The Court of Federal Claims has dismissed several U.S. Navy ships from a patent infringement suit filed by FastShip LLC, because the ships were not manufactured by the time the relevant patents expired.
FastShip asserted U.S Patents 5,080,032 and 5,231,946 against the U.S. Government, alleging that the Navy's Freedom class of Littoral Combat Ships (LCS) infringe the two patents. Ordinarily, the United States has sovereign immunity from lawsuits (meaning that it cannot be sued), but Congress waived sovereign immunity in 28 U.S.C. Section 1498, a statute that grants the Court of Federal Claims exclusive jurisdiction for patent infringement claims against the federal government. The statute specifies that the "use" or "manufacture" (but not sale) of a patented product by or for the government give rise to liability for patent infringement. The Government contended that several of the Freedom class ships involved in the lawsuit — LCS-3, -5, -7, -9, and -11— were still under construction when FastShip's patents expired and therefore could not give rise to liability for infringement.
The patents at issue in the suit (FastShip LLC v. United States, No. 12-484C) generally describe a semi-planning monohulled vessel that is longer than 200 feet with a displacement greater than 2,000 tons. More particularly, the patents cover features pertaining to the hull, inlet, waterjet, and power source of such a vessel. The hull and waterjets of the LCS-3 are shown in the graphic below:
To determine whether the LCS-3 and later Freedom-class ships were "manufactured" during the life of the patents in the sense of the statute, the Court considered how the ships are built. The Freedom-class ships are constructed in modules, which are developed via a phased process that includes material fabrication, paneling, construction, painting, pre-outfitting, and erection/installation. The Court noted that the waterjet impeller systems were installed in the LCS-3 in July 2010, whereas the patents expired on May 18, 2010. The Court also relied on the fact that portions of the LCS-3 bow had not been installed before the expiration date, as shown in the below photograph taken one day after the expiration date of the patents:
The Court applied Supreme Court precedent which requires an "operable assembly of the whole" (as opposed to mere manufacture of parts) in order for there to be "manufacture" that gives rise to infringement liability. Because the LCS-3 "could not possibly float" by the patent expiration date and the hull remained "incomplete and inoperable" on that date, the Court concluded that the LCS-3 was not "manufactured" for the purposes of Section 1498 during the lifetime of the patents. Therefore, the Court granted partial summary judgment to the Government, dismissing the LCS-3 and the later-constructed LCS-5, -7, -9, and -11 from the infringement suit.
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