Fastship, LLC v. United States , 892 F.3d 1298 ( 2018 )

United States Court of Appeals
for the Federal Circuit
______________________
FASTSHIP, LLC,
Plaintiff-Appellant
v.
UNITED STATES,
Defendant-Cross-Appellant
______________________
2017-2248, 2017-2249
______________________
Appeals from the United States Court of Federal
Claims in No. 1:12-cv-00484-CFL, Judge Charles F.
Lettow.
______________________
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.
______________________
2 FASTSHIP, LLC v. UNITED STATES
Before MOORE, WALLACH, and CHEN, Circuit Judges.
WALLACH, Circuit Judge.
Appellant FastShip, LLC (“FastShip”) sued the Unit-
ed States (“the Government”) in the U.S. Court of Federal
Claims, seeking damages for patent infringement pursu-
ant 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 con-
struing 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 sum-
mary 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
1 Section 1498 “waives the Government’s sovereign
immunity and provides a remedy ‘[w]henever an inven-
tion described in and covered by a patent of the United
States is used or manufactured by or for the United
States without license of the owner thereof or lawful right
to use or manufacture the same.’” Liberty Ammunition,
Inc. v. United States, 835 F.3d 1388, 1394 n.3 (Fed. Cir.
2016) (citation omitted) (quoting 28 U.S.C. § 1498(a)). By
waiving the Government’s sovereign immunity, § 1498
“provides a cause of action against the United States”
and, “[a]t the same time, . . . protects government contrac-
tors against infringement liability and remedies where it
applies.” Astornet Techs. Inc. v. BAE Sys., Inc., 802 F.3d
1271, 1277 (Fed. Cir. 2015).
FASTSHIP, LLC v. UNITED STATES 3
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 Fed-
eral 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 Mon-
ohull Ship,” the Patents-in-Suit relate to a “fast ship
whose hull design in combination with a waterjet propul-
sion 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
2 The application that led to the ’946 patent is a
continuation of the application that led to the ’032 patent.
A continuation patent application is “an application filed
subsequently to another application, while the prior
application is pending, disclosing all or a substantial part
of the subject-matter of the prior application and contain-
4 FASTSHIP, LLC v. UNITED STATES
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 bot-
tom 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 sec-
tion at a threshold speed without the hull
planing across the water at a maximum
velocity determined by a Froude Num-
ber,[3] the hull having a length in excess of
200 feet, a displacement in excess of 2000
ing claims to subject-matter common to both applications,
both applications being filed by the same inventor or his
legal representative.” U.S. Water Servs., Inc. v. Novo-
zymes A/S, 843 F.3d 1345, 1348 n.1 (Fed. Cir. 2016)
(internal quotation marks and citation omitted). The
Patents-in-Suit share a common specification. Unless
otherwise noted, we cite to the ’032 patent for ease of
reference.
3 “Froude [N]umbers are dimensionless figures rep-
resenting the ratio of a ship’s speed in knots to the square
root of its length in feet and are used to understand drag
by describing the physics of a ship’s speed relative to its
size.” FastShip III, 131 Fed. Cl. at 600 n.6; see J.A. 332–
33 (testifying, by the Patents-in-Suit’s inventor, on the
meaning of Froude Numbers).
FASTSHIP, LLC v. UNITED STATES 5
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 wa-
ter 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 effi-
ciency 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 re-
lated to its LCS program. FastShip III, 131 Fed. Cl. at
6 FASTSHIP, LLC v. UNITED STATES
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 module 5 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 Sep-
tember 2010. Id. at 77. Although LCS-3 was launched in
December 2010, alignment and connection of the propul-
4 The Court of Federal Claims provided a detailed
summary of the relevant facts, see FastShip III, 131 Fed.
Cl. at 598–606; FastShip II, 122 Fed. Cl. at 72–77; Fast-
Ship I, 114 Fed. Cl. at 501–03, and these facts are largely
undisputed on appeal. Therefore, we provide only a brief
summary of the relevant, undisputed facts necessary to
resolve this appeal.
