Fastship, LLC v. United States
122 Fed. Cl. 71
Fed. Cl.2015Background
- FastShip owned U.S. Patents No. 5,080,032 and No. 5,231,946 (both expired May 18, 2010) claiming a semi‑planing monohull vessel >200 ft, >2,000 tons, with at least one inlet, waterjet(s) coupled to the inlet(s), and a power source coupled to the waterjet(s).
- FastShip sent an administrative infringement claim to the Navy in April 2008; suit was filed in the Court of Federal Claims in August 2012 under 28 U.S.C. § 1498(a).
- The Navy concedes LCS‑1 (USS Freedom) was manufactured before patent expiration; LCS‑3 (USS Fort Worth) and later ships were still under construction when the patents expired.
- At patent expiration (May 18, 2010) LCS‑3 had engines and many components present, but: all four waterjet impeller assemblies were not installed (installed in July 2010); major bow modules were unfinished and were not erected/welded into the hull until August–September 2010.
- The core legal question: whether LCS‑3 (and later LCS ships) were "manufactured by or for the United States" within the meaning of § 1498(a) before the patents expired, such that FastShip may recover.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether LCS‑3 was "manufactured" for the U.S. before patent expiration | LCS‑3 was substantially manufactured by the expiration date; many patented components were assembled on‑site and final connections (e.g., bolting waterjets) were minor steps | LCS‑3 lacked an operable claimed assembly at expiration because key elements (waterjets coupled to inlets/power & complete hull/bow) remained uninstalled/incomplete | Court held LCS‑3 was not manufactured for §1498(a) purposes and dismissed LCS‑3 and later ships from the action |
| Waterjet coupling limitation ("at least one waterjet coupled to the inlet and power source") | Presence on site of assembled impellers and housings meant the waterjet element was effectively manufactured; final bolting was insignificant | No waterjet was coupled to the inlet or power source as of expiration; uninstalled impellers could not provide propulsion — assembly was incomplete | Court found the waterjet limitation unmet at expiration; this defeated manufacture/infringement |
| Hull completeness (bow modules and overall hull operability) | Bow specifics are not separately claimed; overall ship displacement and hull characteristics existed in part and modules reflected substantial completion | An operable hull necessarily includes bow and stern; bow modules were under construction and not erected/welded into hull at expiration, so hull was incomplete/inoperable | Court considered the bow as part of the hull and found the hull element incomplete as of expiration |
| Applicability of Deepsouth / Paper Converting and intent to avoid infringement | Paper Converting applies because LCS‑3 is a long‑lead item and much of the ship was assembled; Navy knew of the claim and could have completed assembly earlier | Deepsouth and Hughes Aircraft control: combination patents protect the operable assembled whole; no evidence Navy intentionally delayed assembly to avoid liability (unlike Paper Converting) | Court declined to adopt Paper Converting’s rationale here and relied on Deepsouth/Hughes Aircraft principles: no manufacture where operable whole was not assembled by expiration |
Key Cases Cited
- Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518 (U.S. 1972) (a combination patent protects only the operable assembled whole — parts alone do not constitute "making")
- Paper Converting Mach. Co. v. Magna‑Graphics Corp., 745 F.2d 11 (Fed. Cir. 1984) (machine assembled and tested during patent term and shipped in a manner showing intent to use post‑patent can constitute "making")
- Hughes Aircraft Co. v. United States, 29 Fed. Cl. 197 (Ct. Cl. 1993) (distinguishing testing/perfection from manufacture; complete physical assembly to the extent feasible supports finding of manufacture)
- Decca Ltd. v. United States, 640 F.2d 1156 (Ct. Cl. 1981) (government takes a compulsory non‑exclusive license upon first use or manufacture by or for the United States)
- Laitram Corp. v. Rexnord, Inc., 939 F.2d 1533 (Fed. Cir. 1991) (failure to meet any single claim limitation negates infringement)