.D. Cal. 2001).

expressly authorized. /d. at 1099.

2. The Federal Circuit Construction Conflicts

With The Separability Of Rights Granted

Under 17 U.S.C. § 106.

The Federal Circuit ruling disenfranchises copyright

owners from the individual rights granted in the

grants copyright owners separately articulated property

rights, which may be assigned or licensed individually

without automatic loss of the other rights. Stewart v.

Abend, 495 U.S. 207, 220-221, 110 S. Ct. 1750, 109

L. Ed. 2d 184 (1990) (“An author holds a bundle of

exclusive rights in the copyrighted work, among them

the right to copy and the right to incorporate the work

into derivative works”); New York Times Co., Inc. v.

Tasini, 583 U.S. 488, 496, 121 S. Ct. 2381, 150 L. Ed. 2d

500 (2001) (“The 1976 Act rejected the doctrine of

indivisibility, recasting the copyright as a bundle of

discrete ‘exclusive rights,’ each of which ‘may be

transferred ... and owned separately[.]”); H.R. Rep.

94-1476, 1976 U.S.C.C.A.N. 5659, 5738 (“Each of the five

enumerated rights may be subdivided indefinitely and,

as discussed below in connection with section 201

[codified at 17 U.S.C. § 201], each subdivision of an

exclusive right may be owned and enforced separately.”)

A limited license granted in one of the listed property

rights does not automatically create a license in all.

Respect, Inc. v. Fremgen, 897 F. Supp. 361, 364 (N.D.

Ill. 1995) (citing Columbia Pictures Industries, Inc. v.

Redd Horne, Inc., 749 F.2d 154, 158 (8d Cir. 1984);

Columbia Pictures Industries, Inc. v. Redd Horne, Inc.,

749 F.2d 154, 158 (37? Cir. 1984).

Here, the Government separately infringed

Blueport’s copyright in the AUMD programs by

creating the MARS programs, which were derivative

works. The Federal Circuit’s opinion lumped together

all of the rights and uses of the copyrighted works in

violation of 17 U.S.C. § 106 such that any grant of even

a limited license to copy and use the AUMD programs

for a limited time morphs under 28 U.S.C. § 1498(b) into

an unlimited license in time and scope conveying all of

the individual rights granted under 17 U.S.C. § 106. The

Federal Circuit’s opinion places Section 1498(b) in direct

conflict with the Copyright Act and Supreme Court

precedent.

C. The Conjunction Of Erroneously Placing The

Burden Of Proof On Plaintiff With A Ruling That

Requires No Nexus Between The Acts Alleged To

Infringe And Those Alleged To Establish The

Defenses, Swallows The Section Whole.

Federal employees will have no right of recourse for

Federal Circuit’s rulings are allowed to stand. The

language “. . . position to influence or induce .. .” is

nebulous enough, but requiring an employee to disprove

that defense, and then placing no requirement of a nexus

between the acts alleged to infringe and the nebulous

term “position”, destroys the entire purpose for Section

1498(a) and (b) in the first place, i.e., remedial measure

designed to give to Federal employees the same rights

in suit against the government that non-employees had.

CONCLUSION

The Federal Circuit’s misconstruction of the defenses

in 28 U.S.C. § 1498(b) highlights the split between the

Circuit Courts of Appeal, and within the Federal Circuit

itself, regarding whether the Government bears the

burden of proving exceptions to substantive waivers of

sovereign immunity. The Federal Circuit incorrectly

construed the “order, influence or induce” exception in

Section 1498(i) to not require any nexus to the

Government’s infringing acts. This lack of required nexus

effects a change in the law of limited licenses and conflicts

with the separability of individual rights of copyright

owners under 17 U.S.C. § 106. This lack of a required nexus

also conflicts with the remedial nature of the Section

1498(b) provisos. Based upon the foregoing it is

respectfully requested that this Court grant the writ of

certiorari.

Respectfully submitted,

Kurt M. RYLANDER

RYLANDER & ASSOCIATES PC

406 West 12" Street

Vancouver, WA 98660

(360) 750-9931

Attorneys for Petitioner

APPENDIX

APPENDIX A — OPINION OF THE UNITED STATES

COURT OF APPEALS FOR THE FEDERAL CIRCUIT

DECIDED JULY 235, 2008

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

2007-5140

BLUEPORT COMPANY, LLC,

Plaintiff-Appellant,

Vv.

UNITED STATES,

Defendant-Appellee.

DECIDED: July 25, 2008

Before MICHEL, Chief Judge, CLEVENGER, Senior

Circuit Judge, and GAJARSA, Circuit Judge.

GAJARSA, Cireuit Judge.

This is an action brought by Blueport Co.

(“Blueport”) against the United States for copyright

infringement and violations of the Digital Millennium

112 Stat. 2860 (Oct. 28, 1998), codified at 17 U.S.C.

§ 1201, et seq. The Court of Federal Claims (“CFC”)

dismissed Blueport’s claims for lack of jurisdiction on

Appendix A

the ground that the Government has not waived

sovereign immunity for any of Blueport’s claims.

Because the CFC’s decision contains no reversible legal

error, we affirm.

BACKGROUND

In this case, Blueport claims that the Government—

specifically the U.S. Air Force—infringed Blueport’s

program.” The AUMD program was written by Air Force

Technical Sergeant Mark Davenport. On March 6, 2000,

Davenport assigned all his rights in the AUMD program

to Blueport.

When Davenport wrote the AUMD program, he was

employed as a manager of the Air Force Manpower Data

System (“MDS”), a database containing manpower

profiles for each unit in the Air Force. In his capacity as

an MDS Manager, Davenport updated the MDS with

new data and provided reports from the MDS to Air

Force personnel upon request. Davenport was also a

member of the Air Force’s Manpower User Group, a

group of manpower personnel from each of the Air

Force’s major commands who provided guidance on the

use of the MDS. Based on his experience with the MDS,

Davenport concluded that the software the Air Force

used to run the MDS was inefficient and began seeking

ways to redesign the software program. Davenport

initially requested training in computer programming

from the Air Force, but his request was denied.

Undeterred, Davenport learned the computer

Appendix A

programming skills necessary to write the AUMD

program on his own time and with his own resources.

Davenport then wrote the source code! for the AUMD

program while at home on his personal computer.

Although he wrote the program solely at his home and

at his own initiative, Davenport’s intent in writing the

program was that other Air Force manpower personnel

would use it.

In June 1998, Davenport shared an early version of

the program with a fellow coworker, and both tested the

program on the MDS at work during regular business

hours. Based on the results of this testing, Davenport

made changes to the source code of the AUMD program

on his home computer. Davenport did not at that time,

or at any time thereafter, bring the AUMD program’s

source code to work or copy it onto Air Force computers.

After these initial tests, Davenport began sharing

copies of the AUMD program with other colleagues. At

first, Davenport shared the AUMD program with

colleagues by giving them a computer disk containing

the program or hy personally installing the program on

1. Source code is the text of a software prograin written in

a human-readatle programming language. Microsoft

Computer Dictionary 491 (5th ed.2002). Once written, source

code is compiled into machine-readable object code that runs

ona computer. /d. at 372. Software programmers usuaily provide

users with only the object code in order to prevent users

from modifying the program. Theodore C. McCullough,

Understanding the Impact of the Digital Millennium Copyright

Act on the Open Source Model of Software Development, 6 Marq.

Intell. Prop. L.Rev. 91, 93-94 (2002).

Appendix A

their computers. Later, Davenport posted the AUMD

program on an Air Force web page so that Air Force

manpower personnel could download it directly. As the

program became popular within the Air Force manpower

community, Davenport’s superiors asked him to train

additional personne] in its use. During this time, he

continued tc modify the program based on feedback he

received and, as a result, improved its functionality and

eliminated programming errors. At some point,

Davenport added an automatic expiration date to each

new version of the AUMD program so that users were

required to download the newest version when the older

one expired.

In September 1998, Davenport gave a presentation

to senior Air Force menpower officers at an annual

conference and, according to one of Davenport’s

superiors, “absolutely sold his audience” on the AUMD

program. Davenport’s performance report deemed him

the “go to troubleshooter for [the] entire [Air Force]

manpower community ... [and] the most knowledgeable

database manager in [the] career field.” The

performance report concluded with a recommendation

to promote Davenport immediately.

Despite Davenport’s success in creating the AUMD

program and his willingness to share it, the Air Force

eventually decided it was becoming too dependent on

Davenport for access to the program. Accordingly,

Davenport’s superiors asked him to turn over the source

code for the program, which Davenport had always kept

on his home computer. When he refused to turn over

Appendix A

the source code, his superiors threatened him with a

demotion and a pay cut, and excluded him from the

Manpower User Group’s advisory authority.

Davenport then assigned all his rights inthe AUMD

program to Blueport. Subsequently, Blueport attempted

to negotiate a license agreement with the Air Force.

However, the Air Force refused Blueport’s offer and

solicited other contractors to recreate the AUMD

program. The Air Force ultimately contracted with

Science Applications International Corporation

(“SAIC”). At the request of the Air Force, SAIC

pyogrammers rnodified the AUMD program’s object

code to extend its expiration date. This modification

allowed Air Force manpower personnel to continue to

use the AUMD program despite Davenport’s refusal to

provide the source code.

In 2002, Blueport brought the present claims

against the Government for copyright infringement and

violations of the DMCA. Specifically, Blueport argues

that the Air Force infringed its copyright in the AUMD

program. In addition, Blueport argues that the Air

Force violated the DMCA by extending the expiration

date in the AUMD program’s object code—thus

circumventing the measures taken by Blueport to

prevent unauthorized use of the program.’ The CFC

dismissed Blueport’s claims for lack of jurisdiction on

2. The DMCA provides that “[n]o person shall circumvent

a technological measure that effectively controls access to a

work protected [by a copy1.ght] under this title.” 17 U.S.C.

§ 1201(a)(1)(A).

Appendix A

the ground that the Government had not waived its

sovereign immunity for any of the claims. Blueport now

appeals. This court has jurisdiction pursuant to 28 U.S.C.

§ 1295(a)(3).

DISCUSSION

In appeals from the CFC, this court reviews fact

findings for clear error and legal rulings without

deference. John R. Sand & Gravel Co. v. United States,

457 F3d 1345, 1353 (Fed.Cir.2006) (hereinafter John R.

Sand & Gravel I), aff’d,_ _-:; U.S. __, 128 S.Ct. 750, 169

L.Ed.2d 591 (2008) (hereinafter John R. Sand & Gravel

IT). “A finding is ‘clearly erroneous’ when although there

is evidence to support it, the reviewing court on the

entire evidence is left with the definite and firm

conviction that a mistake has been committed.” United

States v. United States Gypsum Co., 333 U.S. 364, 395,

68 S.Ct. 525, 92 L.Ed. 746 (1948). Although findings of

fact relating to jurisdictional issues are reviewed for

clear error, the ultimate determination of the CFC’s

jurisdiction is a question of law that is reviewed de novo.

John R. Sand & Gravel I, 457 F.3d at 1354.

In this appeal, we are required to consider the scope

and application of the Government’s waiver of sovereign

immunity for copyright infringement under 28 U.S.C.

§ 1498(b). We are also required to consider whether the

Government has waived its sovereign immunity for

claims brought under the DMCA. In so doing, we bear

in mind two long-established principles of sovereign

immunity. First, “the United States, as [a] sovereign,

“7

Appendix A

‘is immune from suit save as it consents to be sued...

and the terms of its consent to be sued in any court

define that court’s jurisdiction to entertain the suit.’ ”

United States v. Testan, 424 U.S. 392, 96 S.Ct. 948, 953,

47 L.Ed.2d 114 (1976) (quoting United States v.

Sherwood, 312 U.S. 584, 586, 61 S.Ct. 767, 85 L.Ed. 1058

(1941)). Second, “a waiver of the Government’s

sovereign immunity will be strictly construed, in terms

of its scope, in favor of the sovereign.” Lane v. Pena,

518 U.S. 187, 192, 116 S.Ct. 2092, 185 L.Ed.2d 486 (1996);

see also Martinez v. United States, 333 F.3d 1295, 1306

(Fed.Cir.2003) (en banc) (“The ‘limitations and conditions

upon which the Government consents to be sued must

be strictly observed and exceptions thereto are not to

be implied.’ ” (quoting Soriano v. United States, 352

U.S. 270, 276, 77 S.Ct. 269, 1 L.Ed.2d 306 (1957))).