5 “The Freedom class ships are constructed in mod-
ules, which are then assembled or erected.” FastShip II,
122 Fed. Cl. at 74. “The modules are developed via a
phased process that includes material fabrication, panel-
ing, construction, painting, pre-outfitting, and erection.”
Id.
FASTSHIP, LLC v. UNITED STATES 7
sion 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 construc-
tion.” 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” limita-
tion; 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
8 FASTSHIP, LLC v. UNITED STATES
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 inter-
preting the meaning of “manufactured” in § 1498. 6 There-
fore, 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 (2004). Because § 1498 does not define “manufac-
tured,” we interpret the term in accordance with its
“ordinary, contemporary, common meaning.” Sandifer v.
U.S. Steel Corp., 134 S. Ct. 870, 876 (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” includ-
ed “[t]o make (wares or other products) by hand, by ma-
chinery, 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 “manufac-
6 Although we discussed the phrase “used or manu-
factured” in § 1498 in Zoltek Corp. v. United States, our
holding was limited to the meaning of “use.” See 672 F.3d
1309, 1318 (Fed. Cir. 2012) (en banc in relevant part).
FASTSHIP, LLC v. UNITED STATES 9
tured” 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 (1989). Interpreting “manufactured” to
require that the product be “suitable for use” comports
with our prior interpretation of “use” in § 1498. In Zoltek,
we analogized § 1498’s “used or manufactured” language
to the terms “make” and “use” in the Patent Act of 1870,
41st Cong. § 22, 16 Stat. 198, 201. See 672 F.3d at 1318.
We stated that “[t]he Supreme Court has explained that
‘make’ and ‘use’ were not ‘technical terms’” and that
“‘make embraces the construction of the thing invented
and the right to use is a comprehensive term and embrac-
es within its meaning the right to put into service any
given invention.’” Id. (quoting Bauer & Cie v. O’Donnell,
229 U.S. 1, 10, 10–11 (1913) (alterations omitted) (dis-
cussing the terms’ use in the Patent Act)). We then held
that, with respect to the language of § 1498, “to ‘use’ an
invention, each limitation of the claims must be present
in the accused product or process.” Id. Because “make”
was synonymous with “manufacture” in 1918, see, e.g.,
Manufacture, Webster’s Int’l Dictionary of the English
Language (1st ed. 1907), and encompasses “the construc-
tion of the thing invented,” and “use” requires that “each
limitation of the claims must be present,” Zoltek, 672 F.3d
7 We further note that this definition is consistent
with the Supreme Court’s interpretation of “manufacture”
as used in 35 U.S.C. § 289 (2012). See Samsung Elecs. Co.
v. Apple Inc., 137 S. Ct. 429, 435 (2016) (“‘[M]anufacture’
means ‘the conversion of raw materials by the hand, or by
machinery, into articles suitable for the use of man’ and
‘the articles so made.’” (emphasis added) (quoting J.
Stormonth, A Dictionary of the English Language 589
(1885))).
10 FASTSHIP, LLC v. UNITED STATES
at 1318 (emphases added) (internal quotation marks and
citation omitted), we conclude that “manufactured” re-
quires that “each limitation” “of the thing invented” be
present, rendering the invention suitable for use, see id.
at 1319 (holding that “‘used or manufactured by or for the
United States[]’ mean[s] each limitation is present in the
accused product or process”). Therefore, our prior inter-
pretation of “use” further supports our interpretation of
“manufactured” under § 1498.
The legislative history informs our interpretation of
§ 1498. See Thunder Basin Coal Co. v. Reich, 510 U.S.
200, 207 (1994). Congress added “manufacture” to
§ 1498’s predecessor after government contractors were
found liable for patent infringement when producing
warships in accordance with the Navy’s “‘comprehensively
detailed’ specifications” during World War I. Zoltek, 672
F.3d at 1315. This prompted a “swift” reaction from
Acting Secretary of the Navy Franklin D. Roosevelt, who
wrote to the Senate Committee of Naval Affairs to explain
the “difficult situation” where contractors that manufac-
ture patented articles for the Government “are exposed to
expensive litigation” and “are reluctant to take contracts.”
