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Click here for the full text of this decision FACTS:In the late 1990s, the General Land Office began working on a project to abate pollution resulting from commercial fishing boats illegally discharging oily bilge water into coastal waters. The GLO contracted with two companies, Spill Removal Products Inc. (SRP) and Pollution Prevention Products (PPP), to provide design services, components, installation and consulting services for the construction of three bilge water processing facilities located in Port Isabel, Port Lavaca and Palacios. Herbert Holland developed the polymer-based pollution filters used in the facilities and the process for their installation. According to Holland, he was the “managing member” of PPP and the president of SRP, and it is undisputed that all of the GLO’s contacts on the project were with him. The three processing facilities opened in 2001, and all three used Holland’s polymer-based filtration system to extract oil from contaminated bilge water. The GLO paid more than $160,000 to PPP and SRP pursuant to their agreement. Holland applied for a patent on his filtration process in 1998, and in 2000 he received Patent No. 6,027,653 for a “Method of Removing Organic Compounds from Air and Water Columns,” referred to as the “653 patent.” Claim 13 of the patent describes a method of removing and collecting contaminants, first by pretreating the water and then directing it through a series of separation and filtration media. Claim 19 describes the apparatuses used in the separation and filtration processes. The GLO facilities use the method and apparatuses described in Claims 13 and 19 of the patent. In 2002, Holland contacted the GLO and began demanding payment of patent royalties for the three facilities’ use of his patented process. The GLO’s contracts with PPP and SRP did not provide for the payment of patent royalties. When the GLO refused to make any additional payments, Holland sued the state of Texas, the GLO and the Texas Land Commissioner (collectively, the state) alleging that use of his patented process at the Palacios reclamation facilities infringed the 653 patent. He further alleged that the state’s use of his patented process constituted a taking of his property for public use without compensation in violation of Art. I, � 17, of the Texas Constitution. After entering a general denial, the state filed a plea to the jurisdiction which the trial court denied. The 13th Court of Appeals affirmed, holding that Holland had adequately pled a takings claim against the state for which immunity was waived. The Texas Supreme Court granted the state’s petition for review to examine the state’s sovereign immunity under the circumstances. HOLDING:Reversed and dismissed. Because Holland’s claim did not arise as a taking under the constitution but sounded in contract, the 13th Court’s decision conflicted with the Texas Supreme Court’s 2001 decision in General Services Commission v. Little-Tex Insulation Co. Thus, the Texas Supreme Court had jurisdiction over the appeal. In this case, the court stated, the state presented uncontroverted evidence that Holland voluntarily provided and the state accepted his filtration process along with his design assistance pursuant to contractual agreements with SRP and PPP. Whether or not a contract may be implied between the state and Holland individually, the state accepted Holland’s product and his services under color of its contracts with SRP and PPP, and not pursuant to its powers of eminent domain. Any claim for patent infringement Holland might have, the court stated, would be against SRP and PPP, and not the state as a mere party to a contract with them. The court found that the state lacked the requisite intent to take Holland’s patented process under its eminent domain powers; thus, the state was not subject to liability under Art. I, � 17, of the Texas Constitution. Accordingly, the court held that the trial court erred in denying the state’s plea to the jurisdiction. OPINION:O’Neill, J., delivered the opinion of the court.

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