The waiver of sovereign immunity for copyright

infringement in 28 U.S.C. § 1498(b) is, in relevant part,

as follows:

Hereafter, whenever the copyright in any work

protected under the copyright laws of the

United States shall be infringed by che United

States, ... the exclusive action which may be

brought for such infringement shall be an

action by the copyright owner against the

United States in the Court of Federal Claims

for the recovery of his reasonable and entire

compensation as damages for such

Appendix A

infringement ...: Provided, That a

Government employee shall have a right of

action against the Government under this

subsection except where he was in a position

to order, influence, or induce use of the

copyrighted work by the Government:

Provided, however, That this subsection shall

not confer a right of action on any copyright

owner or any assignee of such owner with

respect to any copyrighted work prepared by

a person while in the employment or service

of the United States, where the copyrighted

work was prepared as a part of the official

functions of the employee, or in the

preparation of which Government time,

material, or facilities were used. ...

(Emphases added). Thus, § 1498(b) grants copyright

owners a right of action for copyright infringement

against the United States, subject to three provisos.

First, § 1498(b) does not provide a Government

employee a right of action “where he was in a position

to order, influence, or induce use of the copyrighted

work by the Government.” Jd. (emphasis added)

(hereinafter “the order, influence, or induce proviso”).

Second, § 1498(b) confers no right of action “with respect

to any copyrighted work prepared by a person while in

the employment or service of the United States, where

the copyrighted work was prepared as a part of the

official functions of the employee.” Jd. (emphasis added)

(hereinafter “the official functions proviso”). Third,

§ 1498(b) confers no right of action “with respect to any

Appendix A

copyrighted work ... in the preparation of which

Government time, material, or faciiities were used.”

Id. (emphasis added) (hereinafter “the Government

time, material, or facilities proviso”).

The CFC held that Blueport’s copyright

infringement claim against the Government was

separately barred by all three provisos in § 1498(b) and

thus dismissed the claim for lack of jurisdiction. On

appeal, Blueport makes three arguments challenging

the CFC’s dismissal of its copyright infringement claim.

First, Blueport argues that the provisos in § 1498 (b)

are affirmative defenses that must be proven by the

Government, rather than jurisdictional limitations that

Blueport itself must overcome. Second, Blueport argues

that even if the 3 1498(b) provisos are jurisdictional, the

Government has the burden to show that Blueport’s

claims are barred by one of the provisos. Third, Blueport

argues that its copyright infringement claim does not

fall within any of the § 1498(b) provisos. We disagree

with Blueport on all three arguments and will address

each in turn.

Whether a limitation on claims which may be brought

against the government is jurisdictional—i.e., limits the

scope of the Government’s waiver of sovereign

immunity—or is merely an affirmative defense that may

be raised by the Government, depends on the language

and context of the statute at issue. See John R. Sand &

Gravel II, 128 S.Ct. at 754-57; United States v.

10a

Appendix A

Brockamp, 519 U.S. 347, 352-54, 117 S.Ct. 849, 136

L.Ed.2d 818 (1997); United States v. Beggerly, 524 U.S.

38, 48-49, 118 S.Ct. 1862, 141 L.Ed.2d 32 (1998). For

example, both the Supreme Court and this court have

examined the language and context of various statutes

of limitations on claims against the Government to

determine whether the time limits they impose are

jurisdictional—and thus not subject to issue waiver by

the Government or equitable tolling. See, e.g., John R.

Sand & Gravel IT, 128 S.Ct. at 753-54 (reaffirming that

the statute of limitations for the Court of Federal Claims,

28 U.S.C. § 2501, is a jurisdictional limitation that

requires sua sponte consideration); Beggerly, 524 U.S.

at 48, 118 S.Ct. 1862 (“Equitable tolling is not

permissible where it is inconsistent with the text of the

relevant statute.”); Martinez, 333 F-3d at 1318 (noting

numerous Federal Circuit cases and stating that

“(flollowing the Supreme Court’s lead, we have

determined that certain statutes of limitations are

subject to equitable tolling and that others are not,

depending on the language and context of the particular

limitation statute at issue”). Accordingly, we look to the

text of § 1498(b) to determine whether the limitations

therein are jurisdictional.

3. The Court also explained in John R. Sand & Gravel Il

that, just as in suits between private parties, there is a

rebuttable presumption that equitable tolling applies to suits

against the United States. 128 S.Ct. at 755 (citing Irwin v. Dep't

of Veterans Affairs, 498 U.S. 89, 95-96, 111 S.Ct. 453, 112 L.Ed.2d

435 (1990)). However, that presumption is not applicable here,

because Blueport’s suit was not dismissed for failure to comply

with a statute of limitations.

lla

Appendix A

The text and structure of § 1498(b) demonstrate

that the three provisos to the waiver of sovereign

immunity are jurisdictional limitations. First, the fact

that these provisos are part of the same subsection as

the general waiver of sovereign immunity for copyright

infringement iridicates that they define the scope of the

Government’s waiver, rather than the Government’s

affirmative defenses. See § 1498(b). Indeed, the provisos

are part of the same sentence in which Congress granted

the general waiver of sovereign immunity for copyright

infringement. See id. Second, the provisos themselves

are phrased in terms of withholding a waiver of

sovereign immunity for certain “rights of action.” The

“order, influence, or induce” proviso states that a

government employee “ shall have a right of action

against the Government under this subsection except

where he was in a position to order, influence, or induce

use of the copyrighted work by the Government.” /d.

(emphases added). Likewise, the “official functions”

proviso and the “Government time, material, or

facilities” proviso state that “this subsection shall not

confer a right of action....” Id. (emphasis added). Thus,

the most natural reading of § 1498(b) is that Congress

has not waived sovereign immunity for any claim that

falls within the scope of the § 1498(b) provisos. Cf Zoltek

Corp. v. United States, 442 F.3d 1345, 1850 (Fed.Cir.2006)

(construing 28 U.S.C. § 1498(a) as not waiving sovereign

immunity for infringement of a patented process where

the Government did not perform all steps of the process

in the United States).

}2a

Appendix A

Accordingly, we interpret the provisos of § 1498(b)

as carving out three classes of copyright infringement

claims from the Government’s general waiver of

sovereign immunity for copyright infringement. This

reading comports with the principle that any

uncertainty as to the scope of a waiver of sovereign

immunity should be resolved by construing the waiver

narrowly, in favor of the sovereign. Lane, 518 U.S. at

192, 116 S.Ct. 2092. It follows that because “the terms

of the Government’s consent to be sued in any court

define that court’s jurisdiction to entertain the suit,”

Testan, 96 S.Ct. at 953, the CFC lacks jurisdiction over

any copyright infringement claim within the scope of the

§ 1498(b) provisos.

Blueport also argues that even if the three § 1498(b)

provisos are jurisdictional, the Government has the

burden of proving that its claim is barred by one of the

provisos. In support, Blueport analogizes to cases in

other circuit courts which imposed the burden on the

Government to prove the exceptions to the waiver of

sovereign immunity in the Federal Tort Claims Act

(“FTCA”), 28 U.S.C. § 2680. See, e.g., Prescott v. United

States, 973 F.2d 696, 702 (9th Cir.1992) (“Because an

exception to the FTCA’s general waiver of immunity

although jurisdictional on its face, is analogous to an

affirmative defense, we believe the Sixth and Seventh

Circuits correctly placed the burden on the United

States as the party which benefits from the defense.”);

Stewart v. United States, 199 F.2d 517, 520 (7th Cir.1952)

13a

Appendix A

(holding that the exceptions to the waiver of sovereign

immunity in the FTCA are affirmative defenses that

must be raised and proven by the government). Other

circuit courts, however, have declined to follow the cases

cited by Blueport. See, e.g., Sharp v. United States, 401

F.3d 440, 443 n. 1 (6th Cir.2005) (noting that Prescott

may conflict with the Supreme Court decision in United

States v. Gaubert, 499 U.S. 315, 111 S.Ct. 1267, 113

L.Ed.2d 335 (1991) and declining to address whether

the plaintiff or the Government has the burden of

proving the FTCA’s discretionary function exception);

Kiehn v. United States, 984 F:2d 1100, 1105 n. 7 (10th

Cir.1993) (same); Autery v. United States, 992 F.2d 1523,

1526 n. 6 (11th Cir.1993) (same).

We agree with the CFC that the cases cited by

Blueport are unpersuasive. First, these cases all

interpret a statute, narnely the FTCA, which is not at

issue in this case. Second, the circuit courts are divided

on whether these FTCA cases are consistent with

Supreme Court precedent, in particular the Court’s

decision in Gawbert. Third, we see no reason to interpret

28 U.S.C. § 1498(b) contrary to the long-established

practice of placing the burden of establishing jurisdiction

on the party “who claims that the power of the court

should be exerted in his behalf.” McNutt v. Gen. Motors

Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 80

L.Ed. 1135 (1936). Indeed, it is to be presumed that a

cause of action lies outside the limited jurisdiction of

the federal courts. Kokkonen v. Guardian Life Ins. Co.

of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d

391 (1994) (citing Turner » Bank of N. Am., 4 U.S. (4

l4a

Appendix A

Dall.) 8, 11, 1 L.Ed. 718 (1799)). Moreover, the Supreme

Court has made clear that “the burden of establishing

the contrary rests upon the party asserting jurisdiction.”

Td. (citing McNutt, 298 U.S. at 182-83). Accordingly, the

CFC correctly held that Blueport had the burden of

showing that its claim is not barred jurisdictionally by

the § 1498(b) provisos.

Finally, we consider whether Blueport has met its

burden to show that its copyright infringement claim

does not fall within any of the § 1498(b) provisos. Because

we agree with the CFC that Blueport’s claim is barred

by the “order, influence, or induce” proviso, we need

not address whether the claim is also barred by the

remaining provisos.

As noted, the “order, influence, or induce” proviso

excludes claims by a Government employee who “was in

a position to order, influence, or induce use of the

copyrighted work by the Government” from the waiver

of sovereign immunity for copyright infringement.

See § 1498(b). Here, the CFC found that Davenport’s

position as a member of the Air Force manpower

community gave him access and authority to distribute

the AUMD program freely to his colleagues. Blueport

Co. v. United States, 76 Fed.Cl. 702, 723 (2007). In

particular, the CFC found that Davenport distributed

the AUMD program both by sharing individual copies

with his colleagues and by posting the program on an

Air Force web page so that many more people in the Air

15a

Appendix A

Force manpower community could access it. /d. The CFC

also found that Davenport demonstrated the AUMD

program to senior Air Force manpower personnel and

was part of the Manpower User Group’s advisory

authority. /d. at 723-25. These fact findings are not

clearly erroneous. In addition, the CFC concluded,

based on these findings, that Davenport was in a position

to influence and induce the Air Force’s use of the

program. /d. We agree. Because Blueport’s rights in the

AUMD program are derived from Davenport, we agree

with the CFC that Blueport’s copyright infringement

claim against the Government is precluded by the “order,

influence, or induce” proviso.

Nevertheless, Blueport argues that even if

Davenport was once in a position to influence or induce

the use of the AUMD program by the Air Force, he lost

that position when he was excluded from the Air Force’s

Manpower User Group. On this basis, Blueport argues

that it may bring a copyright infringement claim for the

Air Force’s use of the AUMD program after Davenport

lost this position of influence. We disagree. Nothing in

§ 1498(b) suggests that a party who was in a position to

influence the Government’s use of a copyrighted work

can later bring a claim against the Government for

continued use of that work after he lost his position of

influence. Moreover, we decline Blueport’s invitation to

read such an exception into the “order, influence, or

induce” proviso. See Soriano, 352 U.S. at 276, 77 S.Ct.

269 (explaining that the “limitations and conditions upon

which the Government consents to be sued must be

Strictly observed and exceptions thereto are not to be

implied”).

!6a

Appendix A

In sum, the CFC correctly determined that

Blueport’s copyright infringement claim falls within

the “order, influence or induce” proviso of § 1498(b).

Accordingly, Blueport’s claim is outside the scope of the

Government’s waiver of sovereign immunity for

to dismiss the claim for lack of jurisdiction.

IT.

The CFC also dismissed Blueport’s DMCA claims

against the Government on the ground that the

Government has not waived sovereign immunity for

DMCA claims. Before the CFC and on appeal,

Blueport’s arguments against dismissal of its DMCA

claims amount to a contention that a waiver of sovereign

immunity for DMCA claims should be inferred. However,

it is well-established that a waiver of sovereign immunity

“cannot be implied but must be unequivocally

expressed.” United States v. King, 395 U.S. 1, 4, 89 S.Ct.

1501, 23 L.Ed.2d 52 (1969).