Id. at 1315, 1316. He thus proposed revisions to § 1498’s
predecessor. Id. at 1316. “In response to this letter,”
Congress amended § 1498’s predecessor to provide com-
pensation for contractors that “manufacture” patented
articles for the Government. Id.; see Act of July 1, 1918,
40 Stat. at 705. Although the legislative history does not
directly speak to the meaning of “manufacture” in § 1498,
it indicates Congressional intent to protect government
contract awardees, such as Lockheed Martin and Gibbs &
Cox here, from infringement claims from patent holders,
such as FastShip. Cf. Astornet, 802 F.3d at 1277.
Rather than interpreting the text of § 1498, the Court
of Federal Claims and the parties look to three cases to
guide their interpretation of “manufactured.” See Fast-
Ship II, 122 Fed. Cl. at 80–82; see, e.g., Appellant’s
FASTSHIP, LLC v. UNITED STATES 11
Br. 54–55; Cross-Appellant’s Br. 62–67. However, as
explained below, these cases do not control our interpreta-
tion of “manufactured” in this case.
First, in Deepsouth Packing Co. v. Laitram Corp., the
patent owner invoked 35 U.S.C. § 271(a)8 to enforce its
U.S. patents and enjoin the petitioner from exporting its
products “in less than fully assembled form[] for use
abroad.” 406 U.S. 518, 519 (1972), superseded in part by
statute, Patent Law Amendments Act of 1984, § 101, Pub.
L. No. 98-622, 98 Stat. 3383, 3383 (codified at 35 U.S.C.
§ 271(f)), as recognized in Microsoft Corp. v. AT&T Corp.,
550 U.S. 437, 457–58 (2007). The Supreme Court held
that, “in order to secure the injunction it seeks, [the
patent owner] must show a § 271(a) direct infringement
by [the alleged infringer] in the United States, that is,
that [the alleged infringer] ‘makes,’ ‘uses,’ or ‘sells’ the
patented product within the bounds of this country.” Id.
at 527. In determining that the less-than-fully assembled
products did not infringe the patents, the Supreme Court
considered the “question of manufacture” when interpret-
ing “makes,” “uses,” and “sells” in § 271(a) and explained
that it “c[ould ]not endorse the view that the substantial
manufacture of the constituent parts of a machine consti-
tutes direct infringement when we have so often held that
a combination patent protects only against the operable
assembly of the whole and not the manufacture of its
parts.” Id. at 528 (emphasis added) (internal quotation
marks and parentheses omitted). However, because
Deepsouth interpreted a different word in a different
8 Section 271(a) states that, “[e]xcept as otherwise
provided in this title, whoever without authority makes,
uses, offers to sell, or sells any patented invention, within
the United States or imports into the United States any
patented invention during the term of the patent therefor,
infringes the patent.”
12 FASTSHIP, LLC v. UNITED STATES
statute, Deepsouth is not controlling here. See T-Mobile
S., LLC v. City of Roswell, 135 S. Ct. 808, 817 n.5 (2015)
(“[W]hile it is true that a word used across ‘the same act’
should be given the same meaning, the . . . evidence is
less persuasive [when] it arises out of entirely different
‘acts’ and does not involve any term of art.” (citation
omitted)); see also Zoltek, 672 F.3d at 1317 (faulting the
panel for finding “liability under . . . § 271(a) to be a
predicate to [G]overnment liability under § 1498” because
it, inter alia, “was contrary to the plain language of
§ 1498” and “impermissibly rendered [a] subsection . . . of
§ 1498 inoperative”), 1319 (“Section 1498 makes no refer-
ence to direct infringement as it is defined in § 271(a).”).
Second, in Paper Converting Machine Co. v. Magna-
Graphics Corp., we considered the meaning of “make” and
“use” in § 271(a), assessing “the extent to which a compet-
itor of a patentee can manufacture and test during the life
of a patent a machine intended solely for post-patent use.”
