Fastship, LLC v. United States
This text of 892 F.3d 1298 (Fastship, LLC v. United States) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
Wallach, Circuit Judge.
Appellant FastShip, LLC ("FastShip") sued the United States ("the Government") in the U.S. Court of Federal Claims, seeking damages for patent infringement pursuant to
Following the Court of Federal Claims' opinion construing various terms of the Patents-in-Suit,
see
FastShip, LLC v. United States
(
FastShip I
),
FastShip appeals the Court of Federal Claims' grant of the Government's Motion in
FastShip II
and damages calculation in
FastShip III
. The Government cross-appeals, alleging that, in
FastShip III
, the Court of Federal Claims improperly modified a claim construction from
FastShip I
, thereby resulting in a determination that LCS-1 infringed. We have jurisdiction pursuant
*1301
to
BACKGROUND
I. The Patents-in-Suit
Entitled "Monohull Fast Sealift or Semi-Planing Monohull Ship," the Patents-in-Suit relate to a "fast ship whose hull design in combination with a waterjet propulsion system permits, for ships of about 25,000 to 30,000 tons displacement with a cargo carrying capacity of 5,000 tons, transoceanic transit speeds of up to 40 to 50 knots in high or adverse sea states." '032 patent col. 1 ll. 8-13.
2
The specification indicates that prior to the Patents-in-Suit, these speeds were "not achievable in ships of such size without impairment of stability or cargo capacity such as to render them impracticable."
A vessel comprising:
a hull having a non-stepped profile which produces a high pressure area at the bottom of the hull in a stern section of the hull which intersects a transom to form an angle having a vertex at the intersection and hydrodynamic lifting of the stern section at a threshold speed without the hull planing across the water at a maximum velocity determined by a Froude Number, [ 3 ] the hull having a length in excess of 200 feet, a displacement in excess of 2000 tons, a Froude Number in between about 0.42 and 0.90, and a length-to-beam ratio between about 5.0 and 7.0;
at least one inlet located within the high pressure area;
at least one waterjet coupled to the at least one inlet for discharging water which flows from the inlet to the waterjet for propelling the vessel;
a power source coupled to the at least one waterjet for propelling water from the at least one inlet through the waterjet to propel the vessel and to discharge the water from an outlet of the waterjet; and wherein
acceleration of water into the at least one inlet and from the at least one waterjet produces hydrodynamic lift at the at least one inlet which is additional to the lifting produced by the bottom of the hull in the high pressure area which increases efficiency of the hull and reduces drag.
*1302 51-52 (claim 3), col. 15 ll. 1-2 (claim 5), col. 16 ll. 8-9 (claim 7).
II. The Relevant Factual Background
In 2003, the Navy issued a request for proposals related to its LCS program.
FastShip III
,
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Wallach, Circuit Judge.
Appellant FastShip, LLC ("FastShip") sued the United States ("the Government") in the U.S. Court of Federal Claims, seeking damages for patent infringement pursuant to
Following the Court of Federal Claims' opinion construing various terms of the Patents-in-Suit,
see
FastShip, LLC v. United States
(
FastShip I
),
FastShip appeals the Court of Federal Claims' grant of the Government's Motion in
FastShip II
and damages calculation in
FastShip III
. The Government cross-appeals, alleging that, in
FastShip III
, the Court of Federal Claims improperly modified a claim construction from
FastShip I
, thereby resulting in a determination that LCS-1 infringed. We have jurisdiction pursuant
*1301
to
BACKGROUND
I. The Patents-in-Suit
Entitled "Monohull Fast Sealift or Semi-Planing Monohull Ship," the Patents-in-Suit relate to a "fast ship whose hull design in combination with a waterjet propulsion system permits, for ships of about 25,000 to 30,000 tons displacement with a cargo carrying capacity of 5,000 tons, transoceanic transit speeds of up to 40 to 50 knots in high or adverse sea states." '032 patent col. 1 ll. 8-13.
2
The specification indicates that prior to the Patents-in-Suit, these speeds were "not achievable in ships of such size without impairment of stability or cargo capacity such as to render them impracticable."
