Hughes Aircraft Co. v. United States

• Decision Date: 14 April 1976
• Court: U.S. Claims Court

534 F.2d 889 (1976)

HUGHES AIRCRAFT CO. v The UNITED STATES

No. 426-73

United States Court of Claims

April 14, 1976

[534 .2d 892]

Dugald S. McDougall, Chicago, Ill., attorney of record, for plaintiff; John E. Benoit, Arlington, Va., of counsel.

Irving Jaffe, Washington, D.C., with whom was Asst. Atty. Gen. Rex E. Lee, Washington, D.C., for defendant; James D. Stokes, Jr., and Barry Estrin, Washington, D.C., of counsel.

Before COWEN, Chief Judge, DURFEE, Senior Judge, and KUNZIG, Judge.

ON DEFENDANT'S MOTION FOR PARTIAL DISMISSAL

COWEN, Chief Judge:

This case, involving the alleged infringement of plaintiff's patent[1] pursuant to the Government's participation with the United Kingdom (U.K.) in a joint defense satellite communications program (Skynet II), requires us to decide four questions which concern this court's patent and general jurisdiction. These questions are:

(1) Whether the use or manufacture of plaintiff's patented invention, purportedly on behalf of the U.K. Government, constituted a use or manufacture "by or for the United States" sufficient to vest jurisdiction in this court under 28 U.S.C. § 1498(a);

(2) whether plaintiff's claim "grows out of" or is "dependent upon" the 1970 Memorandum of Understanding[2] between the U.S. and the U.K. so as to preclude this court's jurisdiction by virtue of 28 U.S.C. § 1502;

(3) whether the Skynet II program, insofar as U.S. expenses thereunder were to be fully reimbursed by the U.K., was a non-appropriated fund activity as to which this court lacks jurisdiction by virtue of 28 U.S.C. § 2517; and

(4) whether the omission from the 1968 Foreign Military Sales Act (FMSA), 22 U.S.C. §§ 2751-94 of the special patent infringement jurisdictional provision contained in predecessor statutes manifests congressional intent to eliminate this court's jurisdiction over claims arising from the Government's foreign military sales activities.

In addition to the instant suit, instituted on November 13, 1973, plaintiff on January 17, 1974, also commenced an action for infringement of the same patent[3] [534 .2d 893] against the Philco-Ford Corp. and Marconi Co., Ltd. of Great Britain, in the U.S. District Court for the Middle District of Florida (Orlando Division), Civil Action No. 74-21-Orl-Civ-R. Defendants in that action moved for dismissal on the ground, inter alia, that plaintiff's claims involving the Skynet II program should have been brought in this court pursuant to 28 U.S.C. § 1498(a). By an order entered October 8, 1974, the district court denied defendants' motions but stayed further proceedings pending this court's determination in this case of the scope of our jurisdiction. Although not conceding the jurisdictional issue, plaintiff has taken the position that defendants' motions raise procedural rather than substantive issues so far as plaintiff's interests are concerned. Therefore, plaintiff has elected not to oppose defendant's motion.[4] Since the affidavits and exhibits submitted in support of defendant's motion present for our consideration numerous matters outside the pleadings, we treat this motion as one for partial summary judgment. Ct.Cl. Rule 38(c); Moore-McCormack Lines v. United States, 413 F.2d 568, 570 n. 1, 188 Ct.Cl. 644, 648 n. 1 (1969).

After long and careful consideration, we have concluded, for the reasons set forth below, that (1) plaintiff's patented invention was used and manufactured by and for the United States within the meaning of 28 U.S.C. § 1498(a); (2) plaintiff's claim is not dependent upon the 1970 MOU within the meaning of 28 U.S.C. § 1502; (3) Skynet II was an appropriated fund activity within the meaning of 28 U.S.C. § 2517; and (4) jurisdiction of infringement claims incident to foreign military sales was not eliminated by the omission of a provision therefor in the 1968 FMSA. Accordingly, we hold that plaintiff's claim lies properly within the intended and settled parameters of this court's jurisdiction under 28 U.S.C. § 1498(a), and that defendant's motion for partial summary judgment should therefore be denied.