745 F.2d 11, 16 (Fed. Cir. 1984). In that case, an alleged
infringer engaged in a “scheme to avoid patent infringe-
ment” by conducting tests of the accused device in two
independently non-infringing “stages.” Id. at 15. In
response to the patent owner’s infringement suit, the
alleged infringer asserted that “it should bear no liability
whatsoever for its manufacture, sale, or delivery of the
[allegedly infringing machine] because that machine was
never completed during the life of the . . . patent.” Id. at
14. Although Paper Converting explained that “Deepsouth
was intended to be narrowly construed as applicable only
to the issue of the extraterritorial effect of the American
patent law,” 745 F.2d at 17; see id. (stating that “the
expansive language used in Deepsouth is not controlling
in the present case”), we considered Deepsouth’s “operable
assembly of the whole” standard and determined it “is
probably something short of a full and complete assembly”
and that “‘use’ includes use for the purpose of testing,” id.
at 18, 19; see id. at 17. In finding that the machine in-
FASTSHIP, LLC v. UNITED STATES 13
fringed the patent, we held that, “[w]here . . . significant,
unpatented assemblies of elements are tested during the
patent term, . . . testing the assemblies can be held to be
in essence testing the patented combination and, hence,
infringement.” Id. at 19–20. Moreover, “[t]hat the ma-
chine was not operated in its optimum mode is inconse-
quential: imperfect practice of an invention does not
avoid infringement.” Id. at 20. However, like Deepsouth,
Paper Converting’s analysis is not controlling because it
interpreted § 271(a) rather than § 1498. See T-Mobile,
135 S. Ct. at 817 n.5; see also Zoltek, 672 F.3d at 1317.
Paper Converting is distinguishable from this case. In
Paper Converting, it was undisputed that the alleged
infringer was engaged in a “scheme to avoid patent in-
fringement,” 745 F.2d at 15; see id. at 19 (“It is undisput-
ed that [the alleged infringer] intended to finesse [the
patent owner] out of the sale of a machine on which [the
patent owner] held a valid patent during the life of that
patent.”), and the alleged infringer “built and tested a
patented machine, albeit in less than preferred fashion,”
and tested “an ‘operable assembly’ of the components” of
the patented machine, id. at 19. In contrast, FastShip
has raised only unproven allegations of misconduct by the
Navy, and the Navy had not constructed a ship that was
“suitable for use” when the Patents-in-Suit expired. See
infra Section I.B.2.
Finally, in Hughes Aircraft Co. v. United States, the
Court of Federal Claims addressed the “boundaries of the
problem” of defining “manufactured” in § 1498 with
respect to infringement of a spacecraft. 29 Fed. Cl. 197,
219 (1993). After extensively discussing Deepsouth and
Paper Converting, see id. at 217–22, the Court of Federal
Claims determined that, “[e]ven though test parts were
not intended to be launched with the spacecraft, the fact
remains that the spacecraft . . . had been entirely assem-
bled to the extent feasible at the time” and that “each of
the . . . spacecraft in issue was ‘manufactured’ as of the
14 FASTSHIP, LLC v. UNITED STATES
expiration date of the patent,” id. at 220, 222 (footnote
omitted). As a decision of the Court of Federal Claims,
Hughes Aircraft is not binding on this court. See Dellew
Corp. v. United States, 855 F.3d 1375, 1382 (Fed. Cir.
2017). Moreover, Hughes Aircraft similarly relied on past
opinions’ interpretations of § 271 rather than ascertaining
the plain meaning of “manufactured” in § 1498, see 29
Fed. Cl. at 217–22; see also T-Mobile, 135 S. Ct. at 817
n.5. Therefore, we interpret “manufactured” in § 1498 in
accordance with its plain meaning, such that a product is
“manufactured” when it is made to include each limitation
of the thing invented and is therefore suitable for use.
2. LCS-3 Was Not “Manufactured” Under § 1498 when the
Patents-in-Suit Expired
The undisputed facts demonstrate that LCS-3 was not
“manufactured” when the Patents-in-Suit expired in May
2010. The Asserted Claims disclose a “vessel” comprising,
inter alia, “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,” ’032 patent col. 14
ll. 15–17 (emphasis added), and the record demonstrates
that “[a]ll [four] waterjets and impeller shafts were in-
stalled” in July 2010, J.A. 13541; see FastShip II, 122 Fed.
