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How the 'New GM' Can Steal from Toyota

Green Bag 2d, Vol. 13, No. 4, pp. 399-409, Summer 2010

George Mason Law & Economics Research Paper No. 10-49

12 Pages Posted: 3 Oct 2010  

Adam Mossoff

George Mason University - Antonin Scalia Law School, Faculty

Date Written: September 30, 2010

Abstract

This essay explains how a 2006 court decision arising from the manufacture of the F-22 Raptor fighter jet paves the way for government-owned General Motors to steal intellectual property. In Zoltek v. U.S., the Court of Appeals for the Federal Circuit held that a loophole in the Tucker Act (28 U.S.C. ยง 1498) prevented owners of patented processes from suing the federal government for certain types of unauthorized uses of their patents. The Zoltek court also held that patents are not secured as constitutional "private property" under the Takings Clause of the Fifth Amendment. At the time, many judges and lawyers thought that these statutory and constitutional loopholes for patent-owners were insignificant; at worst, they argued, this benefits only military contractors and the like.

Fast forward four years and the federal government now owns the "new GM." It was inconceivable in 2006 that Uncle Sam soon would be in the business of making cars, not to mention in the businesses of banking and insurance, setting salaries of CEOs, purchasing mortgages, etc., etc. This dramatic turn of events means that court decisions that once seemed exceedingly narrow have acquired new breadth and scope. This essay thus explores how Zoltek justifies extensive infringement of U.S. patents by GM and other firms now working for the federal government. Although it is arguable that denying patent-owners their constitutional rights is insignificant in any situation, the events since 2006 at least suggest that many people spoke too soon when they claimed that Zoltek was of little import or concern.

Keywords: bankruptcy, Charles Wilson, due process, Engine Charlie, equal protection, government contractor, Judge Timothy Dyk, legislative gap, Lockheed Martin, 1952 Patent Act, Obama Administration, Secretary Defense, stealth bomber, Supreme Court

JEL Classification: D23, K11, O31, O34, O38

Suggested Citation

Mossoff, Adam, How the 'New GM' Can Steal from Toyota (September 30, 2010). Green Bag 2d, Vol. 13, No. 4, pp. 399-409, Summer 2010; George Mason Law & Economics Research Paper No. 10-49. Available at SSRN: https://ssrn.com/abstract=1685622

Adam Mossoff (Contact Author)

George Mason University - Antonin Scalia Law School, Faculty ( email )

3301 Fairfax Drive
Arlington, VA 22201
United States
703-993-9577 (Phone)

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