The DMCA itself contains no express waiver of

sovereign immunity. Indeed, the substantive

prohibitions of the DMCA refer to individual persons,

not the Government. See 17 U.S.C. § 1201(a)(1)(A)

(providing that “[n]o person shall circumvent a

technological measure that effectively controls access

to a work protected under this title” (emphasis added));

17 U.S.C. § 1201(a)(1)(B) (providing that “[t]he

prohibition contained in subparagraph (A) shall not

apply to persons .. .” (emphasis added)); 17 U.S.C.

17a

Appendix A

§ 1202(a) (providing that “[nJo person shall knowingly

and with the intent to induce, enable, facilitate, or

conceal infringement...” (emphasis added)); 17 U.S.C.

§ 1203(c)(1) (providing that “a person committing a

violation of section 1201 or 1202 is liable for... .”

(emphasis added)). As the CFC correctly observed, to

hold that the DMCA includes a waiver of sovereign

immunity would “require construing the word ‘person’

to include the term ‘sovereign’.” Blueport Co. v. United

States, 71 Fed.Cl. 768, 780 (2006). Blueport’s

construction of the DMCA thus violates the rule that a

waiver of sovereign immunity must be express. See King,

395 U.S. at 4, 89 S.Ct. 1501.

Blueport also argues that the Tucker Act, 28 U.S.C.

§ 1491(a)(1), provides a general waiver of sovereign

immunity that authorizes DMCA claims against the

Government. The Tucker Act gives the CFC jurisdiction

over “any claim against the United States founded

either upon the Constitution, or any Act of Congress or

any regulation of an executive department, or upon any

express or implied contract with the United States, or

for liquidated or unliquidated damages in cases not

sounding in tort.” 28 U.S.C. § 1491(a)(1). This court has

explained that “because the Tucker Act itself does not

create a substantive cause of action, ‘in order to come

within the jurisdictional reach and the waiver of the

Tucker Act, a plaintiff must identify a separate source

of substantive law that creates the right to money

damages.’ ” Jan’s Helicopter Serv., Inc. v. Fed. Aviation

Admin., 525 F.3d 1299, 1806 (Fed.Cir.2008) (quoting

Fisher v. United States, 402 F.3d 1167, 1172 (Fed.Cir.

18a

Appendix A

2005) (en banc in relevant part)). “In the parlance of

Tucker Act cases, that [statutory] source must be

‘money-mandating.’” Fisher, 402 F.3d at 1172. A statute

is money-mandating if it “ ‘can fairly be interpreted as

mandating compensation by the Federal Government

for the damages sustained.’ ” United States v. Mitchell,

463 U.S. 206, 216-17, 103 S.Ct. 2961, 77 L.Ed.2d 580

(1983) (quoting Testan, 424 U.S. at 400, 96 S.Ct. 948).

Moreover, a statute can be interpreted as money-

mandating if it grants the claimant a right to recover

damages either “expressly or by implication.” /d. at 217

n. 16, 1038 S.Ct. 2961 (citation omitted).

Here, the DMCA cannot be fairly interpreted as

containing either an express or implied right to recover

money-damages from the Government. First, as

discussed above, the substantive prohibitions of the

DMCA refer to persons, not the Government. Second,

the DMCA specifically grants jurisdiction over

DMCA claims to federal district courts, not the CFC.

See 17 U.S.C. § 1203(a) (providing that “[a}]ny person

injured by a violation of section 1201 or 1202 may bring

a civil action in an appropriate United States district

court for such violation” (emphasis added)). This court

has held that the CFC lacks jurisdiction to adjudicate

claims created by statutes, like the DMCA, which

specifically authorize jurisdiction in the district courts.

See, e.g., Ledford v. United States, 297 F.3d 1378, 1382

(Fed.Cir.2002) (holding that 26 U.S.C. § 7432(a), which

states “such taxpayer may bring a civil action for

damages against the United States in a district court of

the United States,” provides for jurisdiction in the

19a

Appendix A

district courts, not the CFC); LeBlanc v. United States,

50 F:3d 1025, 1030 (Fed.Cir.1995) (holding that 31 U.S.C.

§ 3730(h), which states that “[a]n employee may bring

an action in the appropriate district court of the United

States for the relief provided in this subsection,” does

not provide jurisdiction in the CFC). Accordingly, we

reject Blueport’s argument that the CFC has

jurisdiction over DMCA claims against the Government

under the Tucker Act.

Finally, Blueport argues that even if there is no

waiver of sovereign immunity in the DMCA or the

Tucker Act, the waiver of sovereign immunity in $

1498(b) is sufficient. The CFC properly rejected this

argument. This court has held that the DMCA created

new claims for liability that are separate and distinct

from claims for copyright infringement. Chamberlain

Group, Inc. v. Skylink Techs., Inc., 381 F.3d 1178, 1204

(Fed.Cir.2004) (“The DMCA does not create a new

property right for copyright owners. ... The anti-

circumvention and anti-trafficking provisions of the

DMCA create new grounds of liability.”); see also Storage

Tech. Corp. v. Custom Hardware Eng’g & Consulting,

Inc., 421 F.3d 1307, 1318-19 (Fed.Cir.2005) (discussing

the relationship between copyright infringement and

violations of the MCA). Because a claim for a violation

of the DMCA is not, as Blueport argues, a subset of

claims for copyright infringement, the CFC was correct

to hold that the waiver of sovereign immunity in §

1498(b) does not extend to claims against the

Government pursuant to the DMCA.

20a

Appendix A

Accordingly, the CFC was correct to dismiss

Blueport’s DMCA claims for lack of jurisdiction.

CONCLUSION

For the foregoing reasons, the CFC’s decision

dismissing Blueport’s claims against the Government

for lack of jurisdiction is

AFFIRMED.

2la

APPENDIX B — OPINION OF THE UNITED STATES

COURT OF FEDERAL CLAIMS

DATED MAY 7, 2007

UNITED STATES COURT OF FEDERAL CLAIMS

No. 02-1622 C

BLUEPORT COMPANY, LLP

Plaintiff,

THE UNITED STATES,

Defendant.

May 7, 2007

OPINION AND ORDER

BLOCK, Judge.

General Matthew B. Ridgway once observed that,

“what throws you in combat is rarely the fact that your

tactical scheme was wrong... but that you failed to

think through the hard cold facts of logistics.” ' This is

especially true for the United States Air Forces

1. Lt. Col, James C. Rainey, USAF Ret., Cindy Young, &

Roger D. Golden, The Dimensions of Logistics, Air Force J. of

Logistics, Fall 2006, at 84, 84, available at http:// www. aflma.

hq. af. mil/ lgj/ 10 Dimensions. pdf.

22a

Appendix B

(“USAF”). For example, the few hundred aviators and

ground special forces who initially engaged the Taliban

and al Qaeda were the “teeth” in the recent Afghanistan

campaign. These “teeth,” however, would have no bite

without a “tail” of thousands of U.S. personnel flying

reconnaissance, running ships, transporting supplies,

processing intelligence, and moving information. It is

this “tail” that allows the USAF to reach halfway around

the world, commence almost immediate combat

operations in an unexpected, austere theater and then

succeed on an extremely chaotic battlefield.’

Making sure the USAF has the appropriate “teeth”

and “tail” personnel is the responsibility of the Air Force

Manpower Agency (“AFMA”). AFMA is a field operating

agency® within the USAF and provides USAF leaders

with the tools necessary to identify the essential

manpower required for supporting USAF operations.

“Manpower” is the term used to specifically refer to

2. Col. John Jogerst, USAF, What’s So Special about

Special Operations? Lessons from the War in Afghanistan,

Aerospace Power J., Summer 2002, at 98, 101, available at http:/

/www, airpower.maxwell. af.mil/airchronicles/apj/apj 02/sum02/

sum02.pdf.

3. Field operating agencies are subdivisions of the USAF

that report directly to Headquarters, U.S. Air Force (“HQ

USAF”). They are assigned a specialized mission that is

restricted in scope when compared to the mission of a major

command. Field operating agencies carry out activities under

the operational control of HQ USAF. United States Air Force,

Factsheet: The U.S. Air Force, http:// www. af. mil/ factsheets/

(follow “The U.S. Air Force” hyperlink) (last visited Feb. 9, 2007).

23a

Appendix B

personnel assigned to work in AFMA, who have been

trained and assigned to deal exclusively with the technical

study of how many spaces or positions are needed to

perform specific tasks or functions throughout the USAF“

These “manpower personnel” in AFMA determine

personnel requirements, develop programming factors,

manage perforraance management programs, assist with

the execution of competitive sourcing initiatives, and

conduct special :studies.° All this is done with the final goal

of making sure the USAF personnel are efficiently assigned

and utilized.

Frequently, AF'MA relies on computer databases and

programs to help conduct its mission. For example, at

one point most of the manpower data for the USAF was

stored in a database called the Manpower Data System

(“MDS”). Like many computer systems, the MDS had

certain limitations. A computer program specifically

written to increase the functionality of the MDS is the

subject of the instant action. Written by a Technical

Sergeant Davenport allegedly on his off-duty hours, the

AUMD program allowed AFMA personnel to more easily

access local databases storing all types of manpower

4. As Glendon Hendricks, a man who spent almost his entire

military and civilian career in the manpower field, explained at

trial, manpower determined the number of spaces necessary to

perform work ancl then personnel would “match up faces

[people] with the spaces.” Tr. 864.

5. “United States Air Force, Factsheet: Air Force

Manpower Agency, http:// www. af. mil/ factsheets/” (foilow “Air

Force Manpower Agency” hyperlink) (last visited Feb. 9, 2007).

24a

Appendix B

data, such as the number of particular positions at a

local base and the number of personnel authorized to

perform a particular task of work. The AUMD program

also enabled AFMA personnel to print reports

containing needed data quicker and also to create

customized reports. The program preformed well and

was soon used by AFMA personnel stationed around

the world. To be sure, so impressed was the Air Force

with the program, Technical Sergeant Davenport was

asked to provide training and answer questions about

the program at various bases in the United States and

throughout the Pacific.

Over the next year and a half, Davenport continued

to revise and update the AUMD program with

improving the program’s functionality with the input of

AFMA colleagues and other USAF personnel.

Occasionally, Davenport would release a new version of

the AUMD program, which incorporated all the most

recent changes. In all, Davenport produced ten versions

of the AUMD program from May 1998 to January 2000.

Seeing the AUMD’s success and wishing to profit

from the program, Davenport and his uncle established

the Blueport Company, LLP (“Blueport”) in February

2000—some twenty months after Davenport had

produced the first version of the AUMD. Davenport then

registered for a copyright for version 2.1d of the AUMD

program in March 2000 and in the same month assigned

all rights in the program to Blueport. Blueport, in turn,

sought a licensing agreement with the USAF for the

continued use of the AUMD program.

25a

Appendix B

Desiring tc own outright such a program rather than

pursuing a licensing agreement, the USAF procured the

services of a private contractor to “reverse engineer”

the AUMD program, in order to recreate the AUMD’s

functionality. As part of the process of recreating the

computer prog ram’s functionality, the USAF instructed

the contractor to “hack” ® into the AUMD program and

disable the program’s automatic expiration date—the

date when the program would automatically cease

operation. Disabling the automatic expiration date

allowed the USAF to continue using the AUMD

program, while its contractor sought to write a new

program to replace the copyright-protected AUMD.

Jilted by the USAF, Blueport filed a two-count

complaint with this Court. The first count is based on

the alleged infringement of Blueport’s copyright by the

United States. 28 U.S.C. § 1498(b). Specifically, Blueport

maintains that the use by the USAF of the AUMD

program after the expiration date constituted the

infringement. Blueport also contends that the new

computer program written by the contractor—the so-

called MARS program—also constitutes unlawful

infringement because this program of the USAF directly

copied Blueport’s copyrighted AUMD program.

Blueport contends in the complaint’s second count that

6. Hack (v): (a) to write computer programs for enjoyment;

(b) to gain access to a computer illegally. Merriam-Webster OnLine

Dictionary, http:// m-w.com/. See also Blueport Co., LLP v. United

States, 71 Fed.Cl. '768, 770 n. 4 (2006) (noting the definition of

“hack” as “To modify a program, often in an unauthorized manner,

by changing the code itself.”).

26a

Appendix B

the disabling of the AUMD’s automatic expiration date

violated the Digital Millennium Copyright Act of 1998

(“DMCA”). 17 U.S.C. § 1201 et seq.

In an opinion issued on June 29, 2006, the Court

granted the government’s summary judgment motion

on the second count, holding that the United States

Court of Federal Claims lacks jurisdiction under the

DMCA to hear the claim. See Bluweport Company, 71

Fed.Cl. at 768. The Court then conducted a trial in

Portland, Oregon, from July 24 to July 28, 2006,

regarding issues related to the copyright infringement

count of Blueport’s complaint. As explained fully

below, because Blueport fails to make the requisite

jurisdictional showing necessary for a copyright

infringement claim against the United States, the Court

holds for the defendant. See 28 U.S.C. § 1498(b).