Cl. at 77. Moreover, the vessel further comprises a “hull,”
’032 patent col. 14 l. 1, and the construction of the “hull”
was not completed until the “[e]rection of the [bow
m]odule . . . during August 2010,” at the earliest,
J.A. 13563; see FastShip II, 122 Fed. Cl. at 85–86; see also
Oral Arg. at 10:05–48, http://oralarguments.cafc.uscourts.
gov/default.aspx?fl=2017-2248.mp3 (conceding that the
bow was not complete and that “a bow is part of a hull”).
LCS-3 neither was “suitable for use” nor included “each
limitation of the claims” without either of these limita-
tions. Oral Arg. at 10:53–11:11 (acknowledging that the
vessel would not float without the bow); see FastShip II,
122 Fed. Cl. at 85–86 (depicting photographs of the bow
module on the day following the expiration of the Patents-
FASTSHIP, LLC v. UNITED STATES 15
in-Suit and determining that “LCS-3 could not possibly
float by May 18, 2010” (internal quotation marks and
citation omitted)). Therefore, LCS-3 was not “manufac-
tured” under § 1498 when the Patents-in-Suit expired in
May 2010.
We are unpersuaded by FastShip’s remaining coun-
terarguments. See Appellant’s Br. 66–70. First, FastShip
argues that “[a] material factual dispute exists as to
whether the Navy deliberately attempted to avoid in-
fringement by delaying installation of the waterjet as-
semblies in LCS-3, disassembling [LCS-3] waterjets and
sending critical components . . . for use in LCS-1, or
slowing construction of LCS-3 bow modules.” Id. at 67.
However, “[i]n response to a summary judgment mo-
tion, . . . the plaintiff can no longer rest on . . . mere
allegations, but must set forth by affidavit or other evi-
dence specific facts, which for purposes of the summary
judgment motion will be taken as true.” Lujan v. Defs. of
Wildlife, 504 U.S. 555, 561 (1992) (internal quotation
marks and citation omitted); see RCFC 56(a). FastShip
has failed to identify an affidavit or other evidence setting
forth specific facts demonstrating that the Government
“deliberately attempted to avoid infringement by delaying
installation of the waterjet assemblies in LCS-3.” Appel-
lant’s Br. 67. See generally id. FastShip’s claims amount
to nothing more than “mere allegations” that are insuffi-
cient to preclude summary judgment, Lujan, 504 U.S. at
561 (internal quotation marks and citation omitted),
particularly in light of “[t]he presumption that
[G]overnment officials act in good faith,” Am-Pro Protec-
tive Agency, Inc. v. United States, 281 F.3d 1234, 1239
(Fed. Cir. 2002); see id. (discussing “our well-established
precedent that a high burden must be carried to overcome
this presumption”).
Even if the Government had delayed assembly of
waterjet elements in LCS-3 until months after the Pa-
tents-in-Suit expired, FastShip has not explained how
16 FASTSHIP, LLC v. UNITED STATES
such a delay would support a finding that a patented
combination had been “manufactured” during the patent
term under the language of § 1498. FastShip relies on
Paper Converting—a case that we have already ruled does
not control—but Paper Converting’s analysis was based in
part on “sale and delivery during the patent-term of a
‘completed’ machine.” 745 F.2d at 19. FastShip has
presented no evidence that all of the claimed elements of
LCS-3 were completed “by being ready for assembly and
with no useful noninfringing purpose” by May 2010. Id.Second, FastShip avers both that: “[a]nother obvious
factual dispute is over the extent to which the accused
product was substantially completed prior to the [Patents-
in-Suit’s] expiration, ‘to the extent feasible at the time,’”
Appellant’s Br. 67 (quoting Hughes Aircraft, 29 Fed. Cl. at
220); see id. at 67–68; and “[t]here are also factual dis-
putes as to whether LCS-3 (and LCS-1) had been suffi-
ciently tested to constitute ‘testing the patented
combination and, hence, infringement,’” id. at 69 (first
quoting Paper Converting, 745 F.2d at 19–20; then citing
Hughes Aircraft, 29 Fed. Cl. at 220). However, the “to the
extent feasible” and “testing the patented combination”
standards are derived from cases that we rejected as
inapplicable rather than from the plain language of
§ 1498. See supra Section I.B.1. 9
9 We do not hold that evidence regarding feasibility
and testing are never relevant to determining whether a
product is “manufactured” under § 1498. To the extent
these inquiries inform whether the product is “suitable for
use” or includes “each limitation” of an invention, courts
may consider them. However, we need not consider this
evidence here because it is clear that LCS-3 was not
“manufactured” under § 1498 based on the plain language
alone.
