General Dynamics Corp. v. United States

558 F.2d 985, 23 Cont. Cas. Fed. 81,513, 214 Ct. Cl. 607, 198 U.S.P.Q. (BNA) 215, 1977 U.S. Ct. Cl. LEXIS 76
United States Court of Claims·Decided July 8, 1977·No. No. 21-76·Published·Cited by 25 cases

Opinion

Bennett, Judge,

delivered the opinion of the court:

This action for patent infringement requires us to decide whether an unappealed decision of the Armed Services Board of Contract Appeals (the board) against the Government on the existence of a license to use a patent under the standard Patent Rights clause of a Government contract now precludes the Government from raising the license as a defense to the alleged infringement. The Government says that the decision does not preclude it, arguing that the board’s ruling was purely advisory and therefore not binding on it under S&E Contractors, Inc. v. United States, 406 U.S. 1 (1972). We conclude that on the peculiar facts of this case, the Government must abide by what the board held.

The controversy on which the board ruled had its genesis in contract NObsr-77628, a cost-plus-fixed-fee research and development contract entered into between plaintiff and the Government, acting through the Department of the Navy, on June 16, 1959. The contract called for plaintiff to design and furnish experimental, mock-up, and developmental models of a single sideband radio set and a single sideband portable transceiver. The Patent Rights clause of the contract1 granted the Government an irrevocable, [612] nonexclusive, nontransferable, royalty-free license in all inventions (whether patentable or not) "conceived or first actually reduced to practice” in the performance of research and development work under the contract. Some nine patented inventions held by plaintiff were ultimately identified as useable for performance of the contract, by agreement of plaintiffs and the Navy’s representatives during a conference in May 1964. However, at that time, and continuing down to the present, plaintiff conceded that only four of the inventions were licensed to the Government under the Patent Rights clause. The other five, according to plaintiff, were conceived and reduced to practice during plaintiffs own, independent project to develop a single sideband transceiver, called the SC900A, prior to the award of contract NObsr-77628, and thus were not licensed to the Government under that contract.

Less than 1 year after this conference, in March 1965, plaintiff informed the Navy that the latter’s then-intended procurement of single sideband radios from another contractor would infringe the five patents. The Navy responded that it was licensed to practice those inventions under the Patent Rights clause of the parties’ contract, on the theory that they had first been conceived or reduced to practice in the course of performing the contract. Plaintiff refused the Navy’s request to execute confirmatory licenses for the Government to practice the inventions, but did not again raise its infringement claim until February 1968, after the procurement from the other contractor was completed. In March 1968 the Navy repeated its original response, having concluded that plaintiffs submission of additional data in February in support of its position did not prove actual reduction to practice prior to the contract award. Following further exchange of correspondence, the contracting officer for NObsr-77628 rendered a "final decision” determining that the Government was licensed to practice the five inventions, and informed plaintiff that "[djecisions on disputed questions of fact and on other questions that are subject to the procedure of the Disputes clause [of the Government contract] may be appealed in accordance with the provisions of the Disputes clause.”

[613] Plaintiff appealed the contracting officer’s decision to the board, where the parties presented evidence and made arguments on the license issue. Neither party suggested at any time before the board’s decision was rendered that the board lacked jurisdiction to decide the matter under the Disputes clause, nor was lack of jurisdiction raised by the board. Plaintiff prevailed in the proceeding, the board finding that the five inventions had been conceived and actually reduced to practice prior to the award of the research and development contract. General Dynamics Corp., Electronics Div., ASBCA No. 14466, 73-1 BCA ¶ 9960 (Mar. 22, 1973). This decision, however, though favorable to plaintiff, did not by any means end plaintiffs infringement problem. To the contrary, when plaintiff again brought its claim to the Navy, this time for infringement of four of its patents, the patent counsel for the Naval Electronic Systems Command made use of the board’s findings to conclude that two of plaintiffs patents, Nos. 3,054,057 and 3,151,301, were invalid, and therefore that the inventions could be practiced by the Government without infringement. In a letter to plaintiff in May 1975, the patent counsel relied on the board’s findings of actual reduction to practice prior to the contract award to determine that the two inventions had been on sale, sold, or in public use more than 1 year prior to the filing of the patent applications, and so barred from being patented by 35 U.S.C. § 102(b) (1970). The letter further held that the other two inventions, patent Nos. 3,060,329 and 3,132,310, were not patentable over the prior art, 35 U.S.C. §§ 102 and 103, making the patents invalid and absolving the Government’s use from the claimed infringement. The Government then practiced plaintiffs four inventions without payment of royalties therefor, leading plaintiff to file this action for reasonable and entire compensation.

When the Government answered plaintiffs petition in this court, it pleaded as a defense that it enjoyed a license to practice plaintiffs inventions by virtue of the Patent Rights clause of the research and development contract. Plaintiff thereafter moved to strike that defense, claiming that its assertion is barred by the board’s decision that the Government had no such license. We treat plaintiffs [614] motion as one for partial summary judgment. Cities Service Helex, Inc. v. United States, 211 Ct. Cl. 222, 233, 543 F. 2d 1306, 1312 (1976). Defendant filed its opposition to this motion, saying that the board lacked jurisdiction to make the decision and concluding that it must be treated in this court as a nullity. Defendant also, as an alternative, moved for partial summary judgment, claiming that if the board’s findings are made applicable to this action, it is as a matter of law entitled to a ruling that the patents ’057 and ’301, which the Navy’s patent counsel found invalid because of the board’s decision that they had previously been reduced to practice, are indeed invalid as barred by 35 U.S.C. § 102(b). This contention plaintiff counters with the argument that the sales or uses of the inventions prior to the filing of patent applications therefor were either solely for experimental purposes, or accomplished in less than 1 year before the applications were filed, thus escaping the statute’s on-sale bar. Obviously, plaintiff seeks a trial to establish this argument.

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General Dynamics Corp. v. United States, 558 F.2d 985, 23 Cont. Cas. Fed. 81,513, 214 Ct. Cl. 607, 198 U.S.P.Q. (BNA) 215, 1977 U.S. Ct. Cl. LEXIS 76 (cc 1977).

558 F.2d 985 (General Dynamics Corp. v. United States) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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