FACTUAL BACKGROUND‘

Information on work profiles for each unit in the

USAF—how many airmen are required, at what rank

and what level of training are necessary—used v0 be

stored in a database known as the MDS, housed at

Gunter Air Force Base in Alabama. CSPFF 4% 10. The

MDS database was developed in the 1990s and replaced

an antiquated system that had relied on magnetic tapes

and punch cards to store information. Tr. 67. The data

7. Facts from this section are drawn from: Consolidated

Statement of Proposed Findings of Fact (“CSPFF”); Trial

Transcripts (“Tr.”); Plaintiff’s Trial Exhibits (“Pl.’s ‘Trail Ex.”);

and Defendant’s Trial Exhibits (“Def.’s Trial Ex.”).

27a

Appendix B

in the MDS included skill profiles for each position in

the USAF, as well as the training, rank and skill levels

of all USAF personnel. /d. Manpower personnel

constantly accessed the information stored in the MDS

to manage the current and future personnel needs of

the USAF. /d.

Mark Davenport enlisted in the USAF in 1981, and

after four years of service, began working in the

manpower career field. /d. at 63. Around July of 1991,

Davenport was transferred to Gunter, and soon

thereafter, in 1992, began working on preparing the

transition for manpower personnel to use the MDS

system. Jd. at 68-69.

During the beta testing® of the MDS, Davenport—

then a Technica! Sergeant—observed that the system

did not allow manpower personnel at local USAF bases

throughout the Pacific Air Forces (“PACAF’”’)® to print

8. A beta test is a test of a computer product prior to the

program’s genera! or commercial release. Beta testing is the

last stage of testing, and normally can involve sending the

product to beta test sites outside the program developers for

real-world exposure. See Merriam-Webster OnLine Dictionary,

http://m-w. com/.

9. The USAF is organized into major commands

(“MAJCOM”) each representing a major Air Force subdivision

and each having a specific pertion of the Air Force mission.

Each MAJCOM is cirectly subordinate to HQ USAF MAJCOMs

are interrelated and complementary, providing offensive,

defensive, and support elements. In the United States,

MAJCOMs are organized on a functional basis, while overseas

(Cont'd)

28a

Appendix B

reports. /d. at 92. Instead, manpower personnel at local

bases had to send their report requests via e-mail to

PACAF headquarters at Hickam Air Force base in

Hawaii and wait for other manpower technicians there

to respond to the message with a copy of the requested

report attached—a process that could take several

hours. /d. Davenport also noticed that the official

manpower report was a very cluttered document,

containing significant amounts of superfluous

information. /d. at 95-96.

Seeking to find a way to alleviate these MDS

shortcomings, Davenport began experimenting with

writing his own computer program that would allow

USAF manpower personnel to run and print their own

customized reports. /d. at 98. At no time was Davenport

ordered by his superiors to write such a program.

(Cont’d)

MAJCOMs are organized on a geographical basis. The USAF is

currently organized into nine MAJCOMs (seven functional and

two geographical) reporting to HQ USAF. United States Air

Force, Factsheet: The U.S. Air Force, http://www.af.mil/

factsheets/ (follow “The U.S. Air Force” hyperlink) (last visited

Feb. 9, 2007).

PACAF is one of two geographical MAJCOMs in the USAF

and represents the air component of the U.S. military in the

Pacific. PACAF’s area of responsibility extends from the west

coast of the United States to the east coast of Africa and from

the Arctic to the Antarctic, covering more than one hundred

million square miles. United States Air Force, Factsheet: Pacific

Air Forces, http://www. af. mil/ factsheets/ (follow “Pacific Air

Forces” hyperlink) (last visited Feb. 9, 2007).

29a

Appendix B

Id. at 91, 503, 518. Indeed, the USAF never provided

Davenport with any formal computer programming

training, despite repeated requests for such training.

Id. at 69-70, 72-73. It appears that Davenport’s

motivation was the desire to more efficiently access the

MDS and to gain experience in writing his own computer

program. /d. at, 93-94.

Technical Sergeant Davenport entitled the program

the AUMD prozram. CSPFF 9 6. The AUMD, created

in Microsoft Access 97 using the Visual Basic

programming language, actually consisted of two

separate computer programs tailored for use with the

MDS. /d. 191 11, 13; Tr. 97-98. The first program, known

as the AUMD Admin, downloaded data stored in the

MDS and incorporated that data into a local database.

CSPFF 411; Tr. 97-98. The second program, known as

the AUMD Master, allowed users to manipulate the data

in the local MDS database into standard reports and

user-customized reports. CSPFF 9 11; Tr. 97-98. This

allowed manpower personnel to use their office

computers to aczess the information they needed and

print reports containing that information to their office

printer. The AUMD program literally saved manpower

personnel hours of time in printing reports, since

requests to print reports no longer had to be sent to

PACAF headquarters and the result sent back to the

user. Tr. 92.

30a

Appendix R

The first “beta” version of the AUMD program took

Davenport approximately two weeks to write, working

in the evenings after returning home from work, and

on the weekends. Tr. 92. This beta version was

completed on or about May 28, 1998. CSPFF 4 15.

Davenport then provided a copy of this “beta” program

to his friend Master Sergeant William Luckie in June

1998, for review and comment. /d. §| 16.

Davenport and Master Sergeant Luckie conducted

the beta testing of the AUMD at their individual work

stations during their working hours. /d.; Tr. 104. This

was necessitated by the fact that the MDS was a closed

database, only accessible from the USAF computers on

USAF bases. Tr. 328-30. Thus, it was only by drawing

data directly from the MDS that AUMD could create a

local database which individual users could access to run

customized reports. /d. at 328.

While Master Sergeant Luckie was reviewing the

AUMD program at his work station, one of his superiors

saw him using it. Tr. 104. Recognizing the AUMD could

address the shortfalls in the MDS, Master Sergeant

Luckie’s superior asked Luckie to provide the other

manpower personnel at his base with a copy of the

program. /d. Shortly after this, Luckie began preparing

an instruction manual on how to use the program.

Td. at 315-16.

3la

Appendix B

Use of the AUMD quickly spread throughout the

manpower personnel in the PACAF and the USAF in

general. The rapid dissemination of the AUMD occurred

as a result of manpower personnel from local bases

coming to PACAF headquarters for conferences or

transferring to new assignments. Jd. at 336. These

personnel would see Davenport or other manpower

technicians using the AUMD program. /d. Recognizing

the benefits of the program, many of the visiting

manpower personnel requested copies of the program

to take back to their local bases. /d.

The AUMD program spread so quickly that by July

1998, while traveling to several local bases in the PACAF,

as part of his regular duties to provide instruction on

the new MDS, Davenport was asked by manpower

personnel to provide training on the AUMD program.

Id. at 118, 334-36.

During this time, Davenport continuously upgraded

and refined tie AUMD program to improve its

functionality and usefulness. Occasionally, Davenport

would come across an interesting feature in another

program that he would incorporate into the AUMD. /d.

at 347. Significantly, Davenport began to receive

numerous suggestions from USAF manpower personnel

on how the AUMD program could be improved. /d. If

Davenport considered a suggestion useful, he would

incorporate it into the AUMD. J/d. at 415.

32a

Appendix B

By September 1998, Davenport had made enough

changes to th AUMD program to warrant the issue of

a new version of the program, version 1.0 AUMD."°

Id. at 331-32. By this time, most of the USAF bases in

PACAF were using the AUMD program. Jd. at 109-10.

Also, in September 1998, Davenport was asked by his

commanding officer to give a presentation on the AUMD

program for senior AF MA officers at a manpower

conference in San Antonio. Jd. at 111-12. This

presentation was before the heads of the entire USAF

manpower community, and Davenport’s talk was

extremely well received. /d.

10. Ten total versions of the AUMD program would

eventually be produced. Tr. 345. These versions and their release

dates are as follows:

Beta 0.9 May 1998

1.0 September 15, 1998

1.5 February 1, 1999

1.8 April 22, 1999

1.9 August 13, 1999

2.0a September 29, 1999

2.0b October 2, 1999

2.1d November 18, 1999

2.le January 2, 2000

2.1f January 5, 2000

Def.’s Trial Ex. 3; Tr. 345.

33a

Appendix B

After Davenport’s September 1998 presentation,

use of the AUMD increased significantly. Jd. at 350. The

earliest versions of the AUMD contained an “about

screen” with Davenport’s personal e-mail and home

telephone number. /d. at 347. However, after Davenport

began receivinz calls regarding the AUMD program late

at night, he changed the information on the “about

screen” to list only his work e-mail and telephone

number. /d. Davenport was soon overwhelmed with calls

seeking support for the AUMD. /d. at 350. The situation

became such that he could not both perform his regular

duties and provide all the technical support being

requested. /d.

To alleviate the demands for his support with the

program, Davenport began to work more closely with

manpower data managers in other USAF commands.

Id. While Davenport continued to provide user support

for the AUMD program to manpower personnel in

PACAF, manpower personnel in other MAJCOMs were

instructed to first contact the manpower data manager

in their MAJCOM headquarters for support before

contacting Davenport. Jd. Davenport kept these

manpower data managers appraised of changes to the

AUMD program and appraised them of when new

versions of the program would be issued. Jd.

Additionally. to cut back on inquires from personnel

using outdated versions of the AUMD program,

Davenport incorporated an automatic expiration date

into the program. /d. at 351-52. Upon expiration, the

program ceased to function and a screen appeared

34a

Appendix B

instructing the user to contact the manpower data

manager at their MAJCOM headquarters for the latest

version of the AUMD program. /d.

While everyone who worked with MDS agreed that

the AUMD program was an extremely useful program,

some officials in the USAF felt some unease at its

widespread use. /d. at 891-92. This unease allegedly

resulted from the USAF’s lack of possession of

documentation revealing the program’s source codes!!

11. Computer software contains two types of code: machine

readable object code and human readable source code. Object

code uses the two digits 0 and 1 as on (0) and off (1) switches.

All instructions and data in the software are reduced to series

of these numerals. Since it is impractical for most people to

reduce data and instructions to strings of 0’s and 1’s, computer

programming languages have developed. Instead of using only

0’s and 1’s, these programming languages use numerous

symbols and syntax to convey meaning—making them much

easier for people to understand. These programming languages

effectively enable people to write instructions and data in

software. Source code is the text of software written in these

programming languages. Software’s human readable source

code commands are translated into machine readable object

code commands which are executable by the computer. See

Universal City Studios, Inc. v. Reimerdes, 111 F.Supp.2d 294,

305-06 (S.D.N.Y.2000) (giving a detailed description of object

and source codes). Users of software cannot readily modify the

machine readable object code since strings of 0’s and 1’s are

difficult to comprehend. In contrast, the human readable source

code is much easier to modify. For this reason software

developers will often only provide the software users with the

object code, insuring that the users continue to rely on the

(Cont’d)

35a

Appendix B

or even explaining its workings. /d. at 891. As a result

of this unease, concerns were raised that manpower

personnel were becoming increasing reliant on

performing their daily duties with a program over which

the USAF had no control, particularly since it was

supported and updated solely by Davenport. Jd. at 891-

92, 899. Concerns also grew that if anything should

happen to Davenport—should he decide to retire,

become sick, or be hit by the proverbial “Mack truck”—

manpower personnel would be dependent on a computer

program that no one was capable of supporting. /d. at

899, 902.

As a result of these concerns, shortly after the

September 1993 manpower conference in San Antonio,

the USAF began requesting that Davenport provide the

USAF with the: source codes to the AUMD program.

id. at 397. Davenport, however, did not wish to turn over

the source code to the USAF: /d. Davenport considered

the AUMD program his personal program, since he

believed he had initially conceived of the idea and

created it at his home in his spare time. /d. He was also

concerned at what might happen to the program once

(Cont’d)

software developers for changes in the software. Software

developers will als? seek to copyright their source codes. And

to further protect the software from being copied, software

developers will often take technical steps to prevent others from

trying to discern the source code from the basic object code.

See Theodore C. McCullough, Understanding the Impact of the

Digital Millenniun: Copyright Act on the Open Source Model of

Software Development, 6 Marg. Intell. Prop. L.Rev. 91, 94 (2002).

36a

Appendix B

the USAF took over its operation. /d. Davenport believed

that, in the past, when the USAF had taken over other

computer programs developed independently by USAF

personnel, the result was a loss of functionality due to

the changes the USAF insisted on incorporating into

the program. /d. He allegedly wanted to avoid repeat

performance with the AUMD. /d.