FASTSHIP, LLC v. UNITED STATES 17
Third, FastShip contends that “clear factual disputes
remain over the extent to which the relevant portions of
LCS-3 had been completed prior to the expiration of the
[Patents-in-Suit].” Appellant’s Br. 68; see id. (discussing
the semi-planing monohull, “including the modules con-
taining its hook and propulsion system, drive trains, gear
boxes, and waterjet inlets”). However, our conclusion
that, at minimum, the “waterjet” and “hull” limitations
had not been completed prior to the Patents-in-Suit’s
expiration is unaltered by the fact that other portions of
LCS-3 had been completed, which is sufficient for a grant
of summary judgment of non-infringement as to LCS-3.
Cf. Zoltek, 672 F.3d at 1318.
II. The Government’s Cross-Appeal on Infringement by
LCS-1
A. Standard of Review
“We review the legal conclusions of the [Court of Fed-
eral Claims] de novo and its findings of fact for clear
error.” Securiforce Int’l Am., LLC v. United States, 879
F.3d 1354, 1359 (Fed. Cir. 2018) (citation omitted). “The
ultimate interpretation of a claim term, as well as inter-
pretations of evidence intrinsic to the patent (the patent
claims and specifications, along with the patent’s prosecu-
tion history), are legal conclusions, which this court
reviews de novo.” Liberty Ammunition, 835 F.3d at 1395
(internal quotation marks and citation omitted). “Subsid-
iary factual determinations based on extrinsic evidence
are reviewed for clear error.” Id. (internal quotation
marks and citation omitted).
B. The Court of Federal Claims Properly Determined that
LCS-1 Infringes the Asserted Claims
In FastShip I, the Court of Federal Claims construed
the “increases the efficiency of the hull” limitation to
mean “allows achievement of speed through application of
less power than would be required for comparable or even
18 FASTSHIP, LLC v. UNITED STATES
lower speeds with a conventional displacement hull.” 114
Fed. Cl. at 511. In FastShip III, the Court of Federal
Claims reiterated its prior claim construction and evalu-
ated whether LCS-1 satisfies this limitation by comparing
graphs depicting the Patents-in-Suit’s and LCS-1’s power
to speed ratios. 131 Fed. Cl. at 617–18. In making this
comparison, the Court of Federal Claims “convert[ed] the
LCS-1 shaft power measurements to metric units (kilo-
watts) to conform to the metric units used on the power-
speed graph in the ’032 patent.” Id. at 617; see ’032
patent fig.11 (depicting the Patents-in-Suit’s shaft power);
J.A. 4479 (depicting LCS-1’s shaft power).
On appeal, the Government’s primary contention is
that, although the Court of Federal Claims’ “construction
ruling of ‘increases efficiency of the hull’ was cor-
rect, . . . the [C]ourt [of Federal Claims] later erred when
it accepted improper extrinsic evidence to modify its
original construction.” Cross-Appellant’s Br. 41; see id. at
41–60. In the alternative, the Government avers that,
“[e]ven if the [Court of Federal Claims’] acceptance of the
‘metric system’ construction of Figure 11 is characterized
as a factual finding subject to a clear error standard of
review, that finding should be reversed as clear error.”
Id. at 59. We disagree with the Government.