A vessel comprising:
a hull having a non-stepped profile which produces a high pressure area at the bottom of the hull in a stern section of the hull which intersects a transom to form an angle having a vertex at the intersection and hydrodynamic lifting of the stern section at a threshold speed without the hull planing across the water at a maximum velocity determined by a Froude Number, [ 3 ] the hull having a length in excess of 200 feet, a displacement in excess of 2000 tons, a Froude Number in between about 0.42 and 0.90, and a length-to-beam ratio between about 5.0 and 7.0;
at least one inlet located within the high pressure area;
at least one waterjet coupled to the at least one inlet for discharging water which flows from the inlet to the waterjet for propelling the vessel;
a power source coupled to the at least one waterjet for propelling water from the at least one inlet through the waterjet to propel the vessel and to discharge the water from an outlet of the waterjet; and wherein
acceleration of water into the at least one inlet and from the at least one waterjet produces hydrodynamic lift at the at least one inlet which is additional to the lifting produced by the bottom of the hull in the high pressure area which increases efficiency of the hull and reduces drag.
*1302 51-52 (claim 3), col. 15 ll. 1-2 (claim 5), col. 16 ll. 8-9 (claim 7).
II. The Relevant Factual Background
In 2003, the Navy issued a request for proposals related to its LCS program.
FastShip III
,
Lockheed Martin and Gibbs & Cox began construction of LCS-3's first module
5
in July 2009 with the laying of the keel.
FastShip II
,
On May 18, 2010, the Patents-in-Suit expired.
DISCUSSION
This appeal involves three issues, namely, whether the Court of Federal Claims erred in: (1) granting the Government's Motion as to LCS-3; (2) holding that the hydrodynamic lifting of LCS-1's stern at a threshold speed infringes the "increases the efficiency of the hull" limitation; and (3) awarding $6,449,585.82 in damages plus interest. See Appellant's Br. 1-2; Cross-Appellant's Br. 3; Appellant's Reply Br. 29-30. We address these issues in turn.
I. Partial Summary Judgment as to LCS-3's Non-Infringement
A. Standard of Review
"We review a grant of summary judgment by the Court of Federal Claims de novo."
Wells Fargo & Co. v. United States
,
B. The Court of Federal Claims Properly Granted the Government's Motion for Summary Judgment Based on LCS-3's Non-Infringement
In granting the Government's Motion, the Court of Federal Claims determined
*1303
that "the allegedly infringing LCS-3 was not 'manufactured' for purposes of [§] 1498(a) by the date the [Patents-in-Suit] expired" on May 18, 2010.
FastShip II
,
1. The Meaning of "Manufactured" in § 1498
Neither the Court of Federal Claims, nor the parties, nor this court has identified any binding precedent interpreting the meaning of "manufactured" in § 1498. 6 Therefore, we interpret its meaning in the first instance.
We begin our statutory interpretation with the text of § 1498.
See
BedRoc Ltd. v. United States
,
We next consider § 1498 in the context of the overall statutory scheme.
See
Davis v. Mich. Dep't of Treasury
,
The legislative history informs our interpretation of § 1498.
See
Thunder Basin Coal Co. v. Reich
,
Rather than interpreting the text of § 1498, the Court of Federal Claims and the parties look to three cases to guide their interpretation of "manufactured."
See
FastShip II
,
First, in
Deepsouth Packing Co. v. Laitram Corp.
, the patent owner invoked
Second, in
Paper Converting Machine Co. v. Magna-Graphics Corp.
, we considered the meaning of "make" and "use" in § 271(a), assessing "the extent to which a competitor of a patentee can
manufacture
and test during the life of a patent a machine intended solely for post-patent use."
Finally, in
Hughes Aircraft Co. v. United States
, the Court of Federal Claims addressed the "boundaries of the problem" of defining "manufactured" in § 1498 with respect to infringement of a spacecraft.
2. LCS-3 Was Not "Manufactured" Under § 1498 when the Patents-in-Suit Expired
The undisputed facts demonstrate that LCS-3 was not "manufactured" when the Patents-in-Suit expired in May 2010. The Asserted Claims disclose a "vessel" comprising, inter alia, "at least one
waterjet
coupled to the at least one inlet for discharging water which flows from the inlet to the waterjet for propelling the vessel," '032 patent col. 14 ll. 15-17 (emphasis added), and the record demonstrates that "[a]ll [four] waterjets and impeller shafts were installed" in July 2010, J.A. 13541;
see
FastShip II
,
We are unpersuaded by FastShip's remaining counterarguments.