Throughout 1999, USAF officers repeatedly asked

Davenport to turn over the source codes to the AUMD,

to no avail. /d. at 901-02. Unable to obtain the source

code from Davenport, the USAF determined its only

option was to have a private contractor “reverse

engineer” the program. /d. at 902. On January 11, 2000,

the USAF issued a solicitation requesting bids from

private contractors to recreate the AUMD program.

CSPFF 119.

At the same time, Davenport sought an avenue to

financially benefit from the AUMD program. On

February 7, 2000, Davenport and his uncle, Mr. Robert

Gunter, formed Blueport. CSPFF 1 7. The two men

hoped this company would provide them with a vehicle

to sell a license to the USAF for use of the AUMD

program. This formation occurred almost two years after

the Beta version was released and after the program

was widely used by Air Force Manpower divisions. /d.

As part of his efforts to form Blueport, on March 3,

2000, Davenport submitted an application to the United

States Copyright Office to obtain a copyright for the

AUMD program. PIl.’s Trial Ex. 90. In exchange for a

37a

Appendix B

fifty percent share of Blueport, Davenport assigned all

rights to the AUMD program to Blueport on March 6,

2000. CSPFF 4 8; Pl.’s Trial Ex. 108; Tr. 47, 61.

Blueport’s copyright of the AUMD progran, titled

“UMD Admin Program V.2.0A and Master Program

V.2.1D,” was registered on March 9, 2000, as

Registration No. TX 5-159-682. Jd. 11 3; Pl.’s Trial Ex.

139; Tr. 47-48.

On March &1, 2000, Blueport approached the USAF

about acquiring a license to the AUMD program. ‘Ir.

50-51; Pl.’s Trial Ex. 57, 105. Blueport indicated that

the USAF’s rights to use the program would terminate

on May 15, 2000, the expiration date of the latest version

of the AUMD program. Tr. 51; Pl.’s Trial Ex. 57.

Instead of entering into negotiations with Blueport,

the USAF on April 10, 2000, selected Science

Applications International Corporation (“SAIC”) to

recreate the functionality of the AUMD program

through reverse engineering. CSPFF 4% 20; Tr. 206.

However, SAIC did not have time to complete its tasks

before the latest, version of the AUMD would reach its

expiration date of May 15, 2000. CSPFF 9 21.

Mindful of the USAF’s intention to have a private

contractor reverse engineer the AUMD, Davenport did

not prepare any further versions of the AUMD program

and was unwilling to assist the USAF in changing the

automatic expiration of the version then in use. /d.;

Tr. 900. Faced with the situation of being unable to use

the computer program the manpower community had

38a

Appendix B

come to rely upon and not yet having an alternative

program to replace it, the USAF instructed SAIC to

hack into the AUMD program and change the automatic

expiration date from May 15, 2000 to February 15, 2001.

CSPFF {4 23; Tr. 234. This allowed the USAF to keep

the AUMD program operational until SAIC created a

replacement program—the MARS program. Tr. 905.

On May 28, 2001, Blueport submitted to the Air

Force Legal Services Agency an administrative claim

for compensation for the USAF’s copyright infringement

of the AUMD program. P1.’s Trial Ex. 107; CSPFF 9 28.

On January 11, 2002, the Air Force Legal Services

Agency denied Blueport’s administrative claim. Pl.’s

Trail Ex. 104; Tr. 52-53. Blueport then filed its complaint

with this Court on November 18, 2002.

There are primarily four issues raised and

responded to by the parties. For instance, the parties

dispute whether the protections of the copyrighted

AUMD version 2.1d extend also to latter non-

copyrighted versions of the AUMD, specifically AUMD

version 2.1f. It is further disputed whether the

government held an implied license to use the AUMD

program and whether any copying and adaptation of the

AUMD program by the government was an essential

step in utilizing the program, pursuant to 17 U.S.C.

§ 117. Another issue is whether the MARS program is

substantially similar to the AUMD program and if the

government's use of the AUMD program constituted

“fair use” under 17 U.S.C. § 107. Finally, the issue of

the jurisdiction of this court to adjudicate this action

39a

Appendix B

has been raised. This is predicated on certain criteria

found in 28 U.S.C. § 1498(b), which acts as a waiver of

sovereign immunity for copyright infringement actions

against the United States. As explained in greater detail

below, because the Court finds that these statutory

criteria are mandatory jurisdictional requirements not

met by plaintiff, it is not necessary to address the

numerous other issues and arguments presented by this

case.

DISCUSSION

Typically, for copyright infringement, a plaintiff must

show ownership of a valid copyright and copying of the

protected work. Feist Publ’ns, Inc. v. Rural Tel. Serv.

Co., 499 U.S. 340, 361, 111 S.Ct. 1282, 113 L.Ed.2d 358

initially vests with the person who created the work. 17

U.S.C. § 201(a); Cmty. for Creative Non-Violence v. Reid,

490 U.S. 730, 737, 109 S.Ct. 2166, 104 L.Ed.2d 811 (1989).

Copyrights are presumptively valid and a certificate of

evidence of a valid copyright. Herbert v. United States,

36 Fed.Cl. 299, 303 (1996) (citing 17 U.S.C. § 410(c)).”

Here, it is undisputed that Davenport was the creator

of the original AUMD program and that he has assigned

12. The same court issued two opinions in Herbert. The first

decision denied the defendant’s motions for summary judgement.

Herbert vu United States, 32 Fed.Cl. 293, 296-97 (1994) (hereinafter

Herbert I). The second decision, issued two years later after a trial

on the merits, dismissed plaintiff’s complaint. Herbert, 36 Fed.Cl.

at 305-07 (hereinafter Herbert IT).

40a

Appendix B

his rights to plaintiff. CSPFF 94% 6, 8. Plaintiff, by

producing the certificate of copyright registration for

the AUMD program version 2.1d, asserts it has

established ownership of a presumptively valid

But, we proceed not under the Copyright Act, but

under 28 U.S.C. § 1498(b), which acts as a waiver of

sovereign immunity and vests this Court with

jurisdiction to adjudicate copyright infringement claims

against the government. Section § 1498(b) contains

explicit exceptions (characterized as “provisos” or

“conditions” in this opinion) to the waiver—where the

government was “induced” by plaintiff into using the

copyrighted work or where the ownership of the

essence constitutes what is termed “government work”’

under copyright jurisprudence. See Matthew Bender &

Co. v. West Publ’g Co., 158 F.3d 674, 679 (2d Cir.1998)

(holding that the works of the federal government, such

as the text of judicial decisions, are not subject to

As to the latter contingency, there can be no

“presumption” of ownership for jurisdictional purposes

under 28 U.S.C. § 1498(b) because, unlike the Copyright

Act, the substantive factual issue of “government work”

goes to the initial determination of the jurisdictional

waiver of sovereign immunity itself.

4la

Appendix B

I. JURISDICTION OF THE COURT OF

FEDERAL CLAIMS

It is beyond doubt that the United States Court of

Federal Claims “has jurisdiction only where and to the

extent that the government has waived its sovereign

immunity, and any waiver of sovereign immunity cannot

be implied but must be unequivocally expressed.”

Ledford v. United States, 297 F.3d 1378, 1381

(Fed.Cir.2002). There exists two categories of

jurisdictional cases facing this court. In the majority of

cases, the requirement of subject matter is fulfilled

simply because the plaintiff has filed a well-pled

complaint alleging the appropriate jurisdictional facts.

E.g., Fisher v. United States, 402 F.3d 1167, 1173

(Fed.Cir.2005); Spruill v. Merit Sys. Protection Rd. , 978

F:2d 679, 686-88 (Fed.Cir.1992) (noting that well-pleaded

allegations in the complaint are sufficient to overcome

a challenge to subject matter jurisdiction). Plaintiff has

met this “allegation” burden in the present case.

If the validity of the jurisdictional facts alleged in

the complaint are challenged, however, a second, yet

rarer in practice, category of cases emerges whereby

the court must consider relevant evidence in order to

resolve the factual dispute. E.g., Lujan v. Defenders of

Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d

351 (1992) (noting each jurisdictional “element must be

supported in the same way as any other matter on which

the plaintiff bears the burden of proof, 2.e., with the

42a

Appendix B

manner and degree of evidence required at the

successive stages of the litigation.”). See, e.g., Reynolds

v. Army and Air Force Exch. Serv., 846 F.2d 746, 747

(Fed.Cir.1988) (citing Land v. Dollar, 330 U.S. 731, 735,

67 S.Ct. 1009, 91 L.Ed. 1209 (1947)). Ultimately, in these

cases, the plaintiff must prove jurisdiction by a

preponderance of the evidence. Reynolds, 846 F.2d at

748; Zunamon v. Brown, 418 F.2d 883, 886 (8th Cir.1969)

(“[Tjhe court may demand that the party alleging

jurisdiction justify his allegations by a preponderance

of evidence.”) (quoting McNutt v. Gen. Motors

Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 80

L.Ed. 1135 (1936)); Hansen v. United States, 65 Fed.Cl.

76, 94 (2005). Because the factual predicate for

jurisdiction has been challenged, the Court now

proceeds to address this matter.

A. The “Provisos” of 28 U.S.C. § 1498(b):

Jurisdictional or Affirmative Defenses?

An issue arose at trial whether the exceptions to a

plaintiff’s right of action listed in § 1498(b) should be

treated as jurisdictional, that is as conditioning the

Court of Federal Claims’ limited copyright infringement

jurisdiction, or merely as affirmative defenses. ‘Tr. 1064-

65. The genesis of the problem arises from the language

of § 1498(b), for this section not only vests this Court

with exclusive jurisdiction through a waiver of sovereign

43a

Appendix B

immunity,'* bu’ also sets out certain exceptions, provisos,

to a copyright owner’s right of action:

Provided. That a Government employee shall

have a right of action against the Government

under this subsection except where he was in

a position to order influence, or induce use of

the copyrighted work by the Government:

Provided, however, That this subsection shall

not confer a right of action on any copyright

owner or any assignee of such owner with

respect to any copyrighted work prepared by

a person while in the employment or service

of the United States, where the copyrighted

work was prepared as part of the official

functions of the employee, or in the

13. The first half of 28 U.S.C. § 1498(b) provides:

Hereafter, whenever the copyright in any work

protected under the copyright «ws of the United

States shall be infringed by the United States, by a

corporation owned or controlled by the United

States, or by a contractor, subcontractor, or any

person, firra, or corporation acting for the

Government and with the authorization or consent

of the Government, the exclusive action which may

be brought for such infringement shall be an action

by the copyright owner against the United States in

the Court of Federal Claims for the recovery of his

reasonable and entire compensation as damages for

such infringement, including the minimum statutory

damages as set forth in section 504(c) of title 17,

United States Code:

Appendix B

preparation of which Government time,

material, or facilities were used... .

28 U.S.C. § 1498(b) (emphasis original). Thus, a

government employee's right of action is denied in any

one of three circumstances: (1) the employee was in a

position to order, influence, or induce the use of the

work was prepared as part of employee’s “official

function”; or (3) the copyrighted work was prepared

using government time, material or facilities. “The use

of the word ‘or’ in the statute indicates that satisfaction

of any of these conditions is sufficient to deny a right of

action.” Herbert I], 36 Fed.Cl. at 305 (examining the

three exceptions listed in § 1498(b)).

It is well understood that copyright jurisdiction

differs for the federal district courts and the Court of

Federal Claims. While the federal district courts are

vested with jurisdiction to hear copyright infringement

actions pursuant to 28 U.S.C. § 1338(a) (“The district

courts shall have original jurisdiction of any civil action

arising under any Act of Congress relating to patents,

plant variety protection, copyrights and trademarks.”)

the Court of Federal Claims jurisdiction is established

by § 1498(b), which codifies a limited waiver of sovereign

immunity for copyright infringement claims against the

government and establishes this court as the exclusive

forum to hear such claims. 28 U.S.C. § 1498(b) (“[T]he

exclusive action which may be brought for such

infringement shall be an action by the copyright owner

against the United States in the Court of Federal

45a

Appendix B

Claims... .”’). See Boyle v. United States, 200 F.3d 1369,

1373 (Fed.Cir.:2000) (“The plain language of [§ 1498(b)]

states that the United States has waived sovereign

immunity... .”).

