Pitcairn v. United States
| Decision Date | 04 March 1977 |
| Docket Number | No. 50328.,50328. |
| Citation | 547 F.2d 1106 |
| Parties | Stephen PITCAIRN, Agent (substituted for Autogiro Company of America) v. The UNITED STATES. |
| Court | U.S. Claims Court |
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J. Edward Shinn, attorney of record for plaintiff. John J. McAleese, Jr., Bala Cynwyd, Pa., and William P. Cole, of counsel.
B. Frederick Buchan, Jr., and Thomas J. Scott, Jr., Washington, D.C., with whom was Asst. Atty. Gen. Rex E. Lee, Washington, D. C., for defendant.
Before COWEN, Chief Judge, and DAVIS, SKELTON, NICHOLS, KASHIWA, KUNZIG and BENNETT, Judges.
This case comes before the court on plaintiff's and defendant's exceptions to the recommended opinion, findings of fact and conclusion of law, submitted by Judge Donald E. Lane, Associate Judge, United States Court of Customs and Patent Appeals, sitting by designation as Trial Judge in this case, pursuant to 28 U.S.C. § 293(a) and § 2505, in accordance with United States Court of Claims Rule 134(h). In an earlier decision. Autogiro Company of America v. United States, 384 F.2d 391, 181 Ct.Cl. 55, 155 USPQ 697 (1967), rehearing denied, 184 Ct.Cl. 801 (1968), the court held that some 59 patent claims in 11 patents owned by plaintiff were valid and specific claims were infringed by seven different models of helicopters manufactured for defendant under contracts by Vertol, Hiller, Bell, Kaman and McCulloch. The case is before the court now on (1) the similarity or non-similarity of some 39 models of rotary-wing aircraft to any of the representative models which the court has already held to be infringing, and (2) computation of the reasonable and entire compensation which plaintiff is entitled to recover under 28 U.S.C. § 1498.1
The case has been submitted to the court on the briefs and oral arguments of counsel. Upon consideration thereof, since the court agrees with several portions of the trial judge's recommended decision, it adopts (with minor modifications) Part I, Similarity; Part III, Contribution; Part IV, Spare Parts; Part V, Delay Compensation; and Part VI, Experimental Use. The court also adopts with modification the trial judge's findings of fact, except with respect to royalty compensation, and has made its own findings on that subject.2 We have deleted those parts of the trial judge's recommended decision entitled Royalty Compensation, Part II, and Royalty Adjustment Compensation, Part VII, and have substituted our own Part II, Royalty Compensation, in the modified trial judge's opinion which follows. We have also added our own discussion of Delay Compensation to Part V, infra, in supplementation of the trial judge's consideration of that subject. The conclusion of law has been changed to reflect our different view of Royalty Compensation.
The opinion and conclusion of law of the trial judge, as modified and supplemented by the court, follow:
In Autogiro Company of America v. United States, 384 F.2d 391, 181 Ct.Cl. 55, 155 USPQ 697 (1967), rehearing denied, 184 Ct.Cl. 801 (1968), some 59 patent claims in 11 patents owned by plaintiff were held to be valid and specific patent claims were held to be infringed by seven different models of helicopters manufactured under contracts for defendant by Vertol, Hiller, Bell, Kaman and McCulloch. In 1973, the Autogiro Company of America was liquidated, and all of its assets, including its claims against the United States, one of which is the subject matter of this action, were transferred to its stockholders who appointed Stephen Pitcairn as their Agent. Pursuant to motion filed January 30, 1974, unopposed by defendant, Stephen Pitcairn, Agent, was substituted for Autogiro Company of America by the court's order filed February 12, 1974.
The parties to this suit agreed that during the accounting phase, both parties would have the right to present evidence as to the similarity or non-similarity between any model of rotary-wing aircraft or part thereof on which no proofs of infringement were offered at the original trial and those models of rotary-wing aircraft on which proofs were offered and which the court in its decision noted above found to infringe any of the patents remaining in suit. The parties have presented such proofs and have presented proofs on various methods of computing the reasonable and entire compensation due plaintiff.
The main issues in the current phrase of this litigation are (1) the similarity or non-similarity of some 39 models of rotary-wing aircraft to any of the seven models which the court has already held to infringe one or more valid patent claims, and (2) how to compute the amount of the reasonable and entire compensation which plaintiff is to recover under 28 U.S.C. § 1498, for defendant's unauthorized use of plaintiff's inventions. After over 20 years of litigation, including some 62 trial sessions, for the testimony of 57 witnesses on the two present issues, the parties are still poles apart on the end result. Examination of the voluminous record shows that there is little the parties can agree upon except that defendant spent over $639 million, engine costs excluded, in the recovery period, 1946-64, for over 2,200 rotary-wing aircraft.
Defendant now contends that the maximum amount of compensation which this court should allow is $532,279. This represents compensation at a rate of less than 1%, i. e., 0.0832%, on the total procurement cost of $639,257,969. Defendant contends that delay compensation (if any) should be computed at the rates at which the defendant might have borrowed money by hypothetical long term Government bonds, the estimated rates varying from 2.4% to 4.6% per annum, the average being 3.33% for the period 1947-75.
Plaintiff contends that "reasonable and entire compensation" which this court should adopt should include royalties at established rates amounting to $24,570,525, plus delay compensation amounting to $27,851,192 through 1973, plus upward adjustment by $15,034,439 of the royalties to compensate for inflation, plus additional delay compensation for the period 1974 to date of payment, a total of some $67,500,000 plus. The amount sought by plaintiff represents royalty compensation at a rate of 3.85% of the total procurement cost, and delay compensation at rates varying from 4% to 9% per annum, the average being 6.07% for the period 1947-73. The patents, patent claims, and models of rotary-wing aircraft now involved in this litigation are identified in the following table.
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