The Court of Federal Claims did not alter its claim
construction in FastShip III. The Court of Federal Claims
explicitly applied its construction from FastShip I, see
FastShip III, 131 Fed. Cl. at 617, as the Government
ultimately appears to concede, see Cross-Appellant’s
Reply Br. 23 (stating that, in FastShip III, “the [C]ourt [of
Federal Claims] confirmed that it was applying the con-
struction of ‘increases efficiency’ from its earlier claim
construction ruling” (emphasis added)). Before assessing
whether LCS-1 infringed the Asserted Claims by compar-
ing graphs depicting the efficiency of the inventions of the
Patents-in-Suit and LCS-1, the Court of Federal Claims
needed to assure itself that these graphs expressed effi-
FASTSHIP, LLC v. UNITED STATES 19
ciency ratios in the same unit of measure. Therefore, the
Court of Federal Claims “did not alter its claim construc-
tion”; it “at most clarified” that the hull efficiency found in
representative claim 1 would be measured in metric units
rather than imperial units. Mformation Techs., Inc. v.
Research in Motion Ltd., 764 F.3d 1392, 1398 (Fed. Cir.
2014); see Cordis Corp. v. Bos. Sci. Corp., 658 F.3d 1347,
1356 (Fed. Cir. 2011) (explaining that the court’s “post-
verdict elaboration on [its claim construction] only clari-
fied what was inherent in the construction”).
The Court of Federal Claims also did not clearly err as
a factual matter by reading Figure 11 as using metric
units. In its pre-trial contentions of law and fact, the
Government presented an annotated version of Figure 11.
J.A. 17374. The Government argued that the “shaft
horsepower” of the conventional frigate in Figure 11 was
shown in imperial units and plotted horsepower for LCS-1
in imperial units on the same graph, attempting to
demonstrate that “LCS-1 requires substantially more
power than a conventional hull to achieve the same
speeds” and, “[t]hus, this required element of the [Assert-
ed C]laims is . . . not met by . . . LCS-1.” J.A. 17374.
However, the Government did not support its arguments
regarding the units in Figure 11 with any evidence. See
J.A. 17374; see J.A. 17347–96. At trial, the Patents-in-
Suit’s inventor testified that Figure 11 depicts “shaft
horsepower in kilowatts,” J.A. 495, and the Government
failed to rebut this testimony at trial. When the Govern-
ment nevertheless reproduced the annotated Figure 11 in
its post-trial brief, see J.A. 17558, FastShip explained that
“[t]he Navy . . . fail[ed] to note that [J.A. 4479] records
shaft horsepower in imperial units, whereas the [Patents-
in-Suit] record shaft horsepower in metric units (kilo-
watts, or ‘KW’), as [the Patents-in-Suit’s inventor] pointed
out on [d]ay [o]ne of the trial,” J.A. 17607 (footnote omit-
ted). In light of this testimony, the Court of Federal
Claims determined it was “correct to convert . . . LCS-1
20 FASTSHIP, LLC v. UNITED STATES
shaft power measurements to metric units (kilowatts) to
conform to the metric units used on the power-speed
graph in the ’032 patent.” FastShip III, 131 Fed. Cl. at
617.
We are not “left with the definite and firm conviction
that a mistake has been committed.” Ferreiro v. United
States, 350 F.3d 1318, 1324 (Fed. Cir. 2003) (internal
quotation marks and citation omitted). FastShip sup-
ported its argument with the Patents-in-Suit’s inventor’s
testimony, see J.A. 495, and the Court of Federal Claims
was entitled to weigh the credibility of that testimony, see
Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 856
(1982) (“Determining the weight and credibility of the
evidence is the special province of the trier of fact.”).
Moreover, the record demonstrates that “horsepower” can
be measured in either imperial or metric units, see
J.A. 3625–34 (depicting “hull effective power” in “HP” and
“KW”), 4464 (depicting “Gas turbines” and “Diesels” in
“hp” and “kW”), 4578–625 (depicting effective horsepower,
i.e., “EHP,” as both “HP” and “KW”).
In contrast, the Government failed to support its con-
tention that Figure 11 depicts power in imperial units
with any evidence before the Court of Federal Claims.