In federal district court, the private sector’s

analogue to the second “official function” proviso in

§ 1498(b) is the Copyright Act’s “work made for hire”

doctrine. 17 U.i5.C. §§ 101, 201(b). 1 Melville B. Nimmer

& David Nimmer, Nimmer on Copyright § 5.13(b)(2) at

5-98 (2006) (“That formulation parallels the definition

of ‘work made for hire’ consisting of ‘a work prepared

by an employee within the scope of his or her

employment.’ ”).'* This statutory exception to

infringement liability has been treated as an affirmative

defense by the federal district courts with the burden

of persuasion placed on the defendant. See Medforms,

Inc. v. Healthcare Mgmt. Solutions, Inc., 290 F3d 98,

105 (2d Cir.2002) (noting the federal district court

dismissed the defendants’ affirmative defense that a

computer program belonged to the employer under the

“work made for hire” doctrine); Dolman v. Agee, 157

14. The “work made for hire” is an exception to the general

rule that ownership vest with the author of the work, and instead

vests with the author’s employer. See 17 U.S.C. § 201(b) (“In the

case of a work made for hire, the employer or other person for

whom the work was prepared is considered the author for

purposes of this title, and, unless the parties have expressly

agreed otherwise in a written instrument signed by them, owns

all of the rights comprised in the copyright.”); See also 17 U.S.C.

§ 101 (defining a “work made for hire” as “a work prepared by

an employee within the scope of his or her employment....”).

46a

Appendix B

F.3d 708, 712 (9th Cir.1998) (agreeing with the federal

district court that the defendant asserting the work

made for hire defense failed to present the requisite

credible evidence that the author’s work was done at

the “instance and expense” of the employer).

Of course, the issue of the waiver of sovereign

immunity is not implicated in the Copyright Act, where

infringement actions are between private parties.

Consequently, the similarity between that Act’s

exception and the conditions or provisos contained in

§ 1498(b) does not by itself negate the jurisdictional

problem. That the conditions in § 1498(b) are

jurisdictional can readily seen. That same section clearly

waives the sovereign immunity of the United States for

provisos in § 1498(b) can viewed as conditions to that

waiver. In other words, the argument is that if Congress

can open the door fully to lawsuits against the

government, it certainly can only partly open that door.

The argument favoring treating § 1498(b)’s

exceptions as affirmative defenses is more complex. For

instance, the Supreme Court, in Franconia Assocs. v.

United States, 536 U.S. 129, 145, 122 S.Ct. 1993, 153

L.Ed.2d 132 (2002), noted that while the Tucker Act, 28

U.S.C. § 1491, constitutes a waiver of sovereign

immunity, the Tucker Act’s six year limitations period,

28 U.S.C. § 2501,'° “should generally apply to the

15. 28 U.S.C.A. § 2501 provides in pertinent part that every

“claim of which the United States Court of Federal Claims has

jurisdiction shall be barred unless the petition thereon is filed

within six years after such claim first accrues.”

47a

Appendix B

Government ‘in the same way that’ they apply to private

parties,” citing Irwin v. Dep't of Veterans Affairs, 498

U.S. 89, 95, 111 S.Ct. 453, 112 L.Ed.2d 435 (1990). As

such, the argument goes, once immunity from suit has

been waived, a'l other “conditions” are merely statutory

provisions that. do not implicate jurisdiction.

To be sure, this distinction between a jurisdictional

prerequisite and an affirmative defense is significant.

As indicated, affirmative defenses do not generally call

into question subject matter jurisdiction, and the burden

on persuasion is on the defendant. See United States v.

Hitachi America, Ltd., 172 F.8d 1819, 1333-34

(Fed.Cir.1999) (noting an affirmative defense was non-

jurisdictional and can be waived by the parties). If,

however, the § 1498(b) exceptions are considered

yrisdictional conditions or limitations on the waiver of

sovereign immunity, they place the burden of persuasion

on the plaintiff to disprove the § 1498(b) provisos.

See Barrett v. Nicholson, 466 F.3d 1038, 1041

(Fed.Cir.2006) (noting the plaintiff bears the ultimate

burden of estab: ishing jurisdiction by a preponderance

of the evidence). Because jurisdiction is a matter that a

court is duty bound to address first, see, e.g., Moyer v.

Jnited States, 190 F.3d 1314, 1318 (Fed.Cir.1999),

indeed, a court, swa sponte, may raise the jurisdiction

ssue, Folden v. United States, 379 F.3d 1344, 1354

Fed.Cir.2004)), this issue must be addressed before the

nerits of the copyright infringement claim.

The Court will first look to how past cases of the

Sourt of Federai Claims have dealt with this issue. It

48a

Appendix B

will then examine how patent cases have considered this

question. And, finally, the Court will probe more deeply

into how the Supreme Court and the Federal Circuit

have resolved the general issue of whether conditions

to waivers of sovereign immunity should always be

considered as jurisdictional.

B. Previous Treatment of § 1498(b) in the

Court of Federal Claims

No Federal Circuit case seems to have directly

examined whether the provisos in § 1498(b) are

affirmative defenses or conditions on the court’s

jurisdiction. The only Court of Federal Claims cases to

review the exceptions under § 1498(b) are two related

actions in the same case, entitled Herbert v. United

States. (Herbert I, 32 Fed.Cl. at 296-97; Herbert LI, 36

Fed.Cl. at 305-07.) While not concretely deciding the

issue, the court in Herbert J seems to have considered

the exceptions jurisdictional, Herbert I, 32 Fed.Cl. at 296,

while latter in Herbert I], the same court appears to

have implicitly treated the § 1498(b) exceptions as mere

affirmative defenses. Herbert 11, 36 Fed.Cl. at 299. In

Herbert I, the government-defendant moved for

summary judgment on the plaintiff’s copyright

infringement claim, arguing that the § 1498(b)

exceptions denied the court jurisdiction. Herbert I, 32

Fed.Cl. at 296. The court explained that “[dJefendant’s

first argument was based on the jurisdictional

limitations contained in 28 U.S.C. § 1498(b), which

waives sovereign immunity for copyright infringement

actions filed against the United States.” /d. (emphasis

49a

Appendix B

added). The court also noted that “[{a]n affirmative

finding might bar plaintiff from suing the government

for copyright violation. .. .” 7d. The court denied the

defendant’s motion, concluding that defendant’s

arguments were either based on facts in dispute or were

not sufficiently developed for the court to reach a firm

conclusion. /d.

Two years later, after a trial, the same court once

again examined the § 1498(b) exceptions in Herbert I].

36 Fed.Cl. at 305-07. In Herbert I], the court stated that

§ 1498(b) was a “jurisdictional statute which considers

a right of action... .” Jd. at 304. The court then stated

that it had “jurisdiction under 28 U.S.C. § 1498(b) to

hear the claim to determine whether plaintiff has a right

of action for a copyright infringement against the

government.” /id. While that statement could possible

be interpreted to mean only that the Herbert IT court

had jurisdiction to determine whether it had jurisdiction

over the matter, see Moyer, 190 F'3d at 1318, the court

went on to label entire discussion of the provisos

in § 1498(b) as “the government’s defense.” /d.

To demonstrate that the court perhaps changed its mind

and no longer viewed the § 1498(b) provisos as

jurisdictional, the court concluded in Herbert I] that the

plaintiff failed to overcome what it characterized as the

“government’s defenses” [in § 1498(b)], and not as the

failure to meet the jurisdictional requirement in

§ 1498(b). 7d. at 313. Indeed, the court in a footnote

stated that it possessed jurisdiction over the case.

Id. at 313 n. 8.

50a

Appendix B

The only conclusion one can cogently draw is that

Herbert I and II collectively are ambiguous at best

regarding the jurisdictional versus affirmative defense

issue.

C. Jurisdictional Treatment of Patents Claims

under 28 U.S.C. § 1498(a)

Patents cases represent the closest legal analogy to

City Studios, Inc., 464 U.S. 417, 439, 104 S.Ct. 774, 78

L.Ed.2d 574 (1984) (noting when there is no precedent

in the law of copyright, “the closest analogy is provided

by the patent law cases to which it is appropriate to refer

because of the historic kinship between patent law and

Inc., 975 F.2d 832, 841 n. 4 (Fed.Cir.1992) (noting that

patent law is analogous to copyright law). Both are

species of intellectual property, and Congress’ grant of

authority to legislate for both emanate from the

Constitution. See U.S. Const., art. I, sec. 8 (“The

Congress shall have Power . . . to Promote the Progress

of Science and useful Arts, by securing for limited Times

to Authors and Inventors the exclusive Right to their

respective Writings and Discoveries.”).

That patent cases may be cited as persuasive

authority for copyright actions, has been recognized by

the Federal Circuit. See Dynacore Holdings Corp. v. U.S.

Philips Corp., 363 F.3d 1263, 1275 (Fed.Cir.2004) (citmg

Sony Corp. of Am., 464 U.S. at 439, 104 S.Ct. 774). One

reason that this is true is that the provision allowing far

Sla

Appendix B

suits against the United States for patent infringement,

28 U.S.C. § 1498(a), is worded very similarly to the

the addition of a subsection covering copyright

infringement in 1960, 28 U.S.C. § 1498 was split into two

subsections: (a) for suits against the United States

patent infringement, and (b) for suits against the United

16. Compare 28 U.S.C. § 1498(a) (“A Government employee

shall have the right to bring suit against the Government under

this section except where he was in a position to order, influence, or

induce use of the invention by the Government. This section shall

not confer a right of action on any patentee or any assignee of such

patentee with respect to any invention discovered or invented by

a person while in the employment or service of the United States,

where the invention was related to the official functions of the

employee, in cases in which such functions included research and

development, or in the making of which Government time,

materials or facilities were used.”) (emphasis added) with § 1498(b)

(“Hereafter, whenever the copyright in any work protected under

the copyright laws of the United States shall be infringed by the

United States . . . the exclusive action which may be brought for

such infringement shall be an action by the copyright owner

against the United States in the Court of Federal Claims... :

Provided, That a Government employee shall have a right of action

against the Government under this subsection except where he

was ina position to crder, influence, or induce use of the copyrighted

work by the Governinent: Provided, however, That this subsection

shall not confer a right of action on any copyright owner or any

assignee of such ovmer with respect to any copyrighted work

prepared by a perscn while in the employment or service of the

United States, where the copyrighted work was prepared as a part

of the official functions of the employee, or in the preparation of

which Government time, material, or facilities were used... .”)

(emphasis added).

52a

Appendix B

States for copyright infrin,.*ment. See Boyle v. United

States, 44 Fed.Cl. 60, 63 n. 3 (1999) (observing that

section 1498(b) was created when Congress “extended”

the provisions of section 1498(a) concerning patent

infringement to permit an action in the Court of Federal

Claims for copyright infringements). See also Auerbach

v. Sverdrup Corp., 829 F.2d 175, 179-80 (D.C.Cir.1987)

(construing § 1498(b) by analyzing “case law interpreting

the sister provision, section 1498(a), waiving immunity

for patent infringements by the government”).

Nevertheless, as with § 1498(b), no case considering the

three provisos of § 1498(a) has determined whether they

were affirmative defenses or jurisdictional limitations.

See Myers v. United States, 147 Ct.Cl. 485, 489-90, 177

F\Supp. 952 (1959) (holding that plaintiff had no right of

action under the provisos of § 1498, but without

considering whether the provisos were affirmative

defenses or jurisdictional).

With that said, there is scant authority interpreting

§ 1498(a) that address a similar jurisdictional question

that is presently before this Court. That the Federal

Circuit does draw a distinction between statutory

affirmative defenses and jurisdiction in § 1498(a),

however, may be shown by an analysis of the first

paragraph of § 1498(a), which provides that if a private

company makes ar infringing use of a patented

invention “ for the United States... the owner’s remedy

shall be by action against the United States... .”

28 U.S.C. § 1498(a) (emphasis added). See Crater Corp.

v. Lucent Tech., Inc., 255 F.3d 1361, 1364 (Fed.Cir.2001 }

(“If a patented invention is used or manufactured for

53a

Appendix B

the government by a private party, that private party

cannot be held liable for patent infringement.”). Not

surprisingly, when suits that implicate this provision are

between private parties, the Federal Circuit has allowed

the private party-defendant to assert an affirmative

defense that it had acted on the orders of the

government. See Madey v. Duke Univ., 307 F:3d 1351

(Fed.Cir.2002) (noting against private parties § 1498(a)

relieves third parties of patent infringement liability and

in application acts as an affirmative defense); Crater

Corp., 255 F.3d at 1364 (“[D]ismissal of a lawsuit against

a private party pursuant to § 1498(a) is a dismissal

because of the successful assertion of an affirmative

defense rather than a dismissal because of the district

court’s lack of subject matter jurisdiction over the

patent infringement claims.”); Manville Sales Corp. v.