See
Appellant's
*1307
Br. 66-70. First, FastShip argues that "[a] material factual dispute exists as to whether the Navy deliberately attempted to avoid infringement by delaying installation of the waterjet assemblies in LCS-3, disassembling [LCS-3] waterjets and sending critical components ... for use in LCS-1, or slowing construction of LCS-3 bow modules."
Id.
at 67. However, "[i]n response to a summary judgment motion, ... the plaintiff can no longer rest on ... mere allegations, but must set forth by affidavit or other evidence specific facts, which for purposes of the summary judgment motion will be taken as true."
Lujan v. Defs. of Wildlife
,
Even if the Government had delayed assembly of waterjet elements in LCS-3 until months after the Patents-in-Suit expired, FastShip has not explained how such a delay would support a finding that a patented combination had been "manufactured" during the patent term under the language of § 1498. FastShip relies on
Paper Converting
-a case that we have already ruled does not control-but
Paper Converting
's analysis was based in part on "sale and delivery during the patent-term of a 'completed' machine."
Second, FastShip avers both that: "[a]nother obvious factual dispute is over the extent to which the accused product was substantially completed prior to the [Patents-in-Suit's] expiration, 'to the extent feasible at the time,' " Appellant's Br. 67 (quoting
Hughes Aircraft
,
Third, FastShip contends that "clear factual disputes remain over the extent to which the relevant portions of LCS-3 had been completed prior to the expiration of the [Patents-in-Suit]." Appellant's Br. 68; see id. (discussing the semi-planing monohull, *1308 "including the modules containing its hook and propulsion system, drive trains, gear boxes, and waterjet inlets"). However, our conclusion that, at minimum, the "waterjet" and "hull" limitations had not been completed prior to the Patents-in-Suit's expiration is unaltered by the fact that other portions of LCS-3 had been completed, which is sufficient for a grant of summary judgment of non-infringement as to LCS-3. Cf. Zoltek , 672 F.3d at 1318.
II. The Government's Cross-Appeal on Infringement by LCS-1
"We review the legal conclusions of the [Court of Federal Claims] de novo and its findings of fact for clear error."
Securiforce Int'l Am., LLC v. United States
,
B. The Court of Federal Claims Properly Determined that LCS-1 Infringes the Asserted Claims
In
FastShip I
, the Court of Federal Claims construed the "increases the efficiency of the hull" limitation to mean "allows achievement of speed through application of less power than would be required for comparable or even lower speeds with a conventional displacement hull."
On appeal, the Government's primary contention is that, although the Court of Federal Claims' "construction ruling of 'increases efficiency of the hull' was correct, ... the [C]ourt [of Federal Claims] later erred when it accepted improper extrinsic evidence to modify its original construction." Cross-Appellant's Br. 41; see id. at 41-60. In the alternative, the Government avers that, "[e]ven if the [Court of Federal Claims'] acceptance of the 'metric system' construction of Figure 11 is characterized as a factual finding subject to a clear error standard of review, that finding should be reversed as clear error." Id. at 59. We disagree with the Government.
The Court of Federal Claims did not alter its claim construction in
FastShip III
. The Court of Federal Claims explicitly applied its construction from
FastShip I
,
see
FastShip III
,
The Court of Federal Claims also did not clearly err as a factual matter by reading Figure 11 as using metric units. In its pre-trial contentions of law and fact, the Government presented an annotated version of Figure 11. J.A. 17374. The Government argued that the "shaft horsepower" of the conventional frigate in Figure 11 was shown in imperial units and plotted horsepower for LCS-1 in imperial units on the same graph, attempting to demonstrate that "LCS-1 requires substantially more power than a conventional hull to achieve the same speeds" and, "[t]hus, this required element of the [Asserted C]laims is ... not met by ... LCS-1." J.A. 17374. However, the Government did not support its arguments regarding the units in Figure 11 with any evidence.