I Factual Background

The facts essential to our decision in this case, although complex, are not in dispute:[5]

A. The Skynet II Program

The Skynet II system, a product of cooperative defense efforts of the U.S. and the U.K., is primarily utilized by the British Ministry of Defence to provide reliable satellite communication between permanent and mobile British military installations on a segment of the earth (the U.K. segment) extending from the U.K. in the west to Singapore and western Australia in the east. The first Skynet spacecraft, Skynet I, was fabricated and tested in the United States by Philco-Ford Corp., and is presently in a geostationary, synchronous orbit[6] [534 .2d 894] above the Indian Ocean, at the center of the U.K. segment, controlled by the U.K. Telemetry Command Station at RAF Oakhanger, Hampshire, England, and used by nine U.K. earth stations throughout the U.K. segment.

The objectives of the U.S. and the U.K. Governments in the Skynet II program, undertaken to replace Skynet I, are partially set forth in the 1970 MOU.[7] According to the MOU, the U.S. Government was then proceeding to develop a second phase of its own defense satellite communications system (DSCS Phase II), while the U.K. Government also had a continuing operational requirement for defense satellite communications. It was therefore a long-term cooperative aim of the two Governments to introduce equipment with interoperable characteristics so that earth stations, whether U.S. or U.K., would be inherently capable of direct communications through U.S. DSCS satellites or U.K. satellites.[8] The U.K. Skynet Phase II satellites were in fact to comprise the U.K. segment of the U.S. defense satellite communications system. This cooperation was to continue until such time as the United States Government was in a position to offer communication facilities to the U.K. in U.S. DSCS satellites situated over the Indian Ocean area.

Under the 1970 MOU, the U.K. Government was to procure its Skynet II satellites from a British prime contractor who would, in turn, be permitted to make use of U.S. subcontractors with the approval of the U.S. Government. The U.S. further agreed to grant the U.K. and its contractors the use of such technical information, design rights, patent rights and licenses vested in the U.S. Government as may be legally permissible, and to assist the U.K. in obtaining additional rights where necessary. Launch vehicles were to be procured by the U.S. on behalf of the U.K., and the U.S. agreed to launch the satellites into orbit using U.S. launching and satellite control facilities. Costs incurred by the U.S. on behalf of the U.K. were to be paid from a trust fund consisting of sums deposited therein by the U.K. with charges based on work performed in connection with the launch vehicles and services, the satellites, packing and transportation, and administrative services.

Following the launch and final positioning in earth orbit, the U.K. was to have sole communications and operational control over the Skynet II satellites, including attitude control, station-keeping and other command functions exercised by the U.K. ground control station at RAF Oakhanger, Hampshire, England. In the event of an emergency, however, the U.S. could assume operational control if so required by the U.K. Each Government was to provide the communications and control earth stations required for its own use.

The Patent Liability Section I of the 1970 MOU provided that each Government would follow its normal procurement practices in securing all rights considered essential for the program, including the procurement of material, services, documents and information to meet the special requirements of the other Government. Were such procurement to give rise to patent infringement claims or suits, any payments made by one Government in consequence thereof were to be repaid by the other Government. No claims were to be settled, however, without prior consultation with and agreement of the other Government.

B. Plaintiff's Patent

That part of the Skynet II system accused of infringing plaintiff's patent was designed to control the attitude or orientation of a spin-stabilizied, military communications spacecraft while circling the earth [534 .2d 895] in a synchronous orbit. The Skynet II spacecraft had a generally cylindrical body in which were mounted a number of subsystems, including communications, telemetry, tracking and command, reaction control equipment, and attitude and orbit control. The last of these subsystems is alleged to have made use of plaintiff's patent in the following manner: The principal communications radio antenna of the spacecraft was designed to lie on the cylindrical body's central axis, or "spin" axis, and solar cells were arrayed on the outer surface of the cylindrical body. To obtain optimum antenna gain and solar cell illumination (i.e., in order to charge the spacecraft's batteries), it was important that the "spin" axis of the spacecraft be properly oriented with respect to the earth and sun while the spacecraft was in orbit. It was the intended function of the accused control subsystem to achieve and maintain such proper spacecraft orientation. To this end, the control subsystem included means for sensing the spacecraft's orientation with respect to the earth and sun, and for transmitting such data to a ground command station which, after analysis thereof, would in turn transmit commands back to the spacecraft's attitude control, thereby causing one or more of the spacecraft's hydrazine thrust motors (or thrusters) to fire for a predetermined period so as to correct or adjust the spacecraft's attitude or orientation.

C. United Kingdom Involvement

On July 30, 1970, the U.K. Ministry of Defence (then the Ministry of Technology) contracted with the General Electric Co., Ltd. of Great Britain (GEC) to develop and supply...