Paramount Sys., Inc., 917 F.2d 544, 554 (Fed.Cir.1990)

(“The Supreme Court has established that section

1498(a) is to be applied, at least with respect to suits to

which the United States is not a party, as a codification

of a defense and not as a jurisdictional statute.” ( citing

Sperry Gyroscope Co. v. Arma E'ng’g Co., 271 U.S. 232,

235-36, 46 S.Ct. 505, 70 L.Ed. 922 (1926))). But where

the United States is the defendant, its sovereign

immunity is implicated and the Federal Circuit views the

same section of § 1498(a) as jurisdictional. See Hughes

Aircraft Co. v. United States, 209 Ct.Cl. 446, 534 F.2d

889, 897-98 (197€) (explaining that in suits pursuant to

§ 1498(a) against the government, the conditions are

jurisdictional in nature). These cases do then lend at

least some support that conditions to waivers of

sovereign immunity are jurisdictional in nature.

S4a

Appendix B

D. Supreme Court and Federal Circuit

Treatment of Conditions to Waivers

of Sovereign Immunity

The examination of relevant U.S. Supreme Court

and Federal Circuit precedent reveals two paradigms

that harken back to the discussion above that framed

the jurisdictional versus affirmative defense argument.

The first, the traditional view, is represented by the

opening and partial opening of the sovereign immunity

waiver door. This model views any conditions to the

waiver of sovereign immunity as limitations on

jurisdiction. A more modern view is that once a statute

contains the waiver, all further statutory limitations or

conditions,’ even if not met, do not divest the court of

jurisdiction. To be sure, the waiver itself becomes

a rebuttable presumption of jurisdiction. This

presumption may be overcome if the meaning and the

structure of the statute so reflect congressional intent

that the conditions or limitations are jurisdictional in

nature. As will be made clear, under either model, the §

1498(b) provisos should be treated as jurisdictional

requirements that place the burden of proof on

plaintiffs.

ote me ee _— -_—_——

17. Of course, one can take the concept of “conditions” to

jurisdiction as jurisdictional too far. As a matter of semantics,

any substantive statutory provision could be considered a

condition or limitation on jurisdiction. But more than semantics

is at stake. An absolute view would in essence negate the

distinction between a Rule 12(b)(1) motion to dismiss for lack

of subject matter jurisdiction, and a Rule 12(b)(6) motion to

dismiss for failure to state a claim. See generally Fisher v. United

States, 402 F.3d 1167, 1171-72, 1175-76 (Fed.Cir.2005).

SSa

Appendix B

1. Two Models on Conditions on Waivers

of Sovereign Immunity

The treatment of the Tucker Act’s six-year

limitations period, § 2501 (as well as whether the

limitations period is subject to equitable tolling),

provides an excellent example of the two models. The

traditional view that conditions to sovereign immunity

waiver are themselves jurisdictional limitations is

exemplified by several Supreme Court cases in the

Nineteenth Century. In Kendall v. United States, 107

U.S. 123, 2 S.Ct. 277, 27 L.Ed. 487 (1883), the Court

held that the appellant’s claim against the United States

was time-barred pursuant to § 2501’s predecessor

statute.'® The appellant, a veteran soldier of the

Confederacy, contended that he was unable by law to

file his claim until his civil disabilities were removed by

the general amnesty provided by the Proclamation of

December 25, 1868. 107 U.S. at 125, 2 S.Ct. 277. His

18. The Court characterized the pertinent part of the

statute as follows:

“It is provided by the act of March 3, 1863, amending

that of February 24, 1855, establishing the court of

claims, ‘that 2very claim against the United States,

cognizable by the court of claims,’—that is, such as

the government permits to be asserted against it by

Suit in that tribunal,—‘shall be forever barred,

unless the pevition, setting forth a statement of the

claim, be filed in the court or transmitted to it under

the provisions of this [that] act within six years after

the claim first. accrues.’

107 U.S. at 124, 28.Ct. 277.

56a

Appendix B

argument was that his claim did not accrue until the

Proclamation granted amnesty to those who supported

the “insurgent government” and restored their “rights,

privileges and immunities” under the Constitution.

Justice Harlan, writing for the Court, rejected this

argument, recognizing that “the government could not

be sued except with its consent” and may “restrict the

jurisdiction of the court of claims to certain classes of

demands.” Jd. The six-year limitations period

constituted such a restriction and barred the ex-soldier’s

claim: “To that class may be referred claims which are

declared barred if not asserted within the time limited

by the statute.” /d. This strict rule that conditions

(or as the Kendall Court termed it, “restrictions”) to

waivers of sovereign immunity are limitations on

jurisdiction was the law for the remainder of the

Nineteenth Century, and indeed for almost all of the

Twentieth. See United States v. Wardwell, 172 U.S. 48,

19 S.Ct. 86, 43 L.Ed. 360 (1898) (“[statutory limitations

period] is not merely a statute of limitations but also

jurisdictional in its nature, and limiting the cases of

which the Court of Claims can take cognizance.”); Finn

v. United States, 123 U.S. 227, 232-33, 8 S.Ct. 82, 31

L.Ed. 128 (1887) (holding that the general rule that

limitations period is an affirmative defense “has no

application to suits [in the Court of Claims] against the

Unitea States.”); see also De Arnaud v. United States,

151 U.S. 483, 495-96, 29 Ct.Cl. 555, 14 S.Ct. 374, 38 L.Ed.

244 (1894) (denying a claim for compensation by a former

Russian Imperial Army officer, and alleged special agent

of General Fremont during American Civil War, as time-

barred (citing Finn, 123 U.S. at 232-33, 8 S.Ct. 82,

S7a

Appendix B

despite a saving clause suspending the limitations period

in favor of “idiots, lunatics, and insane persons ....’’));

see generally 36A C.J.S. Federal Courts § 823 (2007)

(terming the limitation period in § 2501 as “jurisdictional”

and “as such must be strictly construed,” (citing, inter

alia, Soriano v. United States, 352 U.S. 270, 77 S.Ct.

269, 1 L.Ed.2d 306 (1957), Goldstein v. United States,

131 Ct.Cl. 228, 180 FSupp. 330 (1955), judgment aff’d,

350 U.S. 888, '76 S.Ct. 148, 100 L.Ed. 782 (1955), and

Frazer v. United States, 288 F.3d 1347 (Fed.Cir.2002))).

The earth shifted in 1990, when in Jrwin, the Court

adopted amore flexible test. In /rwin, the Court upheld

a dismissal of the case for lack of jurisdiction because

the complaint was not filed within the time specified by

Title VII of the Civil Rights Act, 42 U.S.C. § 2000e-16(c),

which provides that a complaint against the Federal

Government must be filed within 30 days “of receipt of

notice of final action taken” by the EEOC. Irwin

contended that inaction on the part of his attorney

justified lifting of the limitations period under the

doctrine of equitable tolling. In upholding the dismissal,

the Court observed that the limitations period § 2000e-

16(c) is a “condition to the waiver of sovereign immunity

and thus must be strictly construed.” 498 U.S. at 94,

111 S.Ct. 4538. But, the Court also noted that “our

previous cases dealing with the effect of time limits in

suits against the Government have not been entirely

consistent, even though the cases may be distinguished

on their facts.” /d. (internal citations omitted).

58a

Appendix B

Viewing the case as affording “an opportunity to

adopt a more general rule to govern the applicability of

equitable tolling in suits against the Government,”

Id. at 95, 111 S.Ct. 453, the Court noted that lawsuits

between private litigants are customarily subject to

equitable tolling, and that it had extended the doctrine

to cases under Title VII. Jd. The Court announced a

test to determine whether conditions to waivers of

sovereign immunity are jurisdictional: “Once Congress

has made ...awaiver...([the] condition ... [ought to

be] applicable to suits against the Government, in the

same way that it is applicable to private suits... .” Jd. at

95-96, 111 S.Ct. 453. A rebuttable presumption exists,

therefore, that such doctrines, such as equitable tolling,

that are “applicable to suits against private defendants

should also apply to suits against the United States.”

To be sure, the Court recognized that Congress “may

provide otherwise if it wishes to do so.” Irwin’s tolling

argument was, however, rejected because the facts, to

the Court, did not justify applying the doctrine. Jd.

Exactly by what means Congress was to “provide

otherwise,” 2.e., a Showing that the presumption was not

intended, was what was at issue in a duo of cases: United

States v. Brockamp, 519 U.S. 347, 117 S.Ct. 849, 136

L.Ed.2d 818 (1997), and United States v. Beggerly, 524

U.S. 38, 118 S.Ct. 1862, 141 L.Ed.2d 32 (1998). Both

involved a waiver of sovereign immunity. Beggerly, 524

U.S. 38, 118 S.Ct. 1862, 141 L.Ed.2d 32 (suit under the

Quite Title Act, 28 U.S.C. § 2409(a)); Brockamp, 519 U.S.

347, 117 S.Ct. 849, 186 L.Ed.2d 818 (tax refund). Both

involved the propriety of applying equitable tolling to a

59a

Appendix B

limitations period. See Beggerly, 524 U.S. at 48, 118S.Ct.

1862; Brockanip, 519 U.S. at 348, 117 S.Ct. 849. In both

cases, the private parties cited /rwin as a justification.

See Beggerly, 524 U.S. at 48, 118 S.Ct. 1862; Brockamp,

519 U.S. at 349-50, 117 S.Ct. 849. In both, the Supreme

Court held against the private parties. See Beggerly, 524

U.S. at 48-49, 118 S.Ct. 1862; Brockamp, 519 U.S. at

354, 117 S.Ct. 849. And in both cases, the Court applied

a textual analysis and determined that the structure

and wording of the statutory provision evinced a

congressional intent that the waiver of sovereign

immunity precluded application of equitable tolling (or,

and this is pure semantics, the presumption is rebutted).

See Beggerly, 524 U.S. at 48-49, 118 S.Ct. 1862;

Brockamp, 519 U.S. at 354, 117 S.Ct. 849.

Brockamp is illustrative of whether the statutory

limitations period for a tax refund in the Internal

Revenue Code, 26 U.S.C. § 6511, is subject to the

“implied” doctrine of equitable tolling. In holding that

it is not, the Court opined that the very nature of a tax

statute—that an individual’s particular numbers are at

play and that there is an administrative need for the

general applicaoility of rules—worked against any

presumption that Congress intended equitable tolling

to apply. Brockamp, 519 U.S. at 352, 117 S.Ct. 849."

19. As the Court observed:

The IRS processes more than 200 million tax returns

each year. It issues more than 90 million refunds. To

read an “equitable toliing” exception into § 6511 could

create serious administrative problems by forcing the

(Cont'd)

60a

Appendix B

Although this is a tax case, what was crucial to the Court

was the textual analysis that demonstrated the requisite

intent to overcome the presumption:

To read an “equitable tolling” provision into

these provisions, one would have to assume an

implied exception for tolling virtually every time

a number appears. To do so would work a kind

of linguistic havoc. Moreover, such an

interpretation would require tolling, not only

procedural limitations, but also substantive

limitations on the amount of recovery—a kind

of tolling for which we have found no direct

precedent. Section 6511’s detail, its technical

language, the iteration of the limitations in both

procedural and substantive forms, and the

explicit listing of exceptions, taken together,

indicate to us that Congress did not intend

courts to read other unmentioned, open-ended,

“equitable” exceptions into the statute that it

wrote. There are no counterindications. Tax law,

after all, is not normally characterized by case-

specific exceptions reflecting individualized

equities.

Jd. (internal citations omitted).

(Cont'd)

IRS to respond to, and perhaps litigate, large numbers

of late claims, accompanied by requests for “equitable

tolling” which, upon close inspection, might turn out

to lack sufficient equitable justification.

Id. (internal citations omitted).

6la

Appendix B

2. The Federal Circuit and the Two Models

Of course, this Court is bound by the precedent of

the Federal Circuit unless such precedent “is expressly

overruled by statute or by a subsequent Supreme Court

decision,” Strickland v. United States, 423 F.3d 13385,

1338 n. 3 (2005), which is not the case here. Our Circuit

seems to be of two minds as to the issue of whether

conditions to waivers of sovereign immunity are

themselves jurisdictional. Take the example of the

Tucker Act’s six-year jurisdictional statute, § 2501. One

set of cases treats the failure to meet the limitations

period as not jurisdictional, but instead an element of a

failure to state a claim under RCFC 12(b)(6). See Venture

Coal Sales Co. v. United States, 370 F.3d 1102, 1105 n. 2

(Fed.Cir.2004) (affirming dismissal of the case as time-

barred under 28 U.S.C. § 2501, but opining that the

proper ground for dismissal is failure to state a claim,

not lack of subject matter jurisdiction); Ariadne Fin.