See
J.A. 17374;
see
J.A. 17347-96. At trial, the Patents-in-Suit's inventor testified that Figure 11 depicts "shaft horsepower in kilowatts," J.A. 495, and the Government failed to rebut this testimony at trial. When the Government nevertheless reproduced the annotated Figure 11 in its post-trial brief,
see
J.A. 17558, FastShip explained that "[t]he Navy ... fail[ed] to note that [J.A. 4479] records shaft horsepower in
imperial
units, whereas the [Patents-in-Suit] record shaft horsepower in
metric
units (kilowatts, or 'KW'), as [the Patents-in-Suit's inventor] pointed out on [d]ay [o]ne of the trial," J.A. 17607 (footnote omitted). In light of this testimony, the Court of Federal Claims determined it was "correct to convert ... LCS-1 shaft power measurements to metric units (kilowatts) to conform to the metric units used on the power-speed graph in the '032 patent."
FastShip III
,
We are not "left with the definite and firm conviction that a mistake has been committed."
Ferreiro v. United States
,
In contrast, the Government failed to support its contention that Figure 11 depicts power in imperial units with any evidence before the Court of Federal Claims. The only support the Government provided was an annotated version of Figure 11,
see
J.A. 17374, 17558, but these annotations were prepared by attorneys, and "[a]ttorney argument is not evidence,"
Icon Health & Fitness, Inc. v. Strava, Inc.
,
We see no clear error in the Court of Federal Claims' factual findings. The Government concedes that, if the Court of Federal Claims properly determined the units in Figure 11 are metric units, "then LCS-1 infringes." Cross-Appellant's Reply Br. 24;
see
III. Damages
When reviewing damages awards by the Court of Federal Claims, "[d]ifferent standards of review are applicable to different aspects of a damages award."
Home Savs. of Am., FSB v. United States
,
B. The Court of Federal Claims Clearly Erred in Its Damages Calculation
The Court of Federal Claims determined that "a hypothetical licensing agreement between FastShip and the Navy on September 23, 2006[,] would have resulted in a payment of $6,449,582.82, reflecting a 3% royalty on the cost of the elements of LCS-1 covered by the [Patents-in-Suit] as of the date of the license."
FastShip III
,
CONCLUSION
We have considered the parties' remaining arguments and find them unpersuasive. We affirm the Court of Federal Claims' grant of summary judgment of non-infringement by LCS-3 and finding of infringement by LCS-1. We modify the Court of Federal Claims' damages calculation to $7,117,271.82, plus interest for delay damages. Accordingly, the Judgment of the Court of Federal Claims is
AFFIRMED AS MODIFIED
*1311 COSTS
Each party shall bear its own costs.
Section 1498"waives the Government's sovereign immunity and provides a remedy '[w]henever an invention described in and covered by a patent of the United States is used or manufactured by or for the United States without license of the owner thereof or lawful right to use or manufacture the same.' "
Liberty Ammunition, Inc. v. United States
,
The application that led to the '946 patent is a continuation of the application that led to the '032 patent. A continuation patent application is "an application filed subsequently to another application, while the prior application is pending, disclosing all or a substantial part of the subject-matter of the prior application and containing claims to subject-matter common to both applications, both applications being filed by the same inventor or his legal representative."
U.S. Water Servs., Inc. v. Novozymes A/S
,
"Froude [N]umbers are dimensionless figures representing the ratio of a ship's speed in knots to the square root of its length in feet and are used to understand drag by describing the physics of a ship's speed relative to its size."
FastShip III
,
The Court of Federal Claims provided a detailed summary of the relevant facts,
see
FastShip III
,
"The
Freedom
class ships are constructed in modules, which are then assembled or erected."
FastShip II
,
Although we discussed the phrase "used or manufactured" in § 1498 in
Zoltek Corp. v. United States
, our holding was limited to the meaning of "use."
See
We further note that this definition is consistent with the Supreme Court's interpretation of "manufacture" as used in
Section 271(a) states that, "[e]xcept as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent."
We do not hold that evidence regarding feasibility and testing are never relevant to determining whether a product is "manufactured" under § 1498. To the extent these inquiries inform whether the product is "suitable for use" or includes "each limitation" of an invention, courts may consider them. However, we need not consider this evidence here because it is clear that LCS-3 was not "manufactured" under § 1498 based on the plain language alone.
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