Fastship, LLC v. United States

• Decision Date: 05 June 2018
• Docket Number: 2017-2248,2017-2249
• Citation: 892 F.3d 1298
• Parties: FASTSHIP, LLC, Plaintiff-Appellant v. UNITED STATES, Defendant-Cross-Appellant
• Court: U.S. Court of Appeals — Federal Circuit

892 F.3d 1298

FASTSHIP, LLC, Plaintiff-Appellant

v.UNITED STATES, Defendant-Cross-Appellant

2017-2248

2017-2249

United States Court of Appeals, Federal Circuit.

Decided: June 5, 2018

Mark Lee Hogge, Dentons US LLP, Washington, DC, argued for plaintiff-appellant. Also represented by Carl Paul Bretscher, Shailendra K. Maheshwari, Rajesh Charles Noronha ; Donald Edward Stout, Fitch, Even, Tabin & Flannery LLP, Washington, DC.

Scott David Bolden, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC, argued for defendant-cross-appellant. Also represented by Chad A. Readler, Gary Lee Hausken.

Before Moore, Wallach, and Chen, Circuit Judges.

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 28 U.S.C. § 1498 (2012).¹ According to FastShip, the U.S. Department of the Navy’s ("Navy") Freedom -class Littoral Combat Ships ("LCS"), specifically the LCS-1 and LCS-3, infringe claims 1 and 19 of U.S. Patent No. 5,080,032 ("the '032 patent") and claims 1, 3, 5, and 7 of U.S. Patent No. 5,231,946 ("the '946 patent") (collectively, "the Asserted Claims") (together, the "Patents-in-Suit").

Following the Court of Federal Claims’ opinion construing various terms of the Patents-in-Suit, see FastShip, LLC v. United States (FastShip I ), 114 Fed.Cl. 499 (2013), the Government filed a motion for partial summary judgment pursuant to Rule 56 of the Rules of the Court of Federal Claims ("RCFC"), arguing that the LCS-3 was not "manufactured" by or for the Government within the meaning of § 1498 before the Patents-in-Suit expired, J.A. 164. The Court of Federal Claims granted the Government’s Motion. See FastShip, LLC v. United States (FastShip II ), 122 Fed.Cl. 71, 86 (2015). The Court of Federal Claims then convened a bench trial and issued a post-trial opinion, holding that LCS-1 infringed the Asserted Claims and awarding FastShip $6,449,585.82 in damages plus interest. See FastShip, LLC v. United States (FastShip III ), 131 Fed.Cl. 592, 627 (2017) ; J.A. 82 (Judgment).

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 to 28 U.S.C. § 1295(a)(3). We affirm, with modification to the damages award.

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." Id. col. 1 ll. 13–15; see id. col. 6 l. 59–col. 7 l. 38 (summarizing the purported advantages of the Patents-in-Suit). The parties agree that claim 1 of the '032 patent is representative of all Asserted Claims in this appeal. It recites:

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.

Id. col. 13 l. 68–col. 14 l. 28 (emphasis added). All of the Asserted Claims include the "increases efficiency of the hull" limitation. See id. col. 16 ll. 13–14 (claim 19); '946 patent col. 14 ll. 22–23 (claim 1), col. 14 ll.

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 , 131 Fed.Cl. at 600.⁴ The Navy eventually awarded a team comprised of Lockheed Martin Corp. ("Lockheed Martin") and Gibbs & Cox, Inc. ("Gibbs & Cox") a contract to design and build the Freedom class of LCS. FastShip II , 122 Fed.Cl. at 75 ; see FastShip III , 131 Fed.Cl. at 603. Lockheed Martin and Gibbs & Cox began construction of LCS-1 in February 2005, and LCS-1 was launched in September 2006 and commissioned by the Navy in November 2008. FastShip III , 131 Fed.Cl. at 603.

Lockheed Martin and Gibbs & Cox began construction of LCS-3’s first module⁵ in July 2009 with the laying of the keel. FastShip II , 122 Fed.Cl. at 76. By September 2009, LCS-3’s two gas turbine engines were installed and, by April 2010, at least one, but most likely all four, of the impellers and housings for the waterjets were awaiting installation. Id. However, after corrosion was detected in the waterjet tunnels of LCS-1, components from LCS-3’s waterjets were borrowed for use on LCS-1 in May 2010. Id. LCS-3’s waterjet impeller systems were installed in July 2010, and LCS-3’s final module was erected in September 2010. Id. at 77. Although LCS-3 was launched in December 2010, alignment and connection of the propulsion system and testing continued throughout 2011, and LCS-3 was delivered to the Navy in June 2012. Id.

On May 18, 2010, the Patents-in-Suit expired. Id. At the time of their expiration, "LCS[-]1 was complete and in use by the Navy[ ] but LCS[-]3 was still under construction." FastShip I , 114 Fed.Cl. at 501 (citation omitted).

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 , 827 F.3d 1026, 1032 (Fed. Cir. 2016). Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." RCFC 56(a).

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 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 , 122 Fed.Cl. at 86. FastShip argues that this determination was erroneous as a matter of law. See Appellant’s Br. 54–70. We disagree with FastShip.

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 , 541 U.S. 176, 183, 124 S.Ct. 1587, 158 L.Ed.2d 338 (2004). Because § 1498 does not define "manufactured," we interpret the term in accordance with its "ordinary, contemporary, common meaning." Sandifer v. U.S. Steel Corp. , 571 U.S. 220, 134 S.Ct. 870, 876, 187 L.Ed.2d 729 (2014) (internal quotation marks and citation omitted). Congress enacted the "precursor to ... § 1498" in 1910, Zoltek , 672 F.3d at 1315 ; see Act of June 25, 1910, Pub. L. No. 61-305, 36 Stat. 851, 851–52, and amended the statute to include the "manufactured" language in 1918, Zoltek , 672 F.3d at 1316 ; see Act of July 1, 1918, Pub. L. No. 65-182, 40 Stat. 704, 705 (codified in relevant part in 28 U.S.C. § 1498(a) in 1949). In 1918, the definition of "manufacture" included "[t]o make (wares or other products) by hand, by machinery, or by other agency" and "[t]o work, as raw or partly wrought materials, into suitable forms for use." Manufacture , Webster’s Int’l Dictionary of the English Language (1st ed. 1907); see Manufacture , A New English Dictionary on Historical Principles (1908) (later compiled in the Oxford English Dictionary (1st ed. 1933) ) (defining "manufacture" to include "[t]o work up (material) into forms suitable for use"). The plain meaning of "manufactured" in § 1498 encompasses products "ma[d]e" or "work[ed]" into a form that is "suitable for use."⁷

We next consider § 1498 in the context of the overall statutory scheme. See Davis v. Mich. Dep’t of Treasury , 489 U.S. 803, 809, 109 S.Ct. 1500, 103...