Servs. Pty. Ltd. v. United States 133 F.3d 874, 878

(Fed.Cir.1998) (affirming dismissal of the case on statute

of limitations grounds under 28 U.S.C. § 2501, observing

“that the question of a time bar on [plaintiff’s] claim

does not affect the subject matter jurisdiction of the

Court of Federal Claims”).

The other set of Federal Circuit precedent takes the

more traveled road and views conditions to the waiver

of sovereign imraunity, such as under the Tucker Act’s

six-year limitations period under 28 U.S.C. § 2501, as

strictly jurisdictional. See, e.g., MacLean v. United

States, 454 F.3d 1334, 1336 (Fed.Cir.2006) (“In the Court

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of Federal Claims, the statute of limitations ‘is a

jurisdictional requirement attached by Congress as a

condition of the government’s waiver of sovereign

immunity and, as such, must be strictly construed.’ ”)

(quoting Hopland Band of Pomo Indians v. United

States, 855 F.2d 1573, 1576-77 (Fed.Cir.1988)); Hopland

Band of Pomo Indians, 855 F.2d at 1577 (holding that

limitations period “serves as a jurisdictional limitation

rather than simply as an affirmative defense, such a

statute of limitations have been held as not capable of

waiver or subject to an estoppel, whether pled or not”).

The majority of the judges of the Federal Circuit,

however, appear to subscribe to a variant of the Supreme

Court’s /rwin analysis. In Martinez v. United States,

333 F.3d 1295 (Fed.Cir.2003), the court, sitting en banc,

even though characterizing § 2501’s limitations period

as a “condition on the waiver of sovereign immunity”

and, therefore, “jurisdictional in nature,” would

nonetheless apply (paradoxically) Jrwin’s presumption

20. The confusion lies in the characterization of the

limitations period as a condition to a waiver of sovereign

immunity. See Hopland Band of Pomo Indians, 855 F:2d at 1577

(holding that when limitations periods are conditions to waivers

of sovereign immunity they are not subject to equitable

remedies). Equitable tolling has been applied to such statutes

of limitations, as explained, because it was held that Congress,

aware of such equitable doctrines, presumptively intended their

application. See Beggerly, 524 U.S. at 48, 118 S.Ct. 1862 (rejecting

contention that limitations periods are, zpso facto, conditions

to waivers of sovereign immunity); Brockamp, 519 U.S. at 348,

117 S.Ct. 849 (same).

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Appendix B

favoring equitable tolling. Jd. at 1316.*! Yet, this analysis

was dicta for the court declined to decide the issue because

“Mr. Martinez has not made a sufficient factual showing

to invoke equitable tolling in this case... .” Jd. at 1319.

See also Frazer v. United States, 288 F.3d 1347, 13538

(Fed.Cir.2002) (declining to decide whether § 2501’s

limitations period was subject to equitable tolling because

of a lack of a factual predicate).

A different tack was more recently followed in John

R. Sand & Gravel Co. v. United States, 457 F.3d 1345

(Fed.Cir.2006). ]n that case, the court held that the lessee’s

Fifth Amendment takings claim was time-barred.

Recognizing that the limitations period in § 2501 “is a

jurisdictional requirement for a suit in the Court of Federal

Claims,” 457 F:3d at 1354 (citing (ironically), Martinez, 333

F.3d at 1316), the court opined that because of the

“jurisdictional nature of section 2501 it may not be waived.”

Id. (citing Hopland Band of Pomo Indians, 855 F.2d at

1577). For support, the court noted that § 2501 “enjoys a

longstanding pedigree as a jurisdictional requirement.

Since 1883 when the [U.S. Supreme] Court first held that

the statute of limitations was jurisdictional ..., the Court

has consistently maintained that the time limit is

jurisdictional and therefore cannot be waived.” John R.

Sand & Gravel Co., 457 F.3d at 1355 (citing Kendall, 107

USS. at 125, 2 S.Ct..277).

21. “We therefore hold that the same rebuttable

presumption of equitable tolling applicable to suits against

private defendants should also apply to suits against the United

States. Congress, of course, may provide otherwise if it wishes

to do so.” Id.

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Appendix B

Whether this Court, however, follows the “hard”

view that conditions to waivers of sovereign immunity

are always jurisdictional (typified by the Supreme

Court’s Kendall decision and the Federal Circuit’s John

R. Sand & Gravel Co. decision), or the “soft” view that

such conditions are jurisdictional only if textual analysis

demonstrates that Congress so intended (typified by the

Supreme Court’s /rwin case and the Federal Circuit’s

en bane Martinez dicta ), it is clear that the § 1498 (b)

provisos are jurisdictional. First and foremost, to not

treat the three conditions contained in § 1498(b) (and

the parallel patent infringement conditions contained

in § 1498(b) as well) as jurisdictional would “work a kind

of linguistic havoc.” Brockamp, 519 U.S. at 352, 117 S.Ct.

849. The plain meaning of the text demonstrates that

Congress waived sovereign immunity only if certain

conditions were present. Textually, these conditions

were drafted in close proximity” to the waiver and thus

should be considered exceptions to that waiver. To be

sure, the conditions were literally and deliberately

termed “provisos” to the waiver of sovereign immunity

for copyright infringement:

“Provided, That a Government employee shall

have a right of action against the Government

under this subsection except where he was in

22. Unlike the “work for hire” and “government work”

provisions of the Copyright Act, which are contained in their

own sections. Linguistically, this supports the idea of treating

the preceding conditions as affirmative defenses. Of course, no

waiver of sovereign immunity is involved here.

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Appendix B

a position to order influence, or induce use of

the copyrighted work by the Government. .. .”

“Provided, however, That this subsection shall

not confer a right of action on any copyright

owner or any assignee of such owner with

respect to any copyrighted work prepared by

a person while in the employment or service

of the United States, where the copyrighted

work was prepared as part of the official

functions of the employee, or in the

preparation of which Government time,

material, or facilities were used... .”

28 U.S.C. § 1498(b).

Furthermore, these conditions do not at all fit the

Irwin rationale: “Once Congress has made... a waiver

... [the] condition, [ought to be] applicable to suits

against the Gcvernment, in the same way that it is

applicable to private suits... .” Irwin, 498 U.S. at 96,

111 S.Ct. 453. The exceptions in § 1498(b) go to the very

heart of a sovereign qua sovereign. The scope of the

waiver itself is being defined by the exceptions, as well

as the substance of the claim for copyright infringement

action against the government itself. See Zoltek Corp. v.

United States, 51 Fed.Cl. 829, 833 (2002) (noting 28

U.S.C. § 1498(a)—as noted a subsection using similar

language as § 14.98(b) for patent infringement claims—

“fully sets out what a plaintiff must prove in the Court

of Federal Claims in order to be compensated for the

use and manufacture by the United States of its

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Appendix B

patented invention”). The exceptions in § 1498(b) are

analogous to traditional copyright notions such as the

“work for hire” doctrine and “government work,”

Nimmer & Nimmer, supra, § 5.138(b)(1)-(2) at 5-98, and

were specifically tailored to fit an infringement claim

against the government. This is not like the example of

a limitations period, or even equitable tolling, that are

general in application and, of course, are not at all

unique to copyright and patent infringement actions.

But it is not unlike the “tort” exception to the Tucker

Act itself,*? which has always been treated as

jurisdictional and subject to a dismissal under RCFC

12(b)(1). B.g., Jentoft v. United States, 450 F.3d 1342,

1349 (Fed.Cir.2006) (upholding the granting of a Rule

12(b)(1) motion on the ground that plaintiff’s claim of

retaliation “sounds in tort”).

E. Plaintiff’s Use of Prescott Is Inapplicable to

the Jurisdictional Basis of § 1498(b)

While not directly addressing the issue of whether

or not the provisos are jurisdictional in nature, see P].’s

Post Trial Br. 1-2, plaintiff argues that the issue is

“ultimately a burden of proof question,” with the burden

resting with defendant to overcome the presumption of

23. Whereby the Court of Federal Claims has jurisdiction

to “render judgment upon any claim against the United States

founded either upon the Constitution, or any Act of Congress

or any regulation of an executive department, or upon any

express or implied contract with the United States, or for

liquidated or unliquidated damages in cases not sounding in

tort.” 28 U.S.C. § 1491 (emphasis added).

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Appendix B

jurisdiction. P!.’s Post Trial Resp. 3. For support, plaintiff

argues that the three § 1498(b) exceptions are analogous

to the discretionary function exception under the Federal

Tort Claims Act (“FTCA”), 28 U.S.C. § 2680(a). Pi.’s Post

Trial Br. 1-2. This exception precludes the government’s

general waiver of sovereign immunity for torts when a

claim is: “{B]ased upon the exercise or performance or the

failure to exercise or perform a discretionary function or

duty on the part of a federal agency or an employee of the

Government... .” 28 U.S.C. § 2680(a).

Plaintiff, without any real elaboration, states that

the exceptions in § 1498(b) “are very similar in effect to

the discretionary function exception” under the FTCA,

Pl.’s Post Tria] Br. 1, and points to the Ninth Circuit

decision in Prescott v. United States, 973 F.2d 696, 701-

02 (9th Cir.1992) (holding that the government bears

the burden of proving the discretionary function

exceptions), and, thus, that the burden of proving the

three exceptions in § 1498(b) should rest with the

government. Pl.’s Post Trial Br. 2. The court is

unpersuaded bv plaintiff’s argument.

24. The Court notes that several Circuits have declined to

adopt the holding in Prescott. See Sharp v. United States, 401

Fi3d 440, 443 n. 1 (5th Cir.2005) (noting other circuit courts have

declined to follow Prescott and reserving Judgment on the

issue); Kiehn v. United States, 984 F.2d 1100, 1105 n. 7 (10th

Cir.1993) (noting that “the reasoning in Prescott may be suspect”

in light of United States v. Gaubert, 499 U.S. 315, 111 S.Ct. 1267,

113 L.Ed.2d 335 (1991), but not making a formal ruling on the

issue); Autery v. L/nited States, 992 F.2d 1523, 1526 n. 6 (11th

Cir.1993) (declining to address the burden of proof issue in

Prescott, but noting Prescott may be at odds with Gaubert).

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Appendix B

Of course, Prescott has nothing to do with copyright

infringement claims or this Court’s jurisdiction, which,

as noted above, explicitly does not extended to claims

sounding in tort. 28 U.S.C. § 1491. Nevertheless,

Prescott is also a case striving to resolve whether a

condition to a waiver of sovereign immunity is itself

jurisdictional. The court declared that the discretionary

function exception, “although jurisdictional on its face,

is analogous to an affirmative defense,” Prescott, 973

F.2d at 702, and, accordingly, placed the burden of

persuasion on the defendant. Yet, no textual analysis

(other than the analogy to an affirmative defense) was

here attempted. No Supreme Court case law, precedent

that possibly could be binding, was cited. It is difficult

to see how this case helps plaintiff’s cause.

In conclusion, the language and structure of

§ 1498(b), the Federal Circuit’s treatment of certain

provisions for patents as jurisdictional, and the fact that

no matter whether the “hard” or “soft” model is applied,

this Court must come to the unavoidable conclusion that

the three exceptions are jurisdictional limitations.*°

25. Ultimately, regardless of which party bears the burden

of proof for the three exceptions, the parties agree that the

facts as presented weigh in favor of their respective positions.

Compare Def.’s Post Trial Resp. 4 (“Whether or not Blueport

bears the burden of proving the creation limitations are

inapplicable, the facts of this case demonstrate” the exceptions

preclude Blueport’s right of action.) with Pl.’s Post Trial Resp.

8 (“Whether the § 1498 defenses are jurisdictional or not, and

whomever has the burden of proof, piaintiff established

through the evidence that the defenses do not apply... .”). As

will be seen in the following sections, even if the exceptions are

not jurisdictional, the evidence is overwhelming that plaintiff’s

. claim falls under all three exceptions.

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Appendix B

Accordingly, before the Court can proceed to address

the merits of plaintiff’s copyright infringement claim,

plaintiff must. demonstrate that the three § 1498 (b)

exceptions are inapplicable to Technical Sergeant

Davenport’s development of the AUMD program.

Ii. HAS THE PLAINTIFF MET ITS BURDEN?

Having determined that the provisos to § 1498(b)

are jurisdictional limitations, the Court now turns to see

if plaintiff has met its burden of demonstrating that the

provisos do not apply in this instance. Why statutory

provisions were enacted often gives a clue as to how they

should be applied. &.g., Crandon v. United States, 494

U.S. 152, 158, 110

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