Federal Circuit Defines “manufactured” Pursuant to 28 U.S.C. § 1498June 20, 2018

In FastShip, LLC v. United States, decided on June 5, 2018, the United States Court of Appeals for the Federal Circuit (CAFC) defined the term “manufactured” pursuant to 28 U.S.C. § 1498. The statute states that a patent owner can sue the U.S. government for infringement when “an invention [covered by a U.S. patent] is used or manufactured by or for the United States without proper license . . . or lawful right to use or manufacture . . . .”. FastShip sued the U.S. government for patent infringement in the United States Court of Federal Claims pursuant to § 1498. The government moved for summary judgment arguing that the government had not “manufactured” the product before the expiration of the patent. The Court of Federal Claims granted the government’s motion and the CAFC affirmed that decision.

The patents in question are in regard to a ship design that enables ships of a certain size, carrying cargo of a certain weight, to move at speeds greater than they could without using the designs described in the patents. The patents in question expired on May 18, 2010. The U.S. Navy contracted private companies to construct a ship built using the patents, which began construction in July of 2009, but was not erected until September of 2010.

In its opinion, the CAFC stated that no controlling cases existed on the issue of the definition of “manufactured” pursuant to § 1498. Therefore, based on its plain meaning, the CAFC concluded that “a product is ‘manufactured’ when it is made to include each limitation of the thing invented and is therefore suitable for use”.

The CAFC concluded that no ships were manufactured before expiration of the patent, and therefore affirmed the decision to grant the government’s motion for summary judgment. The CAFC concluded that even though construction had begun, the ship did not include each limitation of the claims and was not suitable for use before the patents expired. The ship lacked elements of the design described in the patents and construction was not far enough along before the patents expired to enable the ship to float.

The CAFC, pursuant to § 1498, concluded that for a product to be considered manufactured, it must include each limitation from the claims of the invention and must be suitable for use.