The only support the Government provided was an anno-
tated version of Figure 11, see J.A. 17374, 17558, but
these annotations were prepared by attorneys, and
“[a]ttorney argument is not evidence,” Icon Health &
Fitness, Inc. v. Strava, Inc., 849 F.3d 1034, 1043 (Fed. Cir.
2017). On appeal, the Government argues that: “[t]he
specification contains a detailed description of a best
mode embodiment of the invention with every reference to
power being expressed in the [i]mperial units of ‘horse-
power’ or ‘HP,’” Cross-Appellant’s Br. 55 (footnote omit-
ted); see ’032 patent col. 3 l. 67, col. 10 ll. 23–24, 55, col. 11
ll. 30–31, 34–35; and “Figure 11 itself only uses the term
‘shaft horsepower x 1000,’” Cross-Appellant’s Br. 55; see
’032 patent fig.11. However, as we explained above, the
FASTSHIP, LLC v. UNITED STATES 21
record demonstrates that horsepower can be measured in
either imperial or metric units. See J.A. 3625–34, 4464,
4578–625.
We see no clear error in the Court of Federal Claims’
factual findings. The Government concedes that, if the
Court of Federal Claims properly determined the units in
Figure 11 are metric units, “then LCS-1 infringes.” Cross-
Appellant’s Reply Br. 24; see id. (stating that “the ques-
tion of whether the power units representing line B
in . . . Figure 11 are imperial units or metric units is
dispositive in this case”). Therefore, we affirm the Court
of Federal Claims’ determination that LCS-1 infringes the
Asserted Claims.
III. Damages
A. Standard of Review
When reviewing damages awards by the Court of
Federal Claims, “[d]ifferent standards of review are
applicable to different aspects of a damages award.”
Home Savs. of Am., FSB v. United States, 399 F.3d 1341,
1346 (Fed. Cir. 2005). Because “the amount of a prevail-
ing party’s damages is a finding of fact,” id. (internal
quotation marks and citation omitted), “the clear error
standard governs . . . findings about the general type of
damages to be awarded . . . , their appropriateness . . . ,
and rates used to calculate them,” id. at 1347.
B. The Court of Federal Claims Clearly Erred in Its
Damages Calculation
The Court of Federal Claims determined that “a hypo-
thetical licensing agreement between FastShip and the
Navy on September 23, 2006[,] would have resulted in a
payment of $6,449,582.82, reflecting a 3% royalty on the
cost of the elements of LCS-1 covered by the [Patents-in-
Suit] as of the date of the license.” FastShip III, 131 Fed.
Cl. at 627; see id. at 622–27. FastShip contends that the
Court of Federal Claims miscalculated the total royalty
22 FASTSHIP, LLC v. UNITED STATES
base as $214,986,194 rather than $237,242,394, which
“might be the result of inadvertent copying.” Appellant’s
Br. 48, 53. The Government agrees with FastShip, Cross-
Appellant’s Br. 80, and both parties agree that the revised
damages award should be $7,117,271.82, plus interest for
delay damages, see id.; Appellant’s Reply Br. 35; Cross-
Appellant’s Reply Br. 28. Having reviewed the Court of
Federal Claims’ damages award, we agree with the par-
ties that the Court of Federal Claims clearly erred by
miscalculating the total royalty base and, thus, the final
damages award. Therefore, we modify the Court of Fed-
eral Claims’ damages award to $7,117,271.82, plus inter-
est for delay damages. See Ajinomoto Co. v. Archer-
Daniels-Midland Co., 228 F.3d 1338, 1351 (Fed. Cir.
2000) (modifying a damages award).
CONCLUSION
We have considered the parties’ remaining arguments
and find them unpersuasive. We affirm the Court of
Federal Claims’ grant of summary judgment of non-
infringement by LCS-3 and finding of infringement by
LCS-1. We modify the Court of Federal Claims’ damages
calculation to $7,117,271.82, plus interest for delay dam-
ages. Accordingly, the Judgment of the Court of Federal
Claims is
AFFIRMED AS MODIFIED
COSTS
Each party shall bear its own costs.